Ayurcann terminates SPAC deal, citing regulatory filing failures

Canadian cannabis manufacturer Ayurcann Holdings Corp. (CSE: AYUR) (OTCQB: AYURF) terminated its planned business combination with Arogo Capital Acquisition Corp. (NASDAQ: AOGO), a special purpose acquisition company, citing failures to meet key regulatory requirements.

The Ontario-based company sent Arogo a termination letter stating the SPAC failed to fulfill covenants related to stock exchange listing and public filings, according to a statement Thursday. Under the termination agreement, Arogo is required to pay Ayurcann a $250,000 fee, though Ayurcann noted it “disputes any payment demand from Arogo in connection with the termination.”

The deal’s collapse comes less than five months after the companies announced plans to combine in a transaction that valued the merged entity at approximately $210 million. The proposed merger also would have given Ayurcann access to up to $19.6 million in cash.

Ayurcann has worked to expand its presence in Canada’s cannabis market, focusing on extraction services and branded products. The company reported revenue of C$25.2 million for fiscal 2024, up 101% from C$12.5 million the previous year, according to filings. However, it posted a net loss of nearly C$4 million for the latest fiscal year.

The termination follows a pattern of challenged cannabis SPAC deals amid broader market volatility and sector-specific headwinds. Ayurcann’s working capital deficit grew to C$2.1 million as of June 30, versus C$706,437 a year earlier, filings show.

Ayurcann’s announcement comes just a day after Arogo initiated its own claim that the transaction had been terminated, demanding the same $250,000 fee that Ayurcann now seeks to collect.