BROWNSTONE RESEARCH SPECIAL REPORT The Trillion-Dollar ...

The Trillion-Dollar OpportunityTHREE NEW SPACS THAT COULD OUTPULL MY PREVIOUS BEST

RECOMMENDATIONS BY 3 TO 1 | BY JEFF BROWN, EDITOR, BLANK CHECK SPECULATOR

BROWNSTONE RESEARCH SPECIAL REPORT

2Brownstone Research | Blank Check Speculator

The Trillion-Dollar OpportunityBY JEFF BROWN, EDITOR, BLANK CHECK SPECULATOR

Note From Jeff Brown: Welcome to Blank Check Speculator. Here, we invest in unique investment vehicles known as special purpose acquisition corporations (SPACs). These “blank check” public companies – as they are known – exist for one reason: to find a promising private company to merge with and sidestep the traditional IPO process and bring that company to the public markets via a reverse merger.

Our mission is to identify and invest in the best SPACs on the market. In doing so, we will effectively gain pre-IPO shares in exciting private companies.

Remember, given the time-sensitive nature

of SPACs, recommendations will be made as opportunities present themselves.

If this is your first time investing in a SPAC, I strongly encourage you go right here. I’ve prepared some supplemental research on SPACs that will provide us the necessary context before making this trade.

Below, I’ll share the details on three “blank check” companies, their backers, and my predictions for acquisition targets. I’ll also share the two ways we can play each of these trades. Remember, we always have a “conservative” and “speculative” approach to suit different investors.

Action to take: Buy units of CM Life Sciences III under the ticker CMLTU up to $11.00 a unit.

Details of the CM Life Sciences III SPAC

IPO Date: 4/7/2021 Amount Raised at IPO: $552 million Additional Sponsor Raise: $13 million SPAC Sponsor: CMLS Holdings Sponsor Affiliation: Casdin Capital Acquisition Target: Targeting a company in the life sciences, synthetic biology and diagnostic fields.

TRILLION-DOLLAR OPPORTUNITY NO. 1: CM LIFE SCIENCES III (CMLTU)

https://members.brownstoneresearch.com/blank-check-speculator/special-reports/the-blank-check-manifesto-bcs


OUR BLANK CHECK COMPANY

CM Life Sciences III (CMLTU) initially filed to go public on February 25 and started trading on April 7. This SPAC raised $480 million in its initial public offering (IPO). Experiencing excess demand, the underwriters in just two days announced exercising their entire over-allotment option, raising an additional $72 million. This puts the total trust value at $552 million.

As a reminder, a SPAC is not an operating company. In essence, it is a publicly traded trust account. The trust value of a SPAC simply refers to the amount of capital that the company can deploy to affect a business combination with a private company (more on that below). And having a trust value of $552 million, we expect this SPAC to bring a company public that’s valued between $1.5 billion and $5 billion.

Units began trading under the ticker CMLTU on April 7. It is important to act quickly in order to acquire units before they split into two separate securities: shares and warrants. Once it is time, my team will send all readers a notice regarding the split of these securities.

Remember, our goal is to purchase units before the split to acquire our “bonus” warrants. Due to the 1/5th warrant coverage, every five units will come with one full warrant. So I encourage readers to buy units in multiples of five. For example, if we buy 500 units, we will receive 500 shares and 100 warrants when the units split into their two respective securities.

(Note: SPACs do not issue fractional warrants. Only full warrants will be issued. So in the case

of CMLTU, which has 1/5th warrant coverage, an investor who purchases five units will receive one warrant. But an investor who purchases nine units will still only receive one warrant. This is why I recommend purchasing units in increments equal to the warrant coverage.)

These warrants are an important part of the investment. They act like “lottery tickets” and give us several options for this investment over time. When a deal is announced and the market likes it, these warrants will soar. It increases our profit potential. And these warrants barely cost investors anything – as long as we get them as part of the unit.

Now, let’s meet the key executives we’ll be investing our capital alongside.

THE SCOOP ON THE SPONSOR

As I always say, the most important detail in any SPAC investment is understanding the sponsor and executives behind it.

Investing in a SPAC is making an investment in the sponsor and the executives. We want to understand who we are putting our money behind, and we want to only target the best and most capable of executives.

We only want to invest alongside executives who are the “real deal.” That means we want to find teams with a proven track record of making great investments, that have actual operating experience in their industry, or have close ties to the industry they are targeting.

In other words, we want to find executives who

Time Window: 24 months Warrant Coverage: 1/5th warrant for each unit Warrant Term: Warrants expire five years after the completion of the initial business combinations or earlier upon redemption or liquidation. Warrant Strike Price: $11.50


have worked “in the trenches” and have a proven track record.

The sponsor behind CM Life Sciences III, Casdin Capital, is an investment firm specializing in life sciences.

Casdin Capital has made a total of 153 investments with 48 exits since being founded in 2011. And it has amassed $3.3 billion under management. In short order it has become one of the largest investment firms dedicated to biotech investing.

And Casdin already has an impressive track record of success in SPACs. In the past few months, its first two SPACS, CM Life Sciences and CM Life Sciences II, announced business combinations.

Casdin’s first SPAC, CM Life Sciences, announced a business combination with Sema4 on February 10, 2021 in a deal worth $2 billion.

