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, the Company, the
Sponsor, the Target, the Seller, and the Seller Parent amended the Unit Purchase
Agreement to extend the date by which the closing of the Business Combination
had to occur (the "Outside Date") from June 30, 2022 until July 29, 2022, with
the ability for the deadline to be extended through August 31, 2022.
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 (the "UPA
Amendment") to (i) further extend the Outside Date from August 31, 2022 until
September 28, 2022 and (ii) provide for the deferral of $30 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 UPA Amendment, the Company will pay the Deferred Cash Consideration in six
equal installments of $5,375,000, payable beginning on the first business day
following January 1, 2023 and on the first business day of each of the following
five fiscal quarters, for a total of $32,250,000 (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 UPA Amendment and is
qualified in its entirety by reference to the full text of the UPA Amendment,
which is filed as Exhibit 10.1 hereto and incorporated by reference herein.
Item 7.01. Regulation FD Disclosure.
On September 19, 2022, Northern Lights Acquisition Corp. (the "Company") issued
a press release announcing (i) the UPA Amendment and (ii) the anticipated
closing date of the Company's pending Business Combination (as defined below)
and a supplement to the Company's definitive proxy statement on Schedule 14A
filed in conjunction therewith, as described in more detail in Item 8.01 of this
Current Report on Form 8-K. The press release is attached hereto as Exhibit 99.1
and incorporated by reference herein.
The information in this Item 7.01, including Exhibit 99.1, is being furnished
and will not be deemed to be filed for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise be subject
to the liabilities of that section, nor will it be deemed to be incorporated by
reference in any filing under the Securities Act or the Exchange Act.
Item 8.01. Other Events.
Supplements to Definitive Proxy Statement
The Company held a special meeting on June 28, 2022 (the "Special Meeting") at
which the Company's stockholders met to consider and approve the Business
Combination and the other matters 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"). As previously disclosed, all matters
presented at the Special Meeting were approved by the Company's stockholders.
The Company initially intended to close the Business Combination immediately
following such approval; however, the closing of the Business Combination was
delayed due to the ongoing review of the Company's listing application by the
Listing Qualifications Staff of the Nasdaq Stock Market (the "Listing
Qualifications Staff").
The Company currently anticipates closing the Business Combination by September
28, 2022. Because of the delay between the Special Meeting and the anticipated
closing date, and in connection with certain revised disclosures set forth
herein, the Company has determined to allow its public stockholders to request
that the Company redeem their shares of Class A Common Stock for cash in
accordance with the Company's Amended and Restated Certificate of Incorporation.
Please see "Additional Redemption Rights" below for more information.
In conjunction with the Company's discussions with the Listing Qualifications
Staff, the Company and the Target have revised certain sections of the June
Proxy Statement to clarify certain aspects of the business of the Target. While
the Company believes that the disclosures currently set forth in the June Proxy
Statement comply fully with applicable law and regulations, to avoid any further
delay to the closing of the Business Combination, the Company has determined to
voluntarily supplement the June Proxy Statement with the supplemental
disclosures attached hereto as Exhibits 99.2, 99.4, and 99.6 (the "Supplemental
Disclosures"). Nothing in the Supplemental Disclosures shall be deemed an
admission of the legal necessity or materiality under applicable law of any of
the disclosures set forth herein. The Company is not resoliciting any votes or
proxies from its stockholders.
The Supplemental Disclosures should be read in conjunction with the June Proxy
Statement, which should be read in their entirety. All page references are to
pages in the June Proxy Statement, and capitalized terms used therein, unless
otherwise defined, have the meanings set forth in the June Proxy Statement. The
June Proxy Statement is hereby supplemented by the Supplemental Disclosures
(and, as so supplemented, is referred to herein as the "Amended Proxy
Statement") as follows:
? The "Risk Factors" section of the June Proxy Statement beginning on page 64 of
the June Proxy Statement is hereby deleted and replaced in its entirety by the
revised "Risk Factors" section included as Exhibit 99.2 hereto. A redline
comparison of the revised "Risk Factors" section as compared to the version in
the June Proxy Statement is included as Exhibit 99.3 hereto.
? The "Business of Safe Harbor Financial" section of the June Proxy Statement
beginning on page 162 of the June Proxy Statement is hereby deleted and
replaced in its entirety by the revised "Business of Safe Harbor Financial"
section included as Exhibit 99.4 hereto. A redline comparison of the revised
"Business of Safe Harbor Financial" section as compared to the version in the
June Proxy Statement is included as Exhibit 99.5 hereto.
? The "SHF's Management's Discussion and Analysis of Financial Condition and
Results of Operations" section of the June Proxy Statement beginning on page
177 of the June Proxy Statement is hereby deleted and replaced in its entirety
by the revised "SHF's Management's Discussion and Analysis of Financial
Condition and Results of Operations" section included as Exhibit 99.6 hereto. A
redline comparison of the revised "SHF's Management's Discussion and Analysis
of Financial Condition and Results of Operations" section as compared to the
version in the June Proxy Statement is included as Exhibit 99.7 hereto.
Additionally, the June Proxy Statement is further supplemented to remove all
references to Paul Penney serving as the Chief Investment Officer of the
post-combination company. Please see the "Other Updates" section of this Current
Report on Form 8-K for more information.
