This SPAC is merging with an already-public company as sponsors get creative before time runs out

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SPACs are known to be a roundabout investment vehicle to take private companies public. Not this one.

Bull Horn Holdings is merging with biotech Coeptis Therapeutics, a public company traded over the counter. The SPAC sponsors told CNBC they went for a public company partly because of greater transparency via a past performance record, which addresses some of the criticisms levelled against blank-check deals.

«We love this deal because it'd already spent some time in the minor leagues and it was ready to move forward. We've created a model that should be looked at by everybody,» Bull Horn CFO Chris Calise said in an interview.

«There are a lot of sponsors right now and the bell is going to ring pretty quickly. I think they are looking for anything unique to make a deal happen,» Calise said. His SPAC was originally targeting a company in the sports and entertainment industry.

This particular deal highlighted the peril many sponsors face as they race the clock to find a target amid a regulatory crackdown and waning enthusiasm. There are nearly 600 blank-check firms hunting for deals right now, most of which launched in 2020 and 2021, according to SPAC Research. SPACs typically have a two-year deadline to merge with a company, and they would have to return capital to investors if a deal fails to come to fruition.

It remains to be seen if other sponsors would replicate Bull Horn's model. It is not uncommon for a stock traded over-the-counter to have a public offering and call it an IPO, according to Jay Ritter, a finance professor at University of Florida who studies IPOs and SPACs.

Ritter noted that Coeptis is currently trading at $2.72 per share in the OTC market, below the price the shares should trade at