Sema4 sits at the intersection of biotechnology and artificial intelligence (AI). Its analytics platform uses AI to sift through biomarkers and genomic data to build predictive models of human health. In other words, Sema4 uses data your body provides to find potential diseases early enough so they’re easily treatable.

Upon announcement, units of CM Life Sciences gained nearly 75%. And its warrants returned two times its units, soaring 152% as seen in the chart above.

And Casdin’s second SPAC, CM Life Sciences II, announced a business combination with SomaLogic on March 29 in a deal worth over $1.2 billion.

SomaLogic is a global leader in technology for proteomics, the study of proteins. SomaLogic’s platform can measure 7,000 proteins and translate those measurements into key clinical indicators of health status and risk.

On the announcement, units of CM Life Sciences II jumped 21%. The combination happened even before CM Life Sciences II split its units into shares and warrants.

After its units split on April 14, warrants of CM Life Sciences II rocketed 574%. These two SPACs are fantastic examples of how warrants are our “lottery tickets.”

Casdin Capital has proven it can bring exciting next-generation companies public through its SPACs – and quickly. I’m confident Casdin will do this again with today’s SPAC because of its elite executive team.

The first executive, Eli Casdin, founded Casdin Capital and is the CEO of today’s SPAC.


Eli Casdin

Eli Casdin has been involved in assessing biotech companies for most of his life. It just so happens that his dad Jeffrey Casdin became the pioneering biotech analyst at Wall Street.

Eli has leveraged his lifetime of biotech knowledge and expertise to make some impressive investment gains.

Casdin invested in Clover Health’s Series C funding round in 2016 when the company was valued at only $670 million. And in January 2021, Clover Health went public at a valuation of $4.5 billion. That’s 572% higher than when Casdin initially invested.

And in February 2019, Casdin invested in Peloton Therapeutics’ Series E funding round. At the time, Peloton was valued at $500 million. And just five months later, Casdin exited Peloton Therapeutics at a valuation of $2.35 billion in July 2019 – 370% higher.

Then in May 2019, Casdin made yet another fantastic investment in the early stage cancer detection company Thrive Earlier Detection. Casdin invested in Thrive’s Series A round, when it was valued at only $165 million.

Casdin exited its investment in Thrive in January 2021 at a valuation of $2.6 billion. That’s 1,476% higher than when Casdin first invested.

And the list of phenomenal investments goes on.

Eli Casdin is a premier investor with deep ties

in the life science space. He currently sits on 19 boards, indicating a large and valuable network. By investing in CM Life Sciences III, we are essentially investors in the next private company Casdin brings to the public market.

And Eli Casdin is joined by our next executive and a director of CM Life Sciences III, Chad Robins.

Chad Robins

Chad Robins is the CEO of Adaptive Biotechnologies (ADPT), which he cofounded in 2009.

Adaptive Biotechnologies is a commercial stage biotechnology company that currently has a market capitalization of more than $5 billion. Adaptive might sound familiar to subscribers of Exponential Tech Investor, as we recently added the company to our model portfolio.

Adaptive sequences the genetics of the human immune system in order to understand exactly how the immune system detects and recovers from a disease. Since its founding, Adaptive has sequenced and characterized more than 58 billion immune receptors.

And under Mr. Robins’ guidance, Adaptive successfully launched the clinical diagnostic test clonoSEQ.

ClonoSEQ is the first and only Food and Drug Administration (FDA)-authorized test to detect and monitor measurable residual disease (MRD) in patients with multiple myeloma, B-cell acute lymphoblastic leukemia, and chronic lymphocytic leukemia.


MRD refers to the small number of cancerous cells that remain in a person either during or following treatment, once the patient is in remission. It’s a major cause of relapse.

And in 2020, Adaptive generated $98.4 million in revenue, up over 150% from $38.4 million in 2017.

It’s an exciting, fast-growing company thanks in large part to Mr. Robins’ guidance.

Mr. Robins is regularly recognized for his abilities as a leader.

In 2019 and 2020, he was in Puget Sound Business Journal’s Power 100. Every year since 2015, he’s been named a Goldman Sachs Most Intriguing Entrepreneur. And in 2016, Ernst & Young gave him the Entrepreneur of the Year – The Pacific Northwest Region Award.

Mr. Robins knows how to grow a next-generation company.

And we have another very exciting executive working alongside us on today’s SPAC – Harlan Robins.

Harlan Robins

Harlan is the brother of Chad Robins and the other cofounder of Adaptive, where he serves as the Chief Scientific Officer.

Harlan is a Harvard graduate. There, he received his BS in physics before going on to attend the University of California, Berkeley. At Berkeley he furthered his studies in physics, receiving a Master’s and PhD.

While heading up the Computational Biology Program at the Fred Hutchinson Cancer Research Center, Harlan discovered a groundbreaking way to sequence T-Cells, a type of white blood cell that fights off diseases.

Harlan’s discovery is the technology that Adaptive is based on. And Harlan’s work has lead Adaptive to amass 386 patents across its immune medicine platform, which uses computational biology and machine learning (ML) to read genetic code.

By investing in CM Life Sciences III, we have all three of these executives working for us. And it’s only a matter of time until they affect a reverse merger through their SPAC.

