Bannix Acquisition today announced that it is further clarifying its and Instant Fame’s intent with respect to the excise tax liabilities associated with any redemptions. To mitigate the current uncertainty surrounding the implementation of the Inflation Reduction Act of 2022, in the event that the SPAC’s deadline extension is approved, the sponsor will indemnify the company against any excise tax liabilities involving redemptions.
As such, the SPAC will not withdraw any amounts from the trust, including interest earned, to pay for the excise tax.
Bannix Acquisition’s original sponsor sold its stake to Instant Fame last fall. The company’s board said it is working to put a proposed business combination before a shareholder vote within the next nine months and to present a potential deal within the next three months.
Nevada-based Instant Fame in October acquired 385,000 shares of common stock of Bannix from the SPAC’s sponsor, Balaji Venugopal Bhat, Nicholos Hellyer, Subbanarasimhaiah Arun, Vishant Vora and Suresh Yezhuvath, as well as 90,000 private placement units from Suresh Yezhuvath in a private transaction.
The sellers immediately loaned the entire proceeds to the SPAC for working capital. This loan will be forfeited by the sellers upon liquidation or a business combination, according to a regulatory filing.
Bannix raised $60 million in a Sepotember 2021 IPO. Read more.
