Insight Acquisition in a regulatory filing disclosed that during the preparation of is 2023 annual report the board learned that former CFO Jeff Gary withdrew $2,497,248.57 from the SPAC’s trust for the payment of taxes. Gary caused the company to make payments of $1,447,889.17 of the trust withdrawal, for income taxes and Delaware franchise taxes. The board learned further that Gary used the remaining $1,049,359.40 to pay for other business expenses.
The transactions were recorded on the books and no money was used for any payments other than for the company’s tax liabilities or Company business-related expenses. The $1,049,359.40 that was withdrawn for tax purposes but used to pay business expenses was paid back in-full to the trust by the sponsor on March 15, 2024 and the sponsor later wired an additional $36,285.07 into the trust to reimburse the acount for interest that would have accrued on the funds that were erroneously withdrawn.
According to the filing, on July 20, 2023, Gary effected the transfer of $480,000 from the company’s operating account to the sponsor and the following month transferred an additional $411,000 from the operating account to the sponsor. Gary informed the board that the money was being used by the sponsor to pay for certain company expenses. The board directed Gary to have the sponsor return the funds to the SPAC. The sponsor transferred $891,000 to the company between Oct. 10 and Nov. 2, 2023.
On April 21, at the request of the board, Gary verbally tendered his resignation as a director.
As a result of Gary’s conduct, he was removed as CEO and CFO, demoted to an assistant finance manager who will report to the CEO and new CFO.
Insight has a merger agreement with Alpha Modus, a technology company with a core focus on artificial intelligence in retail. The deal calls for Alpha Modus shareholders to receive $110 million in stock. A shareholder vote on the merger has not yet been scheduled. Read more.
