Delaware
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6770
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85-1960216
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(Jurisdiction of Incorporation or Organization)
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(Primary Standard Industrial Classification Code Number)
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(I.R.S. Employer Identification Number)
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Jeffrey D. Marell
Raphael M. Russo
Michael Vogel
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
(212) 373-3000
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Tamar Donikyan
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
Telephone: (212) 446-4800
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☒
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Smaller reporting company ☒
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Emerging growth company ☒
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, 2022
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Sincerely,
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Charles B. Bernicker
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Chief Executive Officer and Chairman of the Board of Directors
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•
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Proposal No. 1 — The “Pre-Mergers Charter Amendment Proposal” — to consider and vote upon
a proposal to adopt an amendment (the “Charter Amendment”) to North Mountain’s amended and restated certificate of incorporation currently in effect (the “Existing Charter”) to amend the authorized capital stock of North Mountain to
shares, consisting of (i) shares of common stock, including shares of North Mountain Class A Common Stock, par value $0.0001 per share (“North Mountain Class A Common Stock”) and 3,306,250 shares of North Mountain Class B Common
Stock, par value $0.0001 per share (“North Mountain Class B Common Stock”), and (ii) shares of preferred stock. The full text of the Charter Amendment is attached hereto as Annex B;
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•
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Proposal No. 2 — The “Business Combination Proposal” — to consider and vote upon a
proposal to approve and adopt the Merger Agreement, dated as of December 9, 2021 (the “Merger Agreement”), by and among North Mountain, North Mountain Merger Sub Inc., a Delaware corporation and a direct, wholly owned subsidiary of North
Mountain (“Merger Sub I”), North Mountain Merger Sub II, LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of North Mountain (“Merger Sub II” and together with Merger Sub I, the “Merger Subs”), and
Corcentric, Inc., a Delaware corporation (“Corcentric”) and the transactions contemplated thereby, pursuant to which Merger Sub I will merge with and into Corcentric (the “Initial Merger”), with Corcentric surviving the Initial Merger as
a wholly owned subsidiary of North Mountain (the “Initial Surviving Company”) and immediately following the Initial Merger, the Initial Surviving Company will merge with and into Merger Sub II (the “Subsequent Merger” and together with
the Initial Merger, the “Mergers”), with Merger Sub II surviving the Subsequent Merger as a wholly owned subsidiary of North Mountain. We refer to the Mergers and the other transactions described in the Merger Agreement collectively
hereafter as the “Business Combination” (the “Business Combination”);
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•
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Proposal No. 3 — The “Post-Mergers Charter Approval Proposal” — to consider and vote upon
a proposal to adopt the Second Amended and Restated Certificate of Incorporation (the “Proposed Charter”) in the form attached hereto as Annex C;
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•
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Proposal No. 4 — The “Advisory Charter Proposals” — to consider and vote upon, on a
non-binding advisory basis, certain governance provisions in the Proposed Charter, presented separately in accordance with the United States Securities and Exchange Commission (“SEC”) requirements (Proposals No. 4.A through 4.E, referred
to as the “Advisory Charter Proposals”):
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•
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Proposal No. 4.A: to reclassify the Company’s capital stock and to increase the total number of authorized shares and classes of
stock to shares, consisting of (a) shares of Common Stock, par value $0.0001 per share and (b) shares of preferred stock, par value $0.0001 per share (we refer to this as “Advisory Charter Proposal A”);
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•
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Proposal No. 4.B: to provide with respect to any vote to increase or decrease the number of authorized shares of any class or
classes of stock (but not below the number of shares then outstanding) requires the affirmative vote of the holders of all the then-outstanding shares of capital stock of New Corcentric entitled to vote thereon, voting together as a
single class, irrespective of the provisions of Section 242(b)(2) of the DGCL (we refer to this as “Advisory Charter Proposal B”);
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•
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Proposal No. 4.C: to provide that any amendment to New Corcentric’s bylaws will require the approval of either New Corcentric’s
board of directors or the holders of at least two-thirds (2/3) of the voting power of the voting power of New Corcentric’s then-outstanding shares of capital stock entitled to vote generally in an election of directors, voting together as
a single class; provided, however, that if the New Corcentric Board has approved such adoption, then only the affirmative vote of the holders of at least a majority of the voting power of all then-outstanding shares of New Corcentric's
capital stock entitled to vote generally in the election of directors, voting together as a single class, shall be required to adopt, amend or repeal any provision of the Proposed Bylaws (we refer to this as “Advisory Charter Proposal
C”);
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•
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Proposal No. 4.D: to provide that exclusive jurisdiction of the Delaware Court of Chancery shall not apply to suits brought to
enforce any duty or liability under the Securities Act or the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction, and to provide further that unless New Corcentric consents in writing to the
selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be adopted as the sole and exclusive forum for the resolution of claims arising under the
Securities Act, or the rules and regulations promulgated thereunder (we refer to this as “Advisory Charter Proposal D”); and
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•
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Proposal No. 4.E: to provide certain additional changes, including, among others, those (i) resulting from the Business
Combination, including changing the post-business combination corporate name from “North Mountain Merger Corp.” to “Corcentric, Inc.” and removing certain provisions relating to North Mountain’s prior status as a blank check company and
North Mountain Class B Common Stock that will no longer apply upon the Closing, or (ii) that are administrative or clarifying in nature, including the deletion of language without substantive effect (we refer to this as “Advisory Charter
Proposal E”);
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•
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Proposal No. 5 — The “Equity Incentive Plan Proposal” — to consider and
vote upon a proposal to approve and adopt the equity incentive award plan established to be effective after the Closing of the Business Combination;
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•
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Proposal No. 6 — The “Employee Stock Purchase Plan Proposal” — to
consider and vote upon a proposal to approve and adopt the employee stock purchase plan established to be effective after the Closing of the Business Combination;
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•
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Proposal No. 7 — The “Nasdaq PIPE Issuance Proposal” — to
consider and vote upon a proposal to approve, for purposes of complying with the applicable listing rules of the Nasdaq Stock Market, the issuance of PIPE Shares, the delivery of PIPE Warrants and the issuance of PIPE Warrant Shares
issuable upon exercise of the PIPE Warrants to the PIPE Investors in the PIPE Financing; and
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•
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Proposal No. 8 — The “Adjournment Proposal” — to consider and
vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not
sufficient votes to approve one or more proposals presented to stockholders.
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By Order of the Board of Directors,
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, 2022
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Charles B. Bernicker
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Chief Executive Officer and Chairman of the Board of Directors
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•
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our ability to consummate the Business Combination, or, if we do not consummate the Business Combination, any other initial
business combination;
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•
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New Corcentric’s capitalization after giving effect to the Business Combination and the expected benefits of the Business
Combination; and
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future opportunities for New Corcentric.
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the occurrence of any event, change or other circumstances that could delay the Business Combination or give rise to the
termination of the Merger Agreement;
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the outcome of any legal proceedings that may be instituted against North Mountain following announcement of the proposed Business
Combination and transactions contemplated thereby;
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the inability to complete the Business Combination due to the failure to obtain approval of the stockholders of North Mountain or
to satisfy other conditions to the Closing in the Merger Agreement;
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the ability to obtain or maintain the listing of New Corcentric Common Stock on Nasdaq following the Business Combination;
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the risk that the proposed Business Combination disrupts current plans and operations of Corcentric as a result of the
announcement and consummation of the transactions described herein;
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costs related to the Business Combination; and
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other risks and uncertainties described in this proxy statement/prospectus, including those under the section entitled “Risk Factors.”
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Q.
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Why am I receiving this proxy statement/prospectus?
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A.
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North Mountain has entered into the Merger Agreement with Corcentric and the
other parties thereto, pursuant to which (i) Merger Sub I will merge with and into Corcentric, with Corcentric surviving the Initial Merger as a wholly owned subsidiary of North Mountain and (ii) immediately following the Initial
Merger, the Initial Surviving Company will merge with and into Merger Sub II, with Merger Sub II surviving the Subsequent Merger as a wholly owned subsidiary of North Mountain. A copy of the Merger Agreement is attached to this proxy
statement/prospectus as Annex A. North Mountain stockholders are being asked to consider and vote upon the Business Combination
Proposal to approve the adoption of the Merger Agreement and the Business Combination, among other proposals.
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a)
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each share of Corcentric Common Stock that is issued and outstanding immediately prior to the Effective Time (other than shares
owned by Corcentric as treasury stock, dissenting shares and shares of Corcentric restricted stock) will be converted into the right to receive (i) the Per Share Stock Consideration, (ii) any cash payable in lieu of fractional shares
pursuant to the terms of the Merger Agreement and (iii) the contingent right to receive a number of shares of North Mountain Class A Common Stock, following the Closing (such shares, the “Earnout Shares”) in accordance with the terms of
the Merger Agreement;
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b)
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each share of Corcentric Preferred Stock that is issued and outstanding immediately prior to the Effective Time (other than shares
owned by Corcentric as treasury stock, dissenting shares and the Cash Consideration Shares) will be converted into the right to receive (i) a number of newly issued shares of North Mountain Class A Common Stock, equal to the product of
(A) the Per Share Stock Consideration, multiplied by (B) the number of shares of Corcentric Common Stock that such shares of Corcentric Preferred Stock would be converted into if converted in accordance with the terms of the Corcentric
Certificate of Incorporation immediately prior to the Effective Time, (ii) any cash payable in lieu of fractional shares pursuant to the terms of the Merger Agreement and (iii) the contingent right to receive a number of Earnout Shares
following the Closing in accordance with the terms of the Merger Agreement; and
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c)
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each Cash Consideration Share will be converted into the right to receive an amount of cash, without interest, equal to the
product of (A) the Per Share Merger Consideration Value, multiplied by (B) the number of shares of Corcentric Common Stock that such shares of Corcentric Preferred Stock would be converted into if converted in accordance with the terms of
the Corcentric Certificate of Incorporation immediately prior to the Effective Time (with the aggregate amount of cash payable in respect of the Cash Consideration Shares not to exceed the Total Cash Consideration Amount).
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Q.
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What matters will stockholders consider at the special meeting?
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A.
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The Pre-Mergers Charter Amendment Proposal—a proposal to adopt an amendment
to North Mountain’s Existing Charter to increase the authorized shares of North Mountain Class A Common Stock and shares of preferred stock.
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Q.
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What will happen upon the consummation of the Business Combination?
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A.
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On the Closing Date, (i) Merger Sub I will be merged with and into
Corcentric, with Corcentric surviving the Initial Merger as a wholly owned subsidiary of North Mountain and (ii) immediately following the Initial Merger and as part of the same overall transaction as the Initial Merger, the Initial
Surviving Company will merge with and into Merger Sub II, with Merger Sub II surviving the Subsequent Merger as a wholly owned subsidiary of North Mountain. The Mergers will have the effects specified under Delaware law.
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a)
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each share of Corcentric Common Stock that is issued and outstanding immediately prior to the Effective Time (other than shares
owned by Corcentric as treasury stock, dissenting shares and shares of Corcentric restricted stock) will be converted into the right to receive (i) the Per Share Stock Consideration, (ii) any cash payable in lieu of fractional shares
pursuant to the terms of the Merger Agreement and (iii) the contingent right to receive a number of Earnout Shares following the Closing in accordance with the terms of the Merger Agreement;
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b)
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each share of Corcentric Preferred Stock that is issued and outstanding immediately prior to the Effective Time (other than shares
owned by Corcentric as treasury stock, dissenting shares
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c)
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each share of Corcentric Preferred Stock identified as receiving merger consideration in the form of cash pursuant to the terms of
the Merger Agreement (each such share of Corcentric Preferred Stock, a “Cash Consideration Share”) will be converted into the right to receive an amount of cash, without interest, equal to the product of (A) the Per Share Merger
Consideration Value, multiplied by (B) the number of shares of Corcentric Common Stock that such shares of Corcentric Preferred Stock would be converted into if converted in accordance with the terms of the Corcentric Certificate of
Incorporation immediately prior to the Effective Time (with the aggregate amount of cash payable in respect of the Cash Consideration Shares not to exceed the Total Cash Consideration Amount).
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Q.
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Why is North Mountain proposing the Business Combination Proposal?
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A.
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North Mountain was organized for the purpose of effecting a merger, capital
stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. North Mountain is not limited to any particular industry or sector.
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Q.
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Who is Corcentric?
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A.
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Corcentric’s mission is to transform how businesses purchase, pay, and get
paid. Corcentric is a leading provider of B2B commerce solutions for enterprise and middle-market businesses. Corcentric offers a comprehensive, end-to-end software and technology-enabled suite of Source-to-Pay (“S2P”) and Order-to-Cash
(“O2C”) solutions that, together with its proprietary B2B Payments Network, empowers its customers to enable growth, optimize working capital, enhance visibility, and minimize risk. Corcentric’s solutions are delivered through a
powerful combination of cloud-based software, payments, and advisory services. Corcentric’s solutions are used by more than 2,500 customers globally across numerous industry verticals, and it has processed over $100 billion in
transaction volume on its end-to-end platform during the twelve months ended December 31, 2020. With more than 450,000 buyers and 1.4 million suppliers on its global network, Corcentric is building a preeminent hub for B2B commerce with
significant barriers to entry.
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Q.
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What equity stake will current North Mountain stockholders and Corcentric stockholders have in New Corcentric?
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A.
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It is anticipated that, upon the completion of the Business Combination,
the ownership of New Corcentric will be as follows:
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No Redemption
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50% Redemption
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Contractual
Maximum
Redemption
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Contractual Maximum
Redemption
with $125 million
Minimum Cash(1)
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Shares
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Percentage
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Shares
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Percentage
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Shares
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Percentage
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Shares
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Percentage
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Current Corcentric stockholders
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89,307,448
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79.6%
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89,307,448
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80.2%
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89,307,448
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80.8%
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89,307,448
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82.7%
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Current North Mountain stockholders
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13,225,000
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11.8%
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12,362,500
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11.1%
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11,500,000
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10.4%
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9,000,000
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8.3%
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PIPE Investors
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5,000,000
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4.4%
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5,000,000
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4.5%
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5,000,000
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4.5%
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5,000,000
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4.6%
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Sponsor
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4,706,250
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4.2%
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4,706,250
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4.2%
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4,706,250
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4.3%
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4,706,250
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4.4%
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Total
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112,238,698
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100%
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111,376,198
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100%
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110,513,698
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100%
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108,013,698
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100%
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(1)
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The contractual maximum redemption with $125 million minimum cash scenario assumes that Corcentric waives the minimum cash
condition.
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•
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Assuming no redemption scenario: This presentation assumes that no Public Stockholders
exercise redemption rights with respect to their Public Shares.
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•
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Assuming 50% redemption scenario: This presentation assumes that
the Public Stockholders holding approximately 6.5% of the Public Shares exercise redemption rights with respect to their Public Shares, which is approximately 50% of the Public Shares assumed to be redeemed under the contractual maximum
redemption scenario. This scenario assumes that 862,500 Public Shares are redeemed for an aggregate redemption payment of approximately $8,625,000 plus a pro rata portion of interest accrued on the Trust Account.
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•
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Assuming contractual maximum redemption scenario: This
presentation assumes that the Public Stockholders holding approximately 13.0% of the Public Shares exercise redemption rights with respect to their Public Shares. This scenario assumes that 1,725,000 Public Shares are redeemed for an
aggregate redemption payment of approximately $17,250,000 plus a pro rata portion of interest accrued on the Trust Account. This contractual maximum redemption scenario is based on a minimum cash condition of $150,000,000 at Closing of
the Business Combination, consisting of Trust Account funds, PIPE Financing proceeds and all other North Mountain cash and cash equivalents less the aggregate amount of cash proceeds that will be required to satisfy the redemption of
the Public Shares and the payment of North Mountain estimated transaction expenses of $15,000,000. Corcentric shall have no right or ability to waive the minimum cash condition without the prior written consent of North Mountain (which
consent may be provided or withheld by North Mountain in its sole discretion) if such aggregate amount is less than $125,000,001.
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•
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Assuming contractual maximum redemption with $125 million minimum cash scenario:
This presentation assumes that the Public Stockholders holding approximately 32.0% of the Public Shares exercise redemption rights with respect to their Public Shares. This scenario assumes that 4,225,000 Public Shares are redeemed for
an aggregate redemption payment of approximately $42,225,000 plus a pro rata portion of interest accrued on the Trust Account. This contractual maximum redemption with $125 million minimum cash scenario is based on minimum cash of
$125,000,000 at Closing of the Business Combination and assumes that Corcentric waives the $150,000,000 minimum cash condition.
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Q.
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Who will be the officers and directors of New Corcentric if the Business Combination is consummated?
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A.
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The Merger Agreement provides that, immediately following the consummation
of the Business Combination, the New Corcentric Board will be comprised of seven members, six of which will be designated by Corcentric and one of which will be designated by North Mountain. Immediately following the consummation of the
Business Combination, we expect that the following will be the executive officers
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Q.
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What conditions must be satisfied to complete the Business Combination?
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A.
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There are a number of closing conditions in the Merger Agreement, including
that North Mountain’s stockholders have approved and adopted the Merger Agreement. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, see the section entitled “Proposal No. 2—The Business Combination Proposal—Conditions to Closing; Termination.”
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Q.
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What happens if I sell my shares of North Mountain Class A Common Stock before the special meeting?
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A.
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The North Mountain Record Date for the special meeting will be earlier than
the date that the Business Combination is expected to be completed. If you transfer your shares of North Mountain Class A Common Stock after the North Mountain Record Date, but before the special meeting, unless the transferee obtains
from you a proxy to vote those shares, you will retain your right to vote at the special meeting.
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Q.
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What vote is required to approve the proposals presented at the special meeting?
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A.
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The approval of the Pre-Mergers Charter Amendment Proposal requires the
affirmative vote (in person online or by proxy) of (i) the holders of a majority of the outstanding shares of North Mountain Common Stock, voting together as a single class and (ii) the holders of a majority of the outstanding shares of
North Mountain Class A Common Stock, voting separately as a single class. Accordingly, a North Mountain stockholder’s failure to vote by proxy or to vote in person online at the special meeting, an abstention from voting or a broker
non-vote will have the same effect as a vote against the Pre-Mergers Charter Amendment Proposal.
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Q.
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Do Corcentric’s stockholders need to approve the Business Combination?
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A.
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Yes. Following the execution of the Merger Agreement, Corcentric and certain
holders of Corcentric Capital Stock entered into the Corcentric Stockholder Support Agreements, pursuant to which, among other things and subject to the terms and conditions therein, such Corcentric stockholders agreed to vote or
provide their written consent with respect to all Corcentric Capital Stock beneficially owned by such stockholders in favor of adoption and approval of the Merger Agreement and the approval of the transactions contemplated by the Merger
Agreement, including the Business Combination, and not to (a) transfer any of their
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Q.
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May North Mountain, the Sponsor, Corcentric or their respective, directors, officers or affiliates purchase
shares in connection with the Business Combination?
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A.
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Prior to or following the consummation of the Business Combination and the
other transactions contemplated by the Merger Agreement, North Mountain, the Sponsor, Corcentric and their respective directors, officers or affiliates may privately negotiate transactions or make open market purchases of shares of
North Mountain Class A Common Stock or Public Warrants, although they are under no obligation to do so. They have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions
for any such transactions. None of the funds in the Trust Account will be used to purchase North Mountain Class A Common Stock or Public Warrants in such transactions. Such a purchase would include a contractual acknowledgement that
such stockholder, although still the record holder of such shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our Sponsor, directors, officers or advisors, or
their affiliates, purchase shares in privately negotiated transactions from Public Stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to
redeem their shares. Any such privately negotiated purchases may be effected at purchase prices that are in excess of the pro rata portion of the Trust Account. The purpose of such purchases of shares of North Mountain Class A Common
Stock could be to vote such shares in favor of the Business Combination Proposal and thereby increase the likelihood of obtaining stockholder approval of the Business Combination Proposal. The purpose of any such purchases of warrants
could be to reduce the number of warrants outstanding. Any such purchases of securities may result in the consummation of the Business Combination, which may not otherwise have been possible. 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. In addition, if such purchases are made, the public float of North Mountain Class A Common Stock or Public
Warrants and the number of beneficial holders of securities may be reduced, possibly making it difficult to maintain the quotation, listing or trading of these securities on a national securities exchange.
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Q.
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How many votes do I have at the special meeting?
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A.
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North Mountain’s stockholders are entitled to one vote at the special
meeting for each share of North Mountain Class A Common Stock or North Mountain Class B Common Stock held of record as of the North Mountain Record Date. As of the close of business on the North Mountain Record Date, there were
13,225,000 shares of North Mountain Class A Common Stock outstanding and 3,306,250 shares of North Mountain Class B Common Stock outstanding.
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Q.
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What interests do North Mountain’s current officers and directors and their affiliates have in the Business
Combination and the PIPE Financing?
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A.
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The North Mountain Board and executive officers and their respective
affiliates may have interests in the Business Combination and the PIPE Financing that are different from, in addition to or in conflict with, yours. The North Mountain Board was aware of and considered these interests to the extent such
interests existed at the time, among other matters, in making their recommendation that you vote in favor of the approval of the Business Combination and the transactions contemplated thereby. These interests were considered by the
North Mountain Board when it approved the Business Combination. For further information, please see the section entitled “Proposal No. 2—The Business Combination
Proposal—Interests of North Mountain Directors and Officers in the Business Combination.”
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Q.
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Did the North Mountain Board obtain a third-party valuation or fairness opinion in determining whether or not
to proceed with the Business Combination?
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A.
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The North Mountain Board did not obtain a third-party valuation or fairness
opinion in connection with its determination to approve the Business Combination. The North Mountain Board believes that based upon the financial skills and background of its directors, it was qualified to conclude that the Business
Combination was fair from a financial perspective to its stockholders. The North Mountain Board also determined, without seeking a valuation from a financial advisor, that Corcentric’s fair market value was equal to at least 80% of the
net assets held in the Trust Account (net of amounts withdrawn to fund regulatory compliance costs and to pay taxes and excluding the amount of any deferred underwriting discount). Accordingly, investors will be relying on the judgment
of the North Mountain Board as described above in valuing Corcentric’s business and assuming the risk that the North Mountain Board may not have properly valued such business.
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Q.
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What happens if the Business Combination Proposal is not approved?
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A.
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If the Business Combination Proposal is not approved and North Mountain does
not consummate a business combination by September 22, 2022, or amend its Existing Charter to extend the date by which North Mountain must consummate an initial business combination, North Mountain will be required to dissolve and
liquidate the Trust Account.
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Q.
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Do I have redemption rights?
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A.
