Self-driving technology startup Aurora announced that it will go public through a reverse merger transaction with Reinvent Technology Partners Y (Reinvent), a special purpose acquisition company (SPAC), that will provide the company with a cash injection to help continue its development of autonomous truck driving technology and, in the future, for self-driving passenger vehicles as well.

What is a Reverse Merger?

Reverse mergers, and the SPACs that enable them, have become a somewhat controversial method for companies to go public without having to otherwise meet the strict requirements for listing. Going public is not usually an option for companies such as Aurora that do not have a profitable business model in place (and that have not, in fact, made any profits). In addition, this move comes at a time when the overall self-driving car industry is struggling with failed deadlines, still unreliable technology, high cash burn rates, a loss of public trust and the failure of many similar companies. The move to invest more money into self-driving startups either indicates confidence in a forthcoming technological breakthrough or a desperate attempt to keep companies afloat until this major challenge to artificial intelligence applications is overcome, analysts have opined.

Aurora Founders

The Aurora SPAC funded by Reinvent will result in an injection of more than $2 billion into Aurora so that it can continue its (expensive and unprofitable to date) operations for several more years. Reinvent was launched by Reid Hoffman (the co-founder of LinkedIn), Mark Pincus (Zynga founder) and investor Michael Thompson. Other investors include various other Aurora funders as well as other partners including T. Rowe Price and Associates, Sequoia Capital, Uber, Index Ventures, PACCAR and Volvo, among others.

Aurora’s Products and Competitors

If Aurora's plan is successful investors are likely to see huge returns for their backing but the road ahead is risky and uncertain according to industry analysts. The move to focus on self-driving trucks makes sense from a business perspective but other moves, such as autonomous ride-hailing, have been found to be much more difficult to implement with both Uber and Lyft abandoning their efforts. If Aurora manages to deliver its self-driving truck technology it will give it access to a huge and profitable market the income from which could fund their continued research and development to reach their ultimate goal. This is necessary to overcome the accelerating losses the company has experienced with losses of over $214 million in 2020 and $94 million in 2021.

Panacea Life Sciences, a private CBD company is proceeding with a reverse merger with Exactus BioSolutions, a publicly held company (OTCQB: EXDI). This means that Panacea Life Sciences' principals will maintain control of the company as it goes public through the merger with Exactus. Inc. Through a 1:28 reverse stock split, Exactus, Inc. will trade Series C convertible preferred stock, Series C-1 convertible preferred stock, Series D convertible preferred stock and common stock to acquire Panacea Life Sciences. In total, that will be 1 million, 2 thousand share of convertible preferred stock and 473,639,756 shares of common stock. After the merger is complete, Exactus will change its name to Panacea Life Sciences Holdings. Everything was still pending regulatory approval as of July 2, 2021.

22nd Century

Initially, there were three companies involved in what eventually led to this merger. In 2019, 22nd Century Group invested 14 million in Panacea. With that investment, 22nd Century bought an 11.6% worth of shares in Exactus . That exchange coupled with the Exactus stock trades will complete the transactional aspects of the merger.

Merger Leadership

The leadership of the new company is also being planned. Larry Wert, the EC, and Media Executive of Exactus, Inc. will join the board of directors and no longer be EC. Andrew Johnson, an officer at Exactus, Inc. will become assistant of investor relations at the new company.

Panacea Life Sciences' Leslie Buttorff founded the company in 2017 as a seed-to-sale business. There's began as a female owned business with forward thinking industry practices. From their 51,000 square foot cGMP certified facility in Golden, Colorado they employ the use of CO2 extraction and chromatography equipment. Their product originates from PANA Botanical Farms, Colorado.

Panacea’s Product Line

Panacea's product line includes hemp-derived CBD products like topicals, soft gels, tinctures, sublingual tablets, gummies, and cosmetics. All these products have only a trace of THC. They're made for both the consumer and their pets. Out of the 113 cannabinoids in cannabis, Tetrahydrocannabinol (THC) is the principal psychoactive component.

The developer of popular mobile games Cookie Jam and Disney Pop Town, Jam City Inc. has announced to undergo a reverse merger with DPCM Inc. (Miami). Both have decided to use the money gained by the merger to start a new public gaming company named as Jam City Holdings Inc. The combined evaluation of both the companies would be $1.2 billion.