POTENTIAL TARGETS

Investing in a SPAC means we will never know precisely which company will be acquired. As I like to say, we can think of this like a “box of chocolates.” We know each chocolate in the box will be great. But we never know precisely which one we will get.

However, by studying the SPAC sponsors and key players – and by leveraging my knowledge of early stage technology companies – we can make a few educated guesses about likely targets.

By combining with a company in an industry they are familiar with, they will be able to advise and guide the target through its next growth phase. These two can offer more than just money. That makes a partnership with them extremely valuable for whichever private company they partner with.

CM Life Sciences III raised $552 million between its IPO and subsequent over-allotment. This is a substantial raise. And most likely, the SPAC will target an exciting private company in the fields of life sciences, synthetic biology, and diagnostics with a valuation between $1.5 billion and $5


billion.

I have a couple of ideas of which company that might be.

Insitro: Insitro uses machine learning and high-throughput biological data to create massive data sets to accelerate drug discovery. And seeing that Casdin and his team already brought two biology companies utilizing AI/ML public, it stands to reason the next one will utilize these technologies too.

The combination of AI/ML in biology is one of the most exciting spaces in the industry. These models can help scientists discover previously unseen disease subtypes and speed along the testing process to more accurately predict how the drug will react in the body.

Insitro recently completed its Series C funding at a $2.5 billion valuation in April. This puts it in the middle of our target valuation range.

Resilience: Resilience operates advanced biopharmaceutical factories. It provides manufacturing capabilities from pre-clinical development all the way to commercial supply for the next generation of pharmaceuticals. This includes the manufacturing of cell and gene therapies, viral vectors, vaccines, proteins, and other new discoveries.

Much like Taiwan Semiconductor Manufacturing has factories where companies like NVIDIA and AMD can easily manufacture their high-end semiconductors, Resilience will do the same for biotech companies. That will enable up-and-coming biotech companies to produce their potentially life-saving drugs without raising billions of dollars in capital to build out a manufacturing facility.

Resilience closed its Series B round in October 2020 at a $1.6 billion valuation. And a company with technology as important as Resilience will certainly catch a higher valuation in the public

markets, putting Resilience in the middle of our target range.

Color: Color develops genetic test kits designed for hereditary health issues. The saliva-based kits analyze hereditary disorders and personalized screening guidelines. This allows users to take a precision-based approach to their healthcare in the future.

Color’s high-throughput genetic services allowed it to team up with ThermoFisher to enable routine COVID-19 testing programs in schools nationwide. Diagnostics platforms like this are growing in importance to track viral outbreaks as well as hereditary conditions.

Color recently closed its Series D funding round in January with a $1.5 billion valuation. It will surely catch a higher valuation in the public markets as well, putting it in our projected valuation range for potential targets.

OUR “MONEY BACK DEADLINE”

CM Life Sciences III has less than 24 months to affect a business combination.

SPACs are unique in that they are obligated to affect a business combination within a set amount of time. If they do not do that, they are required to return invested funds to investors, minus any small management fees.

We can think of this as a “money back deadline.” If the business combination doesn’t happen within a specific time frame, the initial $10 per unit raised in its IPO will be returned to investors, less a small amount for management fees. CM Life Sciences III has a “money back deadline” set for April 9, 2023.

In essence, we have two possible outcomes here. Either this SPAC finds a target company, or the vast majority of our investment capital is returned to us.


WHAT TO EXPECT FROM THIS IN-VESTMENT

At the time of the merger with the private company, additional funds may be raised in an IPO-like offering. This is the IPO of the private company. And the name of CM Life Sciences III will be changed into the name of the private company it invested in. The ticker symbol will also change at that time. As the investment unfolds, we’ll be sure to provide regular updates to keep all informed of the developments.

When the IPO of the private company occurs, each one of our shares in CM Life Sciences III will convert directly into the IPO shares of the newly formed company.

Within 52 days after the initial IPO of CM Life Sciences III, each unit of CMLTU will split into stock and warrants. At that time, if we want, we can instruct our broker to split the units into the shares and the warrants. I will follow up with instructions when it is time for us to split our units.

From there, investors have two options…

Conservative investors can plan on buying units of CMLTU, holding until the units split, and then selling the shares at or above the price that they acquired the units. Typically, investors can recover all of their original invested capital and hold on to the warrants − which they have essentially paid nothing for − for the upside.

Speculative investors can plan on buying units of CMLTU and holding them at least until the business combination is announced. By then, we’ll know which company will go public, and then each investor can decide how to trade both the shares and warrants of CMLT. And remember, we will always track both the shares

and the warrants in our model portfolio.

While we can’t ever know exactly which company CM Life Sciences III will invest in, we can be sure that it will be an exciting, high-growth company. Almost certainly, it will be targeting a leading company in the fields of life sciences, synthetic biology, and diagnostics.

Once a business combination is announced, I will follow up with additional analysis and a recommended action to take. But for now, let’s take a position in this exciting Blank Check Speculator company.

Action to Take: Buy units of CM Life Sciences III under the ticker CMLTU up to $11.00 a unit.