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If you are a holder of Public Shares, you may redeem your Public Shares for
cash equal to your pro rata share of the aggregate amount on deposit in the Trust Account, which holds the proceeds of the IPO, as of two business days prior to the consummation of the Business Combination, including interest earned on
the funds held in the Trust Account and not previously released to North Mountain to pay its regulatory compliance costs and its taxes and for working capital purposes, upon the consummation of the Business Combination. The per share
amount North Mountain will distribute to holders who properly redeem their shares will not be reduced by the deferred underwriting commissions North Mountain will pay to the underwriters of its IPO if the Business Combination is
consummated. Holders of the outstanding Public Warrants do not have redemption rights with respect to such warrants in connection with the Business Combination. Our Sponsor has agreed to waive its redemption rights with respect to their
shares of North Mountain Class B Common Stock and any Public Shares that it may have acquired during or after the IPO in connection with the completion of North Mountain’s initial business combination. The shares of North Mountain
Class B Common Stock will be excluded from the pro rata calculation used to determine the per share redemption price. For illustrative purposes, based on funds in the Trust Account of approximately $ million on , the estimated
per share redemption price would have been approximately $ . Additionally, Public Shares properly tendered for redemption will only be redeemed if the Business Combination is consummated; otherwise holders of such shares will only be
entitled to a pro rata portion of the Trust Account (including interest but net of Permitted Withdrawals) in connection with the liquidation of the Trust Account. If the Business Combination is not consummated, North Mountain may enter
into an alternative business combination and close such transaction by September 22, 2022 (subject to the requirements of law) unless extended.
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Q.
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Is there a limit on the number of shares I may redeem?
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A.
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A Public Stockholder, together with any affiliate of his or any other person
with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking redemption rights with respect to 15% or more of the Public Shares. Accordingly, all shares in excess
of 15% of the Public Shares owned by a holder will not be redeemed. On the other hand, a Public Stockholder who holds less than 15% of the Public Shares may redeem all of the Public Shares held by him or her for cash.
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Q.
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Will how I vote affect my ability to exercise redemption rights?
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A.
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No. You may exercise your redemption rights whether you vote your Public
Shares for or against the Business Combination Proposal or do not vote your shares. As a result, the Business Combination
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Q.
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How do I exercise my redemption rights?
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A.
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In order to exercise your redemption rights, you must, prior to 5:00 p.m.
Eastern time on , 2022 (two business days before the special meeting), (i) submit a written request to North Mountain’s transfer agent that North Mountain redeem your Public Shares for cash and (ii) deliver your stock to North
Mountain’s transfer agent physically or electronically through The Depository Trust Company (“DTC”). The address of Continental Stock Transfer & Trust Company, North Mountain’s transfer agent, is listed under the question “Who can help answer my questions?” below. North Mountain requests that any requests for redemption include the identity of the beneficial owner
making such request. Electronic delivery of your stock generally will be faster than delivery of physical stock certificates.
|
Q.
|
What are the U.S. federal income tax consequences of exercising my redemption rights?
|
A.
|
For a discussion of the material U.S. federal income tax considerations for
holders of Public Shares with respect to the exercise of their redemption rights, see the section entitled “Material U.S. Federal Income Tax Considerations of the Business
Combination and the Redemption.” The consequences of a redemption to any particular stockholder will depend on that stockholder’s particular facts and circumstances. Accordingly, you are urged
to consult your tax advisor to determine your tax consequences from the exercise of your redemption rights, including the applicability and effect of U.S. federal, state, local and non-U.S. income and other tax laws in light of your
particular circumstances.
|
Q.
|
If I hold North Mountain Warrants, can I exercise redemption rights with respect to my warrants?
|
A.
|
No. There are no redemption rights with respect to the North Mountain
Warrants.
|
Q.
|
Do I have appraisal rights if I object to the proposed Business Combination?
|
A.
|
No. Neither North Mountain stockholders nor its unit or warrant holders have
appraisal rights in connection with the Business Combination under the DGCL. See the section entitled “Special Meeting of North Mountain Stockholders—Appraisal or Dissenters’
Rights.”
|
Q.
|
What happens to the funds held in the Trust Account upon consummation of the Business Combination?
|
A.
|
If the Business Combination is consummated, the funds held in the Trust
Account will be released to pay (i) North Mountain stockholders who properly exercise their redemption rights, (ii) the Aggregate Cash
|
Q.
|
What happens if the Business Combination is not consummated?
|
A.
|
There are certain circumstances under which the Merger Agreement may be
terminated. See the section entitled “Proposal No. 2—The Business Combination Proposal—Conditions to Closing; Termination” for
information regarding the parties’ specific termination rights.
|
Q.
|
When is the Business Combination expected to be completed?
|
A.
|
It is currently anticipated that the Business Combination will be
consummated promptly following the special meeting, provided that all other conditions to the consummation of the Business Combination have been satisfied or waived.
|
Q.
|
What do I need to do now?
|
A.
|
You are urged to carefully read and consider the information contained in
this proxy statement/prospectus, including the financial statements and annexes attached hereto, and to consider how the Business Combination will affect you as a stockholder. You should then vote as soon as possible in accordance with
the instructions provided in this proxy statement/prospectus on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.
|
Q.
|
How do I vote?
|
A.
|
If you were a holder of record of North Mountain Common Stock on the North
Mountain Record Date, you may vote with respect to the applicable proposals in person online at the special meeting, by internet, by
|
Q.
|
What will happen if I abstain from voting or fail to vote at the special meeting?
|
A.
|
At the special meeting, North Mountain will count a properly executed proxy
marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, an abstention or failure to vote will have the same effect as a vote against the
Pre-Mergers Charter Amendment Proposal and the Post-Mergers Charter Approval Proposal, and will have no effect on any of the other proposals.
|
Q.
|
What will happen if I sign and return my proxy card without indicating how I wish to vote?
|
A.
|
Signed and dated proxies received by North Mountain without an indication of
how the stockholder intends to vote on a proposal will be voted in favor of each proposal presented to the stockholders.
|
Q.
|
How can I attend the special meeting?
|
A.
|
You may attend the special meeting and vote your shares in person online
during the special meeting via live webcast by visiting . You will need the 16-digit meeting control number that is printed on your proxy card to enter the special meeting. If you are a beneficial owner and do not have your
16-digit meeting control number, contact your banker, broker or other nominee. Please note that you will not be able to physically attend the special meeting in person, but may attend the special meeting in person online.
|
Q.
|
Do I need to attend the special meeting in person online to vote my shares?
|
A.
|
No. You are invited to attend the special meeting in person online to vote
on the proposals described in this proxy statement/prospectus. However, you do not need to attend the special meeting in person online to vote your shares. Instead, you may submit your proxy by signing, dating and returning the
applicable enclosed proxy card(s) in the pre-addressed postage-paid envelope. Your vote is important. North Mountain encourages you to vote as soon as possible after carefully reading this proxy statement/prospectus.
|
Q.
|
If I am not going to attend the special meeting in person online, should I return my proxy card instead?
|
A.
|
Yes. After carefully reading and considering the information contained in
this proxy statement/prospectus, please submit your proxy by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.
|
Q.
|
If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?
|
A.
|
No. If your broker holds your shares in its name and you do not give the
broker voting instructions, under the applicable stock exchange rules, your broker may not vote your shares on any of the North Mountain
|
Q.
|
May I change my vote after I have mailed my signed proxy card?
|
A.
|
Yes. You may change your vote by sending a later-dated, signed proxy card to
North Mountain’s Secretary at the address listed below prior to the vote at the special meeting, or attend the special meeting and vote in person online. You also may revoke your proxy by sending a notice of revocation to North
Mountain’s Secretary, provided such revocation is received prior to the vote at the special meeting. If your shares are held in street name by a broker or other nominee, you must contact the broker or nominee to change your vote.
|
Q.
|
What should I do if I receive more than one set of voting materials?
|
A.
|
You may receive more than one set of voting materials, including multiple
copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each
brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting
instruction card that you receive in order to cast your vote with respect to all of your shares.
|
Q.
|
What is the quorum requirement for the special meeting?
|
A.
|
A quorum will be present at the special meeting if a majority of the North
Mountain Common Stock outstanding and entitled to vote at the special meeting is represented in person online or by proxy. As of the North Mountain Record Date, 8,265,626 shares of North Mountain Common Stock would be required to
achieve a quorum.
|
Q.
|
What happens to the North Mountain Warrants I hold if I vote my shares of North Mountain Common Stock against
approval of the Business Combination Proposal and validly exercise my redemption rights?
|
A.
|
Properly exercising your redemption rights as a North Mountain stockholder
does not result in either a vote “FOR” or “AGAINST” the Business Combination Proposal. If the Business Combination is not completed, you will continue to hold your North Mountain Warrants, and if North Mountain does not otherwise
consummate an initial business combination by September 22, 2022 or obtain the approval of North Mountain stockholders to extend the deadline for North Mountain to consummate an initial business combination, North Mountain will be
required to dissolve and liquidate, and your North Mountain Warrants will expire worthless.
|
Q.
|
Following the Business Combination, will North Mountain securities continue to trade on a stock exchange?
|
A.
|
Yes. We anticipate that, following the Business Combination, New Corcentric
Common Stock and Public Warrants will continue trading on Nasdaq under the new symbols “ ” and “ ,” respectively. The North Mountain Units will automatically separate into the component securities upon consummation of the Business
Combination and, as a result, will no longer trade as a separate security.
|
Q.
|
How does the Sponsor intend to vote on the proposals?
|
A.
|
Our Sponsor, directors and officers have agreed to vote any shares of North
Mountain Common Stock owned by them in favor of the Business Combination, including their shares of North Mountain Class B Common Stock and any Public Shares purchased after our IPO (including in open market and privately negotiated
transactions). As of the North Mountain Record Date, our Sponsor, officers and directors beneficially own an aggregate of approximately 20% of the outstanding shares of North Mountain Common Stock.
|
Q.
|
Who will solicit and pay the cost of soliciting proxies?
|
A.
|
North Mountain will pay the cost of soliciting proxies for the special
meeting. North Mountain has engaged Innisfree M&A Incorporated (“Innisfree”) to assist in the solicitation of proxies for the special meeting. North Mountain has agreed to pay Innisfree a fee of up to $20,000 in connection with the
Business Combination. North Mountain will reimburse Innisfree for reasonable out-of-pocket expenses and will indemnify Innisfree and its affiliates against certain claims, liabilities, losses, damages and expenses. North Mountain will
also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of the Public Shares for their expenses in forwarding soliciting materials to beneficial owners of Public Shares and
in obtaining voting instructions from those owners. North Mountain’s directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional
amounts for soliciting proxies.
|
Q.
|
Who can help answer my questions?
|
A.
|
If you have questions about the stockholder proposals, or if you need
additional copies of this proxy statement/prospectus, the proxy card or the consent card you should contact our proxy solicitor at:
|
•
|
each share of Corcentric Common Stock that is issued and outstanding immediately prior to the Effective Time (other than shares
owned by Corcentric as treasury stock, dissenting shares and shares of Corcentric restricted stock) will be converted into the right to receive (i) the Per Share Stock Consideration, (ii) any cash payable in lieu of fractional shares
pursuant to the terms of the Merger Agreement and (iii) the contingent right to receive a number of Earnout Shares following the Closing in accordance with the terms of the Merger Agreement, as further detailed below;
|
•
|
each share of Corcentric Preferred Stock that is issued and outstanding immediately prior to the Effective Time (other than
shares owned by Corcentric as treasury stock, dissenting shares and the Cash Consideration Shares) will be converted into the right to receive (i) a number of newly issued shares of North Mountain Class A Common Stock, equal to the
product of (A) the Per Share Stock Consideration, multiplied by (B) the number of shares of Corcentric Common Stock that such share of
|
•
|
each share of Corcentric Preferred Stock expressly identified as a Cash Consideration Share in accordance with the Merger
Agreement (each such share of Corcentric Preferred Stock, a “Cash Consideration Share”) will be converted into the right to receive the Per Share Cash Consideration multiplied by the number of shares of Corcentric Common Stock that such
shares of Corcentric Preferred Stock would be converted into if converted in accordance with the terms of the Corcentric Certificate of Incorporation immediately prior to the Effective Time. In no event will the Aggregate Cash
Consideration exceed the Total Cash Consideration Amount);
|
•
|
each share of Corcentric Common Stock and Corcentric Preferred Stock held in the treasury of Corcentric immediately prior to the
Effective Time will be cancelled without any conversion thereof and no payment or distribution will be made with respect thereto;
|
•
|
each share of common stock, par value $0.001 per share, of Merger Sub I issued and outstanding immediately prior to the
Effective Time will no longer be outstanding and will thereupon be converted into and become one validly issued fully paid and non-assessable share of common stock, par value $0.001 per share, of the Initial Surviving Company and all
such shares will constitute the only outstanding shares of capital stock of the Initial Surviving Company as of immediately following the Effective Time;
|
•
|
each vested Corcentric stock option, to the extent then outstanding and unexercised, will automatically, without any action on
the part of the holder thereof, be cancelled, and the holder will be entitled to receive in respect of such cancelled vested Corcentric stock option (i) a number of shares of North Mountain Class A Common Stock (any cash payable in lieu
of fractional shares pursuant to the terms of the Merger Agreement) equal to the quotient obtained by dividing (A) the result of (1) the product of (x) the number of shares of Corcentric Common Stock subject to such vested Corcentric
stock option immediately prior to the Effective Time, multiplied by (y) the excess, if any, of (a) the Per Share Merger Consideration Value, over (b) the per share exercise price for the shares of Corcentric Common Stock subject to such
vested Corcentric stock option immediately prior to the Effective Time, minus (2) the applicable withholding taxes payable in respect of such cancelled vested Corcentric stock option, by (B) ten
dollars ($10) and (ii) the contingent right to receive a number of Earnout Shares following the Closing in accordance with the terms of the Merger Agreement, as further detailed below;
|
•
|
each unvested Corcentric stock option, to the extent then outstanding and unexercised, will automatically be converted into an
option to acquire, on the same terms and conditions as were applicable to such unvested Corcentric stock option immediately prior to the Effective Time, including applicable vesting conditions, except for terms rendered inoperative by
reason of the transactions contemplated by the Merger Agreement or for such other administrative or ministerial changes (after such conversion, each a “Rollover Option”) the number of shares of North Mountain Class A Common Stock
determined by multiplying the number of shares of Corcentric Common Stock subject to the unvested Corcentric stock option immediately prior to the Effective Time by the Per Share Stock Consideration and rounding the resulting number
down to the nearest whole number of shares of North Mountain Class A Common Stock, and the per share exercise price for the North Mountain Class A Common Stock issuable upon exercise of such Rollover Option will be determined by
dividing the per share exercise price for the shares of Corcentric Common Stock subject to the unvested Corcentric stock option, as in effect immediately prior to the Effective Time, by the Per Share Stock Consideration, and rounding
the resulting exercise price up to the nearest whole cent. The Rollover Options will also be entitled to the contingent right to receive a number of Earnout Shares following the Closing in accordance with the terms of the Merger
Agreement, as further detailed below; and
|
•
|
each share of Corcentric restricted stock, to the extent then unvested and outstanding, will automatically be converted into the
number of shares of restricted North Mountain Class A Common Stock, subject to the same terms and conditions as were applicable to such Corcentric restricted stock
|
(i)
|
by mutual written consent of North Mountain and Corcentric;
|
(ii)
|
by either North Mountain or Corcentric if the Closing has not occurred on or before August 9, 2022 (the “Termination Date”);
|
(iii)
|
by either North Mountain or Corcentric if the Business Combination has been permanently enjoined or prohibited by the terms of a
final and non-appealable governmental order or law;
|
(iv)
|
by either North Mountain or Corcentric if North Mountain’s stockholder approval is not obtained at the special meeting (subject
to any adjournment or recess of the meeting);
|
(v)
|
by Corcentric upon a breach by North Mountain, Merger Sub I or Merger Sub II, if such breach or failure gives rise to a failure
of a closing condition and cannot be cured or has not been cured within the earlier of 30 days following notice by Corcentric or the Termination Date;
|
(vi)
|
by North Mountain upon a breach by Corcentric, if such breach or failure gives rise to a failure of a closing condition and
cannot be cured or has not been cured within the earlier of 30 days following notice by North Mountain or the Termination Date;
|
(vii)
|
by written notice from North Mountain if the Company Requisite Approval has not been obtained within four business days
following the date that the Registration Statement becomes effective; or
|
(viii)
|
by written notice from North Mountain if Corcentric fails to deliver executed copies of the Corcentric Stockholder Support
Agreements within twenty-four hours from the date of the Merger Agreement.
|
|
| |
No Redemption
|
| |
50% Redemption
|
| |
Contractual
Maximum
Redemption
|
| |
Contractual
Maximum
Redemption
with $125 million
Minimum Cash(1)
|
||||||||||||
|
| |
Shares
|
| |
Percentage
|
| |
Shares
|
| |
Percentage
|
| |
Shares
|
| |
Percentage
|
| |
Shares
|
| |
Percentage
|
Current Corcentric stockholders
|
| |
89,307,448
|
| |
79.6%
|
| |
89,307,448
|
| |
80.2%
|
| |
89,307,448
|
| |
80.8%
|
| |
89,307,448
|
| |
82.7%
|
Current North Mountain stockholders
|
| |
13,225,000
|
| |
11.8%
|
| |
12,362,500
|
| |
11.1%
|
| |
11,500,000
|
| |
10.4%
|
| |
9,000,000
|
| |
8.3%
|
PIPE Investors
|
| |
5,000,000
|
| |
4.4%
|
| |
5,000,000
|
| |
4.5%
|
| |
5,000,000
|
| |
4.5%
|
| |
5,000,000
|
| |
4.6%
|
Sponsor
|
| |
4,706,250
|
| |
4.2%
|
| |
4,706,250
|
| |
4.2%
|
| |
4,706,250
|
| |
4.3%
|
| |
4,706,250
|
| |
4.4%
|
Total
|
| |
112,238,698
|
| |
100%
|
| |
111,376,198
|
| |
100%
|
| |
110,513,698
|
| |
100%
|
| |
108,013,698
|
| |
100%
|
(1)
|
The contractual maximum redemption with $125 million minimum cash scenario assumes that Corcentric waives the minimum cash
condition.
|
•
|
Assuming no redemption scenario: This presentation assumes that no Public Stockholders
exercise redemption rights with respect to their Public Shares.
|
•
|
Assuming 50% redemption scenario: This presentation assumes
that the Public Stockholders holding approximately 6.5% of the Public Shares exercise redemption rights with respect to their Public Shares, which is approximately 50% of the Public Shares assumed to be redeemed under the contractual
maximum redemption scenario. This scenario assumes that 862,500 Public Shares are redeemed for an aggregate redemption payment of approximately $8,625,000 plus a pro rata portion of interest accrued on the Trust Account.
|
•
|
Assuming contractual maximum redemption scenario: This
presentation assumes that the Public Stockholders holding approximately 13.0% of the Public Shares exercise redemption rights with respect to their Public Shares. This scenario assumes that 1,725,000 Public Shares are redeemed for an
aggregate redemption payment of approximately $17,250,000 plus a pro rata portion of interest accrued on the Trust Account. The contractual maximum redemption scenario is based on a minimum cash consideration of $150,000,000 at
Closing of the Business Combination, consisting of Trust Account funds, PIPE Financing proceeds and all other North Mountain cash and cash equivalents of North Mountain less the aggregate amount of cash proceeds that will be required
to satisfy the redemption of the Public Shares and the payment of North Mountain estimated transaction expenses of $15,000,000. Corcentric shall have no right or ability to waive the minimum cash condition without the prior written
consent of North Mountain (which consent may be provided or withheld by North Mountain in its sole discretion) if such aggregate amount is less than $125,000,001.
|
•
|
Assuming contractual maximum redemption with $125 million minimum cash scenario:
This presentation assumes that the Public Stockholders holding approximately 32.0% of the Public Shares exercise redemption rights with respect to their Public Shares. This scenario assumes that 4,225,000 Public Shares are redeemed
for an aggregate redemption payment of approximately $42,225,000 plus a pro rata portion of interest accrued on the Trust Account. This contractual maximum redemption with $125 million minimum cash scenario is based on minimum cash of
$125,000,000 at Closing of the Business Combination and assumes that Corcentric waives the $150,000,000 minimum cash condition.
|
•
|
Class I Directors: ;
|
•
|
Class II Directors: ; and
|
•
|
Class III Directors: .
|
•
|
The pre-combination equity holders of Corcentric will hold the majority of voting rights in New Corcentric;
|
•
|
Corcentric has the right to appoint a majority of directors to the Board of Directors of New Corcentric;
|
•
|
Senior management of Corcentric will comprise the senior management of New Corcentric; and
|
•
|
The operations of Corcentric will comprise the only ongoing operations of New Corcentric.
|
•
|
The Pre-Mergers Charter Amendment Proposal—a proposal to adopt an amendment to North Mountain’s Existing Charter to increase the
authorized shares of North Mountain Class A Common Stock and shares of preferred stock.
|
•
|
The Business Combination Proposal—a proposal to approve and adopt the Merger Agreement and the Business Combination.
|
•
|
The Post-Mergers Charter Approval Proposal—a proposal to approve the adoption of the Proposed Charter.
|
•
|
The Advisory Charter Proposals—proposals to approve, on a non-binding advisory basis, certain governance provisions in the
Proposed Charter, presented separately in accordance with the SEC requirements:
|
•
|
Advisory Charter Proposal A: to reclassify the Company’s capital stock and to increase the total number of authorized shares and
classes of stock to shares, consisting of (a) shares of Common Stock, par value $0.0001 per share and (b) shares of preferred stock, par value $0.0001 per share (we refer to this as “Advisory Charter Proposal A”);
|
•
|
Advisory Charter Proposal B: to provide with respect to any vote to increase or decrease the number of authorized shares of any
class or classes of stock (but not below the number of shares then outstanding) requires the affirmative vote of the holders of all the then-outstanding shares of capital stock of New Corcentric entitled to vote thereon, voting together
as a single class, irrespective of the provisions of Section 242(b)(2) of the DGCL;
|
•
|
Advisory Charter Proposal C: to provide that any amendment to New Corcentric’s bylaws will require the approval of either New
Corcentric’s board of directors or the holders of at least two-thirds (2/3) of the voting power of the voting power of New Corcentric’s then-outstanding shares of capital stock entitled to vote generally in an election of directors,
voting together as a single class; provided, however, that if the New Corcentric Board has approved such adoption, then only the affirmative vote of the holders of at least a majority of the voting power of all then-outstanding shares
of New Corcentric's capital stock entitled to vote generally in the election of directors, voting together as a single class shall be required to adopt, amend or repeal any provision of the Proposed Bylaws;
|
•
|
Advisory Charter Proposal D: to provide that exclusive jurisdiction of the Delaware Court of Chancery shall not apply to suits
brought to enforce any duty or liability under the Securities Act or the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction, and to provide further that unless New Corcentric consents in writing to
the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be adopted as the sole and exclusive forum for the resolution of claims arising under the
Securities Act, or the rules and regulations promulgated thereunder; and
|
•
|
Advisory Charter Proposal E: to provide certain additional changes, including, among others, those (i) resulting from the
Business Combination, including changing the post-business combination corporate name from “North Mountain Merger Corp.” to “Corcentric, Inc.” and removing certain provisions relating to North Mountain’s prior status as a blank check
company and North Mountain Class B Common Stock that will no longer apply upon the Closing, or (ii) that are administrative or clarifying in nature, including the deletion of language without substantive effect.
