Cytocom CEO launches $115M SPAC

FORT COLLINS — Another special purpose acquisition company is preparing to launch along the northern Front Range with Cytocom Inc. CEO Michael Handley at the helm.

Sparta Healthcare Acquisition Corp. is seeking to raise up to $115 million in a bid to join the Nasdaq Capital Market under the ticker “SPTAU”, according to preliminary S-1 filings with the U.S. Securities and Exchange Commission Wednesday afternoon.

Special purpose acquisition companies, or SPACs, are shells that are listed on public exchanges and later acquire or merge with companies looking to go public outside of the normal procedures of an initial public offering.

These vehicles became extremely popular in 2020, including among investors and companies along the Front Range. Serial investor Brad Feld is involved with two SPACs, while the California private-equity firm Gores Group has launched several SPACs from its Boulder office.

Lightning eMotors Inc. (NYSE: ZEV) consummated a go-public effort this month using a SPAC merger that added $270 million in cash to its books, while SomaLogic Inc. is aiming to go public in a deal that would net it $686 million in post-merger proceeds.

However, SPACs have lost plenty of steam in the past few months after a string of poor performances by newly public companies and the SEC announcing plans to scrutinize the asset class. The IPOX SPAC Index, which tracks the industry’s performance, hit a high of 940 points in March but closed the trading day Wednesday at around 723 points.

Sparta’s filings are not effective and are subject to change. The SPAC said it has not entered into any conversations with a potential merger partner, likely a biotechnology company in the oncology, gene-therapy, immunotherapy, acute care or regenerative medicine spaces.

Handley, who is leading Cytocom into going public through the acquisition of Cleveland BioLabs Inc. (Nasdaq: CBLI), is listed as the president and CEO of Sparta.

Cytocom is seeking to begin clinical trials of small doses of the opioid-overdose medicine naltrexone to manage overactive immune system responses to diseases, including COVID-19.

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