Item 1.01. Entry into a Material Definitive Agreement.
Amendment to Unit Purchase Agreement
As previously disclosed, on February 11, 2022, Northern Lights Acquisition
Corp., a Delaware corporation (the "Company") and 5AK, LLC, the Company's
sponsor (the "Sponsor"), entered into a definitive unit purchase agreement (the
"Unit Purchase Agreement") with SHF, LLC d/b/a Safe Harbor Financial, a Colorado
limited liability company (the "Target"), SHF Holding Co., LLC, the sole member
of the Target (the "Seller"), and Partner Colorado Credit Union, the sole member
of the Seller (the "Seller Parent"), whereby the Company will purchase all of
the issued and outstanding membership interests of the Target from the Seller
(the "Business Combination").
As also previously disclosed, on September 19, 2022, the Company, the Sponsor,
the Target, the Seller, and the Seller Parent entered into an amendment to the
Unit Purchase Agreement to extend the Outside Date from August 31, 2022 until
September 28, 2022 and provide for the deferral of $30 million of the $70
million in cash due to the Seller at the closing of the Business Combination. On
September 22, 2022, the parties agreed to a Second Amendment to Unit Purchase
Agreement (the "Second Amendment") providing for the deferral of a total of $50
million (the "Deferred Cash Consideration") of the $70 million due to the Seller
at the closing of the Business Combination. The purpose of deferral is to
provide the Company with additional cash to support its post-closing activities.
Pursuant to the Second Amendment, the Company will pay the Deferred Cash
Consideration in one payment of $15,000,000 on or before December 15, 2022, and
the $35,000,000 balance in six equal installments of $6,416,667, payable
beginning on the first business day following April 1, 2023 and on the first
business day of each of the following five fiscal quarters, for a total of
$38,500,002 (which amount includes 5% interest annualized). The Deferred Cash
Consideration may be prepaid by the Company, in whole or in part, at any time.
In consideration of the Seller's and the Seller Parent's agreement to the
foregoing amendment to the Unit Purchase Agreement, and to secure the Company's
payment thereof, Luminous Capital USA Inc., an affiliate of the Sponsor
("Luminous"), has agreed to escrow 1,200,000 of the shares of the Company's
Class A Common Stock (the "Escrowed Shares") to be received by Luminous at the
closing of the Business Combination, such escrow to be evidenced by an escrow
agreement with a third-party escrow agent reasonably acceptable to the parties
and Luminous. The Escrowed Shares will be released to Luminous upon payment in
full of the Deferred Cash Consideration. Luminous will meanwhile be entitled to
vote all such Escrowed Shares.
The foregoing description is only a summary of the Second Amendment and is
qualified in its entirety by reference to the full text of the Second Amendment,
which is filed as Exhibit 10.1 hereto and incorporated by reference herein.
Item 8.01. Other Events.
Anticipated Changes in PIPE Terms
As described in the Company's definitive proxy statement filed with the SEC and
distributed to the stockholders on June 10, 2022 (the "June Proxy Statement"),
in order to finance a portion of the purchase price payable under the Unit
Purchase Agreement, and the costs and expenses incurred in connection therewith,
the Company entered into a Securities Purchase Agreement (the "PIPE Securities
Purchase Agreement") with certain investors (the "PIPE Investors") concurrently
with the execution of the Unit Purchase Agreement, pursuant to which such PIPE
Investors committed to purchase $60 million of shares of Class A Convertible
Preferred Stock (the "PIPE Shares") and warrants (the "PIPE Warrants") to
purchase up to a number of shares of the Class A Common Stock equal to 50% of
shares of the Class A Common Stock issuable upon conversion of the PIPE Shares
(the "Conversion Shares").
