Morning Roundup: January 4, 2024

At the SPAC of Dawn

The implication that SPACs would have to pay the 1% excise tax on redemptions has sent ripples of uncertainty through the market, but, despite much investor engagement throughout 2023, the issue did not appear to be a primary factor in the fall of any vehicles that year.

Now, in 2024, it has come up as a cause for significant disruption at one.

Western Acquisition Ventures (NASDAQ:WAVS) announced in an 8-K yesterday that its CEO and CFO would resign along with the entirety of its Board in a move “precipitated by the potential excise tax payable under the Inflation Reduction Act and their potential liability if the Company were unable to pay it at the time the tax is due”.

The SPAC has appointed a James McCormick as its new CEO, CFO, Treasurer and Secretary, so, the show may go on. But, the transition comes at an awkward time for Western Acquisition.

It has a combination in hand with cybersecurity firm Cycurion that has been pending since November 2022 and it is now running up on its January 14 transaction deadline. Western Acquisition’s trust has already been reduced -97% to 305,410 shares in earlier extension votes and its shareholders are to vote on a second extension at a special meeting January 9.

Although the SPAC made contributions to trust for its earlier extensions, it now says it ” is not in a position to provide any further extension payments and, accordingly, as with the second extension, it is proposed that only a nominal payment of $100 will be paid in connection with the proposed extension”.

Deals and Funding

• Roth CH Acquisition V Co. (NASDAQ:ROCL) has entered into a definitive agreement to combine with startup miner New Era Helium ta a pre-money valuation of $90 million.
• Pono Capital Three (NASDAQ:PTHR) has added a $2 million PIPE  to its combination with Horizon Aircraft at $10 per share. This PIPE investor is to receive 330,000 additional incentive shares and have 470,000 such shares to distribute to its designees.
  

News and Rumors

• Business Standard: Car sharing platform Zoomcar (NASDAQ:ZCAR) is on track to turn profitable for the full year in 2024, said the company’s co-founder and CEO following its public listing last week after merging with Innovative International Acquisition Corp.
• PR: SpaceX announced this week that it would begin testing its Starlink satellites for use in the T-Mobile cell network, laying down the gauntlet in the direct-t0-cell space with competitors Lynk, which announced an LOI with Slam last month and New Providence‘s 2021 de-SPAC AST SpaceMobile (NASDAQ:ASTS), which is currently on the hunt for new funding.