Delaware | | | 6770 | | | 85-1960216 |
(State or other jurisdiction of incorporation or organization) | | | (Primary Standard Industrial Classification Code Number) | | | (I.R.S. Employer Identification Number) |
Copies to: | |||
Raphael M. Russo, Esq. Brian M. Janson, Esq. Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019 (212) 373-3000 | | | Christian O. Nagler, Esq. Kirkland & Ellis LLP 601 Lexington Avenue New York, NY 10022 (212) 446-4800 |
Large accelerated filer | | | ☐ | | | Accelerated filer | | | ☐ |
Non-accelerated filer | | | ☒ | | | Smaller reporting company | | | ☒ |
| | | | Emerging growth company | | | ☒ |
Title of Each Class of Security Being Registered | | | Amount Being Registered | | | Proposed Maximum Offering Price per Security(1) | | | Proposed Maximum Aggregate Offering Price(1) | | | Amount of Registration Fee |
Units, each consisting of one share of Class A common stock, $0.0001 par value, and one half of one redeemable warrant(2) | | | 13,225,000 Units | | | $10.00 | | | $132,250,000 | | | $17,167 |
Shares of Class A common stock included as part of the units(3) | | | 13,225,000 Shares | | | — | | | — | | | —(4) |
Redeemable warrants included as part of the units(3) | | | 6,612,500 Warrants | | | — | | | — | | | — |
Total | | | | | | | $132,250,000 | | | $17,167(5) |
(1) | Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended, or the Securities Act. |
(2) | Includes 1,725,000 units, consisting of 1,725,000 shares of Class A common stock and 862,500 redeemable warrants, which may be issued upon exercise of a 45-day option granted to the underwriter to cover over-allotments, if any. |
(3) | Pursuant to Rule 416 under the Securities Act, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions. |
(4) | No fee pursuant to Rule 457(g) under the Securities Act. |
(5) | Previously paid. |
| | Per Unit | | | Total | |
Per Unit | | | $10.00 | | | $115,000,000 |
Underwriting Discounts and Commissions(1)(2) | | | $0.55 | | | $6,325,000 |
Proceeds, before expenses, to us | | | $9.45 | | | $108,675,000 |
(1) | Includes $0.35 per unit, or $4,025,000 (or up to $4,628,750 if the underwriter’s option to purchase additional units is exercised in full) in the aggregate, payable to the underwriter for deferred underwriting commissions to be placed in a trust account located in the United States as described herein. The deferred commissions will be released to the underwriter only on completion of an initial business combination, in an amount equal to $0.35 multiplied by the number of shares of Class A common stock sold as part of the units in this offering, as described in this prospectus. Does not include certain fees and expenses payable to the underwriter in connection with this offering. See also “Underwriting” for a description of compensation and other items of value payable to the underwriter. |
(2) | The underwriter will not receive any underwriting discounts or commissions on units purchased by Millais Limited, the indirect majority owner of our sponsor. |
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• | “we,” “us,” “company” or “our company” are to North Mountain Merger Corp., a Delaware corporation; |
• | “public shares” are to shares of our Class A common stock sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market), including the shares purchased by Millais Limited, the indirect majority owner of our sponsor; |
• | “warrants” are to our warrants sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market) and the private placement warrants; |
• | “permitted withdrawals” are to amounts withdrawn from interest earned on the trust account to fund our regulatory compliance costs and to pay our taxes; |
• | “public stockholders” are to the holders of our public shares, including our sponsor, officers, directors and their respective affiliates to the extent our sponsor, officers, directors or their respective affiliates purchase public shares, provided that each of their status as a “public stockholder” shall only exist with respect to such public shares; |
• | “management” or our “management team” are to our officers and directors; |
• | “directors” are to our current directors and director nominees; |
• | “sponsor” are to North Mountain LLC, a Delaware limited liability company; |
• | “initial stockholders” are to our sponsor and any other holders of our founder shares immediately prior to this offering; |
• | “advisory committee” are to an advisory committee formed for the purpose of assisting the board of directors and management with sourcing and evaluating business opportunities and devising plans and strategies to optimize any business that we acquire; |
• | “founder shares” are to shares of our Class B common stock and the shares of our Class A common stock issued upon the automatic conversion thereof at the time of our initial business combination as provided herein; |
• | “common stock” are to our Class A common stock and our Class B common stock; |
• | “private placement warrants” are to the warrants issued to our sponsor in a private placement simultaneously with the closing of this offering; |
• | “equity-linked securities” are to any debt or equity securities that are convertible, exercisable or exchangeable for shares of our Class A common stock issued in a financing transaction in connection with our initial business combination, including but not limited to a private placement of such securities; |
• | “amended and restated certificate of incorporation” are to our certificate of incorporation to be in effect upon the completion of this offering; |
• | “completion window” is the period following the completion of this offering at the end of which, if we have not completed our initial business combination, we will redeem 100% of the public shares, subject to applicable law and certain conditions and as further described herein. The completion window ends 24 months from the closing of this offering; |
• | “letter agreement” refers to the letter agreement, the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part; and |
• | “underwriter’s option to purchase additional units” are to the underwriter’s 45-day option to purchase up to an additional 1,725,000 units to cover over-allotments, if any. |
• | leverage the strategic and transactional experience, including direct SPAC specific experience, of our management team; |
• | utilize our strategic and transactional experience of our management team to bring advice and attention to potential business combination targets; |
• | deliver creative approaches to transaction sourcing; and |
• | utilize an understanding of global financial markets and events, financing, and overall corporate strategy options. |
• | operating companies, setting and changing strategies, and identifying, monitoring and recruiting world-class talent; |
• | developing and growing companies, both organically and through acquisitions and strategic transactions and expanding the product range and geographic footprint of a number of target businesses; |
• | sourcing, structuring, acquiring, integrating and selling businesses; |
• | accessing the capital markets, including financing businesses and helping companies transition to public ownership; |
• | fostering relationships with sellers, capital providers and target management teams; |
• | executing transactions in multiple geographies and under varying economic and financial market conditions; and |
• | consulting services for the management teams of companies that were acquired by SPACs. |
• | Proprietary Sourcing Channels and Leading Industry Relationships. We believe the capabilities and connections associated with our management team will provide us with a differentiated pipeline of merger opportunities that would be difficult for other participants in the market to replicate. We expect these sourcing capabilities will be further bolstered by our management team’s reputation and deep industry relationships. |
• | Investing Experience. We believe that our management’s track record of identifying and sourcing transactions positions us well to appropriately evaluate potential business combinations and select one that will be well received by the public markets. |
• | Execution and Structuring Capability. Our management team believes that the combined expertise and reputation of its members will allow it to source and complete transactions possessing structural attributes that create an attractive investment thesis. These types of transactions are typically complex and require creativity, industry knowledge and expertise, rigorous due diligence, and extensive negotiations and documentation. Our management team believes that by focusing on these types of transactions, it will be able to generate investment opportunities that have attractive risk/reward profiles based on their valuations and structural characteristics. |
• | Deep SPAC Market Experience. Our management team has deep experience with the SPAC acquisition process. Mr. Bernicker was the Chief Financial Officer of CardConnect, which merged with FinTech Acquisition Corp., a former SPAC, in July 2016. Mr. Bernicker acted as a consultant to Repay Holdings Corp (NASDAQ: RPAY) management team on their merger with Thunder Bridge Acquisition, Ltd. in July 2019. He also acted as a consultant to the International Money Express, Inc. (NASDAQ: IMXI) management team on their merger with FinTech Acquisition Corp. II in July 2018 and assisted other SPAC management teams as an advisor. He is also the Chief Executive Officer of South Mountain. |
• | Has a Defensible Market Position. We will seek to acquire a business that has a defensible position within a target market as a result of a differentiated technology, distribution capabilities, customer service or other competitive advantages. |
• | Has an Attractive Financial Profile. We will seek to acquire a business that has highly recurring revenues and operating leverage and has historically generated, or has the near-term potential to generate, strong and sustainable free cash flow. |
• | Would Benefit Uniquely from the Capabilities of our Management Team. We will seek to merge with a business where the collective capabilities of our management can be leveraged to tangibly improve the operations and market position of the target. |
• | Is Sourced Through our Proprietary Channels. We do not expect to participate in broadly marketed processes, but rather will aim to leverage our extensive network to source our business combination. |
• | Has a Committed and Capable Management Team. We will seek to acquire a business with a professional management team whose interests are aligned with those of our investors and complement the expertise of our management team. |
• | Has the Potential to Grow Through Further Acquisition Opportunities. We will seek to acquire a business that has the potential to grow organically and inorganically through additional acquisitions. |
Securities offered | | | 11,500,000 units (or 13,225,000 units if the underwriter’s option to purchase additional units is exercised in full), at $10.00 per unit, each unit consisting of: | |||
| | • | | | one share of Class A common stock; and | |
| | • | | | one half of one redeemable warrant to purchase one share of Class A common stock. | |
Nasdaq Ticker symbols | | | Units: “NMMCU” | |||
| | Class A Common Stock: “NMMC” | ||||
| | Warrants: “NMMCW” | ||||
Trading commencement and separation of Class A common stock and warrants | | | The units will begin trading promptly after the date of this prospectus. The Class A common stock and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus unless Citigroup Global Markets Inc. informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the shares of Class A common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of Class A common stock and warrants. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole warrant. | |||
Separate trading of the Class A common stock and warrants is prohibited until we have filed a Current Report on Form 8-K | | | In no event will the Class A common stock and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K which includes an audited balance sheet of our company reflecting our receipt of the gross proceeds at the closing of this offering. We will file the Current Report on Form 8-K promptly after the closing of this offering. If the underwriter’s option to purchase additional units is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriter’s option to purchase additional units. |
Units: | | | ||||
Number outstanding before this offering | | | None. | |||
Number outstanding after this offering | | | 11,500,000(1) | |||
Common stock: | | |||||
Number outstanding before this offering | | | 3,306,250(2)(4) | |||
Number outstanding after this offering | | | 14,375,000(1)(3)(4) | |||
Warrants: | | |||||
Number of private placement warrants to be sold in a private placement simultaneously with this offering | | | 3,800,000(1) | |||
Number of warrants to be outstanding after this offering and the private placement | | | 9,550,000(1) | |||
Exercisability | | | Each whole warrant offered in this offering is exercisable to purchase one share of our Class A common stock, subject to adjustment as provided herein, and only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. | |||
| | We structured each unit to contain one half of one warrant, with each whole warrant exercisable for one share of Class A common stock, as compared to units issued by some other similar blank check companies which contain whole warrants exercisable for one whole share, in order to reduce the dilutive effect of the warrants upon completion of our initial business combination as compared to units that each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive business combination partner for target businesses. |
(1) | Assumes no exercise of the underwriter’s option to purchase additional units and the forfeiture by our sponsor of 431,250 founder shares. |