Finding This Investment: SPACs can occasionally trade under different ticker symbols depending on your broker. It may trade under the ticker symbols CMLT.U or CMLT/U. And remember, most brokerages have a “symbol lookup” feature that allows us to search for a ticker by typing in the company name.

Risk Management: I recommend holding this investment with no stop loss. Before an acquisition, SPACs trade roughly for the value of their assets under management. That means this investment should not experience much volatility before its announcement of a business combination.

As longtime readers know, I always recommend rational position sizing. And I never recommend we go “all in” on any one investment. Let’s do the same here.



Aries I Acquisition (RAMMU) initially filed to go public on March 3 and started trading on May 19. This SPAC raised $125 million in its IPO.

Experiencing excess demand, the underwriters in just five days announced they exercised their entire over-allotment option, raising an additional $18.75 million. This puts the total trust value at $143.75 million.

When we refer to the trust value of a SPAC, we’re simply referring to the amount of capital that the company can deploy to affect a business combination with a private company (more on that below). And having a trust value of $143.75 million, we expect this SPAC to bring a company public that’s valued between $375 million and $1.25 billion.

Units began trading under the ticker RAMMU on May 19. It is important to act quickly in order to acquire units before they split into two separate securities: shares and warrants.

Remember, our goal is to purchase units before the split to acquire our warrants. Due to the 1/2 warrant coverage, every two units will come with one full warrant. So I encourage readers to buy units in multiples of two. For example, if we buy 200 units, we will receive 200 shares and 100 warrants when the units split into their two respective securities.

(Note: SPACs do not issue fractional warrants. Only full warrants will be issued. So in the case of RAMMU, which has 1/2 warrant coverage, an investor who purchases two units will receive one warrant. But an investor who purchases three units will still only receive one warrant. This is why I recommend purchasing units in increments equal to the warrant coverage.)


Action to take: Buy units of Aries I Acquisition under the ticker RAMMU up to $10.25 a unit.

Details of the Aries I Acquisition SPAC

IPO Date: 5/19/2021 Amount Raised at IPO: $143.75 million Additional Sponsor Raise: $4.5 million SPAC Sponsor: Aries Acquisition Partners Sponsor Affiliation: Terra Carta Partners, LLC Acquisition Target: Targeting a company in aerospace, satellites and space exploration, quantum computing, and cybersecurity sectors. Time Window: 12 months Warrant Coverage: 1/2 warrant for each unit Warrant Term: Warrants expire five years after the completion of the initial business combinations or earlier upon redemption or liquidation. Warrant Strike Price: $11.50

TRILLION-DOLLAR OPPORTUNITY NO. 2: ARIES I ACQUISITION (RAMMU)


Now, let’s get to the sector I’m most excited about for Aries I Acquisition. I expect our SPAC to affect a business combination with a company in this sector.

SECTOR INSIGHTS

The global space economy is booming. It’s an exciting market currently worth $360 billion. And it’s expected to nearly triple to over $1 trillion by 2040.

Historically, space exploration has been dominated by government agencies like NASA. But this dynamic has already changed.

We have recently witnessed private companies like Elon Musk’s SpaceX make massive technological strides. I’ve followed the SpaceX story closely in my daily newsletter The Bleeding Edge.

SpaceX’s reusable rockets have lowered the cost of launching a rocket into orbit from $97 million to $52.7 million. That’s a 46% cost reduction.

And this cost competitiveness led NASA to choose SpaceX to assemble the human landing system for project Artemis, its next manned mission to the Moon. SpaceX was granted a contract worth $2.89 billion. You can read more about it here.

This is just one example of the “new space race.” Space is no longer solely reserved for governments. Investments into private space technology companies are happening at a record pace.

$8.9 billion flowed into space companies last year. And this year is looking to break that record. Investors have already put $4.5 billion to work in space-related companies during the first quarter of 2021 alone.

Over the past year, 11 space-related companies have either gone public or have announced plans to go public. And SPACs are the vehicle of choice

for private companies in the aerospace sector to reach the public markets.

Richard Branson’s Virgin Galactic (SPCE) went public in 2019 through the SPAC Social Capital Hedosophia. Virgin Galactic is one of the companies pioneering space tourism.

When the business combination was announced, Virgin Galactic was valued at over $1.4 billion. It now has a market capitalization of over $6 billion. That’s over four times its initial valuation.

And the private, small satellite launch service company Rocket Lab recently announced it will IPO via Vector Acquisition.

Rocket Lab offers small, frequent launches into low earth orbit. This enables cost-effective satellite launches for applications like communications and GPS. To date, it has launched 104 satellites.

In the proposed business combination with Vector Acquisition, Rocket Lab is valued at $4.1 billion.

Astra is another small satellite launch service company enabling cost-effective launches into low earth orbit. And it recently announced a business combination with the SPAC Holicity in a deal worth over $2.1 billion.

The number of exciting private companies going public through SPACs goes on. With this much excitement around the sector, I predict several more aerospace companies will use SPACs to reach the public markets.

Let’s meet the team we’ll be investing our capital alongside.

OUR EXECUTIVES

As I always say, the most important detail in any SPAC investment is understanding the team behind it.

https://www.brownstoneresearch.com/bleeding-edge/nasa-and-spacex-team-up-for-lunar-exploration/


Investing in a SPAC is making an investment in the executives. We want to understand who we are putting our money behind, and we want to only target the best and most capable of executives.