Offering of Convertible Preferred Stock
As previously disclosed and as described in 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 "PIPE Financing"). The closing of the PIPE Financing will occur immediately
prior to the closing of the Business Combination.
Following the delay in the closing of the Business Combination, the Company and
its advisors have continued to hold discussions with the PIPE Investors and are
in the process of confirming the final pool of investors that will participate
in the PIPE Financing. The Company will file a Current Report on Form 8-K with
the SEC disclosing any changes to the terms of the PIPE Financing that result
from these discussions.
Additional Redemption Rights
Although the Company is not resoliciting any votes or proxies for any of the
matters previously approved at the Special Meeting, the Company will allow its
public stockholders to request that the Company redeem their shares of Class A
Common Stock for cash in accordance with the Company's Amended and Restated
Certificate of Incorporation.
Pursuant to our Amended and Restated Certificate of Incorporation, any holders
of our public shares may demand that such shares be redeemed in exchange for a
pro rata share of the aggregate amount on deposit in the Trust Account, less
franchise and income taxes payable, calculated as of two business days prior to
the consummation of the Business Combination. If demand is properly made and the
Business Combination is consummated, these shares, immediately prior to the
Business Combination, will cease to be outstanding and will represent only the
right to receive a pro rata share of the aggregate amount on deposit in the
Trust Account that holds the proceeds of the Company's initial public offering
(calculated as of two business days prior to the consummation of the Business
Combination, less franchise and income taxes payable). For illustrative
purposes, based on the fair value of investment securities held in the Trust
Account of $118,458,452 as of September 19, 2022, the estimated per share
redemption price would be approximately $10.30.
To exercise its redemption rights, a stockholder must (i) if it holds public
units of the Company, separate the underlying public shares of Class A Common
Stock and public warrants, and (ii) prior to 5:00 p.m. Eastern Time on Friday,
September 23, 2022 , (a) tender its shares of Class A Common Stock by either
physically delivering its share certificate to Continental Stock Transfer &
Trust Company, the Company's transfer agent (the "Transfer Agent"), or
electronically through DTC's DWAC system, and (b) submit a request in writing
that the Company redeem such shares for a pro rata portion of the funds held in
the Trust Account to the Transfer Agent, at the following address:
Continental Stock Transfer & Trust Company
1 State Street 30th Floor
New York, New York 10004
Attention: Mark Zimkind
Email: mzimkind@continentalstock.com
If a broker, dealer, commercial bank, trust company or other nominee holds the
stockholder's public units, the stockholder must instruct such nominee to
separate the public units. The nominee must send written instructions by
facsimile to Continental Stock Transfer & Trust Company, the Transfer Agent.
Such written instructions must include the number of public units to be split
and the nominee holding such public units. The nominee must also initiate
electronically, using DTC's DWAC system, a withdrawal of the relevant units and
a deposit of an equal number of public shares and public warrants. This must be
completed far enough in advance to permit the nominee to exercise the redemption
rights upon the separation of the public shares from the public units. While
this is typically done electronically on the same business day, stockholders
should allow at least one full business day to accomplish the separation. If the
public shares are not timely separated, the exercise of redemption rights may be
delayed or may not occur.
Stockholders that have already requested redemption of their shares in
accordance with the foregoing procedures, and whose redemption request was not
reversed, need not take any further action. Redemption rights are not available
with respect to the shares held by the Sponsor or by the purchasers under
forward purchase agreements entered into on June 16, 2022 among the Company, the
Target and Midtown East Management NL LLC (please see the Company's Current
Report on Form 8-K filed on June 17, 2022 for more information).
Please see the "Special Meeting in Lieu of the 2022 Annual Meeting of Company
Stockholders - Redemption Rights" section of the June Proxy Statement on page
105 of the June Proxy Statement for additional information regarding the process
to exercise redemption rights.
Other Updates
Fameree Consulting Agreement
Effective as of July 1, 2022, the Target and Chris Fameree, the Company's Chief
Financial Officer, entered into an independent contractor agreement (the
"Independent Contractor Agreement"), whereby Mr. Fameree provides assistance
with certain financial reporting, accounting, and other related services to the
Target during the interim period until the closing of the Business Combination.
Mr. Fameree will receive a monthly consulting fee of $23,750.00 from the Target
for the term of the Independent Contractor Agreement, which the parties intend
to terminate upon the consummation of the Business Combination.
Departure of Chief Investment Officer
Paul Penney's role as a consultant to the Target will terminate effective as of
September 30, 2022. The Target is currently anticipates filling his role with
other internal candidates and is undertaking a search for a replacement.
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. 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
. . .
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Amendment to Unit Purchase Agreement
99.1 Press Release
99.2 Revised Risk Factors Section of Proxy Statement
99.3 Redline Comparison of Risk Factors Section of Proxy Statement
99.4 Revised Business of Safe Harbor Financial Section of Proxy
Statement
99.5 Redline Comparison of Business of Safe Harbor Financial Section of
Proxy Statement
99.6 Revised SHF's Management's Discussion and Analysis of Financial
Condition and Results of Operations Section of Proxy Statement
99.7 Redline Comparison of SHF's Management's Discussion and Analysis
of Financial Condition and Results of Operations Section of Proxy
Statement
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