(2) | Consists solely of founder shares and includes up to 431,250 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriter’s option to purchase additional units is exercised. |
(3) | Includes 11,500,000 public shares and 2,875,000 founder shares. |
(4) | Founder shares are classified as shares of Class B common stock, which shares will automatically convert into shares of Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment as described below adjacent to the caption “Founder shares conversion and anti-dilution rights.” |
Exercise price | | | $11.50 per share of Class A common stock, subject to adjustment as described herein. In addition, if we issue additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by our board of directors, and in the case of any such issuance to our initial stockholders or their respective affiliates, without taking into account any founder shares held by them, as applicable, prior to such issuance) (the “newly issued price”), the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the newly issued price. | |||
Exercise period | | | The warrants will become exercisable on the warrant exercise date (which is the later of 30 days after the completion of our initial business combination and 12 months from the closing of this offering), provided in each case that we have an effective registration statement under the Securities Act covering the issuance of the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement). | |||
| | We are not registering the shares of Class A common stock issuable upon exercise of the warrants at this time. However, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our reasonable best efforts to file with the SEC, and within 60 business days following our initial business combination to have declared effective, a registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of our initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our |
| | option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, and in the event we do not so elect, we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. | ||||
| | The warrants will expire at 5:00 p.m., New York City time, on the warrant expiration date, which is five years after the completion of our initial business combination, or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the trust account. | ||||
Redemption of warrants for cash | | | Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement warrants): | |||
| | • | | | in whole and not in part; | |
| | • | | | at a price of $0.01 per warrant; | |
| | • | | | upon a minimum of 30 days’ prior written notice of redemption, which we refer to as the 30-day redemption period; and | |
| | • | | | if, and only if, the closing price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders. | |
| | (collectively, the “redemption requirements for cash”). | ||||
| | We will not redeem the warrants for cash unless a registration statement under the Securities Act covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of common stock is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. | ||||
Cashless Exercise | | | If we call the warrants for redemption for cash as described above, our management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In determining whether to |
| | require all holders to exercise their warrants on a “cashless basis,” our management will consider, among other factors, our cash position, the number of warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of shares of Class A common stock issuable upon the exercise of our warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “fair market value” of our Class A common stock (defined above) over the exercise price of the warrants by (y) the fair market value. Please see “Description of Securities—Warrants—Public Stockholders’ Warrants” for additional information. | ||||
Election of directors; voting rights | | | Prior to the consummation of our initial business combination, only holders of our Class B common stock will have the right to vote on the election of directors. Holders of the Class A common stock will not be entitled to vote on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended if approved by a majority of at least 90% of our common stock voting at a stockholder meeting. With respect to any other matter submitted to a vote of our stockholders, including any vote in connection with our initial business combination, except as required by applicable law or stock exchange rule, holders of our Class A common stock and holders of our Class B common stock will vote together as a single class, with each share entitling the holder to one vote. | |||
Indication of Interest | | | Millais Limited, the indirect majority owner of our sponsor, has expressed an intent to purchase up to 1,150,000 units in this offering (or 1,322,500 units if the underwriter’s option to purchase additional units is exercised in full) at the public offering price. The underwriter will not receive any underwriting discount or commissions on these units and these units (and their constituent shares and warrants) will not be subject to the restrictions on transfer applicable to the founder shares and private placement warrants. | |||
Founder shares | | | On July 14, 2020, our sponsor purchased an aggregate of 3,306,250 founder shares for an aggregate purchase price of $25,000, or approximately $0.008 per share. The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares of common stock upon the completion of this offering. Prior to the initial investment in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible. The purchase price of the founder shares |
| | was determined by dividing the amount of cash contributed to us by the number of founder shares issued. If we increase or decrease the size of this offering, we will effect a stock dividend or a share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of this offering in such amount as to maintain the ownership of founder shares by our initial stockholders at 20% of our issued and outstanding shares of our common stock upon the consummation of this offering. | ||||
| | The founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriter’s option to purchase additional units is exercised. | ||||
| | The founder shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that: | ||||
| | • | | | only holders of the founder shares have the right to vote on the election of directors prior to the consummation of our initial business combination; | |
| | • | | | the founder shares are subject to certain transfer restrictions, as described in more detail below; | |
| | • | | | our initial stockholders, officers and directors have entered into letter agreements with us, pursuant to which they have agreed: (1) to waive their redemption rights with respect to any founder shares and public shares held by them, as applicable, in connection with the completion of our initial business combination; (2) to waive their redemption rights with respect to any founder shares and public shares held by them in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination within the completion window; and (3) to waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination within the completion window (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the completion window). If we submit our initial business combination to our public stockholders for a vote, our initial stockholders, officers and directors have agreed to vote any founder shares and any public shares held by them in |
| | | | favor of our initial business combination. As a result, in addition to our initial stockholders’ founder shares, we would need 4,312,501, or 37.5%, of the 11,500,000 public shares sold in this offering (other than securities to be purchased, directly or indirectly, by Millais Limited, the indirect majority owner of our sponsor) to be voted in favor of an initial business combination (assuming all issued and outstanding shares are voted and the underwriter’s option to purchase additional units is not exercised) in order to have such initial business combination approved; | ||
| | • | | | the founder shares are automatically convertible into shares of our Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described in more detail below; and | |
| | • | | | the holders of the founder shares are entitled to registration rights. | |
Transfer restrictions on founder shares | | | Our initial stockholders, officers and directors have agreed not to transfer, assign or sell any founder shares held by them until the earlier to occur of: (1) one year after the completion of our initial business combination; or (2) the date on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction after our initial business combination that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property (except as described herein under “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants”). Any permitted transferees would be subject to the same restrictions and other agreements of our sponsor with respect to any founder shares. We refer to such transfer restrictions throughout this prospectus as the lock-up. | |||
| | Notwithstanding the foregoing, if the closing price of our common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, the founder shares will be released from the lock-up. | ||||
Founder shares conversion and anti-dilution rights | | | The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in this offering and related to the closing of our initial business combination, the ratio at which shares of Class B common stock shall convert into |
| | shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the total number of all shares of common stock outstanding upon completion of this offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with our initial business combination (net of the number of shares of Class A common stock redeemed in connection with our initial business combination), excluding any shares or equity-linked securities issued, or to be issued, to any seller in our initial business combination and any private placement warrants issued upon the conversion of working capital loans made to us. | ||||
Private placement warrants | | | Our sponsor has subscribed to purchase warrants in a private placement. Each private placement warrant entitles the holder thereof to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. A portion of the purchase price of the private placement warrants will be added to the proceeds from this offering to be held in the trust account. If we do not complete our initial business combination within the completion window, the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares (subject to the requirements of applicable law) and the private placement warrants will expire worthless. The private placement warrants will not be redeemable by us so long as they are held by our sponsor or its permitted transferees (except as described below under “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants”). If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold as part of this offering. Our sponsor, as well as its permitted transferees, have the option to exercise the private placement warrants on a cashless basis. | |||
| | None of the private placement warrants will be redeemable by us so long as they are held by our sponsor or its permitted transferees. | ||||
Transfer restrictions on private placement warrants | | | The private placement warrants (including the Class A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination. |
Proceeds to be held in trust account | | | The rules of the Nasdaq provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. Of the net proceeds we will receive from this offering and the sale of the private placement warrants described in this prospectus, $115.0 million ($10.00 per unit), or $132.3 million ($10.00 per unit) if the underwriter’s option to purchase additional units is exercised in full, will be deposited into a segregated trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee and an aggregate of $1.5 million will be used to pay expenses in connection with the closing of this offering and for working capital following this offering. The proceeds to be placed in the trust account include $4,025,000 (or up to $4,628,750 if the underwriter’s option to purchase additional units is exercised in full) in deferred underwriting commissions. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds that meet certain conditions under Rule 2a-7 under the Investment Company Act and that invest only in direct U.S. government obligations (the “immediate investment strategy”). | |||
| | Except with respect to interest earned on the funds held in the trust account that may be released to us as described below, the funds held in the trust account will not be released from the trust account until the earliest of: (1) the completion of our initial business combination; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window, or (ii) with respect to any provisions relating to the rights of holders of our Class A common stock; and (3) the redemption of all of our public shares if we are unable to complete our initial business combination within the completion window, subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders. | ||||
Anticipated expenses and funding sources | | | Unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use, except permitted withdrawals. The funds in the trust account will be invested only pursuant to the immediate investment strategy. Based upon current interest rates, we expect the trust account to generate approximately $115,000 of interest annually (assuming an interest rate of 0.10% per year); however, we can provide no assurances regarding this amount. Unless and until we |
| | complete our initial business combination, we may pay our expenses only from such interest withdrawn from the trust account and: | ||||
| | • | | | the net proceeds of this offering and the sale of the private placement warrants not held in the trust account, which will initially be $0.8 million in working capital; and | |