|
•
|
The Equity Incentive Plan Proposal—a proposal to approve and adopt the equity incentive award plan established to be
effective as of the Closing.
|
•
|
The Employee Stock Purchase Plan Proposal—a proposal to approve and adopt the employee stock purchase plan established to be
effective as of the Closing.
|
•
|
The Nasdaq PIPE Issuance Proposal—a proposal to consider and vote upon a proposal to approve, for purposes of complying with
the applicable listing rules of the Nasdaq Stock Market, the issuance of PIPE Shares, the delivery of PIPE Warrants and the issuance of PIPE Warrant Shares issuable upon exercise of the PIPE Warrants to the PIPE Investors in the PIPE
Financing.
|
•
|
The Adjournment Proposal— a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further
solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders.
|
•
|
the beneficial ownership of the Sponsor and certain members of the North Mountain Board and officers of an aggregate of
3,306,250 shares of North Mountain Class B Common Stock and 4,145,000 Private Placement Warrants, which shares and warrants were acquired for an aggregate investment of $4,145,000 at the time of the IPO and would become worthless if
North Mountain does not complete a business combination by September 22, 2022, as such stockholders have waived any redemption right with respect to these shares. After giving effect to the provisions of the Share Vesting and Warrant
Cancellation Agreement, the Sponsor would own up to an aggregate of 4,706,250 shares of North Mountain Class A Common Stock (including shares subject to vesting) and no Private Placement Warrants. Such shares have an aggregate market
value of approximately $ , based on the closing price of North Mountain Class A Common Stock of $ on , 2022, the North Mountain Record Date. Because the shares of North Mountain Class B Common Stock were purchased for a
nominal amount, the Sponsor could achieve a significant positive return even if the trading price of shares of New Corcentric following the closing of the Business Combination declines significantly. Each of our officers and directors
is a member of the Sponsor. Harbour Reach Holdings, LLC is the managing member of the Sponsor and Mr. Michael Platt is the indirect controlling member of Harbour Reach Holdings, LLC;
|
•
|
Millais Limited, an affiliate of the Sponsor and an affiliate of North Mountain, agreed to purchase 2,000,000 PIPE Shares and
1,000,000 PIPE Warrants for an aggregate purchase price of $20.0 million in the PIPE Financing;
|
•
|
SMMC Sponsor Interests, LLC, an affiliate of North Mountain and an entity controlled by Charles Bernicker (Chief Executive
Officer and a director of North Mountain) and of which Douglas J. Pauls (a director of North Mountain) is a non-managing member, agreed to purchase 1,500,000 PIPE Shares and 750,000 PIPE Warrants for an aggregate purchase price of
$15.0 million in the PIPE Financing;
|
•
|
the continued indemnification of current directors and officers of North Mountain and the continuation of directors’ and
officers’ liability insurance after the Business Combination;
|
•
|
the fact that our Sponsor, officers and directors will be reimbursed for out-of-pocket expenses incurred in connection with
activities on our behalf, such as identifying potential target businesses and performing due diligence on suitable business combinations. As of January 6, 2022, North Mountain’s Sponsor and its affiliates had incurred $996 of unpaid
reimbursable expenses; and
|
•
|
the fact that our Sponsor, officers and directors will lose their entire investment in us if an initial business combination
is not completed.
|
•
|
Corcentric may not sustain its current rate of growth in the future.
|
•
|
Corcentric earns a substantial portion of its revenue from payment transactions and Corcentric’s growth is dependent upon the
continued acceptance, security and adoption of its payment solutions.
|
•
|
Because Corcentric recognizes subscription revenues over the term of the contract, fluctuations in new sales and customer
cancellations may not be immediately reflected in Corcentric’s operating results and may be difficult to discern.
|
•
|
Corcentric’s business depends substantially on its customers renewing their contracts and subscriptions and purchasing
additional subscriptions from Corcentric. Corcentric’s business could be adversely affected if its customers are not satisfied with the services provided by Corcentric and do not renew their contracts or subscriptions.
|
•
|
A limited number of customer relationships are responsible for a significant portion of Corcentric’s revenue and cash flow. In
addition, Corcentric is subject to credit risk resulting from its managed accounts receivable solutions. A decrease in sales to these customers or a change in these customers’ financial condition could materially harm Corcentric’s
business and operating results.
|
•
|
If Corcentric fails to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing
regulations and payment methods, demand for product enhancements, new product features, and changing business needs, requirements or preferences, its products may become less competitive.
|
•
|
The markets in which Corcentric participates are competitive, and if Corcentric does not compete effectively, its operating
results could be harmed.
|
•
|
Corcentric may require additional capital to support the growth of its business, and this capital might not be available on
acceptable terms, if at all.
|
•
|
Corcentric’s business depends, in part, on Corcentric’s relationships with third parties, including partnerships with financial
institutions, third party service providers, processing providers and other financial services suppliers. If any of Corcentric’s agreements with such financial institutions, third party service providers, processing providers, or
financial services providers are terminated, Corcentric could experience service interruptions.
|
•
|
The 2022 Russian invasion of Ukraine has affected and may continue to affect Corcentric's business operations.
|
•
|
Acquisitions, strategic investments, partnerships, collaborations or alliances could be difficult to identify and integrate,
divert the attention of management, disrupt Corcentric’s business, dilute New Corcentric stockholder value, and adversely affect Corcentric’s operating results and financial condition.
|
•
|
If Corcentric fails to manage its growth effectively, Corcentric may be unable to execute on its plans and strategies, maintain
and grow customer adoption and use of its products and services, or adequately address competitive challenges.
|
•
|
Corcentric's ability to recruit, retain and develop qualified personnel is critical to its success and growth. If Corcentric
is not able to effectively grow our sales and marketing organization, or grow an effective network of channel partners, it may be unable to increase its share of the existing markets or expand into new markets, which would inhibit its
ability to grow and increase its profitability.
|
•
|
If Corcentric fails to offer high-quality customer support, or if its support is more expensive than anticipated, its business
and reputation could suffer.
|
•
|
Corcentric’s private commerce network solutions strategy is in part dependent upon its ability to provide value to both buyers
and suppliers within the network. Failure to do so could have a material adverse effect on Corcentric’s business and results of operations.
|
•
|
Corcentric relies on fees and rebates that it receives from its private commerce network solutions suppliers. The failure to
maintain contracts with these private commerce network solutions suppliers could adversely affect Corcentric’s business, financial condition and results of operations.
|
•
|
Corcentric facilitates the transfer of customer funds daily, and is subject to the risk of errors, which could result in
financial losses, damage to its reputation, or loss of trust in its brand, which would harm its business and financial results.
|
•
|
If Corcentric’s security measures are breached or unauthorized access to customer data is otherwise obtained, Corcentric’s
platform or products may be perceived as not being secure, customers may reduce the use of or stop using Corcentric’s products and platform and Corcentric may incur significant liabilities.
|
•
|
Corcentric’s risk management efforts may not be effective to prevent fraudulent activities by its customers, employees or other
third parties, which could expose Corcentric to material financial losses and liability and otherwise harm its business.
|
•
|
If Corcentric fails to adequately protect its proprietary rights, its competitive position could be impaired and it may lose
valuable assets, generate less revenue and incur costly litigation to protect its rights.
|
•
|
Corcentric may be sued by third parties for various claims including alleged infringement of its proprietary rights, which could
be costly and time-consuming to defend.
|
•
|
Indemnity and liability provisions in various agreements potentially expose Corcentric to substantial liability for intellectual
property infringement, data protection, and other losses.
|
•
|
Corcentric relies on various exemptions from licensing, and regulators may find that it has violated applicable laws or
regulations.
|
•
|
The regulatory environment Corcentric operates in is subject to constant change, and new regulations could make aspects of its
business as currently conducted no longer possible.
|
•
|
Changes to payment card networks fees or rules, or associated laws or regulations, could harm Corcentric’s business.
|
•
|
There can be no assurance that New Corcentric Common Stock will be approved for listing on Nasdaq or that New Corcentric will be
able to comply with the continued listing standards of Nasdaq.
|
•
|
If the Business Combination’s benefits do not meet the expectations of investors or securities analysts, the market price of
North Mountain’s securities or, following the Closing, New Corcentric’s securities, may decline. A market for our securities may not continue, which would adversely affect the liquidity and price of our securities.
|
•
|
Following the consummation of the Business Combination, New Corcentric will incur significant increased expenses and
administrative burdens as a public company, which could have an adverse effect on its business, financial condition and results of operations.
|
•
|
The North Mountain Board did not obtain a fairness opinion in determining whether or not to proceed with the Business
Combination and, as a result, the terms may not be fair from a financial point of view to the Public Stockholders.
|
•
|
North Mountain’s Sponsor, officers and directors have potential conflicts of interest in recommending that stockholders vote
in favor of approval of the Business Combination Proposal and approval of the other proposals described in this proxy statement/prospectus.
|
•
|
Assuming no redemption scenario: This presentation assumes that no Public
Stockholders exercise redemption rights with respect to their Public Shares.
|
•
|
Assuming contractual maximum redemption scenario: This
presentation assumes that the Public Stockholders holding approximately 13.0% of the Public Shares exercise redemption rights with respect to their Public Shares. This scenario assumes that 1,725,000 Public Shares are redeemed for an
aggregate redemption payment of approximately $17,252 including a pro rata portion of interest accrued on the Trust Account of $2. The contractual maximum redemption scenario is based on a minimum cash consideration of $150,000 at
Closing of the Business Combination, consisting of Trust Account funds, PIPE Financing proceeds and all other cash and cash equivalents of North Mountain less the aggregate amount of cash proceeds that will be required to satisfy the
redemption of the Public Shares and the payment of North Mountain estimated transaction expenses of $15,000. Corcentric shall have no right or ability to waive the minimum cash condition without the prior written consent of North
Mountain (which consent may be provided or withheld by North Mountain in its sole discretion) if such aggregate amount is less than $125,000.
|
|
| |
Historical
|
| |
Pro forma
|
||||||
|
| |
North
Mountain
|
| |
Corcentric
|
| |
No redemption
scenario
|
| |
Contractual maximum
redemption scenario
|
Statement of Operations Data - For
the Year Ended December 31, 2021
|
| |
|
| |
|
| |
|
| |
|
Total revenue
|
| |
$—
|
| |
$153,694
|
| |
$153,694
|
| |
$ 153,694
|
Total direct costs of revenue
|
| |
—
|
| |
75,292
|
| |
75,292
|
| |
75,292
|
Operating loss
|
| |
(1,173)
|
| |
(22,203)
|
| |
(28,233)
|
| |
(28,233)
|
Comprehensive income (loss)
|
| |
4,990
|
| |
(33,466)
|
| |
(35,521)
|
| |
(35,953)
|
Basic and diluted net income (loss) per share(1)
|
| |
0.30
|
| |
(4.07)
|
| |
(0.32)
|
| |
(0.33)
|
Basic and diluted net income per share, Class B common
stock
|
| |
0.30
|
| |
n/a
|
| |
n/a
|
| |
n/a
|
|
| |
Historical
|
| |
Pro forma
|
||||||
|
| |
North
Mountain
|
| |
Corcentric
|
| |
No redemption
scenario
|
| |
Contractual maximum
redemption scenario
|
Balance Sheet Data - As of December 31, 2021
|
| |
|
| |
|
| |
|
| |
|
Total assets
|
| |
$132,693
|
| |
$468,932
|
| |
$467,704
|
| |
$ 467,704
|
Total liabilities
|
| |
13,503
|
| |
355,175
|
| |
402,163
|
| |
419,415
|
Redeemable preferred stock
|
| |
—
|
| |
109,531
|
| |
—
|
| |
—
|
Redeemable common stock
|
| |
—
|
| |
5,419
|
| |
—
|
| |
—
|
Class A common stock subject to possible redemption
|
| |
132,250
|
| |
—
|
| |
—
|
| |
—
|
Total stockholders' (deficit) equity
|
| |
(13,060)
|
| |
(1,193)
|
| |
65,541
|
| |
48,289
|
(1)
|
Net income (loss) per share is based on:
|
•
|
North Mountain — weighted average number of shares of North Mountain Class A Common Stock outstanding for the year ended
December 31, 2021;
|
•
|
Corcentric — weighted average number of shares of Corcentric Common Stock outstanding for the year ended December 31, 2021;
and
|
•
|
Pro forma — number of shares of Common Stock of New Corcentric expected to be outstanding after the Closing of the Business
Combination.
|
•
|
historical per share information of North Mountain for the year ended December 31, 2021;
|
•
|
historical per share information of Corcentric for the year ended December 31, 2021; and
|
•
|
unaudited pro forma per share information of New Corcentric for the year ended December 31, 2021 after giving effect to the
Business Combination, assuming two redemption scenarios as follows:
|
○
|
Assuming no redemption scenario:
This presentation assumes that no Public Stockholders exercise redemption rights with respect to their Public Shares.
|
○
|
Assuming contractual maximum redemption scenario: This presentation assumes that the Public Stockholders holding approximately 13.0% of the Public Shares exercise redemption rights with respect to their Public Shares. This scenario
assumes that 1,725,000 Public Shares are redeemed for an aggregate redemption payment of approximately $17,252 including a pro rata portion of interest accrued on the Trust Account of $2. The contractual
maximum redemption scenario is based on a minimum cash consideration of $150,000 at Closing of the Business Combination, consisting of Trust Account funds, PIPE Financing proceeds and all other
cash and cash equivalents of North Mountain less the aggregate amount of cash proceeds that will be required to satisfy the redemption of the Public Shares and the payment of North Mountain estimated transaction
expenses of $15,000. Corcentric shall have no right or ability to waive the minimum cash condition without the prior written consent of North Mountain (which consent may be provided or withheld by
North Mountain in its sole discretion) if such aggregate amount is less than $125,000.
|
|
| |
Historical
|
| |
Pro forma
|
||||||
|
| |
North
Mountain
|
| |
Corcentric
|
| |
No redemption
scenario
|
| |
Contractual maximum
redemption scenario
|
As of and for the Year Ended December 31, 2021
|
| |
|
| |
|
| |
|
| |
|
Book value per share – basic and diluted(1)
|
| |
$(0.79)
|
| |
$(0.09)
|
| |
$0.58
|
| |
$0.44
|
Net income (loss) per share – basic and diluted(2)
|
| |
$0.30
|
| |
$(4.07)
|
| |
$(0.32)
|
| |
$(0.33)
|
Net income per share, Class B common stock – basic and
diluted
|
| |
$0.30
|
| |
n/a
|
| |
n/a
|
| |
n/a
|
(1)
|
Book value per share is calculated as total permanent equity divided by:
|
•
|
North Mountain — Class A Common Stock and Class B Common Stock outstanding as of December 31, 2021;
|
•
|
Corcentric — Common Stock outstanding as of December 31, 2021; and
|
•
|
Pro forma — Common Stock of New Corcentric expected to be outstanding after the Closing of the Business Combination.
|
(2)
|
Net income (loss) per share is based on:
|
•
|
North Mountain — weighted average number of shares of North Mountain Class A Common Stock outstanding for the year ended
December 31, 2021;
|
•
|
Corcentric — weighted average number of shares of Corcentric Common Stock outstanding for the year ended December 31, 2021;
and
|
•
|
Pro forma — number of shares of Common Stock of New Corcentric expected to be outstanding after the Closing of the Business
Combination.
|
•
|
attract new customers and increase sales to Corcentric’s existing customers;
|
•
|
increase adoption and usage of Corcentric’s products and services;
|
•
|
manage the effects of the COVID-19 pandemic on Corcentric’s business and operations;
|
•
|
expand the functionality and scope of the products Corcentric offers;
|
•
|
increase the rates at which customers subscribe to and continue to use Corcentric’s products;
|
•
|
increase the volume of payments processed by successfully monetizing the payment opportunity in Corcentric’s current and
prospective customer base;
|
•
|
increase awareness of Corcentric’s brand and successfully compete with other companies;
|
•
|
provide Corcentric’s customers with high-quality customer support that meets their needs; and
|
•
|
successfully identify and acquire or invest in businesses, products, or technologies that Corcentric believes could complement or
expand its products and services.
|
•
|
sales, marketing and customer success, including an expansion of Corcentric’s sales organization, further developing its
channel partner network and new customer success initiatives;
|
•
|
Corcentric’s technology infrastructure, including systems architecture, scalability, availability, performance, and security;
|
•
|
product development, including investments in Corcentric’s product development team and the development of new products and new
functionality;
|
•
|
acquisitions or strategic investments;
|
•
|
regulatory compliance and risk management; and
|
•
|
general administration, including increased legal and accounting expenses associated with being a public company.
|
•
|
product features, quality, and functionality;
|
•
|
data asset size and ability to leverage artificial intelligence to scale with its customers' business needs;
|
•
|
ease of deployment along with ease of integration with customers’ and partners’ application programming interfaces (API) for their
billing and payment systems as well as third-party technologies;
|
•
|
ability to automate processes;
|
•
|
cloud-based delivery architecture;
|
•
|
advanced security and control features;
|
•
|
brand recognition; and
|
•
|
pricing and total cost of ownership.
|
•
|
improving Corcentric’s key business applications, processes and IT infrastructure to support its business needs;
|
•
|
enhancing information and communication systems to ensure that Corcentric’s employees and offices are well-coordinated and can
effectively communicate with each other and Corcentric’s growing base of customers and partners;
|
•
|
enhancing Corcentric’s internal controls to ensure timely and accurate reporting of all of its operations and financial results
and the added complexities of public company reporting; and
|
•
|
appropriately documenting Corcentric’s IT systems and its business processes.
|
•
|
Corcentric’s ability to attract new customers;
|
•
|
the addition or loss of one or more of Corcentric’s larger customers, including as the result of acquisitions or consolidations;
|
•
|
the timing of recognition of revenues, including a significant portion of Corcentric’s revenues that are transaction-based and
highly recurring in nature and vary based on the number of invoices processed, payments made and payment volume;
|
•
|
the amount and timing of operating expenses;
|
•
|
general economic, industry and market conditions, both domestically and internationally, including any economic downturns and
adverse impacts resulting from the COVID-19 pandemic;
|
•
|
the timing of Corcentric’s billing and collections;
|
•
|
customer renewal, expansion, and adoption rates;
|
•
|
security breaches or, technical difficulties with, or interruptions to the delivery and use of Corcentric’s products and services
on its platform;
|
•
|
the amount and timing of completion of professional services engagements;
|
•
|
increases or decreases in the number of users for Corcentric’s products, services and platform, or pricing changes upon any
renewals of customer agreements;
|
•
|
changes in Corcentric’s pricing policies or those of its competitors;
|
•
|
the timing and success of new product introductions by Corcentric or its competitors or any other change in the competitive
dynamics of Corcentric’s industry, including consolidation among competitors, customers or partners;
|
•
|
extraordinary expenses such as litigation or other dispute-related expenses or settlement payments;
|
•
|
sales tax and other tax determinations by authorities in the jurisdictions in which Corcentric conducts business;
|
•
|
the impact of new accounting pronouncements and the adoption thereof;
|
•
|
fluctuations in stock-based compensation expense;
|
•
|
expenses in connection with mergers, acquisitions or other strategic transactions;
|
•
|
the amount and timing of expenses related to Corcentric’s expansion to markets outside the United States; and
|
•
|
the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for
impairment of goodwill or intangibles from acquired companies.
|
•
|
customers’ budgetary constraints and priorities;
|
•
|
the timing of customers’ budget cycles;
|
•
|
the need by some customers for lengthy evaluations; and
|
•
|
the length and timing of customers’ approval processes.
|
•
|
loss of customers;
|
•
|
lost or delayed market acceptance and sales of Corcentric’s products and services and decreased use of Corcentric’s platform;
|
•
|
legal claims against Corcentric, including warranty and service level agreement claims;
|
•
|
regulatory enforcement action;
|
•
|
diversion of Corcentric’s resources; and
|
•
|
increased insurance costs.
|
•
|
subject Corcentric to significant fines, penalties, criminal and civil lawsuits, forfeiture of significant assets, audits,
inquiries, whistleblower complaints, adverse media coverage, investigations, and enforcement actions in one or more jurisdictions levied by federal, state, local or foreign regulators, state attorneys general and private plaintiffs who
may be acting as private attorneys general pursuant to various applicable federal, state, and local laws;
|
•
|
result in licensure and additional compliance requirements;
|
•
|
increase regulatory scrutiny of Corcentric’s business; and
|
•
|
restrict Corcentric’s operations and force it to change its business practices or compliance program, make product or operational
changes, or delay planned product launches or improvements.
|
•
|
prohibit, restrict, and/or impose taxes or fees on transactions in, to or from certain countries or with certain governments,
individuals, and entities;
|
•
|
impose additional customer identification and customer due diligence requirements;
|
•
|
impose additional reporting or recordkeeping requirements, or require enhanced transaction monitoring;
|
•
|
limit the types of entities capable of providing money transmission services, or impose additional licensing or registration
requirements;
|
•
|
impose minimum capital or other financial requirements;
|
•
|
limit or restrict the revenue that may be generated from money transmission, including revenue from interest earned on customer
funds, transaction fees, and revenue derived from foreign exchange;
|
•
|
require enhanced disclosures to Corcentric’s money transmission customers;
|
•
|
require the principal amount of money transmission originated in a country to be invested in that country or held in trust until
paid;
|
•
|
limit the number or principal amount of transactions that may be sent to or from a jurisdiction, whether by an individual or in
the aggregate; and
|
•
|
restrict or limit Corcentric’s ability to process transactions using centralized databases, for example, by requiring that
transactions be processed using a database maintained in a particular country or region.