Jam City History

Jam City was founded in 2010 by Chris DeWolfe in Los Angeles California. The company operates from over nine studios in United States, Canada, South America, and Europe, with over 825 employees till now. The company's estimated revenue is $176.5 million per year. It has developed a series of mobile games out of which Cookie Jam, Cookie Jam Blast, Disney Emoji Blitz, Snoopy Pop and Frozen Adventures are on top list of game players. Apple App Store ranked 7 of its games in 100 highest-grossing charts. In 2021 over 1.3 million game downloads are reported with around 31 million active users.

The Cookie Jam game generated $500 million revenue and Panda Pop games got 120 million downloads.

DPCM Inc. is a newly organized blank check company that provides financial assets to implement new mergers. Emil Michael is the Chairman and Chief Executive of DPCM Inc. It raised around $300 million in October 2021 IPO.

What Is a Reverse Merger?

A reverse merger is a corporate transformation where a private company becomes public by undertaking the ownership of a public company.

As the Covid 19 breakdown has en-caged all population in their homes, mobile games got the most business throughout 2020 and 2021. DPCM Inc. decided to join hands with Jam City to create new milestones in gaming industry.

As announced on 20 May, Jam City and DPCM will undergo a reverse merger to establish a new game company Jam City Holdings Inc. Chris De Wolfe and Josh Yguado will lead the new company. The later would be listed in New York Stock Exchange under the symbol JAM.

65% shares of the new company would be owned by the stakeholders of Jam City. Netmarble Corp, a South Korean game developer, that is also an investor in Jam City will hold a portion of new company.

Aerpio Pharmaceuticals has announced its entry into a reverse merger agreement with the privately-held Aadi Bioscience. The new entity will operate under the name "Aadi Bioscience, Inc." To support the merger, Aerpio is to raise $155 million in a PIPE deal.

The cash expected from the PIPE financing will fund the company into 2024. It will also be used for the potential approval and commercialization of the company's novel product: FYARRO.

The directors of both companies have approved the merger, which is expected to be finalized in the third quarter of 2021. The PIPE financing will be completed concurrently with the closing of the merger.

Company & Stock Outlook

Following the announcement of the merger, Aerpio shares rose by 17.2% to close at $1.36 on Monday, May 17, 2021. Aadi shareholders will receive Aerpio common stock. 33.2% of the new company will be owned by Aerpio shareholders and 66.8% by Aadi shareholders.

Neil Desai, Aadi's chief executive officer, will head the new company. The company's headquarters will be in Los Angeles, California. The proposed board chairman is Caley Castelein.

Aerpio shareholders will receive a non-transferable contingent value right (CVR) after the merger. At the closing of the merger, Aerpio will enter into a CVR agreement.

The new board will be made of the current Aerpio board members Caley Castelein and Anupam Dalal; Aadi's board members Richard Maroun and Neil Desai; and Aadi's board observer Karin Hehenberger. Behzad Aghazadeh, managing partner of Avoro Capital Advisors will also join the board.

Parties Involved

The PIPE financing will be led by KVP Capital and Acuta Capital Partners. Other institutional investors will be Serrado Capital LLC, Acorn Bioventures, RTW Investments, Rock Springs Capital, Vivo Capital, BVF Partners, Venrock Healthcare Capital Partners, Avoro Ventures, and Avoro Capital Advisors.

The financial advisor for Aerpio for the merger will be Ladenburg Thalmann & Co. Inc. and their legal counsel will be Goodwin Procter LLP. Wilson Sonsini Goodrich & Rosati, P.C. will serve as the legal counsel for Aadi. Piper Sandler & Co and Perella Weinberg Partners LP will be the financial advisors to Aadi for the merger.

Placement agents for the PIPE financing will be Piper Sandler & Co., Cowen and Company LLC, and Jefferies LLC.

First quarter Shopify stock results for 2021 have shown an increase in revenue growth of 110% compared to last year with profits surging on the back of increased subscriptions and the investment in Affirm.

What is Shopify

Shopify is an ecommerce platform that has benefited from the additional lift in online sales that occurred as a result of the pandemic. The Canadian company has already grown 40-fold in the last five years and expectations had been that growth would slow this year after such a stellar performance. Nonetheless, shares in Shopify rose an additional 10% on the announcement.

Analysts View of Shopify

Analysts have been speculating for months about when the global recovery would slow online spending as consumers returned to more traditional shopping habits, but these results show revenue accelerating for the company for all of geographic locations and for all types of merchants on the platform. Gross merchandise volume (GMV) on the platform (a measure used by the ecommerce industry to measure the total value of goods sold in a given period) doubled from the previous year to reach over $37 billion, although this was largely fueled by countries outside the US, according to the company.