| | • | | | loans or additional investments from our sponsor, members of our management team or any of their respective affiliates or other third parties, although they are under no obligation or other duty to loan funds to, or invest in, us, and provided that any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of our initial business combination. If we complete our initial business combination, we expect to repay such loaned amounts out of the proceeds of the trust account released to us. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of all loans made to us by our sponsor, an affiliate of our sponsor or our officers and directors may be convertible into warrants at a price of $1.00 per warrant at the option of the lender at the time of the business combination. The warrants would be identical to the private placement warrants issued to our sponsor. | |
Conditions to completing our initial business combination | | | There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. The Nasdaq rules require that an initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (net of permitted withdrawals and excluding the amount of any deferred underwriting discount). We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case. | |||
| | If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm. We will complete our initial business combination only if the post-transaction company in which our public stockholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as |
| | an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in our initial business combination transaction. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test, provided that in the event that our initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses. | ||||
Permitted purchases of public shares and public warrants by our affiliates | | | If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares or public warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation or other duty to do so. Please see “Proposed Business—Permitted purchases of our securities” for a description of how such persons will determine from which stockholders to seek to acquire securities. There is no limit on the number of shares or warrants such persons may purchase, or any restriction on the price that they may pay. Any such price per share may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. However, such persons have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. In the event our sponsor, directors, officers, advisors or any of their affiliates determine to make any such purchases at the time of a stockholder vote relating to our initial business combination, such purchases could have the effect of influencing the vote necessary to approve such transaction. None of the funds in the trust account will be used to purchase public shares or public warrants in such transactions prior to completion of our initial business combination. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Prior to the consummation of this offering, we will adopt an insider trading policy which will require insiders to refrain from purchasing securities when they are in |
| | possession of any material non-public information and to clear all trades with our legal counsel prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary. | ||||
| | We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Our sponsor, directors, officers, advisors or any of their respective affiliates will be restricted from making purchases if such purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. | ||||
| | We expect that any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. Please see “Proposed Business—Permitted purchases of our securities” for a description of how our sponsor, directors, officers, advisors or any of their respective affiliates will select which stockholders to purchase securities from in any private transaction. | ||||
| | The purpose of any such purchases of shares could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our shares of Class A common stock or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange. |
Redemption rights for public stockholders upon completion of our initial business combination | | | We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including interest (net of permitted withdrawals), divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The redemption right will include the requirement that any beneficial owner on whose behalf a redemption right is being exercised must identify itself in order to validly redeem its shares. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriter. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our initial stockholders, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination. | |||
Manner of conducting redemptions | | | We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either: (1) in connection with a stockholder meeting called to approve the business combination; or (2) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under applicable law or stock exchange listing requirement. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would typically require stockholder approval. We currently intend to conduct redemptions pursuant to a stockholder vote unless stockholder approval is not required by applicable law or stock exchange listing requirement and we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other reasons. | |||
| | If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other reasons, |
| | we will, pursuant to our amended and restated certificate of incorporation: | ||||
| | • | | | conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and | |
| | • | | | file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. | |
| | Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market, in order to comply with Rule 14e-5 under the Exchange Act. | ||||
| | In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules), or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination. | ||||
| | If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirement, or we decide to obtain stockholder approval for business or other reasons, we will: | ||||
| | • | | | conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and | |
| | • | | | file proxy materials with the SEC. | |
| | We expect that a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders |
| | well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to maintain our Nasdaq listing or Exchange Act registration. | ||||
| | If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. Our initial stockholders, officers and directors will count towards this quorum and have agreed to vote any founder shares and any public shares held by them in favor of our initial business combination. We expect that at the time of any stockholder vote relating to our initial business combination, our initial stockholders and their permitted transferees will own at least 20% of our outstanding shares of common stock entitled to vote thereon. As a result, in addition to our initial stockholders’ founder shares, we would need 4,312,501, or 37.5%, of the 11,500,000 public shares sold in this offering (other than securities to be purchased, directly or indirectly, by Millais Limited, the indirect majority owner of our sponsor) to be voted in favor of a transaction (assuming all issued and outstanding shares are voted and the option to purchase additional units is not exercised) in order to have such initial business combination approved. These quorum and voting thresholds and agreements may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction. | ||||
| | Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the proposed business combination may require: (1) cash consideration to be paid to the target or its owners; (2) cash to be transferred to the target for working capital or other general corporate purposes; or (3) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business |
| | combination. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all shares of common stock submitted for redemption will be returned to the holders thereof. | ||||
Tendering share certificates in connection with a tender offer or redemption rights | | | We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the vote on the proposal to approve our initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, rather than simply voting against the initial business combination. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements, which will include the requirement that any beneficial owner on whose behalf a redemption right is being exercised must identify itself in order to validly redeem its shares. | |||
Limitation on redemption rights of stockholders holding more than 15% of the shares sold in this offering if we hold stockholder vote | | | Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, without our prior consent. We believe the restriction described above will discourage stockholders from accumulating large blocks of shares and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our sponsor or its affiliates to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights against a business combination if such holder’s shares are not purchased by us or our sponsor or its affiliates at a premium to the then-current market price |
| | or on other undesirable terms. By limiting our stockholders’ ability to redeem to no more than 15% of the shares sold in this offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including all shares held by those stockholders that hold more than 15% of the shares sold in this offering) for or against our initial business combination. | ||||
Redemption rights in connection with proposed amendments to our certificate of incorporation | | | Our amended and restated certificate of incorporation will provide that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of this offering and the private placement of warrants into the trust account and not release such amounts except in specified circumstances and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of at least 65% of our common stock, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our common stock. In all other instances (other than the election of directors), our amended and restated certificate of incorporation will provide that it may be amended by holders of a majority of our common stock entitled to vote thereon, subject to applicable provisions of the Delaware General Corporation Law, or DGCL, or applicable stock exchange rules. Prior to an initial business combination, we may not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation or on our initial business combination or that would entitle holders thereof to receive funds from the trust account. Our initial stockholders, who will beneficially own 20% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering), may participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they may choose. Our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination within the completion window, unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per share price, |
| | payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals), divided by the number of then outstanding public shares. Our initial stockholders, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination. Any permitted transferees would be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares. | ||||
Release of funds in trust account on closing of our initial business combination | | | On the completion of our initial business combination, the funds held in the trust account will be used to pay amounts due to any public stockholders who exercise their redemption rights as described above under “Redemption rights for public stockholders upon completion of our initial business combination,” to pay the underwriter its deferred underwriting commissions, to pay all or a portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial business combination. If our initial business combination is paid for using equity or debt securities or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemption of our public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. | |||
Redemption of public shares and distribution and liquidation if no initial business combination | | | Our amended and restated certificate of incorporation provides that we will have only the completion window to complete our initial business combination. If we are unable to complete our initial business combination within the completion window, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under |
| | Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within such completion window. | ||||
| | Our initial stockholders, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within the completion window. However, if our sponsor or any of our officers, directors or any of their respective affiliates acquires public shares after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the completion window. The underwriter has agreed to waive its rights to its deferred underwriting commission held in the trust account in the event we do not complete our initial business combination and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares. | ||||
| | Our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination within the completion window, unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals), divided by the number of then outstanding public shares. | ||||
Limited payments to insiders | | | There will be no finder’s fees, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation paid by us to our sponsor, officers or directors or our or any of their respective affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination (regardless of the type of transaction that it is). However, the following payments will be made to our sponsor, officers or directors, or our or their affiliates, and, if made prior to our initial business combination will be made from (i) funds held outside the trust account or (ii) interest |