|
•
|
under certain of Corcentric’s existing credit facilities it must maintain certain financial covenants, which require Corcentric to
maintain a minimum cumulative adjusted EBITDA and a fixed charge coverage ratio; and Corcentric’s failure to comply with these financial covenants could result in an acceleration of its outstanding indebtedness under its credit facilities
and limit Corcentric’s ability to borrow additional amounts under such credit facilities for future requirements;
|
•
|
Corcentric may have difficulty satisfying its obligations under its debt facilities and, if Corcentric fails to satisfy these
obligations, an event of default could result;
|
•
|
covenants relating to Corcentric’s debt may limit its ability to enter into certain contracts or to obtain additional financing
for acquisitions, investments, working capital, capital expenditures and other general corporate activities;
|
•
|
covenants relating to Corcentric’s debt may limit its flexibility in planning for, or reacting to, changes in Corcentric’s
business and the industry in which it operates, including by restricting Corcentric’s ability to make strategic acquisitions, dispose of certain assets or consolidate, merge or transfer all or substantially all of its assets;
|
•
|
covenants relating to Corcentric’s debt may limit its ability to incur additional indebtedness or create or permit liens;
|
•
|
Corcentric may be more vulnerable than its competitors to the impact of economic downturns and adverse developments in the
industry in which it operates;
|
•
|
Corcentric is exposed to the risk of increased interest rates because certain of its borrowings are subject to variable rates of
interest;
|
•
|
one of Corcentric’s credit facilities may require annual prepayments of principle based upon the amount of “excess cash flow” (as
defined in the agreement) generated by the business;
|
•
|
although Corcentric has no current intention to pay any dividends, it may be unable to pay dividends or make other distributions
with respect to your investment either due to cash constraints or limitations imposed by its debt facilities; and
|
•
|
Corcentric may be placed at a competitive disadvantage against less leveraged competitors, some of which are well-funded, and
shifts in the credit market may adversely affect its business.
|
•
|
changes in the relative amounts of income before taxes in the various jurisdictions in which Corcentric operates due to differing
statutory tax rates in various jurisdictions;
|
•
|
changes in tax laws, tax treaties, and regulations or the interpretation of them, including the Tax Cuts and Jobs Act enacted in
2017, as modified by the Coronavirus Aid, Relief, and Economic Security Act enacted in 2020 (“CARES Act”);
|
•
|
changes to Corcentric’s assessment about its ability to realize its deferred tax assets that are based on estimates of its future
results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which it does business;
|
•
|
the outcome of current and future tax audits, examinations, or administrative appeals; and
|
•
|
limitations or adverse findings regarding Corcentric’s ability to do business in some jurisdictions.
|
•
|
a limited availability of market quotations for New Corcentric’s securities;
|
•
|
a determination that New Corcentric Common Stock is a “penny stock” which will require brokers trading in New Corcentric Common
Stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for shares of New Corcentric Common Stock;
|
•
|
a limited amount of analyst coverage; and
|
•
|
a decreased ability to issue additional securities or obtain additional financing in the future.
|
•
|
actual or anticipated fluctuations in New Corcentric’s quarterly financial results or the quarterly financial results of companies
perceived to be similar to it;
|
•
|
changes in the market’s expectations about New Corcentric’s operating results;
|
•
|
success of competitors;
|
•
|
New Corcentric’s operating results failing to meet the expectation of securities analysts or investors in a particular period;
|
•
|
changes in financial estimates and recommendations by securities analysts concerning New Corcentric or the transportation industry
in general;
|
•
|
failure to meet or exceed the financial projections of New Corcentric;
|
•
|
operating and share price performance of other companies that investors deem comparable to New Corcentric;
|
•
|
New Corcentric’s ability to market new and enhanced products and technologies on a timely basis;
|
•
|
changes in laws and regulations affecting New Corcentric’s business;
|
•
|
New Corcentric’s ability to meet compliance requirements;
|
•
|
commencement of, or involvement in, litigation involving New Corcentric, including litigation relating to the Business
Combination, which may be more likely as a result of the earnout provisions in the Merger Agreement;
|
•
|
changes in New Corcentric’s capital structure, such as future issuances of securities or the incurrence of additional debt;
|
•
|
the volume of New Corcentric Common Stock available for public sale;
|
•
|
any major change in the New Corcentric Board or New Corcentric’s management;
|
•
|
sales of substantial amounts of New Corcentric Common Stock by New Corcentric’s directors, executive officers or significant
stockholders or the perception that such sales could occur; and
|
•
|
general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and
acts of war or terrorism.
|
•
|
the beneficial ownership of the Sponsor and certain members of the North Mountain Board and officers of an aggregate of
3,306,250 shares of North Mountain Class B Common Stock and 4,145,000 Private Placement Warrants, which shares and warrants were acquired for an aggregate investment of $4,145,000 at the time of the IPO and would become worthless if
North Mountain does not complete a business combination by September 22, 2022, as such stockholders have waived any redemption right with respect to these shares. After giving effect to the provisions of the Share Vesting and Warrant
Surrender Agreement, the Sponsor would own up to an aggregate of 4,706,250 shares of North Mountain Class A Common Stock (under the no redemption scenario and including shares subject to vesting) and no Private Placement Warrants. Such
shares have an aggregate market value of approximately $ , based on the closing price of North Mountain Class A Common Stock of $ on , 2022, the North Mountain Record Date. Because the shares of North Mountain Class B Common
Stock were purchased for a nominal amount, the Sponsor could achieve a significant positive return even if the trading price of shares of New Corcentric following the closing of the Business Combination declines significantly. Each of
our officers and directors is a member of the Sponsor. Harbour Reach Holdings, LLC is the managing member of the Sponsor and Mr. Michael Platt is the indirect controlling member of Harbour Reach Holdings, LLC;
|
•
|
Millais Limited, an affiliate of the Sponsor and an affiliate of North Mountain, agreed to purchase 2,000,000 PIPE Shares and
1,000,000 PIPE Warrants for an aggregate purchase price of $20.0 million in the PIPE Financing;
|
•
|
SMMC Sponsor Interests, LLC, an affiliate of North Mountain and an entity controlled by Charles Bernicker (Chief Executive
Officer and a director of North Mountain) and of which Douglas J. Pauls (a director of North Mountain) is a non-managing member, agreed to purchase 1,500,000 PIPE Shares and 750,000 PIPE Warrants for an aggregate purchase price of
$15.0 million in the PIPE Financing;
|
•
|
the continued indemnification of current directors and officers of North Mountain and the continuation of directors’ and officers’
liability insurance after the Business Combination;
|
•
|
the fact that our Sponsor, officers and directors will be reimbursed for out-of-pocket expenses incurred in connection with
activities on our behalf, such as identifying potential target businesses and performing due diligence on suitable business combinations. As of January 6, 2022, North Mountain’s Sponsor and its affiliates had incurred $996 of unpaid
reimbursable expenses; and
|
•
|
the fact that our Sponsor, officers and directors will lose their entire investment in us if an initial business combination is
not completed.
|
•
|
no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
|
•
|
the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of
directors or the resignation, death, or removal of a director with or without cause by stockholders, which prevents stockholders from being able to fill vacancies on our board of directors;
|
•
|
the ability of our board of directors to determine whether to issue shares of our preferred stock and to determine the price and
other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
|
•
|
a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special
meeting of our stockholders;
|
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the requirement that a special meeting of stockholders may be called only by the chairperson of the board of directors, the chief
executive officer or the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;
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limiting the liability of, and providing indemnification to, our directors and officers;
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controlling the procedures for the conduct and scheduling of stockholder meetings;
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providing for a staggered board, in which the members of the board of directors are divided into three classes to serve for a
period of three years from the date of their respective appointment or election;
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requiring the affirmative vote of at least 66 2/3% of the voting power of the outstanding shares of capital stock of
New Corcentric entitled to vote generally in the election of directors, voting together as a single class, to amend the Proposed Bylaws; provided, however, that if the New Corcentric Board has
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advance notice procedures that stockholders must comply with in order to nominate candidates to the New Corcentric Board or to
propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain
control of New Corcentric.
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The Pre-Mergers Charter Amendment Proposal—a proposal to adopt an amendment to North Mountain’s Existing Charter to increase the
authorized shares of North Mountain Class A Common Stock and shares of preferred stock.
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The Business Combination Proposal—a proposal to approve and adopt the Merger Agreement and the Business Combination.
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The Post-Mergers Charter Approval Proposal—a proposal to approve the adoption of the Proposed Charter.
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The Advisory Charter Proposals—proposals to approve, on a non-binding advisory basis, certain governance provisions in the
Proposed Charter, presented separately in accordance with the SEC requirements.
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The Equity Incentive Plan Proposal—a proposal to approve and adopt the equity incentive award plan established to be effective
as of the Closing.
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The Employee Stock Purchase Plan Proposal—a proposal to approve and adopt the employee stock purchase plan established to be
effective as of the Closing.
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The Nasdaq PIPE Issuance Proposal—a proposal to consider and vote upon a proposal to approve, for purposes of complying with
the applicable listing rules of the Nasdaq Stock Market, the issuance of PIPE Shares, the delivery of PIPE Warrants and the issuance of PIPE Warrant Shares issuable upon exercise of the PIPE Warrants to the PIPE Investors in the PIPE
Financing.
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The Adjournment Proposal—a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further
solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders.
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the beneficial ownership of the Sponsor and certain members of the North Mountain Board and officers of an aggregate of
3,306,250 shares of North Mountain Class B Common Stock and 4,145,000 Private Placement Warrants, which shares and warrants were acquired for an aggregate investment of $4,145,000 at the time of the IPO and would become worthless if
North Mountain does not complete a business combination by September 22, 2022, as such stockholders have waived any redemption right with respect to these shares. After giving effect to the provisions of the Share Vesting and Warrant
Cancellation Agreement, the Sponsor would own up to an aggregate of 4,706,250 shares of North Mountain Class A Common Stock (including shares subject to vesting) and no Private Placement Warrants. Such shares have an aggregate market
value of approximately $ , based on the closing price of North Mountain Class A Common Stock of $ on , 2022, the North Mountain Record Date. Because the shares of North Mountain Class B Common Stock were purchased for a
nominal amount, the Sponsor could achieve a significant positive return even if the trading price of shares of New Corcentric following the closing of the Business Combination declines significantly. Each of our officers and directors
is a member of the Sponsor. Harbour Reach Holdings, LLC is the managing member of the Sponsor and Mr. Michael Platt is the indirect controlling member of Harbour Reach Holdings, LLC;
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North Mountain’s sponsor is North Mountain LLC, a Delaware limited liability company. The Sponsor currently holds 3,306,250 shares
of North Mountain Class B Common Stock and 4,145,000 Private Placement Warrants, acquired for an aggregate investment of $4,145,000 at the time of the IPO. Harbour Reach Holdings, LLC is the managing member of the Sponsor and Mr. Michael
Platt is the indirect controlling member of Harbour Reach Holdings, LLC. Messrs. Bernicker, Dermatas, Metzger, O’Callaghan and Pauls are non-managing members of the Sponsor;
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Millais Limited, an affiliate of the Sponsor and an affiliate of North Mountain, agreed to purchase 2,000,000 PIPE Shares and
1,000,000 PIPE Warrants for an aggregate purchase price of $20.0 million in the PIPE Financing;
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SMMC Sponsor Interests, LLC, an affiliate of North Mountain and an entity controlled by Charles Bernicker (Chief Executive
Officer and a director of North Mountain) and of which Douglas J. Pauls (a director of North Mountain) is a non-managing member, agreed to purchase 1,500,000 PIPE Shares and 750,000 PIPE Warrants for an aggregate purchase price of
$15.0 million in the PIPE Financing;
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the continued indemnification of current directors and officers of North Mountain and the continuation of directors’ and officers’
liability insurance after the Business Combination;
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the fact that our Sponsor, officers and directors will be reimbursed for out-of-pocket expenses incurred in connection with
activities on our behalf, such as identifying potential target businesses and performing due diligence on suitable business combinations. As of January 6, 2022, North Mountain’s Sponsor and its affiliates had incurred $996 of unpaid
reimbursable expenses; and
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the fact that our Sponsor, officers and directors will lose their entire investment in us if an initial business combination is
not completed.
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You can vote by completing, signing and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your
shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the special meeting.
If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your
shares of North Mountain Common Stock will be voted as recommended by the North Mountain Board. With respect to proposals for the special meeting, that means: “FOR” each of these proposals.
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You can attend the special meeting and vote in person online. However, if your shares of North Mountain Common Stock are held in
the name of your broker, bank or other nominee, you must get a proxy from the broker, bank or other nominee. That is the only way we can be sure that the broker, bank or nominee has not already voted your shares of North Mountain Common
Stock.
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you may send another proxy card with a later date;
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you may notify Innisfree before the special meeting that you have revoked your proxy; or
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you may attend the special meeting, revoke your proxy and vote in person online, as indicated above.
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Submit a request in writing that North Mountain redeem your Public Shares for cash to Continental Stock Transfer & Trust
Company, North Mountain’s transfer agent, at the following address:
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Deliver your Public Shares either physically or electronically through DTC to North Mountain’s transfer agent. Stockholders
seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the transfer agent. It is North Mountain’s understanding that stockholders should
generally allot at least one week to obtain physical certificates from the transfer agent. However, North Mountain does not have any control over this process and it may take longer than one week. Stockholders who hold their shares in
street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically. If you do not submit a written request and deliver your Public Shares as described above, your
shares will not be redeemed.
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each share of Corcentric Common Stock that is issued and outstanding immediately prior to the Effective Time (other than shares
owned by Corcentric as treasury stock, dissenting shares and shares of Corcentric restricted stock) will be converted into the right to receive (i) the Per Share Stock Consideration, (ii) any cash payable in lieu of fractional shares
pursuant to the terms of the Merger Agreement and (iii) the contingent right to receive a number of Earnout Shares following the Closing in accordance with the terms of the Merger Agreement, as further detailed below;
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each share of Corcentric Preferred Stock that is issued and outstanding immediately prior to the Effective Time (other than shares
owned by Corcentric as treasury stock, dissenting shares and the Cash Consideration Shares) will be converted into the right to receive (i) a number of newly issued shares of North Mountain Class A Common Stock, equal to the product of
(A) the Per Share Stock Consideration, multiplied by (B) the number of shares of Corcentric Common Stock that such share of Corcentric Preferred Stock would be converted into if converted in accordance with the terms of the Corcentric
Certificate of Incorporation immediately prior to the Effective Time, (ii) any cash payable in lieu of fractional shares pursuant to the terms of the Merger Agreement and (iii) the contingent right to receive a number of Earnout Shares
following the Closing in accordance with the terms of the Merger Agreement, as further detailed below;
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each share of Corcentric Preferred Stock expressly identified as a Cash Consideration Share in accordance with the Merger
Agreement (each such share of Corcentric Preferred Stock, a “Cash Consideration Share”) will be converted into the right to receive the Per Share Cash Consideration multiplied by the number of shares of Corcentric Common Stock that such
shares of Corcentric Preferred Stock would be converted into if converted in accordance with the terms of the Corcentric Certificate of Incorporation immediately prior to the Effective Time. In no event will the Aggregate Cash
Consideration exceed the Total Cash Consideration Amount;
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each share of Corcentric Common Stock and Corcentric Preferred Stock held in the treasury of Corcentric immediately prior to the
Effective Time will be cancelled without any conversion thereof and no payment or distribution will be made with respect thereto;
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each share of common stock, par value $0.001 per share, of Merger Sub I issued and outstanding immediately prior to the Effective
Time will no longer be outstanding and will thereupon be converted into and become one validly issued fully paid and non-assessable share of common stock, par value $0.001 per share, of the Initial Surviving Company and all such shares
will constitute the only outstanding shares of capital stock of the Initial Surviving Company as of immediately following the Effective Time;
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each vested Corcentric stock option, to the extent then outstanding and unexercised, will automatically, without any action on the
part of the holder thereof, be cancelled, and the holder will be entitled to receive in respect of such cancelled vested Corcentric stock option (i) a number of shares of North Mountain Class A Common Stock (any cash payable in lieu of
fractional shares pursuant to the terms of the Merger Agreement) equal to the quotient obtained by dividing (A) the result of (1) product of (x) the number of shares of Corcentric Common Stock subject to such vested Corcentric stock
option immediately prior to the Effective Time, multiplied by (y) the excess, if any, of (a) the Per Share Merger Consideration Value, over (b) the per share exercise price for the shares of Corcentric Common Stock subject to such vested
Corcentric stock option immediately prior to the Effective Time, minus (2) the applicable withholding taxes payable in respect of such cancelled vested Corcentric stock option, by (B) ten dollars
($10) and (ii) the contingent right to receive a number of Earnout Shares following the Closing in accordance with the terms of the Merger Agreement, as further detailed below;
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each unvested Corcentric stock option, to the extent then outstanding and unexercised, will automatically be converted into an
option to acquire, on the same terms and conditions as were applicable to such unvested Corcentric stock option immediately prior to the Effective Time, including applicable vesting conditions, except for terms rendered inoperative by
reason of the transactions contemplated by the Merger Agreement or for such other administrative or ministerial changes (after such conversion, each a “Rollover Option”) the number of shares of North Mountain Class A Common Stock
determined by multiplying the number of shares of Corcentric Common Stock subject to the unvested Corcentric stock option immediately prior to the Effective Time by the Per Share Stock Consideration and rounding the resulting number down
to the nearest whole number of shares of North Mountain Class A Common Stock, and the per share exercise price for the North Mountain Class A Common Stock issuable upon exercise of such Rollover Option will be determined by dividing the
per share exercise price for the shares of Corcentric Common Stock subject to the unvested Corcentric stock option, as in effect immediately prior to the Effective Time, by the Per Share Stock Consideration, and rounding the resulting
exercise price up to the nearest whole cent. The Rollover Options will be entitled to the contingent right to receive a number of Earnout Shares following the Closing in accordance with the terms of the Merger Agreement, as further
detailed below; and
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each share of Corcentric restricted stock, to the extent then unvested and outstanding, will automatically be converted into the
number of shares of restricted North Mountain Class A Common Stock, subject to the same terms and conditions as were applicable to such Corcentric restricted stock immediately prior to the Effective Time, including applicable vesting
conditions, except for terms rendered inoperative by reason of the transactions contemplated by the Merger Agreement or for such other administrative or ministerial changes (after such conversion, “Rollover Restricted Stock”), determined
by multiplying (i) the number of shares of Corcentric Common Stock subject to such Corcentric restricted stock award immediately prior to the Effective Time by (ii) the Per Share Stock Consideration. The shares of Rollover Restricted
Stock will be entitled to the contingent right to receive a number of Earnout Shares following the Closing in accordance with the terms of the Merger Agreement, as further detailed below.
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corporate organization, qualification to do business and good standing;
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subsidiaries;
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requisite corporate authority to enter into the Merger Agreement and to complete the contemplated transactions;
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absence of conflicts with organizational documents, applicable laws or certain agreements and instruments as a result of entering
into the Merger Agreement or consummating the Business Combination;
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required governmental and regulatory consents necessary in connection with the Business Combination;
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capitalization;
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financial statements;
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absence of undisclosed liabilities;
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legal proceedings and absence of governmental orders;
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compliance with applicable law;
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intellectual property and information technology systems;
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material contracts;
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employee compensation and benefits matters;
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labor matters;
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tax matters;
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broker’s and finder’s fees related to the Business Combination;
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insurance;
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real property and title to assets;
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environmental matters;
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absence of a material adverse effect since December 31, 2020 and absence of certain other changes;
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affiliate agreements;
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internal controls;
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permits; and
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accuracy of Corcentric’s information provided in this proxy statement/prospectus.
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corporate organization, qualification to do business, good standing and corporate power;
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requisite corporate authority to enter into the Merger Agreement and to complete the contemplated transactions;
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absence of conflicts with governing documents, applicable laws or certain agreements and instruments as a result of entering into
the Merger Agreement or consummate the Business Combination;
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litigation and proceedings;
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compliance with laws;
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employee benefit plans;
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required governmental and regulatory consents necessary in connection with the Business Combination;
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financial ability and the trust account;
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tax matters;
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broker’s and finder’s fees related to the Business Combination;
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proper filing of documents with the SEC, the accuracy of information contained in the documents filed with the SEC and
Sarbanes-Oxley certifications;
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historical business activities and absence of certain changes related thereto;
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accuracy of North Mountain’s information provided in this proxy statement/prospectus;
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capitalization;
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North Mountain’s Nasdaq stock market quotation;
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contracts;
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title to property;
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investment company act;
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affiliate agreements;
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business combination restrictions; and
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the Subscription Agreements.
