KBL Merger Corp. IV (KBLM), filed a preliminary proxy this afternoon proposing to extend their current completion deadline of December 9, 2019 to April 9, 2020. KBLM announced they had signed a definitive agreement with CannBioRx, back on July 26, 2019, three months ago, but this new extension will give them an additional four months to close their combination.
As for the particulars, KBLM will be contributing $0.02 each month to the trust for shareholders that do not redeem at the extension vote, a slight reduction from the $0.0225 that KBLM previously offered to extend. Additionally, KBLM is requiring shareholders that wish to redeem MUST vote at this extension. That means any redeemers MUST be a shareholder of Record with the Record Date being November 8th.
So what does all this mean. For one, the fact that KBLM is requiring shareholders to vote typically indicates they are trying to reduce the amount of cash in trust. Meaning, they either have too much cash for the transaction to make sense or, they are trying to eliminate SPAC shareholders so they can replace them with an equity investor, a PIPE. However, whether that is done at a price substantially below trust value or at/near trust value remains to be seen. Either way, expect a significant number of redemptions at this vote due to the reduced contribution to trust and the required vote.
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