| | earned on the trust account and released to us to fund our permitted withdrawals: | ||||
| | • | | | repayment of an aggregate of up to $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses; | |
| | • | | | payment to an affiliate of our sponsor of a total of $10,000 per month, for up to 24 months, for office space, administrative and support services; | |
| | • | | | reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and | |
| | • | | | repayment of loans which may be made by our sponsor, an affiliate of our sponsor or our officers and directors to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. | |
| | These payments may be funded using the net proceeds of this offering and the sale of the private placement warrants not held in the trust account or, upon completion of the initial business combination, from any amounts remaining from the proceeds of the trust account released to us in connection therewith. | ||||
| | Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers or directors or our or any of their respective affiliates. | ||||
Audit Committee | | | Prior to the effectiveness of this registration statement, we will have established and will maintain an audit committee to, among other things, monitor compliance with the terms described above and the other terms relating to this offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to immediately take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. Please see “Management—Committees of the Board of Directors—Audit Committee” for additional information. | |||
Conflicts of Interest | | | As described in “Proposed Business—Sourcing of Potential Business Combination Targets” and “Management—Conflicts of Interest,” each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities, including South Mountain, pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities. Accordingly, if any of our officers or directors becomes aware of a |
| | business combination opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations or duties, he or she will honor these obligations and duties to present such business combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us (including as described above). These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us. | ||||
| | The potential conflicts described above may limit our ability to enter into a business combination or other transactions. These circumstances could give rise to numerous situations where interests may conflict. There can be no assurance that these or other conflicts of interest with the potential for adverse effects on the Company and investors will not arise. | ||||
Indemnity | | | Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below: (1) $10.00 per public share; or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of permitted withdrawals, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriter of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations. |
| | As of August 6, 2020 | |
Balance Sheet Data: | | | |
Working capital deficit | | | $(31,000) |
Total assets | | | $155,000 |
Total liabilities | | | $131,000 |
Total stockholder’s equity | | | $24,000 |
• | a limited availability of market quotations for our securities; |
• | reduced liquidity for our securities; |
• | a determination that our Class A common stock is a “penny stock” which will require brokers trading in our 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 our securities; |
• | a limited amount of news and analyst coverage; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | restrictions on the nature of our investments; and |
• | restrictions on the issuance of securities; |
• | registration as an investment company with the SEC; |
• | adoption of a specific form of corporate structure; and |
• | reporting, record keeping, voting, proxy and disclosure requirements and compliance with other rules and regulations that we are currently not subject to. |
• | may significantly dilute the equity interest of investors in this offering; |
• | may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock; |
• | could cause a change in control if a substantial number of common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and |
• | may adversely affect prevailing market prices for our units, common stock and/or warrants. |
• | default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
• | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
• | our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand; |
• | our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
• | our inability to pay dividends on our common stock; |
• | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
• | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
• | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
• | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
• | solely dependent upon the performance of a single business, property or asset; or |
• | dependent upon the development or market acceptance of a single or limited number of products, processes or services. |
• | the history and prospects of companies whose principal business is the acquisition of other companies; |
• | prior offerings of those companies; |
• | our prospects for acquiring an operating business at attractive values; |
• | a review of debt to equity ratios in leveraged transactions; |
• | our capital structure; |
• | an assessment of our management and their experience in identifying suitable acquisition opportunities; |
• | general conditions of the securities markets at the time of this offering; and |
• | other factors as were deemed relevant. |
• | costs and difficulties inherent in managing cross-border business operations and complying with commercial and legal requirements of overseas markets; |
• | rules and regulations regarding currency redemption; |
• | complex corporate withholding taxes on individuals; |
• | laws governing the manner in which future business combinations may be effected; |
• | tariffs and trade barriers; |
• | regulations related to customs and import/export matters; |
• | longer payment cycles; |
• | tax consequences; |
• | currency fluctuations and exchange controls; |
• | rates of inflation; |
• | challenges in collecting accounts receivable; |
• | cultural and language differences; |
• | employment regulations; |
• | crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars; |
• | deterioration of political relations with the United States; |
• | obligatory military service by personnel; and |
• | government appropriation of assets. |
• | the markets we may serve may be subject to general economic conditions and cyclical demand, which could lead to significant shifts in our results of operations from quarter to quarter that make it difficult to project long-term performance; |
• | fluctuations in customer demand; |
• | competition and consolidation of the specific sector of the industry within which the target business operates; |
• | volatility in the cost of, or disruption in the supply of, key inputs (including equipment, raw materials, energy, intellectual property and human capital) could adversely affect our financial results; |
• | supplier stability and capacity constraints; |
• | inability to obtain necessary insurance coverage for the target business’ operations; |
• | additional expenses and delays due to technical problems, labor problems (including union disruptions) or other interruptions at our facilities after our initial business combination; |
• | work-related accidents that may expose us to liability claims; |
• | our manufacturing processes and products not complying with applicable statutory and regulatory requirements, or if we manufacture products containing design or manufacturing defects, the demand for our products declining and potential liability claims; |
• | litigation and other proceedings, including that we may be liable for damages based on product liability claims, and we may also be exposed to potential indemnity claims from customers for losses due to our work or if our employees are injured performing services; |
• | warranty claims related to our products, and resulting reputational damage and incurrence of significant costs; |
• | changes in industry standards; |
• | changes in tariffs and other trade practices; |
• | inability to protect our intellectual property rights; |
• | our products and manufacturing processes being subject to technological change; |
• | being subject to applicable laws and regulations of federal, state and provincial governments, including environmental and health and safety laws and regulations, and the costs of compliance with such regulations; |
• | disruption or failure of networks, systems or technology as a result of computer viruses, “cyber-attacks,” misappropriation of data or other malfeasance, as well as outages, natural disasters, terrorist attacks, accidental releases of information or similar events; |
• | fluctuations in foreign currency exchange rates; and |
• | the failure of our customers to pay the amounts owed to us in a timely manner. |
• | our ability to select an appropriate target business or businesses; |
• | our ability to complete our initial business combination; |
• | our expectations around the performance of a prospective target business or businesses; |
• | our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; |
• | our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination; |
• | our potential ability to obtain additional financing to complete our initial business combination; |
• | our pool of prospective target businesses, including the location and industry of such target businesses; |
• | the ability of our officers and directors to generate a number of potential business combination opportunities; |
• | our public securities’ potential liquidity and trading; |
• | the lack of a market for our securities; |
• | the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; |
• | the trust account not being subject to claims of third parties; or |
• | our financial performance following this offering. |
| | Without Option to Purchase Additional Units | | | Option to Purchase Additional Units Exercised in Full | |
Gross proceeds | | | | | ||
Gross proceeds from units offered to public(1)(2) | | | $115,000,000 | | | $132,250,000 |
Gross proceeds from private placement warrants offered in the private placement | | | 3,800,000 | | | 4,145,000 |
Total gross proceeds | | | $118,800,000 | | | $136,395,000 |
Estimated offering expenses(3) | | | | | ||
Underwriting commissions (2.0% of gross proceeds from units offered to public, excluding deferred portion)(2)(4) | | | $2,300,000 | | | $2,645,000 |
Legal fees and expenses | | | 300,000 | | | 300,000 |
Printing and engraving expenses | | | 40,000 | | | 40,000 |
Accounting fees and expenses | | | 45,000 | | | 45,000 |
SEC/FINRA Expenses | | | 37,505 | | | 37,505 |
Travel and road show | | | 50,000 | | | 50,000 |
Directors and officers insurance premiums | | | 125,000 | | | 125,000 |
Nasdaq listing and filing fees | | | 75,000 | | | 75,000 |
Miscellaneous expenses(5) | | | 27,495 | | | 27,495 |
| | | | |||
Total estimated offering expenses | | | $3,000,000 | | | $3,345,000 |
| | | | |||
Proceeds after estimated offering expenses | | | $115,800,000 | | | $133,050,000 |
| | | | |||
Held in trust account(4) | | | $115,000,000 | | | $132,250,000 |
% of public offering size | | | 100% | | | 100% |
Not held in trust account | | | $800,000 | | | $800,000 |
| | Amount | | | % of Total | |
Legal, accounting, due diligence, travel and other expenses in connection with any business combination(7) | | | $250,000 | | | 31.3% |
Legal and accounting fees related to regulatory reporting obligations | | | 50,000 | | | 6.2% |
Payment for office space, administrative and support services | | | 240,000 | | | 30.0% |
Reserve for liquidation expenses | | | 100,000 | | | 12.5% |
Nasdaq continued listing fees | | | 75,000 | | | 9.4% |
Working capital to cover miscellaneous expenses (including franchise taxes net of anticipated interest income) | | | 85,000 | | | 10.6% |
| | | | |||
Total(8) | | | $800,000 | | | 100.0% |
(1) | Includes amounts payable to public stockholders who properly redeem their shares in connection with our successful completion of our initial business combination. |
(2) | Includes 1,150,000 units (or 1,322,500 units if the underwriter’s option to purchase additional units is exercised in full) that Millais Limited, the indirect majority owner of our sponsor, has expressed an intent to purchase at the public offering price. The underwriter will not receive any underwriting discount or commissions on such units. |
(3) | Our sponsor has agreed to loan us up to $300,000 as described in this prospectus. As of August 6, 2020, there was $75,000 outstanding |
(4) | The underwriter has agreed to defer underwriting commissions equal to 3.5% of the gross proceeds of this offering. Upon completion of our initial business combination, $4,025,000, which constitutes the underwriter’s deferred commissions (or up to $4,628,750 if the underwriter’s option to purchase additional units is exercised in full) will be paid to the underwriter from the funds held in the trust account and the remaining funds, less amounts released to the trustee to pay redeeming stockholders, will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriter will not be entitled to any interest accrued on the deferred underwriting discounts and commissions. |
(5) | Includes organizational and administrative expenses and may include amounts related to above-listed expenses in the event actual amounts exceed estimates. |
