FORUM MERGER II CORP. (FMCI)

Forum Merger II Corp. (FMCI), which previously filed a preliminary extension proxy on January 17th, without a contribution to trust for non-redeemers, filed their definitive proxy tonight, but this time with a $0.033 per month contribution.

By way of background, FMCI initially filed asking for an additional four more months so that their expiration deadline could be moved from February 7, 2020 to June 10, 2020.  However, the preliminary filing was absent a contribution to trust for non-redeeming shareholders. In fact, there weren’t even place holders for a contribution.

However, in today’s definitive proxy for their February 7th extension vote, they have stated they will now be contributing a very attractive $0.033 per share for each month.  That’s $0.132 total if they need to use all four months.  Which, since they haven’t announced a combination yet, is highly likely.

Keep in mind that most SPACs need roughly four months from deal announcement to closing of a transaction, so we’re all now on FMCI “Announcement Watch”.  However, this reversal of contribution is a little curious.  Plus, it’s an expensive contribution at $660,000 (if no one redeems) for each $0.033 month, or $2.64 million for all four months.  They probably could have gotten away with $0.03 per month, so they seem very motivated to protect their trust value. And when cash becomes important, it’s usually because a target requires it or they’re deep in negotiations and a reduced trust value would change FMCI’s posture.  FMCI may not have a deal on lock yet, but it’s starting to smell like something interesting is cooking.

Or….FMCI’s got nothin’ and they’re just trying to hang on to their cash.  My gut says something is up, but as always, we’ll just have to wait and see.