In other words, we want to find executives who have worked “in the trenches” and have a proven track record.

And each executive behind Aries I acquisition is very formidable.

The executive I believe will make the greatest impact in affecting a business combination is Randy Brinkley. He is our SPAC’s CEO and Director.

Randy Brinkley

Seven times a day – if we are lucky enough – we can look to space and see Mr. Brinkley’s work.

I’m talking about the International Space Station (ISS).

Brinkley was the ISS’s first Program Manager from 1994 until 1999. As Program Manager, Brinkley was responsible for the design,

development, testing, launching, and on-orbit assembly of the ISS.

But arguably his most difficult task was getting the U.S. to integrate Russia into the ISS Program. This was no small feat as the countries were still skeptical of each other’s motivations… The Cold War was still fresh in the minds of the leaders of both space programs.

Brinkley knew the only way to get the station built was for the U.S. and Russia “to sit down, ignore where we came from, and figure out the right thing to do.”

And that is what the U.S. and Russia did. On November 20, 1998, the first element of the ISS, Zarya, was successfully launched into orbit.

Before leading the ISS into orbit, Brinkley was Mission Director of the Hubble Space Telescope Repair Mission.

Brinkley successfully led Hubble’s first servicing mission. It was a two-week journey in December of 1993 to fix the Hubble’s “blurry” camera.

We can see the fixed image below on the right:

Hubble’s Mirror Flaw

Source: NASA

This repair was vital to Hubble’s success. And once finished, it enabled the telescope to capture images of our universe like never before.

After leading teams at NASA, Brinkley went on to become the President of Boeing Satellite Systems (BSS) in March 2001.


At the time, BSS was parent company Boeing’s most exciting growth market. BSS was the world’s largest manufacturer of commercial communications satellites and a major provider of space systems, satellites, and payloads for national defense and research.

Brinkley stayed at Boeing for three years until he started Brinkley & Associates, a private investment and aerospace consulting firm. It’s a firm he was well-suited to start with his experience as an operator in the aerospace industry.

And he brought with him five years of experience as an investor on the board of the private defense and aerospace equity investment firm J.F. Lehman Company. He’d held his post there since 1999.

Randy Brinkley has over 30 years in the aerospace sector. And by investing in Aries I Acquisition, we essentially have Mr. Brinkley working for us.

Mr. Brinkley is also joined by two equally formidable executives – Thane Ritchie and Dr. Mark Mykityshyn.

Thane Ritchie has decades of experience successfully investing in early stage companies.

He’s participated in early stage funding rounds for companies like Facebook, Cambridge Quantum Computing, Twitter, Spotify, and Pinterest.

And Dr. Mark Mykityshyn is the CEO and Managing Partner of Endeavor Technology Group.

Endeavor is a private investment firm focused on businesses in the aerospace, defense, and cybersecurity sectors.

Dr. Mykityshyn was the fourth investor in Endeca Technologies. This is a software company specializing in unstructured data management, web commerce, and business solutions that Oracle acquired in 2011 for $1.1 billion.

By investing in Aries I Acquisition, we have these executives working for us. And it’s only a matter of time until they affect a reverse merger through their SPAC.

POTENTIAL TARGETS



By combining with a company in an industry they are familiar with, our executive team will be able to advise and guide the target through its next growth phase. This team can offer more than just money. That makes a partnership with these executives extremely valuable for whichever private company they partner with.

Aries I Acquisition raised $143.75 million between its IPO and subsequent over-allotment.

And most likely, the SPAC will target an exciting private company in these sectors: aerospace, satellites and space exploration, quantum computing, and cybersecurity. The SPAC would then target a company in one of these sectors with a valuation between $375 million and $1.25 billion.


Axiom Space: Axiom Space is an operator of modules that will attach to the International Space Station. These modules will eventually host government astronauts, tourists, private companies, and other individuals. Onboard the space station, these people will be able to


conduct research, manufacturing operations and space exploration systems testing.

The company just raised $130 million in a Series B round, which valued the company at $740 million. Axiom already has a good relationship with NASA and collaborates with the agency on missions to the ISS. But this is a relationship Brinkley can help take to the next level with his experience working inside NASA and the ISS.

Firefly Aerospace: Firefly Aerospace developed an orbital launch vehicle designed to lower the cost of space travel. It’s launching small payloads between 1,000–8,000 kilograms into low earth orbit for a starting price of $15 million per launch.

The company is currently trying to raise $300 million from private investors. So we know Firefly needs cash… If the team doesn’t receive favorable terms, I could see them using a SPAC to get funding from public markets. And the Aries team is well-suited to help Firefly gain more contracts with companies needing to launch products into orbit.

HawkEye 360: HawkEye 360 developed a space-based radio frequency (RF) mapping and analytics system. This system uses satellite tracking technology to provide insights for maritime, intelligence, telecommunications, and crisis response applications.

The company’s satellites have already revealed potential illegal fishing around the Galápagos Islands, alerted rangers to potential poaching in Garamba National Park in the Congo, and observed decreased maritime activity following the coronavirus outbreak around Wuhan, China.

