Friday evening filings are always the most interesting…
Pensare Aquisition Corp. (WRLS) announced this afternoon that the Company’s sponsor will reduce its contributions to the trust account so that the total monthly payment will be no greater than $200,000. To be clear, Pensare still intends to pay $0.033 per Public Share that is not redeemed to the Trust, but they are capping that amount at a maximum of $200,000 per month. So, if more than 6,060,606 Public Shares remain outstanding after redemptions, then the amount paid per share will be reduced proportionately.
As with most changes to terms, and especially when it’s related to an extension vote, there is usually a deliberate reason behind that change. Whether the SPAC chooses to tell you their reasons almost never happens and we are forced to speculate. Which is why it’s so refreshing to see Pensare be so forthright. To wit, Pensare also disclosed in their press release that, “The Company is currently in active discussions with a target company regarding a potential business combination that is anticipated to require an amount of funding less than the current balance of the Trust Account to consummate the business combination.“
Accordingly, Pensare took a page out of Gig1’s playbook and capped the contribution amount. However, the reasons why they are doing that is because they’re in the unfortunate position of having way too much money for their intended acquisition to make sense. This is why it’s always better to go smaller with a SPAC. You can always raise more money at combination if you need it, but you can’t give money back. Or at least you can by forcing redemptions, but that’s not the way you want to do it.
However, the candor is appreciated. It’s not the most ideal situation, but at least Pensare is including investors in their process.
Stay tuned for any further updates.