(6) | These expenses are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuring a business combination based upon the level of complexity of such business combination. In the event we identify an acquisition target in a specific industry subject to specific regulations, we may incur additional expenses associated with legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may engage a number of consultants to assist with legal and financial due diligence. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would not be available for our expenses. The amount in the table above does not include interest available to us from the trust account. Based on current interest rates, we would expect the trust account to generate approximately $115,000 of interest annually; however, we can provide no assurances regarding this amount. This estimate assumes an interest rate of 0.10% per annum based upon current yields of securities in which the trust account may be invested. In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor, an affiliate of our sponsor or our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account released to us. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor, an affiliate of our sponsor or our officers and directors, if any, as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. |
(7) | Includes estimated amounts that may also be used in connection with our initial business combination to fund a “no shop” provision and commitment fees for financing. |
(8) | Percentages may not total 100% due to rounding. |
Public offering price | | | | | $10.00 | |
Net tangible book value before this offering | | | $ (0.01) | | | |
Increase attributable to public stockholders | | | 1.36 | | | |
Pro forma net tangible book value after this offering and the sale of the private placement warrants | | | | | $1.35 | |
Dilution to public stockholders | | | | | $8.65 | |
Percentage of dilution to new investors | | | | | 86.5% |
| | Shares Purchased | | | Total Consideration | | | Average Price per Share | |||||||
| | Number | | | Percentage | | | Amount | | | Percentage | | |||
Initial Stockholders(1)(2) | | | 2,875,000 | | | 20.00% | | | $25,000 | | | 0.02% | | | $0.009 |
Public Stockholders | | | 11,500,000 | | | 80.00% | | | 115,000,000 | | | 99.98% | | | $10.00 |
| | 14,375,000 | | | 100.0% | | | $115,025,000 | | | 100.0% | | |
(1) | Assumes the full forfeiture of 431,250 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriter’s option to purchase additional units is exercised. |
(2) | Assumes conversion of Class B common stock into Class A common stock on a one-for-one basis. The dilution to public stockholders would increase to the extent that the anti-dilution provisions of the Class B common stock result in the issuance of shares of Class A common stock on a greater than one-to-one basis upon such conversion. |
Numerator: | | | |
Net tangible book value before this offering | | | $(31,000) |
Proceeds from this offering and sale of the private placement warrants, net of expenses | | | 115,800,000 |
Plus: Offering costs accrued for and paid in advance, excluded from net tangible book value before this offering | | | 55,000 |
Less: deferred underwriter’s commissions payable | | | (4,025,000) |
Less: amount of Class A common stock subject to redemption to maintain net tangible assets of $5,000,001 | | | (106,798,990) |
| | $5,000,010 | |
Denominator: | | | |
Shares of Class B common stock outstanding prior to this offering | | | 3,306,250 |
Shares forfeited if option to purchase additional units is not exercised | | | (431,250) |
Shares of Class A common stock included in the units offered | | | 11,500,000 |
Less: shares subject to redemption to maintain net tangible assets of $5,000,001 | | | (10,679,899) |
| | 3,695,101 |
| | August 6, 2020 | ||||
| | Actual | | | As Adjusted(1) | |
Promissory note - related party(2) | | | $75,000 | | | $— |
Deferred underwriting commissions | | | — | | | 4,025,000 |
Class A common stock, 10,679,899 shares subject to redemption(2) | | | — | | | 106,798,990 |
Stockholders’ equity: | | | | | ||
Preferred stock, $0.0001 par value, 1,000,000 shares authorized; no shares issued or outstanding (actual and as adjusted) | | | — | | | — |
Common Stock: | | | | | ||
Class A common stock, $0.0001 par value, 200,000,000 shares authorized (actual and as adjusted); no shares issued or outstanding (actual); 820,101(3) shares issued and outstanding (excluding 10,679,899 shares subject to redemption) (as adjusted) | | | — | | | 82 |
Class B common stock, $0.0001 par value, 20,000,000 shares authorized; 3,306,250(3) shares issued and outstanding (actual); 2,875,000(3) shares issued and outstanding (as adjusted) | | | 331 | | | 288 |
Additional paid-in capital(4) | | | 24,669 | | | 5,000,640 |
Accumulated deficit | | | (1,000) | | | (1,000) |
Total stockholders’ equity | | | 24,000 | | | 5,000,010 |
Total capitalization | | | $99,000 | | | $115,824,000 |
(1) | Assumes the full forfeiture of 431,250 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriter’s option to purchase additional units is exercised. The proceeds of the sale of such shares will not be deposited into the trust account, the shares will not be eligible for redemption from the trust account nor will they be eligible to vote upon the initial business combination. |
(2) | Our sponsor has agreed to loan us up to $300,000 in the aggregate to be used for a portion of the expenses of this offering. As of August 6, 2020, we borrowed $75,000 under the promissory note to be used for a portion of the expenses of this offering. |
(3) | In connection with our initial business combination, we will provide our public stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination, including interest (net of permitted withdrawals), subject to the limitations described herein whereby our net tangible assets will be maintained at a minimum of $5,000,001 and any limitations (including, but not limited to, cash requirements) created by the terms of the proposed business combination. The “as adjusted” amount of Class A common stock, subject to redemption equals the “as adjusted” total assets of $115,824,000, less the “as adjusted” total liabilities of $4,025,000 less “as adjusted” total stockholder’s equity. The value of Class A common stock that may be redeemed is equal to $10.00 per share (which is the assumed redemption price) multiplied by 10,679,899 shares of Class A common stock, which is the maximum number of shares of Class A common stock that may be redeemed for a $10.00 purchase price per share and still maintain at least $5,000,001 of net tangible assets. |
(4) | Actual share amount is prior to any forfeiture of founder shares by our sponsor and the “as adjusted” share amount assumes no exercise of the underwriter’s option to purchase additional units. |
(5) | The “as adjusted” additional paid-in capital calculation is equal to the “as adjusted” total stockholders’ equity of $5,000,010, less common stock (par value) of $370, less the accumulated deficit of ($1,000). |
• | may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class B common stock; |
• | may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock; |
• | could cause a change of control if a substantial number of shares of our common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
• | may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and |
• | may adversely affect prevailing market prices for our Class A common stock and/or warrants. |
• | default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
• | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
• | our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand; |
• | our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding; |
• | our inability to pay dividends on our common stock; |
• | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
• | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
• | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
• | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
• | staffing for financial, accounting and external reporting areas, including segregation of duties; |
• | reconciliation of accounts; |
• | proper recording of expenses and liabilities in the period to which they relate; |
• | evidence of internal review and approval of accounting transactions; |
• | documentation of processes, assumptions and conclusions underlying significant estimates; and |
• | documentation of accounting policies and procedures. |
• | leverage the strategic and transactional experience, including direct SPAC specific experience, of our management team; |
• | utilize our strategic and transactional experience of our management team to bring advice and attention to potential business combination targets; |
• | deliver creative approaches to transaction sourcing; and |
• | utilize an understanding of global financial markets and events, financing, and overall corporate strategy options. |
• | operating companies, setting and changing strategies, and identifying, monitoring and recruiting world-class talent; |
• | developing and growing companies, both organically and through acquisitions and strategic transactions and expanding the product range and geographic footprint of a number of target businesses; |
• | sourcing, structuring, acquiring, integrating and selling businesses; |
• | accessing the capital markets, including financing businesses and helping companies transition to public ownership; |
• | fostering relationships with sellers, capital providers and target management teams; and |
• | executing transactions in multiple geographies and under varying economic and financial market conditions; and |
• | consulting services for the management teams of companies that were acquired by SPACs. |
• | Proprietary Sourcing Channels and Leading Industry Relationships. We believe the capabilities and connections associated with our management team will provide us with a differentiated pipeline of merger opportunities that would be difficult for other participants in the market to replicate. We expect these sourcing capabilities will be further bolstered by our management team’s reputation and deep industry relationships. |
• | Investing Experience. We believe that our management’s track record of identifying and sourcing transactions positions us well to appropriately evaluate potential business combinations and select one that will be well received by the public markets. |
• | Execution and Structuring Capability. Our management team believes that the combined expertise and reputation of its members will allow it to source and complete transactions possessing structural attributes that create an attractive investment thesis. These types of transactions are typically complex and require creativity, industry knowledge and expertise, rigorous due diligence, and extensive negotiations and documentation. Our management team believes that by focusing on these types of transactions, it will be able to generate investment opportunities that have attractive risk/reward profiles based on their valuations and structural characteristics. |
• | Deep SPAC Market Experience. Our management team has deep experience with the SPAC acquisition process. Our Chief Executive Officer, Charles B. Bernicker, served as the Chief Financial Officer of CardConnect from 2012 until the sale to First Data (NYSE: FDC) in July 2017. Mr. Bernicker was involved in all aspects of the reverse merger of CardConnect with FinTech Acquisition Corp. (NASDAQ: CCN), a SPAC, in July 2016. In his capacity as Chief Financial Officer, Mr. Bernicker participated in all aspects of the FinTech Acquisition Corp. merger, including pre-merger evaluation, due diligence, equity and debt capital raising, and public company reporting. Post-merger responsibilities also included investor relations. Mr. Bernicker's employment with First Data terminated in March 2018, and he began providing consulting services to private companies that were evaluating mergers with SPACs, as well as to SPAC sponsor teams. From September 2018 through April 2019, Mr. Bernicker acted as a consultant to Repay Holdings Corp (NASDAQ: RPAY) for their merger with Thunder Bridge Acquisition, Ltd. in July 2019. Mr. Bernicker acted as a consultant to International Money Express, Inc. (NASDAQ: IMXI) from April 2018 through closing of their merger with FinTech Acquisition Corp. II in July 2018. Mr. Bernicker provided strategic consulting related to investor relations, investor marketing, public company reporting, warrant redemption strategy and general consulting to the senior management team. Mr. Bernicker provided strategic consulting related to investor relations, investor marketing, public company reporting, SPAC structuring and general consulting to the Chief Financial Officer and Chief Executive Officer. From August 2018 through March 2019, Mr. Bernicker provided consulting services to Gordon Pointe Acquisition Corporation (NASDAQ: GPAQ) including target evaluation and negotiation and merger structuring. Mr. Bernicker was compensated in cash for his services as a consultant to the companies mentioned above. Our Chief Financial Officer, Nicholas Dermatas, served as the Vice President of Finance for CardConnect from 2012 until the sale to First Data (NYSE: FDC) in July 2017. Mr. Dermatas was involved in the reverse merger of CardConnect with FinTech Acquisition Corp. (NASDAQ: CCN), in July 2016. In his capacity as Vice President of Finance, Mr. Dermatas coordinated the due diligence in the SPAC merger, assisted in external financial reporting, as well as investor relations. |
• | Has a Defensible Market Position. We will seek to acquire a business that has a defensible position within a target market as a result of a differentiated technology, distribution capabilities, customer service or other competitive advantages. |
• | Has an Attractive Financial Profile. We will seek to acquire a business that has highly recurring revenues and operating leverage and has historically generated, or has the near-term potential to generate, strong and sustainable free cash flow. |
• | Would Benefit Uniquely from the Capabilities of our Management Team. We will seek to merge with a business where the collective capabilities of our management can be leveraged to tangibly improve the operations and market position of the target. |
• | Is Sourced Through our Proprietary Channels. We do not expect to participate in broadly marketed processes, but rather will aim to leverage our extensive network to source our business combination. |
