DEF: Mountain Crest V Seeks Extension for CUBEBIO Merger

Mountain Crest Acquisition Corp. V is seeking stockholder approval to extend its business combination deadline to November 16, 2026, to finalize its merger with CUBEBIO Co., Ltd.

Summary

• Mountain Crest Acquisition Corp. V (SPAC) is holding an Annual Meeting on November 4, 2025, to vote on four key proposals.
• The primary proposal is to amend the company's charter to extend the deadline for completing an initial business combination from November 16, 2025, to November 16, 2026.
• The company has an existing Business Combination Agreement with CUBEBIO Co., Ltd., a Korean corporation, signed on August 29, 2024, which management believes cannot be closed by the current deadline.
• Other proposals include the re-election of Suying Liu as a Class III director, ratification of WWC, P.C. as the independent auditor for 2025, and authorization to adjourn the meeting if necessary.
• Public stockholders have the right to redeem their shares for approximately $11.77 per share, based on the $1.19 million in the Trust Account as of October 7, 2025.
• The company's securities are quoted on the OTC Market, not Nasdaq, which poses risks to liquidity, trading activity, and the ability to meet Nasdaq listing requirements for the post-combination entity.
• The Sponsor and management have significant financial incentives to complete a business combination, as their shares and units would be worthless upon liquidation.

Sentiment

Score: 3

Explanation: The sentiment is low due to the necessity of another extension for the business combination, the company's current listing on the OTC Market with associated 'penny stock' risks, and the potential challenges in achieving a Nasdaq listing for the combined entity. While a target has been identified, the repeated delays and significant redemption history indicate ongoing difficulties and uncertainty for public shareholders.

Positives

• The company has identified a target, CUBEBIO Co., Ltd., and entered into a Business Combination Agreement on August 29, 2024.
• Management believes the business combination with CUBEBIO can be closed before the proposed extended date of November 16, 2026.
• The Board of Directors unanimously recommends voting FOR all proposals, including the extension, indicating their commitment to the CUBEBIO merger.
• Public stockholders retain redemption rights, offering a potential exit at the trust value if they do not wish to participate in the extended timeline or the business combination.

Negatives

• Management believes it cannot close the Business Combination with CUBEBIO by the current deadline of November 16, 2025, necessitating an extension.
• The company's common stock and public rights are quoted on the OTC Market, not Nasdaq, leading to reduced liquidity, limited market quotations, and subjection to 'penny stock' rules.
• Maintaining Nasdaq listing for the combined company is a condition precedent to closing the Business Combination, and the current OTC listing status may present challenges to meeting these requirements.
• Each redemption of shares by public stockholders decreases the amount in the Trust Account, potentially impacting the capital available for the combined company.
• The Sponsor and insiders have substantial financial interests (shares, units, loans) that would be worthless if a business combination is not completed, which could incentivize them to pursue a less favorable deal.
• The company may be subject to a 1% excise tax on redemptions under the Inflation Reduction Act of 2022, which cannot be paid from the Trust Account.

Risks

• Inability to complete the Business Combination with CUBEBIO by the current or extended deadline, leading to liquidation and loss of investment opportunity.
• Reduced liquidity and trading activity for securities due to quotation on the OTC Market and subjection to 'penny stock' rules.
• Challenges in meeting Nasdaq listing requirements for the post-Business Combination combined company, which is a condition precedent to closing.
• Potential for a 1% excise tax on stock redemptions after December 31, 2022, under the Inflation Reduction Act of 2022, payable by the company.
• Risk of U.S. foreign investment regulations and review by CFIUS, potentially delaying or prohibiting a business combination, especially with a U.S. target, due to a non-U.S. director.
• The Sponsor may be incentivized to complete a less favorable target company acquisition rather than liquidate due to significant personal investment at risk.
• The exercise of directors' and officers' discretion in changing or waiving business combination terms may result in conflicts of interest.
• If the company is deemed an investment company under the Investment Company Act of 1940, it would face severe restrictions and potentially be forced to liquidate.
• Conversion of Trust Account assets to cash to mitigate Investment Company Act risk would likely result in minimal interest earnings, reducing redemption value.

