M3-Brigade Kills ReserveOne Deal Days Before Shareholder Vote
Turnaround
Company Background
M3-Brigade Acquisition V Corp. (Nasdaq: MBAV) is a special purpose acquisition company sponsored by MI7 Sponsor, LLC, an affiliate of CC Capital. It raised approximately $297.7 million in its August 2024 initial public offering, with funds held in trust and approximately $306.88 million on deposit as of December 31, 2025. The SPAC has an approximate market capitalization of $350.4 million.
In July 2025, the company announced a business combination with ReserveOne, Inc., a newly formed digital asset management firm affiliated with the same CC Capital sponsor group, which planned to build a diversified cryptocurrency portfolio mirroring the proposed U.S. Strategic Bitcoin Reserve. The transaction was framed as a more-than-$1 billion deal, combining trust proceeds with $500 million in equity PIPE commitments and $250 million in convertible note subscriptions from a roster of institutional crypto investors including Galaxy Digital, Pantera Capital, and Kraken.
Over the following months, the company drew at least $1.1 million in working capital loans from the sponsor — $500,000 under a $2.5 million promissory note issued in June 2025 and $600,000 under a separate $2 million promissory note issued in February 2026, both non-interest bearing and payable only upon a completed business combination. The S-4 registration statement was declared effective by the SEC on May 13, 2026, and the definitive proxy was mailed to shareholders on May 21, 2026.
What Was Disclosed
M3-Brigade and ReserveOne mutually terminated the Business Combination Agreement on June 12, 2026, citing market conditions in the digital asset sector that had "changed significantly" since the deal was announced. By operation of the termination, the Equity PIPE Subscription Agreements, Convertible Notes Subscription Agreements, and the Sponsor Support Agreement all terminated according to their terms. Simultaneously, ReserveOne, Pubco, and the company withdrew the S-4 registration statement (Registration No. 333-279951) that had been declared effective only 30 days earlier. The board cancelled the extraordinary general meeting that had been scheduled, after a postponement, for June 18, 2026.
On the same date, the company entered into a set of replacement agreements. Under Securities Purchase Agreements, the sponsor agreed to convert 4,279,279 of its Class B founder shares into Class A shares and sell them to outside investors at $3.33 per share, generating $14,250,000 in gross proceeds for the sponsor. Each investor placed its purchase price into escrow pending the closing, which must occur by August 2, 2026, or investors may terminate and reclaim their escrowed funds. A portion of those proceeds is expected to be loaned back to the company — up to $4,000,000 — specifically to pay accrued expenses due and payable at closing, defined in the agreements as "Covered Expenses."
Separately, the company entered into Voting Support and Non-Redemption Agreements with certain investors holding up to an aggregate of 16,000,000 Class A shares, who committed not to redeem those shares in connection with the extension vote. In exchange, the sponsor agreed to transfer up to 8,000,000 of its private placement warrants to those shareholders. Additional Voting Support Agreements were signed with unaffiliated third parties who agreed only to vote in favor of the amendment proposals. The company also proposes, at a forthcoming shareholder meeting, to extend its business combination deadline by one year to August 2, 2027, withdraw $0.10 per non-redeemed Class A share from the trust account for expenses, rename the company to Velos Acquisition I Corp., and remove the fairness opinion requirement from its articles of association.
Why It Matters
The termination wipes out 11 months of disclosed deal work, including a confidentially submitted and then publicly effective S-4, two rounds of sponsor working capital loans, and $750 million in PIPE commitments that had been secured from prominent institutional investors. ReserveOne had no operating history; its business plan was entirely dependent on funding from the proposed transaction. With the deal gone, so is that investment thesis entirely.
The replacement structure concentrates scrutiny on the sponsor's economics. The founder shares being sold were originally acquired at nominal cost; at $3.33 per share, the sponsor is monetizing its promote ahead of any business combination at a price well below the approximately $10.77 per-share trust value implied by the December 31, 2025 trust balance. That same pool of cash is what the non-redemption shareholders are being paid — in warrants — to keep in trust. The company needs those commitments: without them, sufficient redemptions could drain the trust below whatever minimum a future target might require, or trigger delisting concerns.
The August 2, 2026 deadline is operative on two fronts. If the Securities Purchase Agreement transactions do not close by that date, investors can walk away and retrieve their escrowed funds. That date is also the company's existing business combination deadline, meaning the extension vote must succeed before then or the company faces liquidation. Management will need to file a new proxy, solicit shareholders, and close the replacement transactions — all within roughly seven weeks of the June 12 announcement.