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change or amend its certificate of incorporation, bylaws or other organizational documents;
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(i) make, declare or pay any dividend or distribution (whether in cash, stock or property) to any of the stockholders of
Corcentric in their capacities as stockholders, except dividends and distributions by a wholly-owned subsidiary of Corcentric to Corcentric or another wholly-owned subsidiary of Corcentric, (ii) effect any recapitalization,
reclassification, split or other change in its capitalization, (iii) except in connection with the exercise or settlement of any Corcentric equity award, authorize for issuance, issue, sell, transfer, pledge, encumber, dispose of or
deliver any additional shares of its capital stock or securities convertible into or exchangeable for shares of its capital stock, or issue, sell, transfer, pledge, encumber or grant any right, option, restricted stock unit, stock
appreciation right or other commitment for the issuance of shares of its capital stock, or split, combine or reclassify any shares of its capital stock, or (iv) except as required pursuant to the Corcentric stock plans or any award
agreement thereunder as in effect on the date of the Merger Agreement, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any shares of its capital stock or other equity interests;
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enter into, or amend or modify any material term of (in any manner adverse to Corcentric and its subsidiaries), terminate
(excluding any expiration in accordance with its terms), renew or fail to exercise any renewal rights, or waive or release any material rights, claims or benefits under certain
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sell, transfer, lease, pledge or otherwise encumber or subject to any lien, abandon, cancel, let lapse or convey or dispose of any
of its or its subsidiaries assets, properties or business (including Corcentric intellectual property and Corcentric software), except for (i) with respect to registered intellectual property, where Corcentric has, in its reasonable
business judgment, decided to cancel, abandon, allow to lapse or not renew such registered intellectual property that Corcentric determined in good faith to no longer be useful to and not material to the Company’s business,
(ii) transactions solely among Corcentric and its wholly-owned subsidiaries or among the wholly-owned subsidiaries of Corcentric, (iii) dispositions of obsolete or worthless assets, (iv) sales of inventory in the ordinary course of
business consistent with past practice and (iv) sales, abandonment, lapses of assets or items or materials (in each case other than Corcentric intellectual property and Corcentric software) in excess of a specified aggregate amount, other
than as permitted by the Merger Agreement and encumbrances on property and assets in the ordinary course of business consistent with past practice and that would not, individually or in the aggregate, reasonably be expected to be material
to Corcentric and its subsidiaries, taken as a whole;
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except as otherwise required pursuant to the terms of Corcentric’s benefit plans, policies or agreements in effect on the date of
the Merger Agreement or applicable law, (i) grant any increase in compensation, benefits or severance to any director, employee or independent contractor of Corcentric or its subsidiaries with an annual base salary in excess of a
specified amount, (ii) adopt, enter into, materially amend or terminate any Corcentric benefit plan or any collective bargaining or similar agreement (including agreements with works councils and trade unions and side letters) to which
Corcentric or any of its subsidiaries are a party or by which they are bound, (iii) grant or provide any severance or termination payments or benefits to any director, employee or independent contractor of Corcentric or its subsidiaries
with an annual base salary in excess of a specified amount, (iv) hire any employee or independent contractor of Corcentric or its subsidiaries other than any employee or independent contractor with an annual base salary of less than a
specified amount, or terminate any employee of Corcentric or its subsidiaries with an annual base salary in excess of a specified amount (other than for cause), or (v) take any action that will result in the acceleration or vesting of any
payment or benefit of any director, officer, employee or independent contractor of Corcentric or its subsidiaries under any of the Corcentric benefit plans, policies or agreements;
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(i) fail to maintain its existence or acquire by merger or consolidation with, or merge or consolidate with, or purchase a
material portion of the assets or equity of, any corporation, partnership, limited liability company, association, joint venture or other business organization or division thereof; or (ii) adopt or enter into a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the transactions contemplated by the Merger Agreement);
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make any capital expenditures (or commitment to make any capital expenditures) that in the aggregate exceed a specified amount,
other than (i) any capital expenditure (or series of related capital expenditures) consistent with Corcentric’s annual capital expenditure budget for periods following the date of the Merger Agreement, with respect to any such
expenditures made in 2022, made available and reasonably acceptable to North Mountain following the date of the Merger Agreement or (ii) in connection with buying any assets purchased for lease or resale in the ordinary course of
business;
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make any loans, advances or capital contributions to, or investments in, any other person or entity, make any material change in
its existing borrowing or lending arrangements for or on behalf of such persons or entities, or enter into any “keep well” or similar agreement to maintain the financial condition of any other person or entity, except advances to
employees or officers of Corcentric and its subsidiaries in the ordinary course of business consistent with past practice and extended payment terms for customers in the ordinary course of business;
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make, revoke or change any material tax election, adopt or change any material tax accounting method or period, file any material
tax return inconsistent with past practice in any material respect, file any amendment to a material tax return, enter into any agreement with a governmental authority with respect to a material amount of taxes, settle or compromise any
examination, audit or other action with a taxing authority relating to any material taxes, or consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of material taxes,
defer the payment of any material taxes pursuant to Section 2303 of the CARES Act (or similar successor provision) or any other law or executive order or executive memo intended to address the consequences of COVID-19, or enter into any
material tax sharing, indemnification, allocation or similar agreement or arrangement (excluding any commercial contract entered into in the ordinary course of business and not primarily related to taxes);
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take any action, or knowingly fail to take any action, which would prevent or impede the transactions contemplated by the Merger
Agreement from qualifying for the intended tax treatment;
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acquire or dispose of any fee interest in real property;
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enter into, renew or amend in any material respect any Corcentric affiliate agreement;
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waive, release, compromise, settle or satisfy any pending or threatened material claim (including any pending or threatened
action) or compromise or settle any liability, other than in the ordinary course of business consistent with past practice or that involves monetary damages that do not exceed a specified amount in the aggregate;
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incur, create, assume, refinance, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any
indebtedness in excess of a specified amount, other than (i) solely between Corcentric and any of its wholly-owned subsidiaries or between any of such wholly-owned subsidiaries or (ii) in connection with borrowings or extensions of credit
in the ordinary course of business under (A) that certain Amended and Restated Loan and Security Agreement, dated as of November 15, 2018 (as amended, restated, amended and restated, modified and supplemented from time to time prior to
the date hereof), by and among Corcentric, Corcentric, LLC and Corcentric Capital Equipment Solutions, LLC, as borrowers thereunder, the other obligors party thereto from time to time, the lenders party thereto from time to time and Bank
of America, N.A., as agent or (B) that certain Loan and Security Agreement, dated as of November 15, 2018 (as amended, restated, amended and restated, modified and supplemented from time to time prior to the date hereof), by and among
Corcentric, Corcentric, LLC and Corcentric Capital Equipment Solutions, LLC, as borrowers thereunder, the other obligors party thereto from time to time, the lenders party thereto from time to time, and TCW Asset Management Company LLC,
as agent for the lenders, in each case, subject to certain limitations;
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enter into any material new line of business outside of the business currently conducted by Corcentric and its subsidiaries as of
the date of the Merger Agreement;
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make any material change in its financial accounting methods, principles or practices, except insofar as may have been required by
a change in GAAP (including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization) or applicable law;
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voluntarily fail to maintain, cancel or materially change coverage under, in a manner materially detrimental to Corcentric or any
of its subsidiaries, any insurance policy maintained with respect to Corcentric and its subsidiaries and their assets and properties; or
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enter into any agreement or undertaking to do any action prohibited by the foregoing.
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change, modify or amend the trust agreement, the North Mountain organizational documents or the organizational documents of Merger
Sub I or Merger Sub II, other than to effectuate the Charter Amendment, the Proposed Charter and the Proposed Bylaws;
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make, declare, set aside or pay any dividends on, or make any other distribution (whether in cash, stock or property) in respect
of any of its outstanding capital stock or other equity interests; split, combine, reclassify or otherwise change any of its capital stock or other equity interests; or, other than the redemption of any shares of North Mountain Class A
Common Stock or as otherwise required by North Mountain’s organizational documents in order to consummate the transactions contemplated by the Merger Agreement, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or
otherwise acquire, any capital stock of, or other equity interests in, North Mountain;
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make, revoke or change any material tax election, adopt or change any material tax accounting method or period, file any amendment
to a material tax return, enter into any agreement with a governmental authority with respect to a material amount of taxes, settle or compromise any examination, audit or other action with a governmental authority relating to any
material taxes or settle or compromise any claim or assessment by a governmental authority in respect of material taxes, consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in
respect of taxes, or enter into any material tax sharing, indemnification, allocation or similar agreement or arrangement (excluding any commercial contract entered into in the ordinary course of business and not primarily related to
taxes);
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take any action, or knowingly fail to take any action, which action or failure to act would prevent or impede the transactions
contemplated by the Merger Agreement from qualifying for the intended tax treatment;
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enter into, renew or amend in any material respect, any North Mountain affiliate agreement (or any contract, that if existing on
the date of the Merger Agreement, would have constituted a North Mountain affiliate agreement);
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enter into, or amend or modify any material term of (in a manner adverse to North Mountain or any of its subsidiaries (including
Corcentric and its subsidiaries)), terminate (excluding any expiration in accordance with its terms), or waive or release any material rights, claims or benefits under, any contract to which North Mountain or any of its subsidiaries is a
party or by which any of their assets is bound (or any contract, that if existing on the date of the Merger Agreement, would have constituted such a contract) or any collective bargaining or similar agreement (including agreements with
works councils and trade unions and side letters) to which North Mountain or its subsidiaries is a party or by which it is bound;
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waive, release, compromise, settle or satisfy any pending or threatened claim (including any pending or threatened action) or
compromise or settle other than claims, compromises or settlements that do not exceed a specified aggregate amount;
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incur, create, assume, refinance, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any
indebtedness;
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(A) offer, issue, deliver, grant or sell, or authorize or propose to offer, issue, deliver, grant or sell, any capital stock of,
or other equity interests in, North Mountain or any of its subsidiaries or any securities convertible into, or any rights, warrants or options to acquire, any such capital stock, equity, equity-based or phantom interests, other than
(i) in connection with the exercise of any North Mountain warrants outstanding on the date of the Merger Agreement, (ii) in connection with the conversion of the North Mountain Class B Common Stock pursuant to North Mountain’s
organizational documents, (iii) the transactions contemplated by the Merger Agreement (including transactions contemplated by the Subscription Agreements) or (iv) the transactions contemplated by any Subscription Agreement executed after
the date of the Merger Agreement with certain persons in accordance with the terms of the Merger Agreement or (B) amend, modify or waive any of the terms or rights set forth in, any North Mountain warrant or the warrant agreement,
including any amendment, modification or reduction of the warrant price set forth therein, other than pursuant to the Subscription Agreements and the Share Vesting and Warrant Surrender Agreement;
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except as contemplated by the Equity Incentive Plan or the 2022 ESPP, (i) adopt or amend any North Mountain benefit plan, or
enter into any employment contract or collective bargaining agreement or
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fail to maintain its existence or acquire by merger or consolidation with, or merge or consolidate with, or purchase a material
portion of the assets or equity of, any corporation, partnership, limited liability company, association, joint venture or other business organization or division thereof; or adopt or enter into a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the transactions contemplated by the Merger Agreement);
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make any capital expenditures;
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make any loans, advances or capital contributions to, or investments in, any other person, make any change in its existing
borrowing or lending arrangements for or on behalf of such persons, or enter into any “keep well” or similar agreement to maintain the financial condition of any other person or entity;
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enter into any new line of business outside of the business currently conducted by North Mountain and its subsidiaries as of the
date of the Merger Agreement;
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make any change in its financial accounting methods, principles or practices, except insofar as may have been required by a change
in GAAP (including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization) or applicable law;
|
•
|
voluntarily fail to maintain, cancel or materially change coverage under any insurance policy in form and amount equivalent to the
insurance coverage currently maintained with respect to North Mountain and its subsidiaries and their assets and properties; or
|
•
|
enter into any agreement or undertaking to do any action prohibited by the foregoing.
|
•
|
Corcentric and North Mountain providing, subject to certain specified restrictions and conditions, to the other party and its
respective representatives reasonable access to Corcentric’s and North Mountain’s (as applicable) and their respective subsidiaries’ properties, records, systems, contracts and commitments;
|
•
|
Corcentric, its subsidiaries and stockholders agreeing not to engage in transactions involving securities of North Mountain
without North Mountain’s prior consent;
|
•
|
Corcentric waiving claims to the Trust Account;
|
•
|
Corcentric and North Mountain cooperating on the preparation and efforts to make effective this proxy statement/prospectus;
|
•
|
North Mountain making certain disbursements from the Trust Account;
|
•
|
North Mountain keeping current and timely filing all reports required to be filed or furnished with the SEC and otherwise
complying in all material respects with its reporting obligations under applicable securities laws;
|
•
|
Corcentric taking all actions necessary to cause certain agreements to be terminated and/or modified or amended in accordance with
the terms of the Merger Agreement;
|
•
|
North Mountain taking steps to exempt the acquisition of North Mountain Class A Common Stock from Section 16(b) of the Exchange
Act pursuant to Rule 16b-3 thereunder;
|
•
|
North Mountain obtaining directors’ and officers’ liability insurance prior to the closing;
|
•
|
cooperation between Corcentric and North Mountain in obtaining any necessary third-party consents required to consummate the
Business Combination;
|
•
|
agreement relating to the intended tax treatment of the transactions contemplated by the Merger Agreement;
|
•
|
confidentiality and publicity relating to the Merger Agreement and the transactions contemplated thereby; and
|
•
|
Corcentric and North Mountain agreeing not to amend, supplement or modify any of the Subscription Agreements, the Corcentric
Stockholder Support Agreements, the Registration Rights Agreement, the Lock-up Agreements, the Share Vesting and Warrant Surrender Agreement or the Confidentiality Agreement, without the prior written consent of the other (such consent
not to be unreasonably withheld, conditioned or delayed).
|
•
|
all applicable waiting periods (and any extensions thereof) under the HSR Act in respect of the transactions contemplated by the
Merger Agreement shall have expired or been terminated;
|
•
|
there shall not have been entered, enacted or promulgated any governmental order, statute, rule, regulation or governmental order
enjoining or prohibiting the consummation of the transactions contemplated by the Merger Agreement;
|
•
|
the redemption offer in relation to the Public Shares shall have been completed in accordance with the terms of the Merger
Agreement and this proxy statement/prospectus;
|
•
|
the registration statement of which this proxy statement/prospectus forms a part shall have become effective under the Securities
Act and no stop order suspending the effectiveness of the registration statement shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the SEC and not withdrawn;
|
•
|
North Mountain shall have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the
Exchange Act);
|
•
|
the approval by North Mountain stockholders of the Business Combination Proposal, the Pre-Mergers Charter Amendment Proposal,
the Post-Mergers Charter Approval Proposal, the Equity Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Nasdaq PIPE Issuance Proposal shall have been obtained;
|
•
|
the Corcentric Stockholder Approval shall have been obtained;
|
•
|
the North Mountain Class A Common Stock, the PIPE Warrants and the shares of North Mountain Class A Common Stock issuable upon the
exercise of the PIPE Warrants to be issued or delivered in connection with the transactions contemplated by the Merger Agreement (including the Earnout Shares), including the transactions contemplated by the Subscription Agreements, shall
have been approved for listing on Nasdaq, subject only to official notice of issuance thereof and the requirement to have a sufficient number of round lot holders; and
|
•
|
the Existing Charter will have been amended by the Charter Amendment.
|
•
|
the accuracy of the representations and warranties of Corcentric as of the date of the Merger Agreement and as of the Closing Date
of the Business Combination, other than, in most cases, those failures to be true and correct that would not reasonably be likely to have a material adverse effect on Corcentric;
|
•
|
each of the covenants of Corcentric to be performed or complied with as of or prior to the Closing shall have been performed or
complied with in all material respects; and
|
•
|
the receipt of a certificate signed by an officer of Corcentric certifying that the two preceding conditions have been satisfied.
|
•
|
the accuracy of the representations and warranties of North Mountain, Merger Sub I and Merger Sub II as of the date of the Merger
Agreement and as of the closing date of the Business Combination, other than, in most cases, those failures to be true and correct that would not reasonably be likely to cause an event, change, circumstance, effect or development
(collectively, “Effects”) that, individually or in the aggregate with one or more other Effects, does or would reasonably be expected to prevent, materially delay or materially impair North Mountain, Merger Sub I or Merger Sub II from
consummating the Mergers on or before the Termination Date;
|
•
|
each of the covenants of North Mountain to be performed or complied with as of or prior to the closing shall have been performed
or complied with in all material respects;
|
•
|
the receipt of a certificate signed by an executive officer of North Mountain certifying that the two preceding conditions have
been satisfied; and
|
•
|
(a) the funds contained in the Trust Account as of immediately prior to the Effective Time; plus (b) all other cash and cash
equivalents of North Mountain; minus (c) the aggregate amount of cash proceeds that will be required to satisfy the redemption of any shares of North Mountain Class A Common Stock pursuant to the redemption offer (to the extent not
already paid); minus (d) the amount of the Outstanding Acquiror Expenses (as defined in the Merger Agreement) plus (e) the aggregate amount of cash committed to acquire North Mountain Class A Common Stock pursuant to the Subscription
Agreements (including any Subscription Agreements that have been entered into after the date hereof as permitted by the terms of the Merger Agreement or as otherwise agreed by North Mountain and Corcentric) (and that has been funded to
the escrow account in accordance with the Subscription Agreements solely to the extent such Subscription Agreement expressly contemplates the funding of such committed cash into an escrow account prior to the Closing), shall equal or
exceed $150,000,000, provided, that, Corcentric shall have no right or ability to waive this condition without the prior written consent of North Mountain (which consent may be provided or withheld by North Mountain in its sole
discretion) if such aggregate amount is less $125,000,001.
|
•
|
by written consent of Corcentric and North Mountain; or
|
•
|
by written notice from either Corcentric or North Mountain to the other if the approval of North Mountain stockholders to the
Business Combination Proposal, the Charter Amendment Proposal, the Charter Approval Proposal, the Equity Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Nasdaq PIPE Issuance Proposal are not obtained at the
North Mountain special meeting (subject to any adjournment or recess of the North Mountain special meeting).
|
•
|
prior to the closing, by written notice to Corcentric from North Mountain if (i) there is any breach of any representation,
warranty, covenant or agreement on the part of Corcentric set forth in the Merger Agreement such that the conditions described in the first two bullet points under the heading “—Conditions to Closing;
North Mountain, Merger Sub I and Merger Sub II” above would not be satisfied at the Closing (a “terminating Corcentric breach”), except that, if such terminating Corcentric breach is curable by Corcentric through the exercise of
its commercially reasonable efforts, then, for a
|
•
|
by written notice from North Mountain if the Corcentric Stockholder Approval has not been obtained within four business days
following the date that the registration statement of which this proxy statement/prospectus forms a part becomes effective; or
|
•
|
by written notice from North Mountain if Corcentric shall not have delivered executed copies of the Corcentric Stockholder Support
Agreements within twenty-four hours from the date of the Merger Agreement.
|
•
|
Large Market with Secular Shift to Digital Channels. According to Visa’s 2019 annual
report, there is over $120 trillion of global B2B payment volume. The North Mountain Board considered Corcentric management’s belief that conventional B2B procurement, AP, and AR processes are inefficient and primed for disruption, with
Visa estimating that more than 40% of B2B payments volume is still being processed through paper checks. In addition, businesses have been transitioning to digital channels with the development of superior technology and the increased
focus on automation after the COVID-19 pandemic. Based on its review of the industry data and information related to Corcentric’s business provided by Corcentric to North Mountain, the North Mountain Board expects these trends to continue
as businesses adopt Corcentric’s comprehensive end-to-end suite of solutions and allows Corcentric to capitalize on management’s estimated revenue opportunity of $140 billion;
|
•
|
Recurring Revenue Model. Corcentric has a highly attractive B2B commerce platform
yielding differentiated growth and margin expansion driven by software and payments revenue. Based on its review of the industry data and information provided by Corcentric to North Mountain related to Corcentric’s business, the North
Mountain Board believes that Corcentric’s ability to combine software and payments in a manner that optimizes its customers’ operations differentiates Corcentric’s platform from other B2B commerce platforms. Corcentric has also been
successful in driving revenue by
|
•
|
Platform Supports Further Growth Strategies. Corcentric’s platform supports actionable
opportunities to cross-sell its solutions into the Corcentric customer base. Corcentric’s platform offers robust solutions for both S2P and O2C processes which allows it to sell S2P solutions for customers only utilizing O2C and to sell
O2C solutions for customers only utilizing S2P. In addition, the Corcentric platform facilitates just over $100 billion in transaction volume annually, and Corcentric monetizes less than 3% of those payments;
|
•
|
Deep Relationships with a Significant Customer Base across Diverse Industry Verticals.
Corcentric has a growing and loyal customer base of over 2,500 customers across the enterprise and middle-market segments, with demonstrated customer demand across diverse industry verticals. Corcentric’s solutions serve all verticals and
include various levels of customization for each industry. Corcentric’s organization has developed domain expertise across several verticals and Corcentric’s sales teams have been structured to serve these end markets;
|
•
|
Due Diligence. Due diligence examinations of Corcentric prior to North Mountain’s entry
into the Merger Agreement with Corcentric, which included discussions and meetings with Corcentric’s management team regarding Corcentric’s business and business plan, operations, prospects and forecasts (including the assumptions and key
variable underlying the Corcentric financial model), valuation analyses with respect to the Business Combination and other material matters, as well as a due diligence examination of Corcentric conducted by North Mountain’s advisors;
|
•
|
Stockholder Liquidity. The obligation in the Merger Agreement to have North Mountain
Class A Common Stock issued as consideration listed on the Nasdaq, a major U.S. stock exchange, which the North Mountain Board believes has the potential to offer North Mountain stockholders enhanced liquidity;
|
•
|
Financial Condition. The North Mountain Board also considered factors such as
Corcentric’s historical financial results, outlook, financial plan, customer-level metrics (both operational and financial) and debt structure as well as mergers and acquisitions activity for companies in the B2B commerce industry. In
considering these factors, the North Mountain Board reviewed Corcentric’s historical growth and its current prospects for growth if Corcentric achieves its business plan and various historical and current financial statements of
Corcentric. In reviewing these factors, the North Mountain Board noted that Corcentric is well-positioned for strong future growth;
|
•
|
Experienced and Proven Management Team. Corcentric has a strong management team with
significant experience in the B2B commerce and financial industries. Corcentric’s management team is led by its founder and Chief Executive Officer, Doug Clark, and the senior management of Corcentric intends to remain with Corcentric,
providing helpful continuity in advancing Corcentric’s strategic and growth goals;
|
•
|
Lock-Up. Certain stockholders of Corcentric have agreed to be subject to a 180 day lockup
in respect of their North Mountain Class A Common Stock, subject to certain customary exceptions, which will provide important stability to the leadership and governance of Corcentric;
|
•
|
PIPE Financing. Third-party investor interest, including top-tier institutional
investors’ interest, in the PIPE Financing served as validation of the valuation and opportunity represented by a transaction with Corcentric;
|
•
|
Role of Independent Directors. North Mountain’s independent directors, Robert L. Metzger,
Douglas J. Pauls and Scott O’Callaghan, evaluated the proposed terms of the Business Combination, including the Merger Agreement and unanimously approved, as members of the North Mountain Board, the Merger Agreement and the Business
Combination;
|
•
|
Other Alternatives. The North Mountain Board believes, after a thorough review of other
business combination opportunities reasonably available to North Mountain, that the proposed Business Combination represents the best potential business combination for North Mountain and the most
|
•
|
Continued Ownership by Sellers. Corcentric’s existing stockholders would be receiving a
significant amount of New Corcentric Common Stock in the proposed Business Combination and are “rolling over” the majority of their existing equity interests of Corcentric into equity interests in New Corcentric reflecting such
stockholders’ confidence in the Corcentric business and the continued growth prospects of the Corcentric business going forward;
|
•
|
Negotiated Transaction. The financial and other terms of the Merger Agreement and the
fact that such terms and conditions are reasonable and were the product of arm’s length negotiations between North Mountain and Corcentric; and
|
•
|
Considerations Relating to the Merger Agreement. The North Mountain Board also considered
the following aspects of the Merger Agreement:
|
○
|
the nature of the conditions to the completion of the Business Combination included in the Merger
Agreement, including the exceptions to the events that would constitute a material adverse effect on Corcentric for purposes of the Merger Agreement, as well as the likelihood of satisfaction of all conditions to the completion of the
transactions;
|
○
|
the representations and warranties of North Mountain and Corcentric, as well as that the interim
operating covenants requiring Corcentric to use its commercially reasonable efforts to conduct its business prior to completion of the Business Combination in the ordinary course of business consistent with past practice and restricting
North Mountain and Corcentric from taking certain actions, subject to specified limitations;
|
○
|
the requirement that each party use its commercially reasonable efforts to obtain material consents
and approvals of third parties in connection with the Business Combination;
|
○
|
the restrictions in the Merger Agreement on Corcentric’s ability to respond to and negotiate certain
acquisition proposals from third parties; and
|
○
|
the right of the North Mountain Board to change its recommendation to North Mountain stockholders to
vote “FOR” the North Mountain Proposals described in this proxy statement/ prospectus if, subject to certain conditions, the North Mountain
Board has determined in good faith, after consultation with its outside legal counsel, that the failure to take such action would be inconsistent with its fiduciary duties to its stockholders under applicable law.
|
•
|
Macroeconomic Risks. Macroeconomic uncertainty, including the potential impact of the
COVID-19 pandemic, and the effects it could have on the post-Business Combination company’s revenues;
|
•
|
Business Plan and Projections May Not Be Achieved. The risk that Corcentric may not be
able to execute on its business plan, and realize the financial performance as set forth in the financial projections, in each case, presented to management of North Mountain;
|
•
|
Exclusivity Restrictions. The fact that the Merger Agreement includes exclusivity
provisions that prohibit North Mountain and its affiliates from soliciting other business combination proposals on behalf of North Mountain, and which restrict North Mountain’s ability to consider other potential business combinations
until the earlier of the termination of the Merger Agreement or the consummation of the Business Combination;
|
•
|
No Survival of Remedies for Breach of Representations, Warranties or Covenants of Corcentric.
