The status of a blank-check merger deal between two Houston-area companies is up in the air after the Nasdaq markets said the deal was not compliant with market rules.
Infrared Camera Holdings, a SPAC formerly known as SportsMap Acquisition Tech Corp. (Nasdaq: SMAP), filed an 8-K acknowledging the notice on Dec. 21. The form was filed just days after SportsMap completed its previously announced merger with Beaumont-based MSAI Operating Inc., formerly known as Legacy ICI and Infrared Camera Holdings.
The combined company began trading on Nasdaq on Dec. 20 under the ticker MSAI, according to the filing.
According to the 8-K, the company received a notice from Nasdaq stating that its Nasdaq listing application was not approved prior to the merger closing. The written notice came from the Listings Qualifications Department of Nasdaq and it determined that MSAI was noncompliant with market regulations requiring a minimum of 1.1 million “unrestricted publicly held shares” and a minimum of 400 round lot holders — or shareholders that own 100 or more unrestricted securities.
After markets opened on Dec. 21, MSAI was trading at $12.36 at 9 a.m. Central Standard Time, a significant jump from its price at market closing the previous day, which was $2.62 according to Nasdaq.
In the 8-K, the SPAC confirmed it plans to appeal Nasdaq’s decision to a hearing panel. The Houston Business Journal reached out to Gow for further comment but did not receive a response before press time.
The merger was announced in December 2022, a year after SportsMap went public with an eye on combining with a company in one of four target areas: new methods of fan engagement; health and wellness through wearables and other data analytics; esports, the realm of professional, competitive video games; and fantasy sports and gambling technology.
SportsMap’s board includes former Houston Astros President Reid Ryan, now CEO of Ryan Sanders Baseball, and the Houston Dynamo’s first general manager, Oliver Luck, who has held several other sports leadership roles over the years. Gow's own sports and media background includes serving as chairman of Gow Media, which owns ESPN Radio Houston, SportsMap Radio Network, CultureMap and several other digital content sites.
Legacy ICI is based in Beaumont and was founded in 1995. The company produces produces thermal imaging platforms intended for industrial-sector uses such as methane-leak detention and conveyer belt monitoring in warehouses. The software is intended to reduce unplanned downtime by predicting maintenance needs for industrial equipment.
Following record highs in SPAC activity around the country, 2023 has seen a downturn for blank-check companies, with many facing bankruptcy after failing to find deals after their IPOs. Recently in Houston, Next Renewable Fuels is searching for new financing avenues for its planned biofuels projects after the collapse of an anticipated merger with the SPAC Industrial Tech Acquisitions II. Earlier in 2023, Houston-based ESM Acquisition Corp. dissolved after failing to reach a business deal within two years of its formation.
There have been some local successes in blank-check deals this year, however. Houston-based space company Intuitive Machines (Nasdaq: LUNR), one of three anchor tenants at the Houston Spaceport, completed its merger deal to go public in February 2023. The company is planning to be one of the first private businesses to land a spacecraft on the moon in 2024.
In December, Nabors Energy Transition Corp., a SPAC associated with the drilling giant Nabors Industries Ltd., completed a deal that took the Australian renewables company Vast Renewables Ltd. public with the ticker VSTE on Nasdaq.
