DEF 14A: Maquia Capital Acquisition Corporation Faces Delisting Notice Amidst Business Combination Uncertainty

Maquia Capital Acquisition Corporation's annual meeting will address director elections and auditor ratification as the company navigates a delisting notice and business combination challenges.

Summary

• Maquia Capital Acquisition Corporation will hold its annual meeting of stockholders on May 20, 2024, to elect two directors and ratify the appointment of Marcum, LLP as the independent registered public accounting firm for the year ending December 31, 2023.
• The company is a blank check company that consummated its IPO on May 7, 2021, raising approximately $160 million.
• As of December 31, 2023, the amount in the Trust Account was $11.63 per public share.
• The company has until August 7, 2024, to complete a business combination.
• Maquia received a delisting notification from NASDAQ for failing to complete a business combination within 36 months of its IPO registration statement.
• The company intends to appeal the delisting ruling.
• The Board unanimously recommends voting for the election of director nominees and the ratification of Marcum, LLP.
• As of May 2, 2024, there were 3,709,774 shares of Class A common stock and 2,371,813 shares of Class B common stock outstanding and entitled to vote.
• The Sponsor and officers and directors own approximately 78.4% of the issued and outstanding shares.
• The company experienced internal control weaknesses related to tax payments from the trust account, which have been addressed by the Sponsor replenishing the funds.
• The company's sponsor has agreed to transfer to such Third Parties 2.5% per month of the Non-Redeemed Shares up to a maximum of 6 months (depending upon the month the initial business combination is consummated), of the Company's Class A common stock held by such Third Parties, immediately following the consummation of an initial business combination, if the Third Parties continue to hold such Non-Redeemed Shares through the Special Meeting.

Sentiment

Score: 4

Explanation: The sentiment is neutral to slightly negative due to the delisting notice, internal control issues, and the uncertainty surrounding the business combination. The sponsor's actions to replenish the trust account provide some positive offset.

Positives

• The Board is actively seeking to complete a business combination before the deadline.
• The Sponsor has replenished funds to the trust account to correct internal control deficiencies.
• The company is appealing the NASDAQ delisting notice.
• The company has engaged Advantage Proxy to assist in the solicitation of proxies for the Meeting.

Negatives

• The company received a delisting notification from NASDAQ.
• The company failed to hold an annual meeting of stockholders within the required twelve-month period from the end of Nasdaqs fiscal year.
• The company experienced internal control weaknesses related to tax payments from the trust account.
• The company's business combination agreement with Immersed did not close by the extended date of May 7, 2024.

Risks

• Failure to complete a business combination by August 7, 2024, will result in liquidation.
• The NASDAQ delisting could negatively impact the company's ability to complete a business combination and reduce liquidity for its securities.
• The company may face significant material adverse consequences, including a limited availability of market quotations for Maquias securities.
• The company may face a determination that the Maquia Class A Common Stock is a penny stock which will require brokers trading in Maquia Class A Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for Maquias securities.
• The company may face a limited amount of news and analyst coverage.
• The company may face a decreased ability to issue additional securities or obtain additional financing in the future.

Future Outlook

The company is focused on completing a business combination by August 7, 2024, and intends to appeal the NASDAQ delisting notice.

Management Comments

• The Board unanimously recommends voting for the election of director nominees and the ratification of Marcum as the Companys independent registered public accounting firm.
• Our Board believes that the stability and continuity on our Board is important as we continue to complete an initial business combination.

Industry Context

As a SPAC, Maquia Capital Acquisition Corporation is under pressure to identify and merge with a target company within a specific timeframe, a common challenge in the SPAC industry. The SEC's increased scrutiny of SPAC transactions and accounting practices adds complexity.

Comparison to Industry Standards

• The challenges faced by Maquia Capital Acquisition Corporation, such as the delisting notice and the need to secure a business combination within a limited timeframe, are common among SPACs.
• The internal control weaknesses identified are concerning, as maintaining robust financial controls is a fundamental requirement for publicly listed companies.
• The company's efforts to address these weaknesses and the Sponsor's willingness to replenish the trust account are positive steps, but the company's future depends on its ability to complete a business combination and maintain compliance with listing requirements.

Related Party Transactions

• The Sponsor purchased an aggregate of 583,743 placement units at a price of $10.00 per unit for an aggregate purchase price of $5,837,430.
• The company borrowed $177,111 under this promissory note, which was repaid in full.
• The Extension Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which our initial business combination is consummated and (ii) our liquidation.

Stakeholder Impact

• Shareholders face the risk of liquidation if a business combination is not completed.
• Employees may experience uncertainty due to the company's uncertain future.
• The company's ability to attract a target business may be affected by the delisting notice.

Next Steps

• Appeal the NASDAQ delisting notice.
• Continue efforts to identify and complete a business combination by August 7, 2024.
• Implement and maintain improved internal controls.
• Recovery efforts from the Redeeming Stockholders through CST.

Key Dates

Keywords

business combination, proxy statement, annual meeting, delisting, NASDAQ, directors, auditor, SPAC, Maquia Capital, Marcum LLP