Armada Acquisition Corp. I (AACI) Postpones Extension Vote, Clarifies Excise Tax Change
by Nicholas Alan Clayton on 2023-01-19 at 9:06am

Armada I (NASDAQ:AACI) announced this morning that it has postponed its extension vote from 1 pm ET January 20 to the same time January 30, while noting that a recent proposed accounting change would not affect its redemption rate.

The SPAC caused a stir this week when it filed a supplement to its extension proxy stating that it intended to seek the ability to remove earned interest from the trust account to pay for any excise tax due to redemptions. There continues to be some uncertainty as to whether SPACs will be forced to pay the Inflation Reduction Act’s 1% excise tax on share buybacks for shares redeemed outside of a total liquidation.

Armada may have thought it was getting out ahead of this by stating in the proxy that this 1% would come from earned interest in its trust. But, coming so soon on the eve of a vote, investors are sure to have preferred the tax was not paid from the trust.

It has now clarified that it “will not adjust the estimated redemption price per share for the Company’s estimated tax liabilities relating to the interpretation and operation of the Inflation Reduction Act of 2022.” As such, its redemption price is to remain $10.17 per share for now.

Armada I still has time to make further clarifications or revisions if need be as its transaction deadline is not until February 17. But, it is also likely eager to get on with it as it works to close its combination with adtech firm Rezolve, which is now the 7th-oldest pending deal in circulation having been announced in December 2021.

 

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