HawkEye 360 just raised $55 million at a $455 million valuation in April. We know the company needs money. And Aries’ connections to the aerospace and defense industries could benefit the growth of HawkEye.


Aries I Acquisition has about 12 months to affect a business combination.


We can think of this as a “money back deadline.” If the business combination doesn’t happen within a specific time frame, the initial $10 per unit raised in its IPO will be returned to investors, less a small amount for management fees. Aries I Acquisition has a “money back deadline” set for May 21, 2022.

It’s worth noting that a 12-month window is about half the time of a typical SPAC deadline. As we well know, most SPACs tend to have a 24-month deadline. Of course, with shareholder approval, Aries I Acquisition can work through the process of getting an extension. But that comes with work, expense, and some risk in doing so.

I suspect the 12-month window is an indication that Aries already has a short list of private companies, one of which will result in a merger. This would explain the 12-month window. The team already knows what it’s going to do.


At the time of the merger with the private company, additional funds may be raised in an IPO-like offering. This is the IPO of the private company. And the name of Aries I Acquisition will be changed into the name of the private company it invested in. The ticker symbol will also change at that time. As the investment unfolds, we’ll be sure to provide regular updates to keep all informed of the developments.


When the IPO of the private company occurs, each one of our shares in Aries I Acquisition will convert directly into the IPO shares of the newly formed company.

Within 52 days after the initial IPO of Aries I Acquisition, each unit of RAMMU will split into stock and warrants. At that time, if we want, we can instruct our broker to split the units into the shares and the warrants. I will follow up with instructions when it is time for us to split our units.


Conservative investors can plan on buying units of RAMMU, holding until the units split, and then selling the shares at or above the price that they acquired the units. Typically, investors can recover all of their original invested capital, and hold on to the warrants − which they have essentially paid nothing for − for the upside.

Speculative investors can plan on buying units of RAMMU and hold them at least until the business combination is announced. By then, we’ll know which company will go public, and then each investor can decide how to trade both the shares and warrants of RAM. And remember, we will always track both the shares and the warrants in our model portfolio.

While we can’t ever know exactly which company Aries I Acquisition will invest in, we can be sure that it will be an exciting, high-growth company. Almost certainly, the SPAC will be targeting a leading company in the following sectors: aerospace, satellites and space exploration,

quantum computing, artificial intelligence and machine learning, cybersecurity, and blockchain and digital currencies.


Action to Take: Buy units of Aries I Acquisition under the ticker RAMMU up to $10.25 a unit.

Finding This Investment: SPACs can occasionally trade under different ticker symbols depending on your broker. It may trade under the ticker symbols RAMM.U or RAMM/U. And remember, most brokerages have a “symbol lookup” feature that allows us to search for a ticker by typing in the company name.





Catalyst Partners Acquisition (CPARU) initially filed to go public on March 11 and started trading on May 18. This SPAC’s total trust value is $300 million.

When we talk about the trust value of a SPAC, this simply refers to the amount of capital that the company can deploy to affect a business combination with a private company. And having a trust value of $300 million, we expect this SPAC to bring a company public that’s valued between $1 billion and $3 billion.

Units began trading under the ticker CPARU on May 18. It is important to act quickly in order to acquire units before they split into two separate securities: shares and warrants.

Remember, our goal is to purchase units before the split to acquire our warrants. Due to the 1/5th warrant coverage, every five units will come with one full warrant. So I encourage readers to buy units in multiples of five. For example, if we buy 500 units, we will receive 500 shares and 100 warrants when the units

split into their two respective securities.

(Note: SPACs do not issue fractional warrants. Only full warrants will be issued. So in the case of CPARU, which has 1/5th warrant coverage, an investor who purchases five units will receive one warrant. But an investor who purchases nine units will still only receive one warrant. This is why I recommend purchasing units in increments equal to the warrant coverage.)


Now, let’s meet the key executives we’ll be investing our capital alongside.

THE SCOOP ON THE SPONSOR

As I always say, the most important detail in any

Action to take: Buy units of Catalyst Partners Acquisition under the ticker CPARU up to $10.25 a unit.

Details of the Catalyst Partners Acquisition SPAC

IPO Date: 5/18/2021 Amount Raised at IPO: $300 million Additional Sponsor Raise: $11.2 million SPAC Sponsor: CAT Sponsor, LLC Sponsor Affiliation: General Catalyst Acquisition Target: Targeting an enterprise software company. Time Window: 24 months Warrant Coverage: 1/5th warrant for each unit Warrant Term: Warrants expire five years after the completion of the initial business combinations or earlier upon redemption or liquidation. Warrant Strike Price: $11.50

TRILLION-DOLLAR OPPORTUNITY NO. 3: CATALYST PARTNERS ACQUISITION (CPARU)


SPAC investment is understanding the sponsor and executives behind it.

Investing in a SPAC is making an investment in the sponsor and the executives. We want to understand who we are putting our money behind, and we want to only target the best and most capable of executives.


In other words, we want to find executives who have worked “in the trenches” and have a proven track record.

The sponsor behind Catalyst Partners Acquisition, General Catalyst, is a renowned venture capital firm.

General Catalyst first started with a $100 million fund in 2000. Since then, it has accumulated over $9.1 billion in assets under management and made 946 investments with 253 exits.