Future Outlook

Management believes it can close the Business Combination with CUBEBIO Co., Ltd. before the proposed extended date of November 16, 2026. The company is actively working towards completing this transaction. If the extension is approved, the company will continue its efforts to consummate the business combination, and the post-combination entity aims to be listed on Nasdaq.

Management Comments

• Management believes that it cannot close the Business Combination before November 16, 2025.
• Management believes that it can close the Business Combination before November 16, 2026.
• The Board has determined that each of the proposals are advisable and recommends that you vote or give instruction to vote FOR such proposals.

Industry Context

This filing reflects a common challenge faced by Special Purpose Acquisition Companies (SPACs) in the current market environment, where completing a de-SPAC transaction within the initial timeframe often requires extensions. The difficulty in maintaining a Nasdaq listing, as indicated by the company's current OTC Market quotation, is a significant hurdle that can deter potential target companies and impact investor confidence, distinguishing it from SPACs that successfully maintain major exchange listings throughout their lifecycle. The proposed merger with CUBEBIO Co., Ltd., a Korean corporation, suggests a cross-border transaction, which can introduce additional complexities and regulatory considerations, such as potential CFIUS review, compared to domestic mergers.

Management Changes

Corporate Governance

Related Party Transactions

• Sponsor purchased 1,725,000 Founder Shares for $25,000 prior to IPO.
• Sponsor purchased 223,000 Private Units for $2,230,000 in a private placement.
• Sponsor converted $900,000 in promissory notes into 225,000 shares of common stock at $4.00 per share.
• Sponsor provides administrative support for $10,000 per month.
• Sponsor has provided interest-free loans to the Company, with $1,070,000 outstanding as of October 7, 2025, which are repayable upon business combination or forgivable upon liquidation (except for funds outside trust account).
• Officers and directors are reimbursed for out-of-pocket expenses related to identifying target businesses.

Stakeholder Impact

• Shareholders: Face continued uncertainty regarding the business combination, potential for further share redemptions reducing trust value, and risks associated with the company's OTC listing. Those who redeem will receive cash at trust value. Those who don't will retain voting rights on the business combination and future redemption rights.
• Sponsor/Insiders: Have significant financial exposure, as their substantial equity holdings and loans would become worthless if a business combination is not completed, creating a strong incentive to finalize a deal.
• CUBEBIO Co., Ltd.: The target company's merger is contingent on the extension and successful Nasdaq listing of the combined entity, introducing uncertainty for its shareholders and operations.
• Underwriters: Entitled to a deferred underwriting fee of $2,070,000, payable only upon completion of a Business Combination.

Next Steps

• Hold Annual Meeting of Stockholders on November 4, 2025, to vote on proposals.
• If Extension Proposal is approved, file the Extension Amendment with the Delaware Secretary of State.
• Continue working to consummate the Business Combination with CUBEBIO Co., Ltd. by November 16, 2026 (if extended).
• If Extension Proposal is not approved or Business Combination is not consummated by the deadline, the company will wind up its affairs and redeem outstanding Public Shares.
• The post-Business Combination combined company will seek listing on Nasdaq.

Key Dates

Recommendation

The recommendation is 'hold' due to the significant uncertainty surrounding the completion of the business combination with CUBEBIO and the company's current listing on the OTC Market. While the proposed extension provides more time, the repeated delays and the risk of not meeting Nasdaq listing requirements for the combined entity present considerable downside. The redemption option offers a floor for public shareholders at the trust value, which is slightly above the current market price, mitigating immediate 'sell' pressure. However, the lack of a definitive closing date and the inherent risks of SPACs failing to complete a deal prevent a 'buy' recommendation. Investors should monitor the progress of the CUBEBIO merger and the company's efforts to achieve a Nasdaq listing.

Keywords

SPAC, Business Combination, Extension, CUBEBIO, Merger, Proxy Statement, Redemption Rights, OTC Market, Nasdaq Listing, SEC Filing, Corporate Governance, Risk Factors, Mountain Crest Acquisition Corp. V