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Digital Asset SPAC pushes merger vote to Aug. 14 amid banking capital gaps
The deal, which needs at least $50 million in closing cash after redemptions and PIPE funding, was not set to automatically reopen redemptions after the vote was postponed.
Digital Asset Acquisition Corp., the SPAC seeking to merge with the parent of regulated bank Old Glory Bank, postponed its shareholder vote on the transaction to 10 a.m. Eastern Time on Aug. 14, moving it from July 31. The prior meeting date was two days after the stated July 29 redemption deadline, and the SPAC said it would continue soliciting proxies but gave no reason for the delay, according to CryptoSlate.
The postponement did not automatically reopen redemptions. Under the final prospectus, investors could withdraw a redemption request through the deadline, and afterward only with the company's consent before closing. The filing also does not indicate whether any post-deadline withdrawals have been approved.
CryptoSlate reported that Old Glory Bank fell below two capital thresholds going into the vote window, including having a Tier 1 leverage ratio below the ordinary 4% adequately capitalized level as of June 29. Separate regulator requirements include a Federal Deposit Insurance Corp. consent order and Oklahoma State Banking Department action that sets a 14% Tier 1 leverage ratio while it remains in effect, with additional restrictions under prompt-corrective-action rules for growth, capital distributions, acquisitions, branches, and new business lines.
The merger agreement includes a closing condition tied to aggregate cash of at least $50 million, calculated from trust cash remaining after redemptions, PIPE proceeds actually received, and proceeds to be received from other transaction financing. The parent company said closing depends on other parties and market conditions and is not assured, and its consolidated disclosures say its capital is not expected to cover operating losses and minimum regulatory capital needs over the next 12 months, creating substantial doubt about going concern status.