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Kalyx Development Terminates Merger Agreement with AAPC

October 6, 2017


In a Form 8-K just filed with the SEC, it was announced that Kalyx has terminated its merger agreement with Atlantic Alliance Partnership Corp. (NASDAQ:AAPC). Kalyx is the landlord to handfuls of cannabis companies including STWC Holdings (OTC:STWC), Medicine Man (OTC:MDCL) and more, in a similar structure to that of Innovative Industrial Properties (NYSE:IIPR)


Kalyx is a self-described "fully-integrated real estate development company and one of the leading multi-state providers of commercial and industrial space to the rapidly growing, highly regulated cannabis industry." 


Back in May of this year, AAPC and Kalyx announced that the two companies had entered into a merger agreement under which, subject to certain closing conditions, Kalyx will merge with and into AAPC. This is the merger agreement that has now been terminated, due to a breach of one of the closing conditions.


As mentioned in the 8-K filed by AAPC, "due to the inability to list the securities of the combined entity on any U.S. national stock exchange upon consummation of the Merger, which was one of the closing conditions set forth in the Merger Agreement, the Company, Sponsor, Fox, Kalyx and the Kalyx Stockholders elected to abandon the transactions contemplated by the Merger Agreement and enter into a Termination Agreement."


As we covered on October 3rd, AAPC disclosed that the company received a written notice from the Nasdaq indicating that they did not satisfy listing requirementsListing Rule 5550(a)(3), a.k.a. the “Minimum Holders Rule”, requires the company to have at least 300 public holders of its ordinary shares for continued listing on Nasdaq. If AAPC did not meet this requirement by the opening of trading on Thursday, October 5, 2017, the blank check company stood the chance of being suspended or de-listed from the Nasdaq. 


It seems that AAPC was unable to achieve the 300 shareholder threshold required by Nasdaq to continue being listed, thus causing the merger to fall through. As more developments unfold, we'll be sure to keep readers informed. 


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