Insight Acquisition said it identified and corrected accounting errors stemming from $2.7 million in withdrawals from its trust account since the completion of its IPO in September 2021through Dec. 31, 2023.
The SPAC said it used the funds to pay income and Delaware franchise taxes. Through Dec. 31, 2023, the company paid $1,653,743 to the tax authorities, which resulted in remaining excess funds withdrawn from the trust totalling $1,049,359. Additionally, the withdrawn trust funds were held in the company’s operating account that also holds funds deposited by the sponsor to be used for general operating expenses. Management determined that this use of the withdrawn trust funds was not in accordance with the trust agreement.
During the period in which the over withdrawals occurred, the SPAC held a meeting in September 2023 at which stockholders voted to extend the termination deadline to June 7. Insight Acquisition said t has since determined that $628,758 of the over-withdrawn amount is due to shareholders who redeemed stock ahead of the extension vote. \
The company determined these errors were material to the Form 10-Q for the three and nine months ended Sept. 30, 2023.
Meanwhile, the SPAC has filed a proxy for shareholders to consider another extension as the company continues work on a $110 million merger agreement with Alpha Modus, a technology company with a core focus on artificial intelligence in retail.
Terms also include a potential $22 million earn out for Alpha Modus stockholders and a $7.5 million earn out for Insight’s sponsor, both payable through the issuance of the combined company’s common stock at $10 per share and based on the achievement of price targets.
The deal is not subject to a minimum cash closing condition.
Alpha Modus offers technology as a service. Its core technologies have been deployed on IBM’s Bluemix platform and earned a Beacon Award by IBM 2016 for Best New Application on IBM Cloud from an Entrepreneur. Alpha Modus has been recognized by IBM Watson as a thought leader in technology. Read more.