• | Has a Committed and Capable Management Team. We will seek to acquire a business with a professional management team whose interests are aligned with those of our investors and complement the expertise of our management team. |
• | Has the Potential to Grow Through Further Acquisition Opportunities. We will seek to acquire a business that has the potential to grow organically and inorganically through additional acquisitions. |
• | subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination; and |
• | cause us to depend on the marketing and sale of a single product or limited number of products or services. |
Type of Transaction | | | Whether Stockholder Approval is Required |
Purchase of assets | | | No |
Purchase of stock of target not involving a merger with the company | | | No |
Merger of target into a subsidiary of the company | | | No |
Merger of the company with a target | | | Yes |
• | we issue (other than in a public offering for cash) shares of common stock that will either (a) be equal to or in excess of 20% of the number of shares of common stock then outstanding or (b) have voting power equal to or in excess of 20% of the voting power then outstanding; |
• | any of our directors, officers or substantial security holders (as defined by the Nasdaq rules) has a 5% or greater interest, directly or indirectly, or if such persons collectively have a 10% or greater interest, in the target business or assets to be acquired or in the consideration to be paid in the transaction or series of related transactions and the present or potential issuance of common stock, or securities convertible into or exercisable for common stock, could result in an increase in outstanding common shares or voting power of 5% or more; or |
• | the issuance or potential issuance will result in our undergoing a change of control. |
• | the timing of the transaction, including in the event we determine stockholder approval would require additional time and there is either not enough time to seek stockholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company; |
• | the expected cost of holding a stockholder vote; |
• | the risk that the stockholders would fail to approve the proposed business combination; |
• | other time and budget constraints of the company; and |
• | additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to stockholders. |
• | conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and |
• | file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. |
• | conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and |
• | file proxy materials with the SEC. |
• | prior to the consummation of our initial business combination, we shall either: (1) seek stockholder approval of our initial business combination at a meeting called for such purpose at which stockholders may seek to redeem their shares, regardless of whether they vote for or against the proposed business combination, into their pro rata share of the aggregate amount on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including interest (net of permitted withdrawals); or (2) provide our public stockholders with the opportunity to tender their shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an |
• | we will not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001; |
• | if we seek stockholder approval of our initial business combination, a majority of the outstanding shares of common stock voted are voted in favor of the business combination at a duly held stockholders meeting shall constitute such approval; |
• | if our initial business combination is not consummated within the completion window, then our existence will terminate and we will distribute all amounts in the trust account; and |
• | prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (1) receive funds from the trust account or (2) vote on any initial business combination. |
| | Redemptions in Connection with our Initial Business Combination | | | Other Permitted Purchases of Public Shares by our Affiliates | | | Redemptions if we fail to Complete an Initial Business Combination | |
Calculation of redemption price | | | Redemptions at the time of our initial business combination may be made pursuant to a tender offer or in connection with a stockholder vote. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a stockholder vote. In either case, our public stockholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination (which is initially anticipated to be | | | If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their respective affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Such purchases will only be made to the extent such purchases are made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. None of the funds in the trust | | | If we are unable to complete our initial business combination within the completion window, we will redeem all public shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares. |
| | Redemptions in Connection with our Initial Business Combination | | | Other Permitted Purchases of Public Shares by our Affiliates | | | Redemptions if we fail to Complete an Initial Business Combination | |
| | $10.00 per share), including interest (net of permitted withdrawals), divided by the number of then outstanding public shares, subject to the limitation that no redemptions will take place if all of the redemptions would cause our net tangible assets to be less than $5,000,001 and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of a proposed business combination. | | | account will be used to purchase shares in such transactions. | | | ||
Impact to remaining stockholders | | | The redemptions in connection with our initial business combination will reduce the book value per share for our remaining stockholders, who will bear the burden of the deferred underwriting commissions and permitted withdrawals (to the extent not paid from amounts accrued as interest on the funds held in the trust account). | | | If the permitted purchases described above are made, there will be no impact to our remaining stockholders because the purchase price would not be paid by us. | | | The redemption of our public shares if we fail to complete our initial business combination will reduce the book value per share for the shares held by our initial stockholders, who will be our only remaining stockholders after such redemptions. |
| | Terms of Our Offering | | | Terms Under a Rule 419 Offering | |
Escrow of offering proceeds | | | The rules of the Nasdaq provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. $115,000,000 of the net proceeds of this offering and the sale of the | | | Approximately $97,807,500 of the offering proceeds, representing the gross proceeds of this offering less allowable underwriting commissions, expenses and company deductions under Rule 419, would be required to be deposited into either an escrow account with an insured depositary |
| | Terms of Our Offering | | | Terms Under a Rule 419 Offering | |
| | private placement warrants will be deposited into a trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee. | | | institution or in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests in the account. | |
Investment of net proceeds | | | $115,000,000 of the net offering proceeds and the sale of the private placement warrants held in trust will be invested only pursuant to the immediate investment strategy. | | | Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States. |
Receipt of interest on escrowed funds | | | Interest on proceeds from the trust account to be paid to stockholders is reduced by: (1) permitted withdrawals; and (2) in the event of our liquidation for failure to complete our initial business combination within the allotted time, up to $100,000 of net interest that may be released to us should we have no or insufficient working capital to fund the costs and expenses of our dissolution and liquidation. | | | Interest on funds in escrow account would be held for the sole benefit of investors, unless and only after the funds held in escrow were released to us in connection with our completion of a business combination. |
Limitation on fair value or net assets of target business | | | The Nasdaq rules require that an initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (net of permitted withdrawals and excluding the amount of any deferred underwriting discount). | | | The fair value or net assets of a target business must represent at least 80% of the maximum offering proceeds. |
Trading of securities issued | | | The units will begin trading on or promptly after the date of this prospectus. The Class A common stock and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus unless Citigroup Global Markets Inc. informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. We will file the Current Report on Form 8-K promptly after the closing | | | No trading of the units or the underlying common stock and warrants would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account. |
| | Terms of Our Offering | | | Terms Under a Rule 419 Offering | |
| | of this offering. If the underwriter’s option to purchase additional units is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriter’s option to purchase additional units. | | | ||
Exercise of the warrants | | | The warrants cannot be exercised until the later of 30 days after the completion of our initial business combination and 12 months from the closing of this offering. | | | The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the escrow or trust account. |
Election to remain an investor | | | We will provide our public stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including interest, which interest shall be net of permitted withdrawals, upon the completion of our initial business combination, subject to the limitations described herein. We may not be required by applicable law or stock exchange rules to hold a stockholder vote. If we are not required by applicable law or stock exchange rules and do not otherwise decide to hold a stockholder vote, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, we hold a stockholder vote, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Pursuant to the tender offer rules, the tender offer period will be not less | | | A prospectus containing information pertaining to the business combination required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of a post-effective amendment to the company’s registration statement, to decide if he, she or it elects to remain a stockholder of the company or require the return of his, her or its investment. If the company has not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account are automatically returned to the stockholder. Unless a sufficient number of investors elect to remain investors, all funds on deposit in the escrow account must be returned to all of the investors and none of the securities are issued. |
| | Terms of Our Offering | | | Terms Under a Rule 419 Offering | |
| | than 20 business days and, in the case of a stockholder vote, a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. Additionally, each public stockholder may elect to redeem its public shares without voting and, if they do vote, irrespective of whether they vote for or against the proposed transaction. | | | ||
Business combination deadline | | | If we are unable to complete an initial business combination within the completion window, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as | | | If an acquisition has not been completed within 18 months after the effective date of the company’s registration statement, funds held in the trust or escrow account are returned to investors. |
| | Terms of Our Offering | | | Terms Under a Rule 419 Offering | |
| | promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. | | | ||
Release of funds | | | Except with respect to permitted withdrawals, the funds held in the trust account will not be released from the trust account until the earliest of: (1) the completion of our initial business combination; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination within the completion window or (ii) with respect to any other provisions relating to the rights of holders of our Class A common stock; and (3) the redemption of all of our public shares if we are unable to complete our initial business combination within the completion window, subject to applicable law. | | | The proceeds held in the escrow account are not released until the earlier of the completion of a business combination and the failure to effect a business combination within the allotted time. |
Limitation on redemption rights of stockholders holding more than 15% of the shares sold in this offering if we hold a stockholder vote | | | If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect Excess Shares (more than an aggregate of 15% of the shares sold in this | | | Most blank check companies provide no restrictions on the ability of stockholders to redeem shares based on the number of shares held by such stockholders in connection with an initial business combination. |
| | Terms of Our Offering | | | Terms Under a Rule 419 Offering | |
| | offering). Our public stockholders’ inability to redeem Excess Shares will reduce their influence over our ability to complete our initial business combination and they could suffer a material loss on their investment in us if they sell Excess Shares in open market transactions. | | | ||
Tendering stock certificates in connection with a tender offer or redemption rights | | | We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders or up to two business days prior to the vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two business days prior to the vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. | | | In order to perfect redemption rights in connection with their business combinations, holders could vote against a proposed business combination and check a box on the proxy card indicating such holders were seeking to exercise their redemption rights. After the business combination was approved, the company would contact such stockholders to arrange for them to deliver their certificate to verify ownership. |