The fact that the Merger Agreement provides that North Mountain will not have any surviving remedies against Corcentric or its stockholders after the Closing as a result of any inaccuracies or breaches of the representations, warranties,
covenants, obligations or agreements of Corcentric set forth in the Merger Agreement. As a result, North Mountain stockholders could be adversely affected by, among other things, a decrease in the financial performance or worsening of
financial condition of Corcentric
|
•
|
Redemption Risk. The potential that a significant number of North Mountain stockholders
elect to redeem their shares of North Mountain Class A Common Stock prior to the consummation of the Business Combination and pursuant to the Existing Charter, which would potentially make the Business Combination more difficult or
impossible to complete;
|
•
|
Stockholder Vote. The risk that North Mountain’s stockholders may fail to provide the
respective votes necessary to effect the Business Combination;
|
•
|
Closing Conditions. The fact that the completion of the Business Combination is
conditioned on the satisfaction of certain closing conditions that are not within North Mountain’s control;
|
•
|
Litigation. The possibility of litigation challenging the Business Combination or that an
adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination;
|
•
|
Listing Risks. The challenges associated with preparing Corcentric, a private entity, for
the applicable disclosure and listing requirements to which New Corcentric will be subject as a publicly traded company on the Nasdaq;
|
•
|
Benefits May Not Be Achieved. The risks that the potential benefits of the Business
Combination may not be fully achieved or may not be achieved within the expected timeframe;
|
•
|
Liquidation of North Mountain. The risks and costs to North Mountain if the Business
Combination is not completed, including the risk of diverting management focus and resources from other business combination opportunities, which could result in North Mountain being unable to effect a business combination by
September 22, 2022;
|
•
|
Growth Initiatives May Not be Achieved. The risk that Corcentric’s growth initiatives may
not be fully achieved or may not be achieved within the expected timeframe;
|
•
|
No Third-Party Valuation. The risk that North
Mountain did not obtain a third-party valuation or fairness opinion in connection with the Business Combination; and
|
•
|
Fees and Expenses. The fees and expenses associated with completing the Business
Combination, and the costs and compliance burden associated with being a publicly traded, public reporting company.
|
•
|
Interests of Certain Persons. The Sponsor and certain members of the North Mountain Board
and officers of North Mountain may have interests in the Business Combination and related transactions. (see the section entitled “—Interests of North Mountain Directors and Officers in the Business
Combination”); and
|
•
|
Other Risk Factors. Various other risk factors associated with the business of
Corcentric, as described in the section entitled “Risk Factors” appearing elsewhere in this proxy statement/prospectus.
|
|
| |
2021E
|
| |
2022E
|
| |
2023E
|
Adjusted revenue (Non-GAAP)
|
| |
$117
|
| |
$148.6
|
| |
$189.6
|
y-o-y (%)
|
| |
|
| |
27.0%
|
| |
27.6%
|
|
| |
|
| |
|
| |
|
Adjusted gross profit (Non-GAAP)
|
| |
$78
|
| |
$103
|
| |
$139
|
Adjusted gross margin (Non-GAAP)
|
| |
66.7%
|
| |
69.3%
|
| |
73.3%
|
|
| |
|
| |
|
| |
|
Adjusted EBITDA (Non-GAAP)
|
| |
$28
|
| |
$42
|
| |
$63
|
margin
|
| |
23.9%
|
| |
28.3%
|
| |
33.2%
|
$ in millions
|
| |
2022E
|
| |
2022E
|
| |
Revenue Growth
|
| |
2022E Margin
|
||||||
|
| |
Revenue
|
| |
EBITDA
|
| |
2022E
|
| |
2023E
|
| |
Gross
|
| |
EBITDA
|
B2B Software and Payments
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Bill.com
|
| |
$350
|
| |
$1
|
| |
34%
|
| |
37%
|
| |
77%
|
| |
NM
|
Coupa
|
| |
$838
|
| |
$129
|
| |
25%
|
| |
27%
|
| |
69%
|
| |
17%
|
Billtrust
|
| |
$150
|
| |
$(8)
|
| |
18%
|
| |
24%
|
| |
71%
|
| |
-6%
|
average
|
| |
$446
|
| |
$41
|
| |
26%
|
| |
29%
|
| |
72%
|
| |
6%
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
High-Growth FinTech
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Adyen
|
| |
$1,620
|
| |
$995
|
| |
44%
|
| |
37%
|
| |
NA
|
| |
NA
|
Square
|
| |
$6,440
|
| |
$ 1,245
|
| |
31%
|
| |
29%
|
| |
85%
|
| |
19%
|
Shift4
|
| |
$614
|
| |
$231
|
| |
25%
|
| |
17%
|
| |
63%
|
| |
38%
|
average
|
| |
$2,891
|
| |
$824
|
| |
33%
|
| |
28%
|
| |
74%
|
| |
29%
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Financial SaaS
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Avalara
|
| |
$805
|
| |
$18
|
| |
23%
|
| |
22%
|
| |
74%
|
| |
NA
|
Blackline
|
| |
$504
|
| |
$66
|
| |
21%
|
| |
24%
|
| |
80%
|
| |
NA
|
Anaplan
|
| |
$688
|
| |
$2
|
| |
25%
|
| |
28%
|
| |
78%
|
| |
NA
|
Q2 Holdings
|
| |
$600
|
| |
$52
|
| |
21%
|
| |
NA
|
| |
54%
|
| |
NA
|
average
|
| |
$649
|
| |
$35
|
| |
23%
|
| |
25%
|
| |
72%
|
| |
NA
|
$ in million
|
| |
2022E
|
| |
2022E
|
| |
Revenue Growth
|
| |
2022E Margin
|
||||||
|
| |
Revenue
|
| |
EBITDA
|
| |
2022E
|
| |
2023E
|
| |
Gross
|
| |
EBITDA
|
Corcentric
|
| |
$149
|
| |
$42
|
| |
27%
|
| |
28%
|
| |
69%
|
| |
28%
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
B2B Software and Payments
|
| |
$446
|
| |
$41
|
| |
26%
|
| |
29%
|
| |
72%
|
| |
6%
|
High-Growth FinTech
|
| |
$ 2,891
|
| |
$ 824
|
| |
33%
|
| |
28%
|
| |
74%
|
| |
29%
|
Financial SaaS
|
| |
$649
|
| |
$35
|
| |
23%
|
| |
25%
|
| |
72%
|
| |
NA
|
average
|
| |
$ 1,329
|
| |
$ 300
|
| |
27%
|
| |
27%
|
| |
73%
|
| |
17%
|
|
| |
FV / Revenue
|
| |
FV / Revenue / Growth
|
| |
FV / EBITDA
|
| |
FV / EBITDA / Growth
|
||||||||||||
|
| |
2022E
|
| |
2023E
|
| |
2022E
|
| |
2023E
|
| |
2022E
|
| |
2023E
|
| |
2022E
|
| |
2023E
|
B2B Software and Payments
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Bill.com
|
| |
46.8x
|
| |
34.2x
|
| |
1.4x
|
| |
0.9x
|
| |
NM
|
| |
NM
|
| |
NM
|
| |
NM
|
Coupa
|
| |
22.7x
|
| |
17.8x
|
| |
0.9x
|
| |
0.7x
|
| |
NM
|
| |
NM
|
| |
NM
|
| |
NM
|
Billtrust
|
| |
11.0x
|
| |
8.9x
|
| |
0.6x
|
| |
0.4x
|
| |
NM
|
| |
NM
|
| |
NM
|
| |
NM
|
median(1)
|
| |
22.7x
|
| |
17.8x
|
| |
0.9x
|
| |
0.7x
|
| |
NM
|
| |
NM
|
| |
NM
|
| |
NM
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
High-Growth FinTech
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Adyen
|
| |
46.1x
|
| |
33.6x
|
| |
1.1x
|
| |
0.9x
|
| |
75.0x
|
| |
54.2x
|
| |
1.7x
|
| |
1.5x
|
Square
|
| |
17.3x
|
| |
13.4x
|
| |
0.6x
|
| |
0.5x
|
| |
89.6x
|
| |
63.3x
|
| |
2.9x
|
| |
2.2x
|
Shift4
|
| |
13.1x
|
| |
11.2x
|
| |
0.5x
|
| |
0.7x
|
| |
34.8x
|
| |
28.6x
|
| |
1.4x
|
| |
1.7x
|
median(1)
|
| |
17.3x
|
| |
13.4x
|
| |
0.6x
|
| |
0.7x
|
| |
66.5x
|
| |
48.7x
|
| |
2.0x
|
| |
1.8x
|
Financial SaaS
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Avalara
|
| |
16.0x
|
| |
13.2x
|
| |
0.7x
|
| |
0.6x
|
| |
NM
|
| |
NM
|
| |
NM
|
| |
6.2x
|
Blackline
|
| |
12.7x
|
| |
10.3x
|
| |
0.6x
|
| |
0.4x
|
| |
97.5x
|
| |
61.2x
|
| |
4.7x
|
| |
2.6x
|
Anaplan
|
| |
11.7x
|
| |
9.1x
|
| |
0.5x
|
| |
0.3x
|
| |
NM
|
| |
NM
|
| |
NM
|
| |
5.3x
|
Q2 Holdings
|
| |
9.9x
|
| |
8.4x
|
| |
0.5x
|
| |
0.4x
|
| |
NM
|
| |
84.7x
|
| |
5.6x
|
| |
4.5x
|
median(1)
|
| |
12.2x
|
| |
9.7x
|
| |
0.6x
|
| |
0.4x
|
| |
97.5x
|
| |
73.0x
|
| |
5.2x
|
| |
4.9x
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
median(1)
|
| |
17.3x
|
| |
13.4x
|
| |
0.6x
|
| |
0.7x
|
| |
82.0x
|
| |
60.8x
|
| |
3.6x
|
| |
3.4x
|
(1)
|
FV / EBITDA and FV / EBITDA / Growth multiples calculated using the average of the companies.
|
$ in millions
|
| |
2022E Multiples
|
| |
Enterprise Value
|
||||||||||||||||||
Valuation Methodology
|
| |
B2B Soft.
and Pay.
|
| |
High-Growth
FinTech
|
| |
Financial
SaaS
|
| |
Median
|
| |
B2B Soft.
and Pay.
|
| |
High-Growth
FinTech
|
| |
Financial
SaaS
|
| |
Median
|
Revenue Multiple Analysis
|
| |
22.7x
|
| |
17.3x
|
| |
12.2x
|
| |
17.3x
|
| |
$3,373
|
| |
$2,570
|
| |
$1,813
|
| |
$2,570
|
Growth Adjusted Revenue Multiple Analysis
|
| |
0.9x
|
| |
0.6x
|
| |
0.6x
|
| |
0.6x
|
| |
$3,607
|
| |
$2,405
|
| |
$2,204
|
| |
$2,405
|
EBITDA Multiple Analysis
|
| |
NM
|
| |
66.5x
|
| |
97.5x
|
| |
82.0x
|
| |
NM
|
| |
$2,795
|
| |
$4,100
|
| |
$3,448
|
Growth Adjusted EBITDA Multiple Analysis
|
| |
NM
|
| |
2.0x
|
| |
5.2x
|
| |
3.6x
|
| |
NM
|
| |
$2,269
|
| |
$5,842
|
| |
$4,055
|
$ in millions
|
| |
Corcentric
|
| |
Publicly Traded Benchmark Companies
|
||||||||||||
Valuation Methodology
|
| |
Enterprise
Value
|
| |
2022E
Multiple
|
| |
B2B Soft.
and Pay.
|
| |
High-Growth
FinTech
|
| |
Financial
SaaS
|
| |
Median
|
Revenue Multiple Analysis
|
| |
$ 1,200
|
| |
8.1x
|
| |
22.7x
|
| |
17.3x
|
| |
12.2x
|
| |
17.3x
|
Growth Adjusted Revenue Multiple Analysis
|
| |
$ 1,200
|
| |
0.3x
|
| |
0.9x
|
| |
0.6x
|
| |
0.6x
|
| |
0.6x
|
EBITDA Multiple Analysis
|
| |
$ 1,200
|
| |
28.5x
|
| |
NM
|
| |
66.5x
|
| |
97.5x
|
| |
82.0x
|
Growth Adjusted EBITDA Multiple Analysis
|
| |
$ 1,200
|
| |
1.1x
|
| |
NM
|
| |
2.0x
|
| |
5.2x
|
| |
3.6x
|
•
|
the beneficial ownership of the Sponsor and certain members of the North Mountain Board and officers of an aggregate of
3,306,250 shares of North Mountain Class B Common Stock and 4,145,000 Private Placement Warrants, which shares and warrants were acquired for an aggregate investment of $4,145,000 at the time of the IPO and would become worthless if
North Mountain does not complete a business combination by September 22, 2022, as such stockholders have waived any redemption right with respect to these shares. After giving effect to the provisions of the Share Vesting and Warrant
Cancellation Agreement, the Sponsor would own up to an aggregate of 4,706,250 shares of North Mountain Class A Common Stock (including shares subject to vesting) and no Private Placement Warrants. Such shares have an aggregate market
value of approximately $ , based on the closing price of North Mountain Class A Common Stock of $ on , 2022, the North Mountain Record Date. Because the shares of North Mountain Class B Common Stock were purchased for a nominal
amount, the Sponsor could achieve a significant positive return even if the trading price of shares of New Corcentric following the closing of the Business Combination declines significantly. Each of our officers and directors is a
member of the Sponsor. Harbour Reach Holdings, LLC is the managing member of the Sponsor and Mr. Michael Platt is the indirect controlling member of Harbour Reach Holdings, LLC;
|
•
|
Millais Limited, an affiliate of the Sponsor and an affiliate of North Mountain, agreed to purchase 2,000,000 PIPE Shares and
1,000,000 PIPE Warrants for an aggregate purchase price of $20.0 million in the PIPE Financing;
|
•
|
SMMC Sponsor Interests, LLC, an affiliate of North Mountain and an entity controlled by Charles Bernicker (Chief Executive
Officer and a director of North Mountain) and of which Douglas J. Pauls (a director of North Mountain) is a non-managing member, agreed to purchase 1,500,000 PIPE Shares and 750,000 PIPE Warrants for an aggregate purchase price of
$15.0 million in the PIPE Financing;
|
•
|
the continued indemnification of current directors and officers of North Mountain and the continuation of directors’ and officers’
liability insurance after the Business Combination;
|
•
|
the fact that our Sponsor, officers and directors will be reimbursed for out-of-pocket expenses incurred in connection with
activities on our behalf, such as identifying potential target businesses and performing due diligence on suitable business combinations. As of January 6, 2022, North Mountain’s Sponsor and its affiliates had incurred $996 of unpaid
reimbursable expenses; and
|
•
|
the fact that our Sponsor, officers and directors will lose their entire investment in us if an initial business combination is
not completed.
|
•
|
The pre-combination equity holders of Corcentric will hold the majority of voting rights in the combined company;
|
•
|
Corcentric has the right to appoint a majority of directors to the Board of Directors of New Corcentric;
|
•
|
Senior management of Corcentric will comprise the senior management of New Corcentric; and
|
•
|
The operations of Corcentric will comprise the only ongoing operations of New Corcentric.
|
•
|
Class I Directors: ;
|
•
|
Class II Directors: ; and
|
•
|
Class III Directors: .
|
|
| |
Assuming
No Redemption
|
| |
Assuming
50% Redemption
|
| |
Assuming
Contractual Maximum
Redemption
|
| |
Assuming
Contractual Maximum
Redemption with
$125 million
Minimum Cash(1)
|
||||||||||||
|
| |
Number of
shares of New
Corcentric
Common Stock
|
| |
%
|
| |
Number of
shares of New
Corcentric
Common Stock
|
| |
%
|
| |
Number of
shares of New
Corcentric
Common Stock
|
| |
%
|
| |
Number of
Shares of New
Corcentric
Common Stock
|
| |
%
|
Current Corcentric Stockholders
|
| |
89,307,448
|
| |
79.6%
|
| |
89,307,448
|
| |
80.2%
|
| |
89,307,448
|
| |
80.8%
|
| |
89,307,448
|
| |
82.7%
|
Current North Mountain Public Stockholders
|
| |
13,225,000
|
| |
11.8%
|
| |
12,362,500
|
| |
11.1%
|
| |
11,500,000
|
| |
10.4%
|
| |
9,000,000
|
| |
8.3%
|
PIPE Investors
|
| |
5,000,000
|
| |
4.4%
|
| |
5,000,000
|
| |
4.5%
|
| |
5,000,000
|
| |
4.5%
|
| |
5,000,000
|
| |
4.6%
|
Sponsor
|
| |
4,706,250
|
| |
4.2%
|
| |
4,706,250
|
| |
4.2%
|
| |
4,706,250
|
| |
4.3%
|
| |
4,706,250
|
| |
4.4%
|
Total
|
| |
112,238,698
|
| |
100%
|
| |
111,376,198
|
| |
100%
|
| |
110,513,698
|
| |
100%
|
| |
108,013,698
|
| |
100%
|
(1)
|
The contractual maximum redemption with $125 million minimum cash scenario assumes that Corcentric waives the minimum cash
condition.
|
•
|
Assuming no redemption scenario: This presentation assumes that no Public Stockholders
exercise redemption rights with respect to their Public Shares.
|
•
|
Assuming 50% redemption scenario: This presentation assumes that
the Public Stockholders holding approximately 4.4% of the Public Shares exercise redemption rights with respect to their Public Shares, which is approximately 50% of the Public Shares assumed to be redeemed under the contractual maximum
redemption scenario. This scenario assumes that 862,500 Public Shares are redeemed for an aggregate redemption payment of approximately $8,625,000 plus a pro rata portion of interest accrued on the Trust Account.
|
•
|
Assuming contractual maximum redemption scenario: This
presentation assumes that the Public Stockholders holding approximately 13.0% of the Public Shares exercise redemption rights with respect to their Public Shares. This scenario assumes that 1,725,000 Public Shares are redeemed for an
aggregate redemption payment of approximately $17,250,000 plus a pro rata portion of interest accrued on the Trust Account of $1,543. The contractual maximum redemption scenario is based on a minimum cash consideration of $150,000,000
at Closing of the Business Combination, consisting of Trust Account funds, PIPE Financing proceeds and all other North Mountain cash and cash equivalents of North Mountain less the aggregate amount of cash proceeds that will be required
to satisfy the redemption of the Public Shares and the payment of North Mountain estimated transaction expenses of $15,000,000. Corcentric shall have no right or ability to waive the minimum cash condition without the prior written
consent of North Mountain (which consent may be provided or withheld by North Mountain in its sole discretion) if such aggregate amount is less than $125,000,001.
|
•
|
Assuming contractual maximum redemption with $125 million minimum cash scenario:
This presentation assumes that the Public Stockholders holding approximately 32.0% of the Public Shares exercise redemption rights with respect to their Public Shares. This scenario assumes that 4,225,000 Public Shares are redeemed for
an aggregate redemption payment of approximately $42,225,000 plus a pro rata portion of interest accrued on the Trust Account. This contractual maximum redemption with $125 million minimum cash scenario is based on minimum cash of
$125,000,000 at Closing of the Business Combination and assumes that Corcentric waives the $150,000,000 minimum cash condition.
|
|
|
| |
Existing Charter
|
| |
Proposed Charter
|
|
|
Number of Authorized Shares
|
| |
The Existing Charter provides that the total number of authorized shares of all
classes of capital stock is 221,000,000 shares, par value of $0.0001 per share, consisting of (a) 220,000,000 shares of North Mountain Common Stock, including (i) 200,000,000 shares of North Mountain Class A Common Stock and (ii)
20,000,000 shares of North Mountain Class B Common Stock, and (b) 1,000,000 shares of preferred stock.
|
| |
The Proposed Charter increases the total number of authorized shares of all
classes of capital stock, following the automatic conversion of all Class B common stock into Class A common stock immediately prior to the Closing of the Business Combination, to shares, par value of $0.0001 per share, consisting of
(a) shares of Common Stock and (b) shares of preferred stock. New Corcentric will not have Class B common stock.
|
|
|
No Class Vote on Changes in Authorized Number of Shares of Stock
|
| |
The Existing Charter contains no specific provision regarding the required vote
to change the authorized shares of any class of stock.
|
| |
The Proposed Charter provides that, any vote to increase or decrease the number
of authorized shares of any class or classes of stock (but not below the number of shares then outstanding) requires the affirmative vote of the holders of all the then-outstanding shares of capital stock of New Corcentric entitled to
vote thereon, voting together as a single class, irrespective of the provisions of Section 242(b)(2) of the DGCL.
|
|
|
Required Vote to Amend the Bylaws
|
| |
The Existing Charter requires an affirmative vote of either a majority of the
board of directors or the holders of at least a majority of the voting power of all then-outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class, for the adoption,
amendment, alteration or repeal of bylaws.
