FinServ II (FSRX) Inks Non-Redemption Agreement

FinServ Acquisition Corp. II (NASDAQ:FSRX) announced in an 8-K this afternoon that it has signed a non-redemption agreement with one or more unaffiliated third parties.

As part of the agreement, the parties have agreed to not redeem an aggregate of 400,000 shares of FSRX in connection with the SPAC’s upcoming meeting on February 20 to consider an extension. FinServ II currently has a completion deadline of February 22, but intends to extend it to August 22.

In exchange for not redeeming their shares, FinServ’s sponsor has agreed to transfer 100,000 shares to the third parties immediately following the completion of a business combination.

Additionally, the SPAC has agreed that the funds held in its trust, including any interest, will not be used to pay for any excise tax liabilities with respect to any future redemptions prior to or in connection with the extension or a liquidation. FinServ intends to do this in an effort to mitigate the current uncertainty surrounding the implementation of the Inflation Reduction Act of 2022.

As of February 22, the pro rata portion of the funds available in its trust for the redemption will be approximately $10.15.

This non-redemption agreement is not expected to increase the likelihood of the approval of FinServ’s extension proposal, but it is expected to increase the amount of funds that remain in its trust following the meeting.

The SPAC announced the pricing of its upsized $265 million IPO, but has not found a target to combine with just yet.  It hopes to combine with a fintech business valued between $500 million and $2 billion that is disrupting traditional services.