Tendering stock certificates in connection with a tender offer or redemption rights | | | We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders or up to two business days prior to the vote on the | | | In order to perfect redemption rights in connection with their business combinations, holders could vote against a proposed business combination and check a box on the proxy card indicating such holders were seeking to exercise their redemption rights. After the business combination was approved, the company would contact such |
| | Terms of Our Offering | | | Terms Under a Rule 419 Offering | |
| | proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two business days prior to the vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. | | | stockholders to arrange for them to deliver their certificate to verify ownership. |
Name | | | Age | | | Title |
Charles B. Bernicker | | | 55 | | | Chief Executive Officer, President and Director |
Robert L. Metzger | | | 52 | | | Director Nominee |
Scott O’Callaghan | | | 57 | | | Director Nominee |
Douglas J. Pauls | | | 62 | | | Director Nominee |
Nicholas Dermatas | | | 36 | | | Chief Financial Officer and Secretary |
• | assisting board oversight of (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) our independent auditor’s qualifications and independence, and (4) the performance of our internal audit function and independent auditors; |
• | the appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and any other independent registered public accounting firm engaged by us; |
• | pre-approving all audit and non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; |
• | reviewing and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their continued independence; |
• | setting clear hiring policies for employees or former employees of the independent auditors; |
• | setting clear policies for audit partner rotation in compliance with applicable laws and regulations; |
• | obtaining and reviewing a report, at least annually, from the independent auditors describing (1) the independent auditor’s internal quality-control procedures and (2) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues; |
• | meeting to review and discuss our annual audited financial statements and quarterly financial statements with management and the independent auditor, including reviewing our specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; |
• | reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and |
• | reviewing with management, the independent auditors, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities. |
• | reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; |
• | reviewing and making recommendations to our board of directors with respect to (or approving, if such authority is so delegated by our board of directors) the compensation, and any incentive-compensation and equity-based plans that are subject to board approval of all of our other officers; |
• | reviewing our executive compensation policies and plans; |
• | implementing and administering our incentive compensation equity-based remuneration plans; |
• | assisting management in complying with our proxy statement and annual report disclosure requirements; |
• | approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees; |
• | producing a report on executive compensation to be included in our annual proxy statement; and |
• | reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
• | identifying, screening and reviewing individuals qualified to serve as directors, consistent with criteria approved by the board, and recommending to the board of directors candidates for nomination for election at the annual meeting of stockholders or, following our initial business combination, to fill vacancies on the board of directors; |
• | developing and recommending to the board of directors and overseeing implementation of our corporate governance guidelines; |
• | coordinating and overseeing the annual self-evaluation of the board of directors, its committees, individual directors and management in the governance of the company; and |
• | reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary. |
• | None of our officers or directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities. |
• | In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. Please see “—Directors, Director Nominees and Executive Officers” for a description of our management’s other affiliations, |
• | Our initial stockholders, officers and directors have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the consummation of our initial business combination. Additionally, our initial stockholders, officers and directors have agreed to waive their redemption rights with respect to any founder shares held by them if we fail to consummate our initial business combination within the completion window. However, if our initial |
• | Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether to proceed with a particular business combination. |
• | Our key personnel may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such key personnel was included by a target business as a condition to any agreement with respect to our initial business combination. |
• | the corporation could financially undertake the opportunity; |
• | the opportunity is within the corporation’s line of business; and |
• | it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation. |
Name of Individual | | | Entity Name | | | Entity’s Business | | | Affiliation |
Charles B. Bernicker | | | South Mountain Merger Corp. | | | Blank Check Company | | | CEO and Director |
Nicholas Dermatas | | | South Mountain Merger Corp. | | | Blank Check Company | | | CFO |
Robert L. Metzger | | | William Blair & Company, L.L.C. | | | Financial Services | | | Senior Director |
| Payroc, LLC | | | Payment Solutions | | | Director | ||
| MissionOG | | | Venture Capital | | | Senior Advisor | ||
| South Mountain Merger Corp. | | | Blank Check Company | | | Director | ||
Scott O’Callaghan | | | Onex Credit | | | Financial Services | | | Managing Director |
| South Mountain Merger Corp. | | | Blank Check Company | | | Director | ||
Douglas J. Pauls | | | BankUnited, Inc. | | | Financial Services | | | Director |
| Essent Group Ltd. | | | Insurance | | | Director | ||
| Global Atlantic Financial Group Limited | | | Financial Services | | | Director | ||
| South Mountain Merger Corp. | | | Blank Check Company | | | Director |
• | each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; |
• | each of our executive officers, directors and director nominees; and |
• | all our executive officers, directors and director nominees as a group. |
Name and Address of Beneficial Owner(1) | | | Number of Shares Beneficially Owned(2) | | | Approximate Percentage of Outstanding Common Stock | |||
| | | | Before Offering | | | After Offering(2) | ||
North Mountain LLC(3) | | | 3,306,250 | | | 100.0% | | | 20.0% |
Millais Limited(4) | | | — | | | — | | | — |
Charles B. Bernicker(3) | | | — | | | — | | | — |
Nicholas Dermatas | | | — | | | — | | | — |
Robert L. Metzger | | | — | | | — | | | — |
Scott O’Callaghan | | | — | | | — | | | — |
Douglas J. Pauls | | | — | | | — | | | — |
All directors and executive officers as a group (five individuals) | | | — | | | — | | | — |
(1) | Unless otherwise noted, the business address of each of the following entities or individuals is c/o North Mountain Merger Corp., 767 Fifth Avenue, 9th Floor, New York, NY 10153. |
(2) | Interests shown consist solely of shares of Class B common stock which are referred to herein as founder shares. Such shares will automatically convert into shares of Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment, as described in the section entitled “Description of Securities.” |
(3) | Represents common stock held by our sponsor. Harbour Reach Holdings, LLC (“Harbour Reach”) is the managing member of our sponsor and Mr. Michael Platt is the indirect controlling members of Harbour Reach. Mr. Bernicker is a non-managing member of our sponsor. Accordingly, all of the shares held by our sponsor may be deemed to be beneficially held by Harbour Reach and Messrs. Platt and Bernicker. The post-offering ownership percentage column below assumes that the underwriter does not exercise its option to purchase additional units, that our sponsor forfeits 431,250 founder shares and that there are 14,375,000 shares of our common stock issued and outstanding after this offering. |
(4) | Millais Limited, the indirect majority owner of our sponsor, has expressed an interest in purchasing up to 1,150,000 units in this offering (or 1,322,500 units if the underwriter’s option to purchase additional units is exercised in full). |
• | repayment of an aggregate of up to $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses; |
• | payment to an affiliate of our sponsor of a total of $10,000 per month, for up to 24 months, for office space, administrative and support services; |
• | reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and |
• | repayment of loans which may be made by our sponsor, an affiliate of our sponsor or our officers and directors to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. |
• | 11,500,000 shares of our Class A common stock underlying the units being offered in this offering; and |
• | 2,875,000 shares of Class B common stock held by our initial stockholders. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption, which we refer to as the 30-day redemption period; and |
• | if, and only if, the closing price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders. |
• | if we are unable to complete our initial business combination within the completion window, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than ten business days thereafter, subject to lawfully available funds therefor, redeem 100% of the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law; |
• | prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to: (1) receive funds from the trust account; or (2) vote on any initial business combination; |
• | although we do not intend to enter into a business combination with a target business that is affiliated with our sponsor, our directors or our officers, we are not prohibited from doing so. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent and disinterested directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm that such a business combination is fair to our company from a financial point of view; |
• | if a stockholder vote on our initial business combination is not required by applicable law or stock exchange rules and we do not decide to hold a stockholder vote for business or other reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act; |
• | if required by applicable stock-exchange rules, our initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (excluding the amount of any deferred underwriting discount). |
• | if our stockholders approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination within the completion window, we will provide our public stockholders with the opportunity to redeem all or a portion of their shares of common stock upon such approval at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals), divided by the number of then outstanding public shares; and |
• | we will not effectuate our initial business combination with another blank check company or a similar company with nominal operations. |
• | prior to such time, our board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; |
• | upon consummation of the transaction which resulted in the stockholder becoming an “interested stockholder,” the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced (excluding certain shares); or |
• | on or subsequent to such time, the business combination is approved by the Board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder. |
• | 1% of the total number of shares of Class A common stock then outstanding, which will equal 115,000 shares immediately after this offering (or 132,250 if the underwriter exercises its option to purchase additional units in full); or |
• | the average weekly reported trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
• | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
• | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
• | the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and |
• | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
• | an individual who is a United States citizen or resident of the United States; |
• | a corporation or other entity treated as a corporation for United States federal income tax purposes created in, or organized under the law of, the United States or any state or political subdivision thereof; |
• | an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source; or |
• | a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons (within the meaning of the Code) who have the authority to control all substantial decisions of the trust or (B) that has in effect a valid election under applicable Treasury regulations to be treated as a United States person. |
• | the gain is effectively connected with the conduct of a trade or business by the non-U.S. Holder within the United States (and, if an applicable tax treaty so requires, is attributable to a U.S. permanent establishment or fixed base maintained by the non-U.S. Holder); |
• | the non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition and certain other conditions are met; or |
• | we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the non-U.S. Holder held our Class A common stock, and, in the case where shares of our Class A common stock are regularly traded on an established securities market, the non-U.S. Holder has owned, directly or constructively, more than 5% of our Class A common stock at any time within the shorter of the five-year period preceding the disposition or such non-U.S. Holder’s holding period for the shares of our Class A common stock. There can be no assurance that our Class A common stock will be treated as regularly traded on an established securities market for this purpose. |