|
| |
The Proposed Charter requires an affirmative vote of the New Corcentric Board or
the holders of at least two-thirds (2/3) of the voting power of all then-outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class, for the adoption, amendment, or
repeal of any provision of the bylaws (in addition to any vote of the holders
|
|
|
|
| |
Existing Charter
|
| |
Proposed Charter
|
|
|
|
| |
|
| |
of any class or series of stock if required by applicable law); provided,
however, that if the New Corcentric Board has approved such adoption, then only the affirmative vote of the holders of at least a majority of the voting power of all then-outstanding shares of New Corcentric's capital stock entitled to
vote generally in the election of directors, voting together as a single class, shall be required to adopt, amend or repeal any provision of the Proposed Bylaws.
|
|
|
Limitation of Exclusive Forum Provision
|
| |
The Existing Charter adopts the Court of Chancery of the State of Delaware (the
“Chancery Court”) as the sole and exclusive forum for certain stockholder litigation, except for any action as to which the Chancery Court determines that there is an indispensable party not subject to the jurisdiction of such court and
to which jurisdiction such party does not consent, which is vested in the exclusive jurisdiction of another court or forum, or for which the Chancery Court does not have subject matter jurisdiction, or any action arising under the
Securities Act as to which the Chancery Court and the federal district court for the District of Delaware shall have concurrent jurisdiction. The Existing Charter further provides that such exclusive forum provision does not apply to
suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
|
| |
The Proposed Charter modifies the current exclusive forum provision to clarify
that the exclusive jurisdiction of the Chancery Court shall not apply to suits brought to enforce any duty or liability under the Securities Act or the Exchange Act, or any other claim for which the federal courts have exclusive
jurisdiction. In addition, the Proposed Charter adopts, unless New Corcentric consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of
America as the sole and exclusive forum for the resolution of claims arising under the Securities Act, or the rules and regulations promulgated thereunder.
|
|
|
Other Changes, Including Removal of Blank Check Company Provisions
|
| |
The Existing Charter contains various provisions applicable only to blank check
companies and relating to North Mountain's relationship with its directors, officers and the Sponsor.
|
| |
The Proposed Charter provides for certain additional changes, including, among
others, those (i) resulting from the Business Combination, including changing the post-business combination corporate name from “North Mountain Merger Corp.” to “Corcentric, Inc.” and removing
|
|
|
|
| |
Existing Charter
|
| |
Proposed Charter
|
|
|
|
| |
|
| |
certain provisions relating to North Mountain’s prior status as a blank check
company and North Mountain Class B Common Stock that will no longer apply upon the Closing, or (ii) that are administrative or clarifying in nature, including the deletion of language without substantive effect.
|
|
•
|
any employee who is customarily scheduled to work 20 hours or less per week;
|
•
|
any employee whose customary employment is not more than five months in a calendar year;
|
•
|
any employee who has been employed less than two years;
|
•
|
any employee who is not employed by Corcentric prior to the applicable exercise date;
|
•
|
any employee who is a highly compensated employee (within the meaning of Section 414(q) of the Code) or any highly compensated
employee with compensation above a specified level, who is an officer, or who is subject to the disclosure requirements of Section 16(a) of the Exchange Act; or
|
•
|
any employee who is a citizen or resident of a jurisdiction outside the United States if the grant of the option is prohibited
under the laws of the jurisdiction governing such employee or compliance with the laws of the jurisdiction would cause the 2022 ESPP or any offering or option granted thereunder to violate the requirements of Section 423 of the Code.
|
•
|
the issuance, pursuant to the terms of the Subscription Agreements, of 5,000,000 PIPE Shares to the PIPE Investors in the PIPE
Financing, which will be consummated concurrently with the Closing;
|
•
|
the delivery, pursuant to the terms of the Subscription Agreements, of 2,500,000 PIPE Warrants to the PIPE Investors in the
PIPE Financing, which will be consummated concurrently with the Closing; and
|
•
|
the issuance, pursuant to the terms of the North Mountain Warrant Agreement, of 2,500,000 PIPE Warrant Shares upon exercise of
the PIPE Warrants.
|
(a)
|
each share of Corcentric Common Stock that is issued and outstanding immediately prior to the Effective Time (other than shares
owned by Corcentric as treasury stock, dissenting shares and shares of Corcentric restricted stock) will be converted into the right to receive (i) the Per Share Stock Consideration, (ii) any cash payable in lieu of fractional shares
pursuant to the terms of the Merger Agreement and (iii) the contingent right to receive a number of Earnout Shares following the Closing in accordance with the terms of the Merger Agreement;
|
(b)
|
each share of Corcentric Preferred Stock that is issued and outstanding immediately prior to the Effective Time (other than
shares owned by Corcentric as treasury stock, dissenting shares and the Cash Consideration Shares) will be converted into the right to receive (i) a number of newly issued shares of North Mountain Class A Common Stock, equal to the
product of (A) the Per Share Stock Consideration, multiplied by (B) the number of shares of Corcentric Common Stock that such share of Corcentric Preferred Stock would be converted into if converted in accordance with the terms of the
Corcentric Certificate of Incorporation immediately prior to the Effective Time, (ii) any cash payable in lieu of fractional shares pursuant to the terms of the Merger Agreement and (iii) the contingent right to receive a number of
Earnout Shares following the Closing in accordance with the terms of the Merger Agreement;
|
(c)
|
each share of Corcentric Preferred Stock expressly identified as a Cash Consideration Share in accordance with the Merger
Agreement (each such share of Corcentric Preferred Stock, a “Cash Consideration Share”) will be converted into the right to receive the Per Share Cash Consideration multiplied by the number of shares of Corcentric Common Stock that such
shares of Corcentric Preferred Stock would be converted into if converted in accordance with the terms of the Corcentric Certificate of Incorporation immediately prior to the Effective Time. In no event will the Aggregate Cash
Consideration exceed the Total Cash Consideration Amount);
|
(d)
|
each share of Corcentric Common Stock and Corcentric Preferred Stock held in the treasury of Corcentric immediately prior to
the Effective Time will be cancelled without any conversion thereof and no payment or distribution will be made with respect thereto;
|
(e)
|
each share of common stock, par value $0.001 per share, of Merger Sub I issued and outstanding immediately prior to the
Effective Time will no longer be outstanding and will thereupon be converted into and become one validly issued fully paid and non-assessable share of common stock, par value $0.001 per share, of the Initial Surviving Company and all
such shares will constitute the only outstanding shares of capital stock of the Initial Surviving Company as of immediately following the Effective Time;
|
(f)
|
each vested Corcentric stock option, to the extent then outstanding and unexercised, will automatically be cancelled, and the
holder will be entitled to receive in respect of such cancelled vested Corcentric stock option (i) a number of shares of North Mountain Class A Common Stock (any cash payable in lieu of fractional shares pursuant to the terms of the
Merger Agreement) equal to the quotient obtained by dividing (A) the result of (1) the product of (x) the number of shares of Corcentric Common Stock subject to such vested Corcentric stock option immediately prior to the Effective
Time, multiplied by (y) the excess, if any, of (a) the Per Share Merger Consideration Value, over (b) the per share exercise price for the shares of Corcentric Common Stock subject to such vested Corcentric stock option immediately
prior to the Effective Time, minus (2) the applicable withholding taxes payable in respect of such cancelled vested Corcentric stock option, by (B) ten dollars ($10) and (ii) the contingent right to receive a number of Earnout Shares
following the Closing in accordance with the terms of the Merger Agreement;
|
(g)
|
each unvested Corcentric stock option, to the extent then outstanding and unexercised, will automatically be converted into an
option to acquire, on the same terms and conditions as were applicable to such unvested Corcentric stock option immediately prior to the Effective Time, including applicable vesting conditions, except for terms rendered inoperative by
reason of the transactions contemplated by the Merger Agreement or for such other administrative or ministerial changes (after such conversion, each a “Rollover Option”) the number of shares of North Mountain Class A Common
|
(h)
|
each share of Corcentric restricted stock, to the extent then unvested and outstanding, will automatically be converted into
the number of shares of restricted North Mountain Class A Common Stock, subject to the same terms and conditions as were applicable to such Corcentric restricted stock immediately prior to the Effective Time, including applicable
vesting conditions, except for terms rendered inoperative by reason of the transactions contemplated by the Merger Agreement or for such other administrative or ministerial changes (after such conversion, “Rollover Restricted Stock”),
determined by multiplying (i) the number of shares of Corcentric Common Stock subject to such Corcentric restricted stock award immediately prior to the Effective Time by (ii) the Per Share Stock Consideration. The shares of Rollover
Restricted Stock will be entitled to the contingent right to receive a number of Earnout Shares following the Closing in accordance with the terms of the Merger Agreement.
|
|
| |
North
Mountain
(Historical)
|
| |
Corcentric
(Historical)
|
| |
No redemption scenario
|
| |
Contractual maximum
redemption scenario
|
||||||||||||
|
| |
Transaction
Accounting
Adjustments
|
| |
Note 3
|
| |
Pro Forma
|
| |
Transaction
Accounting
Adjustments
|
| |
Note 3
|
| |
Pro Forma
|
||||||
Assets
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Current assets:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Cash and cash equivalents
|
| |
$304
|
| |
$9,856
|
| |
$1,840
|
| |
(a), (b)
|
| |
$12,000
|
| |
$1,840
|
| |
(a),(b)
|
| |
$12,000
|
Accounts receivable, net
|
| |
—
|
| |
239,404
|
| |
—
|
| |
|
| |
239,404
|
| |
—
|
| |
|
| |
239,404
|
Rebates, fees, and other receivables
|
| |
—
|
| |
10,735
|
| |
—
|
| |
|
| |
10,735
|
| |
—
|
| |
|
| |
10,735
|
Inventories, prepaid expenses, and other current assets
|
| |
127
|
| |
17,705
|
| |
—
|
| |
|
| |
17,832
|
| |
—
|
| |
|
| |
17,832
|
Total current assets
|
| |
431
|
| |
277,700
|
| |
1,840
|
| |
|
| |
279,971
|
| |
1,840
|
| |
|
| |
279,971
|
Property and equipment, net
|
| |
—
|
| |
26,499
|
| |
—
|
| |
|
| |
26,499
|
| |
—
|
| |
|
| |
26,499
|
Goodwill
|
| |
—
|
| |
114,497
|
| |
—
|
| |
|
| |
114,497
|
| |
—
|
| |
|
| |
114,497
|
Other intangible assets, net
|
| |
—
|
| |
37,483
|
| |
—
|
| |
|
| |
37,483
|
| |
—
|
| |
|
| |
37,483
|
Other assets
|
| |
—
|
| |
12,753
|
| |
(3,499)
|
| |
(b)
|
| |
9,254
|
| |
(3,499)
|
| |
(b)
|
| |
9,254
|
Marketable securities held in Trust Account
|
| |
132,262
|
| |
—
|
| |
(132,262)
|
| |
(c)
|
| |
—
|
| |
(132,262)
|
| |
(c)
|
| |
—
|
Total assets
|
| |
$132,693
|
| |
$468,932
|
| |
$(133,921)
|
| |
|
| |
$467,704
|
| |
$(133,921)
|
| |
|
| |
$467,704
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Liabilities, commitments and
contingencies, mezzanine equity and stockholders' equity
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Current liabilities:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Current portion of long-term debt, net
|
| |
$—
|
| |
$751
|
| |
$—
|
| |
|
| |
$751
|
| |
$—
|
| |
|
| |
$751
|
Accounts payable
|
| |
—
|
| |
152,540
|
| |
—
|
| |
|
| |
152,540
|
| |
—
|
| |
|
| |
152,540
|
Rebates payable
|
| |
—
|
| |
6,785
|
| |
—
|
| |
|
| |
6,785
|
| |
—
|
| |
|
| |
6,785
|
Accrued expenses and other current liabilities
|
| |
428
|
| |
27,298
|
| |
12,713
|
| |
(b), (d)
|
| |
40,439
|
| |
12,713
|
| |
(b),(d)
|
| |
40,439
|
Total current liabilities
|
| |
428
|
| |
187,374
|
| |
12,713
|
| |
|
| |
200,515
|
| |
12,713
|
| |
|
| |
200,515
|
Long-term debt, net
|
| |
—
|
| |
164,625
|
| |
(25,422)
|
| |
(e)
|
| |
139,203
|
| |
(8,170)
|
| |
(e)
|
| |
156,455
|
Deferred income taxes
|
| |
—
|
| |
2,092
|
| |
417
|
| |
(f)
|
| |
2,509
|
| |
417
|
| |
(f)
|
| |
2,509
|
Other liabilities
|
| |
—
|
| |
1,084
|
| |
—
|
| |
|
| |
1,084
|
| |
—
|
| |
|
| |
1,084
|
Deferred underwriting fee payable
|
| |
4,629
|
| |
—
|
| |
(4,629)
|
| |
(b)
|
| |
—
|
| |
(4,629)
|
| |
(b)
|
| |
—
|
Warrant liabilities - Private Warrants
|
| |
3,275
|
| |
—
|
| |
(3,275)
|
| |
(g)
|
| |
—
|
| |
(3,275)
|
| |
(g)
|
| |
—
|
Warrant liabilities - Public Warrants
|
| |
5,171
|
| |
—
|
| |
1,000
|
| |
(h)
|
| |
6,171
|
| |
1,000
|
| |
(h)
|
| |
6,171
|
Sponsor Vesting Shares liability
|
| |
—
|
| |
—
|
| |
16,898
|
| |
(i)
|
| |
16,898
|
| |
16,898
|
| |
(i)
|
| |
16,898
|
Earnout Shares liability
|
| |
—
|
| |
—
|
| |
35,783
|
| |
(j)
|
| |
35,783
|
| |
35,783
|
| |
(j)
|
| |
35,783
|
Total liabilities
|
| |
13,503
|
| |
355,175
|
| |
33,485
|
| |
|
| |
402,163
|
| |
50,737
|
| |
|
| |
419,415
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Commitments and contingencies and mezzanine equity:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Redeemable preferred stock
|
| |
—
|
| |
109,531
|
| |
(109,531)
|
| |
(k)
|
| |
—
|
| |
(109,531)
|
| |
(k)
|
| |
—
|
Redeemable common stock
|
| |
—
|
| |
5,419
|
| |
(5,419)
|
| |
(k)
|
| |
—
|
| |
(5,419)
|
| |
(k)
|
| |
—
|
Class A common stock subject to possible redemption
|
| |
132,250
|
| |
—
|
| |
(132,250)
|
| |
(k)
|
| |
—
|
| |
(132,250)
|
| |
(k)
|
| |
—
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Stockholders' (deficit) equity:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Common stock
|
| |
—
|
| |
12
|
| |
(12)
|
| |
(k)
|
| |
—
|
| |
(12)
|
| |
(k)
|
| |
—
|
Class A common stock
|
| |
—
|
| |
—
|
| |
11
|
| |
(k)
|
| |
11
|
| |
11
|
| |
(k)
|
| |
11
|
Class B common stock
|
| |
—
|
| |
—
|
| |
—
|
| |
(k)
|
| |
—
|
| |
—
|
| |
(k)
|
| |
—
|
Preferred stock
|
| |
—
|
| |
—
|
| |
—
|
| |
(k)
|
| |
—
|
| |
—
|
| |
(k)
|
| |
—
|
Additional paid-in capital
|
| |
—
|
| |
59,222
|
| |
47,007
|
| |
(k)
|
| |
106,229
|
| |
29,755
|
| |
(k)
|
| |
88,977
|
Cumulative translation adjustments
|
| |
—
|
| |
175
|
| |
—
|
| |
(k)
|
| |
175
|
| |
—
|
| |
(k)
|
| |
175
|
Accumulated deficit
|
| |
(13,060)
|
| |
(38,709)
|
| |
10,895
|
| |
(k)
|
| |
(40,874)
|
| |
10,895
|
| |
(k)
|
| |
(40,874)
|
Treasury stock at cost
|
| |
—
|
| |
(21,893)
|
| |
21,893
|
| |
(k)
|
| |
—
|
| |
21,893
|
| |
(k)
|
| |
—
|
Total stockholders' (deficit) equity
|
| |
(13,060)
|
| |
(1,193)
|
| |
79,794
|
| |
|
| |
65,541
|
| |
62,542
|
| |
|
| |
48,289
|
Total liabilities, commitments and
contingencies, mezzanine equity and stockholders' (deficit) equity
|
| |
$132,693
|
| |
$468,932
|
| |
$(133,921)
|
| |
|
| |
$467,704
|
| |
$(133,921)
|
| |
|
| |
$467,704
|
|
| |
North
Mountain
(Historical)
|
| |
Corcentric
(Historical)
|
| |
No redemption scenario
|
| |
Contractual maximum
redemption scenario
|
||||||||||||
|
| |
Transaction
Accounting
Adjustments
|
| |
Note 3
|
| |
Pro Forma
|
| |
Transaction
Accounting
Adjustments
|
| |
Note 3
|
| |
Pro Forma
|
||||||
Revenue:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Payments, software and advisory revenue
|
| |
$—
|
| |
$109,789
|
| |
$—
|
| |
|
| |
$109,789
|
| |
$—
|
| |
|
| |
$109,789
|
Equipment sales
|
| |
—
|
| |
43,905
|
| |
—
|
| |
|
| |
43,905
|
| |
—
|
| |
|
| |
43,905
|
Total revenues
|
| |
—
|
| |
153,694
|
| |
—
|
| |
|
| |
153,694
|
| |
—
|
| |
|
| |
153,694
|
Direct cost of revenues (excluding depreciation and
amortization shown separately below):
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Direct costs of payments, software and advisory revenue
|
| |
—
|
| |
35,788
|
| |
—
|
| |
|
| |
35,788
|
| |
—
|
| |
|
| |
35,788
|
Direct costs of equipment sales
|
| |
—
|
| |
39,504
|
| |
—
|
| |
|
| |
39,504
|
| |
—
|
| |
|
| |
39,504
|
Total direct costs of revenue
|
| |
—
|
| |
75,292
|
| |
—
|
| |
|
| |
75,292
|
| |
—
|
| |
|
| |
75,292
|
Operating expenses:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Research and development
|
| |
—
|
| |
3,081
|
| |
—
|
| |
|
| |
3,081
|
| |
—
|
| |
|
| |
3,081
|
Sales and marketing
|
| |
—
|
| |
26,646
|
| |
—
|
| |
|
| |
26,646
|
| |
—
|
| |
|
| |
26,646
|
General and administrative
|
| |
—
|
| |
47,301
|
| |
4,857
|
| |
(l),(m),(n),(o)
|
| |
52,158
|
| |
4,857
|
| |
(l),(m),(n),(o)
|
| |
52,158
|
Depreciation and amortization
|
| |
—
|
| |
23,577
|
| |
—
|
| |
|
| |
23,577
|
| |
—
|
| |
|
| |
23,577
|
Operating costs
|
| |
1,173
|
| |
—
|
| |
—
|
| |
|
| |
1,173
|
| |
—
|
| |
|
| |
1,173
|
Total operating expenses
|
| |
1,173
|
| |
100,605
|
| |
4,857
|
| |
|
| |
106,635
|
| |
4,857
|
| |
|
| |
106,635
|
Operating loss
|
| |
(1,173)
|
| |
(22,203)
|
| |
(4,857)
|
| |
|
| |
(28,233)
|
| |
(4,857)
|
| |
|
| |
(28,233)
|
Interest expense
|
| |
—
|
| |
(9,418)
|
| |
636
|
| |
(p)
|
| |
(8,782)
|
| |
204
|
| |
(p)
|
| |
(9,214)
|
Interest income
|
| |
—
|
| |
65
|
| |
—
|
| |
|
| |
65
|
| |
—
|
| |
|
| |
65
|
Foreign exchange gain (loss)
|
| |
—
|
| |
60
|
| |
—
|
| |
|
| |
60
|
| |
—
|
| |
|
| |
60
|
Interest earned on marketable securities held in Trust
Account
|
| |
9
|
| |
—
|
| |
(9)
|
| |
(q)
|
| |
—
|
| |
(9)
|
| |
(q)
|
| |
—
|
Change in fair value of warrant liability
|
| |
6,154
|
| |
—
|
| |
(2,398)
|
| |
(r)
|
| |
3,756
|
| |
(2,398)
|
| |
(r)
|
| |
3,756
|
Income (loss) before income taxes
and equity in income of affiliate
|
| |
4,990
|
| |
(31,496)
|
| |
(6,628)
|
| |
|
| |
(33,134)
|
| |
(7,060)
|
| |
|
| |
(33,566)
|
Provision (benefit) for income taxes
|
| |
—
|
| |
1,404
|
| |
417
|
| |
(s)
|
| |
1,821
|
| |
417
|
| |
(s)
|
| |
1,821
|
Equity in income of affiliate
|
| |
—
|
| |
112
|
| |
—
|
| |
|
| |
112
|
| |
—
|
| |
|
| |
112
|
Net income (loss)
|
| |
$4,990
|
| |
$(32,788)
|
| |
$(7,045)
|
| |
|
| |
$(34,843)
|
| |
$(7,477)
|
| |
|
| |
$(35,275)
|
Less preferred stock dividends and accretion of
preferences
|
| |
—
|
| |
(21,336)
|
| |
—
|
| |
|
| |
(21,336)
|
| |
—
|
| |
|
| |
(21,336)
|
Net income (loss) available for
common stockholders
|
| |
$4,990
|
| |
$(54,124)
|
| |
$(7,045)
|
| |
|
| |
$(56,179)
|
| |
$(7,477)
|
| |
|
| |
$(56,611)
|
Comprehensive income (loss):
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Net income (loss)
|
| |
4,990
|
| |
(32,788)
|
| |
(7,045)
|
| |
|
| |
(34,843)
|
| |
(7,477)
|
| |
|
| |
(35,275)
|
Cumulative translation adjustment
|
| |
—
|
| |
(678)
|
| |
—
|
| |
|
| |
(678)
|
| |
—
|
| |
|
| |
(678)
|
Comprehensive income (loss)
|
| |
$4,990
|
| |
$(33,466)
|
| |
$(7,045)
|
| |
|
| |
$(35,521)
|
| |
$(7,477)
|
| |
|
| |
$(35,953)
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Net income (loss) per share
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Basic and diluted weighted average shares outstanding
|
| |
13,225,000
|
| |
13,301,808
|
| |
|
| |
(t)
|
| |
112,238,698
|
| |
|
| |
(t)
|
| |
110,513,698
|
Basic and diluted net income (loss) per share(1)
|
| |
$0.30
|
| |
$(4.07)
|
| |
|
| |
(t)
|
| |
$(0.32)
|
| |
|
| |
(t)
|
| |
$(0.33)
|
Basic and diluted weighted average shares outstanding,
Class B common stock
|
| |
3,306,250
|
| |
n/a
|
| |
|
| |
|
| |
n/a
|
| |
|
| |
|
| |
n/a
|
Basic and diluted net income per share, Class B common
stock
|
| |
$0.30
|
| |
n/a
|
| |
|
| |
|
| |
n/a
|
| |
|
| |
|
| |
n/a
|
(1)
|
Net income (loss) per share is based on:
|
•
|
North Mountain — weighted average number of shares of North Mountain Class A Common Stock outstanding for the year ended
December 31, 2021;
|
•
|
Corcentric — weighted average number of shares of Corcentric Common Stock outstanding for the year ended December 31, 2021; and
|
•
|
Pro forma — number of shares of Common Stock of New Corcentric expected to be outstanding after the Closing of the Business
Combination.