Shopify has said that it does expect some moderation in growth in the coming year, however, as the impact of the pandemic lessens and shops reopen which means customers are likely to return to physical stores rather than shopping exclusively online.

Shopify First Quarter Results

Shopify stock results show it had better than expected revenue and adjusted earnings in the quarter of $988 million (analyst expectations were $863 million) compared with $470 million in the previous year. This resulted in adjusted earnings per share of $2.01 (analyst expectations were $0.77). Net income was also boosted by an $1.3 billion gain in its shares in Affirm Holdings which was listed on the stock exchange in January. The partnership with Affirm, sealed the previous July, resulted in Shopify receiving 20 million shares in the company.

German aircraft startup Lilium has announced that it will float on the US stock market through a reverse merger undertaken with Qell Acquisition Corp, a special purpose acquisition company (SPAC), in a deal that will result in a business worth $3.3 billion. Lilium is among a number of aviation companies that are looking to deploy electrically powered planes and take advantage of advances in battery powered technology. Lilium, who have built and tested a five-seater prototype aircraft, aim to compete in the short-haul flight market with a plane that can take off and land vertically and that has achieved speeds of over 100km/h in test flights. The company aims to market its plane to travelers wanting to beat traffic and those making short flights between cities.

Who is Involved with Qell Acquisition

The Qell acquisition company is led by Barry Engle, a former president of General Motors, who has stated that the deal to float Lilium will help achieve the goal of commencing commercial operations by 2024. Daniel Wiegand, the CEO and co-founder of Lilium, has said that Qell is a partner that brings tremendous experience in the mobility business and shares the company's sustainable travel philosophy.

How big is the Reverse Merger?

The total proceeds of the deal are expected to be about $830 million made up of $380 million held in trust and a $450 million private placement. The private placement investors include the fund manager Baillie Gifford as well as investment funds managed by Tencent, Blackrock, Ferrovial, Palantir, Atomico, LGT, FII Institute among other private funds. The transaction implies a value of $2.4 billion for the enterprise which is calculated by multiplying 70% of forecast revenue of $3.3 billion with a forecast of core profits at 3.4 times of $708 million by 2026.

Sportradar is a sports data firm founded in 2001 based in Switzerland. It is a Multinational Corporation known globally as a leader of sports data and digital content services. Sportradar collects and analyses sports data then distribute the same to the media, bookmakers, sports federations and betting companies. Some of its investors include the NFL and NBA owners Ted Leonsis, Michael Jordan and Mark Cuban.

Sportradar will go public after coming to terms with Todd Boehly-led SPAC on a reverse merger deal. Before getting into the details of the deal, there are few terms that one needs to understand.

What is a Reverse Merger?

A reverse merger occurs when private company mergers with a publicly trading company and operates under its legal shell. The private company takes over the management of the publicly trading company, controls ownership of the stock and even changes its name. For a reverse merger to happen, both companies don't have to be operating in the same industry. In most cases, reverse mergers are considered when the public company begins to fail financially and is left with the legal public corporate shell as its only asset.

What is SPAC

Special Purpose Acquisition Company (SPAC) is a company created to provide capital through an Initial Public Offering (IPO). They do not have any commercial operations. The reason for raising capital is for the acquisition of an existing company. SPACs are given a grace period of two years to finalize an acquisition process, failure to meet the deadline, they must return the raised funds to investors.

Sportradar Going Public

Sportradar, through Horizon Acquisition Corp.11, a SPAC, will go public. The corporation is led by Todd Boehly, Los Angeles Dodgers minority owner. According to Sportico, the deal values Sportradar at $10 billion.
Initially, the company was considering a traditional IPO. If that was to happen, Sportradar IPO would fetch a lesser amount compared to that of the SPAC. The global data company has already signed a letter of intent with Horizon, the Special Purpose Acquisition Company. This becomes an initiating step of the acquisition process.

There's a new kid in town and his name is SPAC. Everywhere you go in the financial world, you hear about some kind of SPAC deal taking place. A SPAC, or Special Purpose Acquisition Corporation, is a new way of taking a company public without going through a lot of pre-listing due diligence. The idea is that you create a SPAC, which is just an empty shell whose sole purpose is to buy real companies later on, and get it listed on the stock exchange of choice. Since it is an empty suit that has no non-monetary assets or business to slow things down via rigorous scrutiny, it is easier to get a listing.