Underwriter | | | Number of Units |
Citigroup Global Markets Inc. | | | 11,500,000 |
Total | | | 11,500,000 |
| | Paid by North Mountain Merger Corp. | ||||
| | No Exercise | | | Full Exercise | |
Per Unit(1)(2) | | | $0.55 | | | $0.55 |
Total(1)(2) | | | $6,325,000 | | | $7,273,750 |
(1) | $0.20 per unit, or $2,300,000 in the aggregate (or $2,645,000 in the aggregate if the underwriter’s over-allotment option is exercised in full), is payable upon the closing of this offering. $0.35 per unit, or $4,025,000 in the aggregate (or $4,628,750 in the aggregate if the underwriter’s over-allotment option is exercised in full) payable to the underwriter for deferred underwriting commissions will be placed in a trust account located in the United States as described herein. The deferred commissions will be released to the underwriter only on and concurrently with completion of an initial business combination. |
(2) | The underwriter will not receive any underwriting discounts or commissions on units purchased, directly or indirectly, by Millais Limited, the indirect majority owner of our sponsor. |
• | Short sales involve secondary market sales by the underwriter of a greater number of units than it is required to purchase in the offering. |
• | “Covered” short sales are sales of units in an amount up to the number of units represented by the underwriter’s over-allotment option. |
• | “Naked” short sales are sales of units in an amount in excess of the number of units represented by the underwriter’s over-allotment option. |
• | Covering transactions involve purchases of units either pursuant to the over-allotment option or in the open market after the distribution has been completed in order to cover short positions. |
• | To close a naked short position, the underwriter must purchase units in the open market after the distribution has been completed. A naked short position is more likely to be created if the underwriter is concerned that there may be downward pressure on the price of the units in the open market after pricing that could adversely affect investors who purchase in the offering. |
• | To close a covered short position, the underwriter must purchase units in the open market after the distribution has been completed or must exercise the over-allotment option. In determining the source of units to close the covered short position, the underwriter will consider, among other things, the price of units available for purchase in the open market as compared to the price at which it may purchase units through the over-allotment option. |
• | Stabilizing transactions involve bids to purchase units so long as the stabilizing bids do not exceed a specified maximum. |
(a) | to any legal entity which is a qualified investor as defined in the Prospectus Directive; |
(b) | to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the Representative for any such offer; or |
(c) | in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of shares of our common stock shall result in a requirement for the publication by us or any underwriter of a prospectus pursuant to Article 3 of the Prospectus Directive. |
• | released, issued, distributed or caused to be released, issued or distributed to the public in France; or |
• | used in connection with any offer for subscription or sale of the units to the public in France. |
• | to qualified investors (investisseurs qualifiés) and/or to a restricted circle of investors (cercle restreint d’investisseurs), in each case investing for their own account, all as defined in, and in accordance with, Article L.411-2, D.411-1, D.411-2, D.734-1, D.744-1, D.754-1 and D.764-1 of the French Code monétaire et financier; |
• | to investment services providers authorized to engage in portfolio management on behalf of third parties; or |
• | in a transaction that, in accordance with article L.411-2-II-1° -or-2° -or 3° of the French Code monétaire et financier and article 211-2 of the General Regulations (Règlement Général) of the Autorité des Marchés Financiers, does not constitute a public offer (appel public à l’épargne). |
• | shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the shares pursuant to an offer made under Section 275 of the SFA except; |
• | to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions specified in Section 275 of the SFA; |
• | where no consideration is or will be given for the transfer; or |
• | where the transfer is by operation of law. |
(a) | you confirm and warrant that you are either: |
(i) | a “sophisticated investor” under section 708(8)(a) or (b) of the Corporations Act; |
(ii) | a “sophisticated investor” under section 708(8)(c) or (d) of the Corporations Act and that you have provided an accountant’s certificate to us which complies with the requirements of section 708(8)(c)(i) or (ii) of the Corporations Act and related regulations before the offer has been made; |
(iii) | a person associated with the company under section 708(12) of the Corporations Act; or |
(iv) | a “professional investor” within the meaning of section 708(11)(a) or (b) of the Corporations Act, and to the extent that you are unable to confirm or warrant that you are an exempt sophisticated investor, associated person or professional investor under the Corporations Act any offer made to you under this document is void and incapable of acceptance; and |
(b) | you warrant and agree that you will not offer any of the common stock for resale in Australia within 12 months of that common stock being issued unless any such resale offer is exempt from the requirement to issue a disclosure document under section 708 of the Corporations Act. |
ASSETS | | | |
Current asset—cash | | | $100,000 |
Deferred offering costs | | | 55,000 |
Total Assets | | | $155,000 |
| | ||
LIABILITIES AND STOCKHOLDER’S EQUITY | | | |
Current liabilities | | | |
Accrued expenses | | | $1,000 |
Accrued offering costs | | | 55,000 |
Promissory note – related party | | | 75,000 |
Total Current Liabilities | | | 131,000 |
| | ||
Commitments (Note 6) | | | |
| | ||
Stockholder’s Equity | | | |
Preferred stock, $0.0001 par value; 1,000,000 authorized; none issued and outstanding | | | — |
Class A Common stock, $0.0001 par value; 200,000,000 shares authorized; none issued and outstanding | | | — |
Class B Common stock, $0.0001 par value; 20,000,000 shares authorized; 3,306,250 shares issued and outstanding(1) | | | 331 |
Additional paid-in capital | | | 24,669 |
Accumulated deficit | | | (1,000) |
Total Stockholder’s Equity | | | 24,000 |
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY | | | $155,000 |
(1) | Includes an aggregate of up to 431,250 shares subject to forfeiture if the underwriter’s over-allotment option is not exercised in full or in part (see Note 7). |
Formation and operating costs | | | $1,000 |
Net Loss | | | $(1,000) |
Weighted average shares outstanding, basic and diluted(1) | | | 2,875,000 |
Basic and diluted net loss per common share | | | $(0.00) |
(1) | Excludes an aggregate of up to 431,250 shares subject to forfeiture if the underwriter’s over-allotment option is not exercised in full or in part (see Note 7). |
| | Class B Common Stock(1) | | | Additional Paid-In Capital | | | Accumulated Deficit | | | Total Stockholder’s Equity | ||||
| | Shares | | | Amount | | |||||||||
Balance—July 14, 2020 (inception) | | | — | | | $— | | | $— | | | $— | | | $— |
Issuance of Class B common stock to Sponsor(1) | | | 3,306,250 | | | 331 | | | 24,669 | | | — | | | 25,000 |
Net loss | | | — | | | — | | | — | | | (1,000) | | | (1,000) |
Balance—August 6, 2020 | | | 3,306,250 | | | $331 | | | $24,669 | | | $(1,000) | | | $24,000 |
(1) | Includes an aggregate of up to 431,250 shares subject to forfeiture if the underwriter’s over-allotment option is not exercised in full or in part (see Note 7). |
Cash Flows from Operating Activities: | | | |
Net loss | | | $(1,000) |
Changes in operating assets and liabilities: | | | |
Accrued expenses | | | 1,000 |
Net cash used in operating activities | | | — |
| | ||
Cash Flows from Financing Activities: | | | |
Proceeds from issuance of Class B common stock to Sponsor | | | 25,000 |
Proceeds from promissory note – related party | | | 75,000 |
Net cash provided by financing activities | | | 100,000 |
| | ||
Net Change in Cash | | | 100,000 |
Cash—Beginning | | | — |
Cash—Ending | | | $100,000 |
| | ||
Non-cash investing and financing activities: | | | |
Deferred offering costs included in accrued offering costs | | | $55,000 |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption; and |
• | if, and only if, the closing sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
Item 13. | Other Expenses of Issuance and Distribution. |
SEC expenses | | | $17,167 |
FINRA expenses | | | 20,338 |
Accounting fees and expenses | | | 45,000 |
Printing and engraving expenses | | | 40,000 |
Travel and road show expenses | | | 50,000 |
Directors and officers insurance premiums(1) | | | 125,000 |
Legal fees and expenses | | | 300,000 |
Nasdaq listing and filing fees | | | 75,000 |
Miscellaneous | | | 27,495 |
Total | | | $700,000 |
(1) | This amount represents the approximate amount of annual director and officer liability insurance premiums the registrant anticipates paying following the completion of its initial public offering and until it completes a business combination. |
Item 14. | Indemnification of Directors and officers. |
(a) | A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful. |
(b) | A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which |
(c) | To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith. |
(d) | Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders. |
(e) | Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) incurred by former officers and directors or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate. |
(f) | The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to such provision after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred. |
(g) | A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section. |
(h) | For purposes of this section, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. |
(i) | For purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section. |
Item 15. | Recent Sales of Unregistered Securities. |
Item 16. | Exhibits and Financial Statement Schedules. |
(a) | Exhibits. The following exhibits are being filed herewith: |
Exhibit | | | Description |
| | Form of Underwriting Agreement | |
| | Certificate of Incorporation | |
| | Form of Amended and Restated Certificate of Incorporation | |
| | Bylaws | |
| | Form of Specimen Unit Certificate | |
| | Form of Specimen Class A Common Stock Certificate | |
| | Form of Specimen Warrant Certificate (included in Exhibit 4.4) | |
| | Form of Warrant Agreement between the Warrant Agent and the Registrant | |
| | Opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP | |
| | Promissory Note, dated July 14, 2020, issued to North Mountain LLC | |
| | Form of Letter Agreement among the Registrant and the Registrant’s officers and directors and North Mountain LLC and its members | |
| | Form of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant | |
| | Form of Registration Rights Agreement between the Registrant and certain security holders | |
| | Securities Subscription Agreement, dated July 14, 2020, between the Registrant and North Mountain LLC | |
| | Form of Private Placement Warrants Purchase Agreement between the Registrant and North Mountain LLC | |
| | Form of Indemnity Agreement | |
| | Form of Administrative Services Agreement, by and between the Registrant and an affiliate of North Mountain LLC | |
| | Consent of Marcum LLP | |
| | Consent of Paul, Weiss, Rifkind, Wharton & Garrison LLP (included in Exhibit 5.1) | |
| | Consent of Robert L. Metzger | |
| | Consent of Scott O’Callaghan | |
| | Consent of Douglas J. Pauls |
* | Filed herewith. |
** | Filed previously. |
(b) | Financial Statements. See page F-1 for an index to the financial statements and schedules included in the registration statement. |
Item 17. | Undertakings. |
(a) | The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser. |
(b) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
(c) | The undersigned registrant hereby undertakes that: |
(1) | For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. |
(2) | For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(3) | For the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
(4) | For the purpose of determining liability of a registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of an undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by an undersigned registrant; |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
| | NORTH MOUNTAIN MERGER CORP. | ||||
| | | | |||
| | By: | | | /s/ Charles B. Bernicker | |
| | Name: | | | Charles B. Bernicker | |
| | Title: | | | Chief Executive Officer |
Signature | | | Title | | | Date |
| | | | |||
/s/ Charles B. Bernicker | | | Chief Executive Officer, Chief Financial Officer and Director (Principal Executive, Financial and Accounting Officer) | | | September 15, 2020 |
Charles B. Bernicker | | |||||
| ||||||
| | | | |||
/s/ Nicholas Dermatas | | | Chief Financial Officer (Principal Financial and Accounting Officer) | | | September 15, 2020 |
Nicholas Dermatas | | |||||
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Very truly yours,
|
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North Mountain Merger Corp.
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written.
|
||
Citigroup Global Markets Inc.
|
||
By: | ||
Name: | ||
Title: |
Underwriters
|
Number of Underwritten
Securities to be Purchased
|
|||
Citigroup Global Markets Inc.
|
[11,500,000
|
]
|
||
Total
|
[11,500,000
|
]
|