FG Merger II Corp. (NASDAQ: FGMC), a special purpose acquisition company (SPAC), reported that roughly 6.6 million shares were tendered for redemption ahead of a June 9 special meeting to vote on its proposed business combination with BOXABL, a company that manufactures modular housing. According to the company, approximately $68.8 million is expected to be removed from FGMC's trust account as a result of the redemptions, leaving about $14 million remaining and approximately 1.4 million public shares outstanding.
The upcoming vote will determine whether the SPAC will proceed with its merger with BOXABL, a firm founded in 2017 that aims to disrupt the housing market with its foldable, modular building systems. If approved by stockholders and all remaining closing conditions are satisfied, the combined company is expected to be renamed BOXABL Inc. and begin trading on Nasdaq under the ticker BXBL. Stockholders who do not redeem their shares, or who withdraw redemption requests before closing, are expected to become shareholders of BOXABL upon completion of the transaction.
BOXABL's flagship product, the Casita, is a 361 square foot studio unit that includes a full kitchen, bathroom, and utilities. The company says the unit can be unfolded on-site in less than an hour and is manufactured inside BOXABL's facilities. Additionally, BOXABL has announced the Baby Box, a smaller 120 square foot unit built to RV code, intended for simpler, no-foundation setups. The company is also developing stackable and connectable box models that can be combined to form townhomes, multifamily units, or larger single-family homes.
The high redemption rate—over 82% of public shares—reflects typical SPAC dynamics where investors often redeem their shares ahead of a merger, particularly when the trust value per share is above the current trading price. For FGMC, the trust account had approximately $10.00 per share prior to redemptions, but the stock has traded below that level, making redemption an attractive option for arbitrageurs. The remaining $14 million in trust will be available to fund the combined company's operations, though it is a relatively small amount for a venture aiming to scale manufacturing.
Despite the redemptions, the merger's approval is not necessarily in jeopardy. SPAC mergers require a majority of votes cast, and the remaining shareholders, including the sponsor, may still provide sufficient support. However, the reduced cash in trust could impact BOXABL's growth plans, as the company will have less capital to deploy for production expansion. BOXABL's innovative approach has attracted worldwide attention, but the company faces significant challenges in scaling its manufacturing and sales to meet demand.
For leaders in business and technology, this news underscores the volatility and risk inherent in SPAC transactions, especially for early-stage companies in capital-intensive industries like housing. The outcome of the merger vote will determine whether BOXABL gains public market access and the capital needed to execute its vision of affordable, rapidly deployable housing. Investors and industry watchers will be closely monitoring the results, as they could signal the viability of modular construction as a solution to housing shortages.