What Is A SPAC

Afterwards, the SPAC is used to "buy" an existing company that wants to go public but doesn't want to expose itself to a lot of SEC scrutiny or time-consuming delays. The two companies can also "merge". In either event, the façade of the SPAC is wound down and the new venture changes its ticker symbol to that of the targeted acquisition in a process known as a reverse merger.

Apex Clearing Reverse Merger

Case in point is the recent announcement regarding the SPAC Northern Star Investment Corporation II Apex Clearing reverse merger. The newly-merged entity will be listed as APX on the New York Stock Exchange and will bid adieu to the corporate profile of the technically senior partner in the transaction.

What this reverse merger will do is provide Apex with the public recognition that it has already earned among dedicated professionals through its quiet back office viability in the financial community. Apex has provided the lifting power for many innovative financial companies and revolutionary new techniques that have greatly broadened the ability of ordinary people to participate in the great stock market boom of the past several years.

Robinhood and Apex

Until it opened up its own platform, the now-well-known firm Robinhood used Apex as the clearinghouse for all of its financial transactions. Apex was a pioneer in both fractional share and crypto trading. A lot of entities are powered by Apex in one way or another. Firmly profitable and now about to become widely available to the general public, the brain trust behind Apex has set the company up for a regular moonshot.

CarLotz, a used vehicle consignment sales company, has been listed on the Nasdaq exchange (under the ticker image 'LOTZ') after finalizing a reverse merger process with Acamar Partners Acquisition Corp which is a special purpose acquisition company (or SPAC) that is focused on the consumer and retail markets which itself went public in 2019.

Reverse Merger

The reverse merger was funded through a $311 million cash-in-trust injection from Acamar Partners and a placement of $125 million from private investments in public equity in the company. The deal values the company at about $820 million and has attracted investors including Fidelity Management & Research Company, Rick Wagoner (former CEO of General Motors) and TRP Capital partners, among others. CarLotz joins other used vehicle companies that have gone public recently. Its shares saw a 3% drop in its share price to just under $12 after the listing.

CarLotz Expansion

The company is based in Richmond, Virginia and has an additional eight locations, or hubs, located in Virginia, Texas, Florida, North Carolina and Illinois. It said it plans to expand by opening three or four hubs each quarter in the near term with locations in Seattle and Orlando due to open in the next few months.

The CEO of CarLotz, Michael Bor, a former banker, said he hoped the public listing would raise the profile of the company and improve its ability to source used vehicles for sale by enhancing the company's brand awareness. He went on to say that even with its marketing efforts to date, many people were not familiar with the company even in areas where it was already operating. He wants to get the message out that the company's business model is not based on making profits on the sale of ex-fleet and other used cars, but rather its primary benefit is that it provides a streamlined process for selling used cars generally, and that this is where the value lies for its customers. It operates a technology-driven buying, sourcing and selling process that provides a multi-channel service with a comprehensive selection of vehicles. It enables an end-to-end e-commerce interface for buying and selling used vehicles.

As more and more money rushes into cryptocurrencies for a safe haven, it is only natural that the investment side of the crypto business is also starting to heat up as well. In the latest move, Intercontinental Exchange's Cryptocurrency Venture has agreed to acquisition by VPC Impact Acquisition Holdings, Inc. (ticker VIH). VIH is what is known as an SPAC or Special Purpose Acquisition Company. SPACs are shell companies whose only function is to acquire other companies and bring them onto the stock market.

Reverse Merger

Rather than going through the many regulatory hurdles of making an IPO under their own name, Intercontinental can spin off this part of their business and get it onto the exchange much faster and with less regulatory interference by allowing it to be "acquired" by an existing firm already listed on the exchange. The process is technically a reverse merger but a very specialized one that is distinct in almost everything except name.

Under a standard reverse merger format, ICE would spin off the crypto side of the business into a separate company, which would then be free to pursue its destiny any way it wants. Instead, ICE will retain a majority stake in the new venture, which will be known as Bakkt, while VIH will put upwards of 500 million dollars into the new enterprise in the form of marketing and product development.

Bakkt Killer App

The underlying purpose of the Bakkt venture is to create a killer app for consumer use of cryptocurrencies and other digital assets such as rewards points, loyalty bonuses, and even credits from video games. By folding all of these disparate programs into one easily-accessed processing point, the company hopes to gain a foothold in all things crypto no matter where they originate from.