Based on further discussions with the PIPE Investors, the Company currently
anticipates that the terms of the PIPE Securities Purchase Agreement, the PIPE
Registration Rights Agreement, the PIPE Shares, the PIPE Warrants, and the
Certificate of Designation to be filed with the Secretary of State of the State
of Delaware setting forth the preferences, rights and limitations of the PIPE
Shares (the "PIPE Certificate of Designation") will be amended as follows:
? To provide that the Floor Price (as defined in the PIPE Certificate of
Designation) will be reduced to $1.25 if and only if the Company's
stockholders provide the approval contemplated by Nasdaq Listing Standard Rule
5635(d) with respect to the issuance of the Conversion Shares based on a
reduction of the Floor Price to $1.25 (the "Requisite Stockholder Approval");
provided, however, that no holder of Conversion Shares issued prior to
obtaining the Requisite Stockholder Approval will be allowed to vote such
Conversion Shares for or against such proposal;
? To provide that (i) as soon as practicable after the filing of the PIPE
Certificate of Designation, but in any event not later than one hundred and
twenty days (120) days after such filing date, the Company will call a special
meeting of its stockholders to obtain the Requisite Stockholder Approval for
the reduction of the Floor Price to $1.25 and (ii) the Company's Board of
Directors will recommend approval of such proposal; if the Requisite
Stockholder Approval is not obtained at such a meeting, the Company will call
additional meetings, and the Board of Directors will make such recommendation,
at least once every six (6) months thereafter until the Requisite Stockholder
Approval is obtained (each such meeting, a "Subsequent Stockholder Meeting");
? To provide that the Sponsor and the Seller Parent will enter into voting
agreements with the Company, pursuant to which the Sponsor and the Seller
Parent will each agree to vote the securities of the Company held by such
party at the time of each Subsequent Stockholder Meeting in favor of the
Requisite Stockholder Approval;
? To provide that if the Requisite Stockholder Approval is received and, on the
date that the Requisite Stockholder Approval is received, if a prior scheduled
downward adjustment of the Conversion Price (as defined in the PIPE
Certificate of Designation) would have resulted in a Conversion Price lower
than the prior Floor Price (the "Theoretical Adjustment Price"), then such
Conversion Price shall be downwardly adjusted to the Theoretical Adjustment
Price effective, automatically and without further action of the Company or
any PIPE Investor, on the trading day immediately following the trading day
upon which the Requisite Stockholder Approval is obtained regardless of
whether a scheduled downward adjustment of the Conversion Price would have
otherwise occurred on such trading day; provided, however, in no event shall
the Theoretical Adjustment Price be less than $1.25; and
? To provide that the issuance of any shares of Class A Common Stock or Common
Stock Equivalents (as defined in the PIPE Securities Purchase Agreement)
issued or issuable in connection with any bona fide strategic or commercial
alliances, acquisitions, mergers, joint ventures, licensing arrangements, and
strategic partnerships, provided, that (x) the primary purpose of such
issuance is not to raise capital as reasonably determined, (y) the purchaser
or acquirer or recipient of the securities is not an entity that is primarily
in the business of investing in securities and (z) the purchaser or acquirer
or recipient of the securities in such issuance solely consists of either (A)
the actual participants in such strategic or commercial alliance, strategic or
commercial licensing arrangement or strategic or commercial partnership, (B)
the actual owners of such assets or securities acquired in such acquisition or
merger or (C) the stockholders, partners, employees, consultants, officers,
directors or members of the foregoing persons, in each case, which is, itself
or through its subsidiaries, an operating company or an owner of an asset, in
a business synergistic with the business of the Company and shall provide to
the Company additional benefits in addition to the investment of funds, and
(z) the number or amount of securities issued to such persons by the Company
shall not be disproportionate to each such person's actual participation in
(or fair market value of the contribution to) such strategic or commercial
alliance or strategic or commercial partnership or ownership of such assets or
securities to be acquired by the Company, as applicable, shall be exempt from
the restrictions contained in the PIPE Securities Purchase Agreement on
issuances of Class A Common Stock and Common Stock Equivalents.
? The Company has also agreed that 20% of the proceeds of the offering will be
held in escrow as liquidated damages in the event that the agreed resale
registration statement is not filed or declared effective in accordance with
the PIPE Registration Rights Agreement.
Additional Information and Where to Find It
The proposed Business Combination involving the Company and the Target was
submitted to the stockholders of the Company for their consideration. The
Company filed the June Proxy Statement with the SEC on June 10, 2022, which was
distributed to the stockholders of the Company in connection with the Company's
solicitation for proxies for the vote by the stockholders of the Company in
connection with the proposed Business Combination and other matters as described
in the June Proxy Statement. Before making any voting decision, the stockholders
of the Company and other interested persons were advised to read the June Proxy
Statement along with all other relevant documents filed with the SEC in
connection with the proposed Business Combination and the Company's solicitation
of proxies for its special meeting of stockholders to be held to approve, among
other things, the proposed Business Combination, because these documents contain
important information about the Company, the Target, and the proposed Business
Combination. The stockholders approved the Business Combination on June 28,
2022. On September 19, 2022 and September 21, 2022, the Company filed Current
Reports on Form 8-K with the SEC to supplement certain sections of the June
Proxy Statement (as supplemented to date, the "Amended Proxy Statement"), as
described in such reports. Stockholders will be able to obtain free copies of
the Amended Proxy Statement as well as other documents filed with the SEC
regarding the proposed Business Combination and other documents filed with the
SEC by the Company, without charge, at the SEC's website located at www.sec.gov
or by directing a request to Northern Lights Acquisition Corp., 10 East 53rd
Street, Suite 3001, New York, NY, 10022, or by telephone at (615) 554-0044.
