Figure’s plan to buy a mortgage bank via SPAC is dead


Figure Acquisition Corp. I, a blank check company affiliated with fintech Figure Technologies that planned to merge with a mortgage bank, will be delisted from the New York Stock Exchange. Figure’s plan to go public through a SPAC has been scrapped with the NYSE’s decision.

The NYSE notified Figure on December 19 that it is “determined to commence proceedings to delist the company’s warrants from the NYSE and that trading in the company’s warrants would be suspended immediately,” according to a 8-K filing by Figure on Monday. 

Trading price levels on the warrants were out of compliance with rules listed in the exchange’s manual, the filing said. December 30 will be the last day of operations at Figure Acquisition Corp., except for the purpose of winding up, according to Figure Technologies. Figure doesn’t intend to appeal the NYSE’s decision.

The impending delisting comes days after stockholders approved an amendment to its certificate of incorporation to allow Figure to wind up early by changing the date of which the firm must cease all operations if it fails to complete a “merger, capital stock exchange, asset acquisition stock acquisition, stock purchase reorganization or similar business combination, according to the company.

On December 16, stockholders agreed to redeem all of its outstanding Class A common stock, effective as of December 30, prior to the company’s contractual expiration date of February 23. All Class A stockholders who elected to have their shares redeemed in connection with the meeting will receive payment of the expected redemption price of about $10.05 on or about December 20, Figure said. 

“While receiving the votes to extend the SPAC, we made the decision to dissolve FACA,” Mike Cagney, chairman of the SPAC and chief executive of Figure Technologies wrote on LinkedIn last week following the stockholder meeting. 

“While we are disappointed, our decision reflects the state of the capital markets. We’ll continue to bring you wins on #blockchain in 2023. I’m hoping we can bring some life back to the #spac space, if not for just one deal,” he wrote. 

The combination of rising redemption rates — which point to how many investors are exchanging their shares for their money back – and sharp interest rate increases made it an unfavorable environment for SPAC, ultimately snuffing out Cagney’s plan to merge with a mortgage bank via Figure next year.

Earlier this month, the company signed a non-binding letter of intent with the privately held $3-5 billion asset holding company that has a nationwide residential mortgage lending and servicing operations. Cagney was also seeking stockholder approval of a six-month extension to complete its initial business combination by August 23, 2023 at the time of the announcement.

The proposed transaction provides a “unique value creation opportunity” and will start exploring how to leverage Figure’s digital asset registration technologies in the bank’s warehouse business, the firm said in a prepared statement.

Figure also unsuccessfully sought to merge with New Jersey-based Homebridge Financial Services. The companies canceled the merger in June after not receiving regulatory approval.

At press time, Figure didn’t respond to requests for comment about its future plans to bring blockchain technology to a financial institution. 



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