Redwoods Acquisition Corp. announced that it has entered into a purchase agreement with Redwoods Capital LLC for a private placement of 477,500 units at an issue price of $10 per unit for gross proceeds of $4,775,000 on March 9, 2022. Each unit consists of one share of common stock, par value $0.0001, one redeemable warrant and one right to receive one-tenth of a share of common stock upon the consummation of an initial business combination.

The warrants will entitle the holder to purchase one Class A ordinary share at an exercise price of $11.50 per share, exercisable from the later of the date that is 30 days after the first date on which the company completes a business combination, and the date that is 12 months from the date of the closing of the transaction. The underwriters have been granted an over-allotment option to issue up to 530,000 units at a price of $10 per warrants for gross proceeds of $5,300,000 in the transaction. The securities are subject to a lock-up period of 1 year after the completion of its initial business combination.

The warrants are non redeemable in nature. Once the warrants became exercisable, in whole or part in nature it can be redeemed at a price of $0.01 per warrant upon a minimum of 30 days' prior written notice of redemption, and only if, the closing price of Class A common stock equals or exceeds $16.50 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders. The transaction is expected to close along with the IPO.