Participants in Solicitation
The Company and its directors and executive officers may be deemed participants
in the solicitation of proxies from the Company's stockholders with respect to
the Business Combination. Information about those directors and executive
officers and a description of their interests in the Company is contained in the
Company's Registration Statement on Form S-1 filed with the SEC on June 2, 2021
in connection with its initial public offering, its Annual Report on Form 10-K
for the year ended December 31, 2021 filed with the SEC on March 25, 2022, the
Amended Proxy Statement, each of which was filed with the SEC and is available
free of charge at the SEC's web site at www.sec.gov, or by directing a request
to Northern Lights Acquisition Corp., 10 East 53rd Street, Suite 3001, New York,
NY, 10022.
The Seller, the Seller Parent, the Target, and their respective directors,
managers, and executive officers may also be deemed to be participants in the
solicitation of proxies from the Company's stockholders in connection with the
Business Combination. A list of the names of such parties and information
regarding their interests in the Business Combination may be obtained by reading
the Amended Proxy Statement.
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such statements
include, but are not limited to, statements about future financial and operating
results, our plans, objectives, expectations and intentions with respect to
future operations, products and services; and other statements identified by
words such as "will likely result," "are expected to," "will continue," "is
anticipated," "estimated," "believe," "intend," "plan," "projection," "outlook"
or words of similar meaning. These forward-looking statements include, but are
not limited to, statements with respect to trends in the cannabis industry,
including changes in U.S and state laws, rules, regulations and guidance
relating to the Target's services, the Target's growth prospects and the
Target's market size, the Target's projected financial and operational
performance, including relative to its competitors, new product and service
offerings the Target may introduce in the future, the proposed Business
Combination, including the implied enterprise value, the expected post-closing
ownership structure and the likelihood and ability of the parties to
successfully consummate the Business Combination, the risk that the proposed
Business Combination may not be completed in a timely manner or at all, which
may adversely affect the price of the Company's securities, the failure to
satisfy the conditions to the consummation of the proposed Business Combination,
the effect of the announcement or pendency of the proposed Business Combination
on the Company's or the Target's business relationships, performance, and
business generally, the outcome of any legal proceedings that may be instituted
against the Company or the Target related to the Unit Purchase Agreement or the
proposed Business Combination, the ability to maintain the listing of the
Company's securities on the Nasdaq Capital Market, the price of the Company's
securities, including volatility resulting from changes in the competitive and
highly regulated industry in which the Target plans to operate, variations in
performance across competitors, changes in laws and regulations affecting the
Target's business and changes in the combined capital structure, the ability to
implement business plans, forecasts, and other expectations after the completion
of the proposed Business Combination, and identify and realize additional
opportunities, and other statements regarding the Target's and the Company's
expectations, hopes, beliefs, intentions or strategies regarding the future.
Such forward-looking statements are based upon the current beliefs and
expectations of our management and are inherently subject to significant
business, economic and competitive uncertainties and contingencies, many of
which are difficult to predict and generally beyond our control. Actual results
and the timing of events may differ materially from the results anticipated in
these forward-looking statements.
In addition to factors previously disclosed in the Company's reports filed with
the SEC, the Amended Proxy Statement, and those identified elsewhere in this
communication, the following factors, among others, could cause actual results
and the timing of events to differ materially from the anticipated results or
other expectations expressed in the forward-looking statements: (i) the risk
that the transactions contemplated by the Unit Purchase Agreement may not be
completed in a timely manner or at all, which may adversely affect the price of
the Company's securities; (ii) the risk that the transactions contemplated by
. . .
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
99.1 Press Release
10.1 Second Amendment to Unit Purchase Agreement
104 Cover Page Interactive Data File (Embedded within the Inline XBRL
document and included in Exhibit)
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