Yesterday, Gordon Pointe Acquisition Corp. (GPAQ), released additional documentation regarding their transaction with HOF Village, Inc., but there was a section in the 8-K that had everyone scratching their heads. Specifically, the wording around the warrants and what happens if a shareholder elects to redeem. At first blush, it looked like GPAQ was saying that if a shareholder elects to redeem their share, their warrants would be cancelled. Obviously, that would be SPAC suicide. However, this is the language found in the 8-K, item 1.01:
“(c) each issued and outstanding GPAQ warrant (including GPAQ private placement warrants but excluding any warrants held by a GPAQ stockholder that elects to have its shares redeemed pursuant to GPAQ’s organizational documents) shall be automatically converted into one Holdings warrant, following which all GPAQ warrants shall cease to be outstanding and shall automatically be canceled and retired and shall cease to exist;”
Mostly, after reading it yesterday, I figured it was a mistake or just poorly worded. Especially because it didn’t make much sense. What if you never owned the share and happened to buy warrants in the open market? Then what? The language didn’t seem to account for those scenarios. Plus, there is nothing in the prospectus that says GPAQ can do something like this (I checked), so even if GPAQ could deny redeemers their warrants, there would be such an uproar, that they would have had to change it back anyway or risk having their deal voted down. As a result, it just seemed like someone flubbed the wording.
However, in the spirit of due diligence, I followed up with the powers that be (the bankers) and can confirm that this was in fact just a poorly worded “turn of phrase” and it is NOT Gordon Pointe’s intention to cancel the warrants for shareholders who redeem. It will be the standard redemption and vote and presumably, the language will be fixed or at least clarified.
So, in summary, you can ignore that section. Nothing to see here.