General Catalyst’s team of 73 is packed with industry experts, current and former C-suite executives, entrepreneurs, and veteran investors.

And General Catalyst’s team knows how to identify and invest in next-generation companies.

In 2013, the firm invested in Snapchat’s Series B round. At that time, Snapchat was valued around $800 million.

Snapchat went public in March 2017 at a valuation of $33 billion, 4,025% higher than when General Catalyst invested. As impressive as

this is, it’s a small win compared to some other investments.

One of those huge winners is Stripe. General Catalyst invested in the payment processing company in 2012 – when the company had a valuation around $100 million. Its most recent valuation was $95 billion – a 94,900% increase in value.

And in 2014, General Catalyst was one of the early investors in the health care company Livongo.

Livongo is known for its unified, artificial intelligence (AI)/machine learning (ML)-enabled platform to help people with chronic conditions live better lives.

General Catalyst took part in Livongo’s Series A round, where it raised $10 million at a valuation of $30 million.

In November 2020, Livongo was acquired by Teledoc Health for $18.5 billion. From General Catalyst’s initial investment, Livongo’s valuation grew 61,500%…

I’m confident General Catalyst’s success will continue, and it will affect an exciting business combination with this SPAC.

And that’s because of its elite executive team.

The first executive is the Chairman and CEO of our SPAC, James Cash.

James Cash

Dr. James Cash began his work in academia


as a professor at the Harvard Business School from 1976 to 2003. From there, he became the James E. Robison Professor and Senior Associate Emeritus of the Harvard Business School.

He is responsible for introducing computer-based systems and technology into Harvard’s curriculum.

While at Harvard, his research focused on the still-nascent field of information technology (IT), where he authored textbooks like Building the Information-Age Organization: Structure, Control, and Information Technologies.

Dr. Cash quickly became a highly sought-after expert in the strategic use of IT.

To fulfill the demand for his expertise, Dr. Cash started The Cash Catalyst, LLC. In his words, he created his business to “explore the most challenging issues of the day and proximate future.” There he educates senior technology executives and board members in addressing the challenges facing the digitalization of business.

And Dr. Cash has spent a lot of time guiding companies and organizations forward. He has served on more than 60 nonprofit, public and private-sector boards. These include companies like Walmart, General Electric, Microsoft, and Quantum Exchange.

He is currently on the board of the insurance giant Chubb Limited and the Boston Celtics.

When companies and boards are seeking an expert on digital transformation, James Cash is on the top of the list.

By investing in Catalyst Partners Acquisition, we get to put our money to work alongside Dr. James Cash. And Dr. Cash is joined by Paul Sagan, President and Vice Chairman of Catalyst Partners Acquisition.

Paul Sagan

Mr. Sagan has decades of experience leading some of the most important technology companies. He’s currently on the board of companies like Carbon Black, VMware, and Moderna. And because of his vast experience and expertise, he is now a Senior Advisor and Executive in Residence (XIR) at General Catalyst.

Regarding his own career, Sagan stated, “[I] sought to work with companies that innovate to solve seemingly intractable challenges, and do so in ways that change traditional business paradigms.”

And Sagan did just that, playing a key role in growing one of the most important IT infrastructure companies in the world – Akamai Technologies.

Sagan was Akamai’s 15th employee when he joined the company as its Chief Operating Officer after it launched out of MIT in 1998. Akamai hadn’t even generated any revenue yet. But its next big innovation would steer the company’s fortunes for years to come

Akamai provided a solution to improve upload times for internet users. In the late 1990s, most internet users were on 56 Kilobits Per Second (Kbps) dial-up modems.

At those speeds, it took almost two and a half minutes to download just one megabyte of data. (Now it takes less than a second for most people to download a megabyte.) That meant it would take a long time for a website to load if it had a lot of graphics or animations. This was an acute


problem for advertisers, which used images and animations to grab users’ attention.

Akamai developed a solution to this issue. Its service routed web clients to use the private network Akamai owned to decongest the public internet networks. This was the first major content delivery network (CDN). CDNs are still in use today, and Akamai remains a leader in the space… In fact, it’s on my watchlist as an investment for The Near Future Report.

Akamai’s revenue grew from nothing in 1998 to $210 million in 2004. That’s the year before Sagan became its CEO.

Once Sagan became CEO in 2005, Akamai’s revenue took off. In just seven years, he increased revenue by more than 500% to nearly $1.4 billion in revenue.

During Sagan’s tenure, Akamai’s enterprise value (EV) increased over three-fold, from $1.7 billion in March 2005 to $6.2 billion at the end of 2012. After seven years heading up Akamai, Sagan stepped down and decided to focus his efforts on the world of investing as a venture capitalist.

Here is what Akamai’s Lead Independent Director Martin M. Coyne II said when Mr. Sagan made the decision to step down as CEO:

Paul will not be an easy executive to replace… As a result of Paul’s insightful leadership and guidance, Akamai has been transformed from a successful startup company into an S&P 500 global leader.

Paul then leveraged his strong track record in IT and web-based services by assuming the role of partner at General Catalyst in 2014. Since then, he’s worked to bring exciting early stage technology companies public alongside our chosen executive team.

