Allegro Merger Corp. Makes Some Changes to Its SPAC Structure
by Kristi Marvin on 2018-06-21 at 3:36pm

Allegro Merger Corp. Filed an Amended S-1 this Afternoon with Some Notable Changes.

In addition to bringing on Chardan Capital Markets as a co-manager, Allegro Merger Corp. changed its Rights Terms  to reflect holders receiving one-tenth (1/10) of a share versus the originally stated one-twentieth (1/20).  Allegro had been the first SPAC to deviate from the standard 1/10th, but it appears 1/20th was not well received. Hence, the change.  Additionally, the time to completion deadline has been shortened from 21 months to 18 months.

The filing also shows Chardan will now be participating in the purchase of Private Placement Units.  Previously, Cantor had committed to purchasing 50,000 units of the total 372,500 units, at a purchase price of $10.00.  The 50,000 units will now be split between Cantor and Chardan, except there appears to be a mistake in the prospectus.  The Underwriting section lists Cantor as purchasing 38,250 units and Chardan 11,250.  However, that only adds up to 49,500 units.  I’m sure this will be corrected in future filings, but for now we have it listed, as is, below until we get confirmation on the numbers.

New Summary Terms:
  • Sector Focus: General / Broad
  • $10.00 unit comprised of one share of common stock, one right and one full warrant
  • Each right entitles the holder to receive one-tenth (1/10) of one share 
  • 100% held in trust ($10.00 per share)
  • 18 months to complete an acquisition 
  • Warrant redemption price: $18.00
  • Redemption rights:  limitation of 20% of the shares sold in the IPO
  • Founders, Cantor Fitzgerald and Chardan (the Underwriters) to purchase 372,500 Private Placement units at $10.00 to bring the trust to 100% (Founders – 322,500 units / Cantor – 38,250 units / Chardan – 11,250)
  • Underwriter fees: 2.0% + 3.5% deferred fee.  Cantor Fitzgerald is sole book-runner.

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