By investing in Catalyst Partners Acquisition, we

essentially have Dr. Cash and Paul Sagan, as well as the rest of the SPAC’s executives, working for us.

POTENTIAL TARGETS



By combining with a company in an industry they are familiar with, they will be able to advise and guide the target through its next growth phase. These two can offer more than just money. That makes a partnership with them extremely valuable for whichever private company they partner with.

Catalyst Partners Acquisition raised $300 million during its IPO. And most likely, the SPAC will target an exciting private company in the fields of life sciences, synthetic biology, and diagnostics with a valuation between $1 billion and $3 billion.


Dynata: Dynata collects and analyzes data from a wide panel of clients across various industries. It then provides the tools for businesses to understand the data so that they can improve product flow, sales and other key metrics. Companies like Starbucks, Verizon, and Amazon use its platform to make sure their services are optimized for maximum sales and consumer satisfaction.

The company recently raised $67 million in


March, which was twice as much as it raised the year before. That tells me the firm may need cash and could aim to tap the public markets. Its last known valuation was $3 billion, putting it in our target range. General Catalyst believes “data is at the heart of business innovation.” General Catalyst could help bring Dynata’s data platform to the next level.

SentinelOne: SentinelOne is a cybersecurity company protecting devices and servers against malware and threats. The company uses AI to detect threats on any device in a given network and eliminate said threats with a fully automated response. And the AI will even adapt its defenses automatically against advanced cyberattacks.

As the future of work is changing, and more employees choose to work from home (WFH), end-to-end protection of the kind SentinelOne provides will become extremely important to protect company networks and employees’ computers.

The company raised $267 million in a Series F round in November 2020 at a $3 billion valuation. And it raised $200 million in a Series E round in February 2020.

That tells me the company is in growth mode and burning through cash. And going public would be a great way to raise more capital to make sure it can fund its expansion. General Catalyst is focused on both WFH and cybersecurity companies.

Ironclad: Ironclad has developed a digital platform to automate the process of writing and approving contracts. Its platform automatically identifies key terms and entities. Then it allows its users to search, tag, and manage contracts more efficiently. This kind of platform will be useful for legal, sales, and operations teams – whether the teams are in an office or working remotely.

The company recently raised a Series D round in January 2021 at a $1 billion valuation. And then almost immediately after that, it raised

an undisclosed amount two months later. The company appears to be burning through cash as well. And this is the exact kind of enterprise software General Catalyst is interested in.


Catalyst Partners Acquisition has 24 months to affect a business combination.


We can think of this as a “money back deadline.” If the business combination doesn’t happen within a specific time frame, the initial $10 per unit raised in its IPO will be returned to investors, less a small amount for management fees. Catalyst Partners Acquisition has a “money back deadline” set for May 20, 2023.

In essence, we have two possible outcomes here. Either this SPAC finds a target company, or the vast majority of our investment capital is returned to us.


At the time of the merger with the private company, additional funds may be raised in an IPO-like offering. This is the IPO of the private company. And the name of Catalyst Partners Acquisition will be changed into the name of the private company it invested in. The ticker symbol will also change at that time. As the investment unfolds, we’ll be sure to provide regular updates to keep all informed of the developments.

When the IPO of the private company occurs, each one of our shares in Catalyst Partners Acquisition will convert directly into the IPO shares of the newly formed company.


Within 52 days after the initial IPO of Catalyst Partners Acquisition, each unit of CPARU will split into stock and warrants. At that time, if we want, we can instruct our broker to split the units into the shares and the warrants. I will follow up with instructions when it is time for us to split our units.


Conservative investors can plan on buying units of CPARU, holding until the units split, and then selling the shares at or above the price that they acquired the units. Typically, investors can recover all of their original invested capital, and hold on to the warrants − which they have essentially paid nothing for − for the upside.

Speculative investors can plan on buying units of CPARU and holding them at least until the business combination is announced. By then, we’ll know which company will go public, and then each investor can decide how to trade both the shares and warrants of CPAR. And remember, we will always track both the shares and the warrants in our model portfolio.

While we can’t ever know exactly which company Catalyst Partners Acquisition will invest in, we can be sure that it will be an exciting, high-growth company. Almost certainly, the company will be targeting a leading enterprise software company.


Action to Take: Buy units of Catalyst Partners Acquisition under the ticker CPARU up to $10.25 a unit.

Finding This Investment: SPACs can occasionally trade under different ticker symbols depending on your broker. It may trade under the ticker symbols CPAR.U or CPAR/U. And remember, most brokerages have a “symbol lookup” feature that allows us to search for a ticker by typing in the company name.



And we should be sure to keep an eye out on the second Tuesday of every month. On that day, I will publish a thorough monthly update where we will review our entire Blank Check Speculator portfolio.

Regards,

Jeff Brown Editor, Blank Check Speculator

P.S. I hope all readers have had an enjoyable experience with Blank Check Speculator so far. I couldn’t be more excited about the opportunities I’m tracking for our portfolio. We have so much to look forward to.

And remember, if you’re enjoying Blank Check Speculator – or if you’d like to offer any feedback – you can always write to my team by clicking here.

https://members.brownstoneresearch.com/blank-check-speculator/portfolio/

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