|
•
|
The portion of Earnout Shares allocated to holders of Corcentric Common Stock and Corcentric Preferred Stock (4,453,318 Earnout
Shares) falls within the scope of ASC 815, according to which it is determined to be liability classified and recognized at fair value at the Closing of the Business Combination (see Note 3(j) Earnout
Shares liability). Post-Business Combination, this liability will be remeasured to its fair value at the end of each reporting period and subsequent changes in the fair value post-Business Combination will be recognized
in New Corcentric’s statement of operations within other income/expense.
|
•
|
The portion of Earnout Shares allocated to holders of vested equity awards (109,636 Earnout Shares) falls within the scope of
ASC 718, according to which it is determined to be equity classified and the respective fair value is to be recognized as a compensation expense at the Closing of the Business Combination (see Note 3(m) Nonrecurring compensation expense related to Earnout Shares allocated to holders of vested equity awards).
|
•
|
The portion of Earnout Shares allocated to holders of unvested equity awards (437,046 Earnout Shares) falls within the scope of
ASC 718, according to which it is determined to be equity classified and the respective fair value is to be recognized as compensation expense over the derived service period (see Note 3(n) Compensation
expense related to Earnout Shares allocated to holders of unvested equity awards).
|
•
|
Sponsor will surrender 4,145,000 Private Placement Warrants in exchange for 1,400,000 shares of North Mountain Class A Common
Stock (the “Warrant Shares”); and
|
•
|
3,306,250 shares of North Mountain Class B Common Stock will be converted to 3,306,250 shares of North Mountain Class A Common
Stock.
|
|
| |
No redemption scenario
|
| |
Contractual maximum redemption scenario
|
||||||
|
| |
Shares
|
| |
Voting rights, %
|
| |
Shares
|
| |
Voting rights, %
|
Corcentric stockholders(1)
|
| |
89,307,448
|
| |
79.58%
|
| |
89,307,448
|
| |
80.81%
|
North Mountain Public Stockholders
|
| |
13,225,000
|
| |
11.78%
|
| |
11,500,000
|
| |
10.41%
|
Sponsor(2)
|
| |
4,706,250
|
| |
4.19%
|
| |
4,706,250
|
| |
4.26%
|
PIPE Investors
|
| |
5,000,000
|
| |
4.45%
|
| |
5,000,000
|
| |
4.52%
|
Total
|
| |
112,238,698
|
| |
100%
|
| |
110,513,698
|
| |
100%
|
(1)
|
Excludes 5,000,000 Earnout Shares as the earnout contingencies have not yet been met.
|
(2)
|
Includes 2,103,124 Sponsor Vesting Shares.
|
•
|
The pre-combination equity holders of Corcentric will hold the majority of voting rights in New Corcentric;
|
•
|
Corcentric has the right to appoint a majority of directors to the board of directors of New Corcentric;
|
•
|
Senior management of Corcentric will comprise the senior management of New Corcentric; and
|
•
|
The operations of Corcentric will comprise the only ongoing operations of New Corcentric.
|
•
|
Assuming no redemption scenario: This presentation assumes that no Public
Stockholders exercise redemption rights with respect to their Public Shares.
|
•
|
Assuming contractual maximum redemption scenario: This presentation
assumes that the Public Stockholders holding approximately 13.0% of the Public Shares exercise redemption rights with respect to their Public Shares. This scenario assumes that 1,725,000 Public Shares are redeemed for an aggregate
redemption payment of approximately $17,252 including a pro rata portion of interest accrued on the Trust Account of $2. The contractual maximum redemption scenario is based on a minimum cash consideration of $150,000 at Closing of the
Business Combination, consisting of Trust Account funds, PIPE Financing proceeds and all other cash and cash equivalents of North Mountain less the aggregate amount of cash proceeds that will be required to satisfy the redemption of the
Public Shares and the payment of North Mountain estimated transaction expenses of $15,000. Corcentric shall have no right or ability to waive the minimum cash condition without the prior written consent of North Mountain (which consent
may be provided or withheld by North Mountain in its sole discretion) if such aggregate amount is less than $125,000.
|
3(a)
|
Cash and cash equivalents. Represents the impact of the Business Combination on
the cash and cash equivalents balance of New Corcentric.
|
|
| |
Note
|
| |
No redemption
scenario
|
| |
Contractual maximum
redemption scenario
|
North Mountain cash and cash equivalents as of
December 31, 2021 - pre Business Combination
|
| |
|
| |
304
|
| |
304
|
Corcentric cash and cash equivalents as of December 31,
2021 - pre Business Combination
|
| |
|
| |
9,856
|
| |
9,856
|
Total pre Business Combination
|
| |
|
| |
10,160
|
| |
10,160
|
|
| |
|
| |
|
| |
|
Transaction accounting adjustments:
|
| |
|
| |
|
| |
|
North Mountain cash held in Trust Account
|
| |
(1)
|
| |
132,262
|
| |
132,262
|
PIPE Financing
|
| |
(2)
|
| |
50,000
|
| |
50,000
|
Payment to redeeming North Mountain Public Stockholders
|
| |
(3)
|
| |
—
|
| |
(17,252)
|
Cash to existing Corcentric stockholders at the Business Combination
|
| |
(4)
|
| |
(120,000)
|
| |
(120,000)
|
Payment of deferred underwriting fees
|
| |
(5)
|
| |
(4,629)
|
| |
(4,629)
|
Payment of transaction costs incurred by Corcentric
|
| |
(6)
|
| |
(3,226)
|
| |
(3,226)
|
Payment of other estimated transaction costs of North Mountain
|
| |
(7)
|
| |
(10,371)
|
| |
(10,371)
|
Payment of other estimated transaction costs of Corcentric
|
| |
(8)
|
| |
(16,576)
|
| |
(16,576)
|
Payment of additional costs of Corcentric
|
| |
(9)
|
| |
(198)
|
| |
(198)
|
Partial repayment of revolving line of credit
|
| |
(10)
|
| |
(25,422)
|
| |
(8,170)
|
Total Transaction accounting adjustments
|
| |
|
| |
1,840
|
| |
1,840
|
|
| |
|
| | | | ||
Post-Business Combination cash and cash equivalents balance
|
| |
|
| |
$12,000
|
| |
$12,000
|
(1)
|
Represents the amount of the restricted investments, and cash and cash equivalents held in the Trust Account at the Closing of
the Business Combination (see Note 3(c) Trust Account).
|
(2)
|
Represents the issuance, in a private placement consummated concurrently with the Closing of the Business Combination, to PIPE
Investors of 5,000,000 shares of North Mountain Class A Common Stock at the purchase price of $10 per share and 2,500,000 Public Warrants (see Note 3(k) Impact on equity).
|
(3)
|
Represents the amount paid to Public Stockholders who exercised redemption rights under the contractual maximum redemption
scenario, including a pro rata portion of interest accrued on the Trust Account of $2 (see Note 3(k) Impact on equity).
|
(4)
|
Represents the amount of cash consideration paid to existing Corcentric stockholders at the Closing of the Business Combination
(see Note 3(k) Impact on equity).
|
(5)
|
Represents the payment of deferred underwriting fees incurred as part of North Mountain’s IPO committed to be paid upon the
consummation of a Business Combination (see Note 3(b)(1) Transaction costs).
|
(6)
|
Represents payment of accrued Corcentric transaction cost (see Note 3(b)(2) Transaction
costs).
|
(7)
|
Represents payment of other estimated transaction costs of North Mountain (see Note 3(b)(4) Transaction costs).
|
(8)
|
Represents payment of other estimated transaction costs of Corcentric (see Note 3(b)(5) Transaction
costs).
|
(9)
|
Represents payment of additional costs of Corcentric (see Note 3(b)(6) Transaction
costs).
|
(10)
|
Represents partial repayment of Corcentric’s revolving line of credit (see Note 3(e) Partial
repayment of revolving line of credit).
|
(1)
|
Payment of deferred underwriting fee payable incurred by North Mountain in the amount of $4,629 (see Note 3(a)(5) Cash and cash equivalents). The unaudited pro forma condensed combined balance sheet reflects payment of these costs as a reduction of cash and cash equivalents, with a corresponding decrease
in deferred underwriting fee payable.
|
(2)
|
Payment of accrued transaction costs specific to Corcentric related to the Business Combination in the amount of $3,226. The
unaudited pro forma condensed combined balance sheet reflects these costs as a reduction of cash and cash equivalents, with a corresponding decrease in accrued expenses and other current liabilities (see Note 3(a)(6) Cash and cash equivalents).
|
(3)
|
Recognition of Corcentric’s capitalized transaction costs related to the Business Combination in the amount of $3,499 as a
reduction to equity proceeds. The unaudited pro forma condensed combined balance sheet reflects these costs as a decrease in other assets, with a corresponding decrease in additional paid-in capital (see Note 3(k) Impact on equity).
|
(4)
|
Payment of other estimated transaction costs of North Mountain that are incremental and directly attributable to the Business
Combination in the amount of $10,371 (see Note 3(a)(7) Cash and cash equivalents). The unaudited pro forma condensed combined balance sheet reflects these costs as a
reduction of cash and cash equivalents, with a corresponding decrease in additional paid-in capital (see Note 3(k) Impact on equity). Costs considered to be directly attributable
to the Business Combination include certain legal, banking, advisory, accounting and other fees.
|
(5)
|
Payment of other estimated transaction costs of Corcentric that are incremental and directly attributable to the Business
Combination in the amount of $16,576. The unaudited pro forma condensed combined balance sheet reflects these costs as a reduction of cash and cash equivalents, with a corresponding decrease in additional paid-in capital (see Note
3(a)(8) Cash and cash equivalents, Note 3(k) Impact on equity). Costs considered to be directly attributable to the
Business Combination include certain legal, banking, advisory, accounting and other fees.
|
(6)
|
Payment of additional costs of Corcentric in the amount of $198. The unaudited pro forma condensed combined balance sheet
reflects these costs as a reduction of cash and cash equivalents, with a corresponding increase in accumulated deficit (see Note 3(a)(9) Cash and cash equivalents, Note 3(k) Impact on equity). Additional costs include certain consulting fees which are determined to be not directly attributable and incremental to the Business Combination.
|
|
| |
|
| |
North Mountain / New Corcentric common stock
|
| |
Sponsor
Vesting
Shares
|
| |
Corcentric
Common
stock
|
| |
Corcentric
Treasury
stock
|
| |
Additional
paid-in
capital
|
| |
Cumulative
translation
adjustments
|
| |
Accumulated
deficit
|
| |
Total
stockholders'
(deficit)
equity
|
| |
North Mountain Temporary equity
|
| |
Corcentric Temporary equity
|
|||||||||||||||||||||||||||
|
| |
|
| |
Class A
|
| |
Class B
|
| |
Class A
common
stock
subject to
possible
redemption
|
| |
Redeemable
preferred
stock
|
| |
Redeemable
common
stock
|
||||||||||||||||||||||||||||||||||||||||||
|
| |
Note
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
||||||||||||
North Mountain equity as of December 31, 2021 - pre Business
Combination
|
| |
|
| |
—
|
| |
$—
|
| |
3,306,250
|
| |
$—
|
| |
—
|
| |
—
|
| |
$—
|
| |
—
|
| |
$—
|
| |
$—
|
| |
$—
|
| |
$(13,060)
|
| |
$(13,060)
|
| |
13,225,000
|
| |
$132,250
|
| |
—
|
| |
$—
|
| |
—
|
| |
$—
|
Corcentric equity as of December 31, 2021 - pre Business
Combination
|
| |
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
13,343,058
|
| |
12
|
| |
2,067,031
|
| |
(21,893)
|
| |
59,222
|
| |
175
|
| |
(38,709)
|
| |
(1,193)
|
| |
—
|
| |
—
|
| |
2,700,967
|
| |
109,531
|
| |
3,502,268
|
| |
5,419
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Total equity as of December 31, 2021 - Pre Business
Combination
|
| |
|
| |
—
|
| |
—
|
| |
3,306,250
|
| |
—
|
| |
—
|
| |
13,343,058
|
| |
12
|
| |
2,067,031
|
| |
(21,893)
|
| |
59,222
|
| |
175
|
| |
(51,769)
|
| |
(14,253)
|
| |
13,225,000
|
| |
132,250
|
| |
2,700,967
|
| |
109,531
|
| |
3,502,268
|
| |
5,419
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Transaction Accounting Adjustments:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Reclassification of North Mountain's Common stock shares
subject to possible redemption
|
| |
|
| |
13,225,000
|
| |
1
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
132,249
|
| |
—
|
| |
—
|
| |
132,250
|
| |
(13,225,000)
|
| |
(132,250)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Reclassification of Sponsor-held Class B stock
|
| |
|
| |
3,306,250
|
| |
—
|
| |
(3,306,250)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
PIPE Investors
|
| |
3(a)(2)
|
| |
5,000,000
|
| |
1
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
49,999
|
| |
—
|
| |
—
|
| |
50,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Shares issued to the Sponsor as consideration for
forfeiture of warrants
|
| |
|
| |
1,400,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Sponsor Vesting Shares
|
| |
|
| |
(2,103,124)
|
| |
—
|
| |
—
|
| |
—
|
| |
2,103,124
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Shares issued to Corcentric stockholders as consideration
|
| |
|
| |
89,307,448
|
| |
9
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(9)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Cash to existing Corcentric stockholders at Business
Combination
|
| |
3(a)(4)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(120,000)
|
| |
—
|
| |
—
|
| |
(120,000)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Corcentric's capitalized expenses related to the Business
Combination
|
| |
3(b)(3)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(3,499)
|
| |
—
|
| |
—
|
| |
(3,499)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Other estimated transaction costs of North Mountain
|
| |
3(b)(4)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(10,371)
|
| |
—
|
| |
—
|
| |
(10,371)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Other estimated transaction costs of Corcentric
|
| |
3(b)(5)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(16,576)
|
| |
—
|
| |
—
|
| |
(16,576)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Additional costs of Corcentric
|
| |
3(b)(6)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(198)
|
| |
(198)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Sponsor Vesting Shares liability
|
| |
3(i)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(16,898)
|
| |
—
|
| |
—
|
| |
(16,898)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Earnout Shares liability
|
| |
3(j)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(35,783)
|
| |
—
|
| |
—
|
| |
(35,783)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Elimination of historical Corcentric redeemable preferred
stock
|
| |
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
109,531
|
| |
—
|
| |
—
|
| |
109,531
|
| |
—
|
| |
—
|
| |
(2,700,967)
|
| |
(109,531)
|
| |
—
|
| |
—
|
Elimination of historical Corcentric redeemable common
stock
|
| |
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
5,419
|
| |
—
|
| |
—
|
| |
5,419
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(3,502,268)
|
| |
(5,419)
|
Elimination of Private Placement Warrants of the Sponsor
|
| |
3(g)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
3,275
|
| |
—
|
| |
—
|
| |
3,275
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Recognition of Public Warrants liability attributable to
PIPE Investors
|
| |
3(h)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(1,000)
|
| |
—
|
| |
—
|
| |
(1,000)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Elimination of historical Corcentric common stock
|
| |
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(13,343,058)
|
| |
(12)
|
| |
—
|
| |
—
|
| |
12
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Elimination of historical accumulated deficit of North
Mountain
|
| |
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(13,060)
|
| |
—
|
| |
13,060
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Elimination of historical Corcentric treasury stock
|
| |
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(2,067,031)
|
| |
21,893
|
| |
(21,893)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Vesting of equity awards at the Closing of the Business
Combination
|
| |
3(l)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
669
|
| |
—
|
| |
(669)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Compensation expense related to earnout for vested equity
awards holders
|
| |
3(m)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
881
|
| |
—
|
| |
(881)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Tax liability related to net settlement of vested options
|
| |
3(d)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(15,939)
|
| |
—
|
| |
—
|
| |
(15,939)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Tax effect of pro forma adjustments
|
| |
3(f)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(417)
|
| |
(417)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Total Transaction Accounting Adjustments
|
| |
|
| |
110,135,574
|
| |
11
|
| |
(3,306,250)
|
| |
—
|
| |
2,103,124
|
| |
(13,343,058)
|
| |
(12)
|
| |
(2,067,031)
|
| |
21,893
|
| |
47,007
|
| |
—
|
| |
10,895
|
| |
79,794
|
| |
(13,225,000)
|
| |
(132,250)
|
| |
(2,700,967)
|
| |
(109,531)
|
| |
(3,502,268)
|
| |
(5,419)
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Post-Business Combination equity balance
|
| |
|
| |
110,135,574
|
| |
$11
|
| |
—
|
| |
$—
|
| |
2,103,124
|
| |
—
|
| |
$—
|
| |
—
|
| |
$—
|
| |
$106,229
|
| |
$175
|
| |
$(40,874)
|
| |
$65,541
|
| |
—
|
| |
$—
|
| |
—
|
| |
$—
|
| |
—
|
| |
$—
|
|
| |
|
| |
North Mountain / New Corcentric common stock
|
| |
Sponsor
Vesting
Shares
|
| |
Corcentric
Common
stock
|
| |
Corcentric
Treasury
stock
|
| |
Additional
paid-in
capital
|
| |
Cumulative
translation
adjustments
|
| |
Accumulated
deficit
|
| |
Total stockholders'
(deficit) equity
|
| |
North Mountain Temporary equity
|
| |
Corcentric Temporary equity
|
|||||||||||||||||||||||||||
|
| |
|
| |
Class A
|
| |
Class B
|
| |
Class A
common
stock
subject to
possible
redemption
|
| |
Redeemable
preferred
stock
|
| |
Redeemable
common
stock
|
||||||||||||||||||||||||||||||||||||||||||
|
| |
Note
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
||||||||||||
North Mountain equity as of December 31, 2021 - pre Business
Combination
|
| |
|
| |
—
|
| |
$—
|
| |
3,306,250
|
| |
$—
|
| |
—
|
| |
—
|
| |
$—
|
| |
—
|
| |
$—
|
| |
$—
|
| |
$—
|
| |
$(13,060)
|
| |
$(13,060)
|
| |
13,225,000
|
| |
$132,250
|
| |
—
|
| |
$—
|
| |
—
|
| |
$—
|
Corcentric equity as of December 31, 2021 - pre Business
Combination
|
| |
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
13,343,058
|
| |
12
|
| |
2,067,031
|
| |
(21,893)
|
| |
59,222
|
| |
175
|
| |
(38,709)
|
| |
(1,193)
|
| |
—
|
| |
—
|
| |
2,700,967
|
| |
109,531
|
| |
3,502,268
|
| |
5,419
|
Total equity as of December 31, 2021 - Pre Business
Combination
|
| |
|
| |
—
|
| |
—
|
| |
3,306,250
|
| |
—
|
| |
—
|
| |
13,343,058
|
| |
12
|
| |
2,067,031
|
| |
(21,893)
|
| |
59,222
|
| |
175
|
| |
(51,769)
|
| |
(14,253)
|
| |
13,225,000
|
| |
132,250
|
| |
2,700,967
|
| |
109,531
|
| |
3,502,268
|
| |
5,419
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Transaction Accounting Adjustments:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Reclassification of North Mountain's Common stock shares
subject to possible redemption
|
| |
|
| |
13,225,000
|
| |
1
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
132,249
|
| |
—
|
| |
—
|
| |
132,250
|
| |
(13,225,000)
|
| |
(132,250)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Reclassification of Sponsor-held Class B stock
|
| |
|
| |
3,306,250
|
| |
—
|
| |
(3,306,250)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Less: Redemption of redeemable stock
|
| |
3(a)(3)
|
| |
(1,725,000)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(17,252)
|
| |
—
|
| |
—
|
| |
(17,252)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
PIPE Investors
|
| |
3(a)(2)
|
| |
5,000,000
|
| |
1
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
49,999
|
| |
—
|
| |
—
|
| |
50,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Shares issued to the Sponsor as consideration for
forfeiture of warrants
|
| |
|
| |
1,400,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Sponsor Vesting Shares
|
| |
|
| |
(2,103,124)
|
| |
—
|
| |
—
|
| |
—
|
| |
2,103,124
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Shares issued to Corcentric stockholders as consideration
|
| |
|
| |
89,307,448
|
| |
9
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(9)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Cash to existing Corcentric stockholders at Business
Combination
|
| |
3(a)(4)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(120,000)
|
| |
—
|
| |
—
|
| |
(120,000)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Corcentric's capitalized expenses related to the Business
Combination
|
| |
3(b)(3)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(3,499)
|
| |
—
|
| |
—
|
| |
(3,499)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Other estimated transaction costs of North Mountain
|
| |
3(b)(4)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(10,371)
|
| |
—
|
| |
—
|
| |
(10,371)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Other estimated transaction costs of Corcentric
|
| |
3(b)(5)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(16,576)
|
| |
—
|
| |
—
|
| |
(16,576)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Additional costs of Corcentric
|
| |
3(b)(6)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(198)
|
| |
(198)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Sponsor Vesting Shares liability
|
| |
3(i)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(16,898)
|
| |
—
|
| |
—
|
| |
(16,898)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Earnout Shares liability
|
| |
3(j)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(35,783)
|
| |
—
|
| |
—
|
| |
(35,783)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Elimination of historical Corcentric redeemable preferred
stock
|
| |
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
109,531
|
| |
—
|
| |
—
|
| |
109,531
|
| |
—
|
| |
—
|
| |
(2,700,967)
|
| |
(109,531)
|
| |
—
|
| |
—
|
Elimination of historical Corcentric redeemable common
stock
|
| |
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
5,419
|
| |
—
|
| |
—
|
| |
5,419
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(3,502,268)
|
| |
(5,419)
|
Elimination of Private Placement Warrants of the Sponsor
|
| |
3(g)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
3,275
|
| |
—
|
| |
—
|
| |
3,275
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Recognition of Public Warrants liability attributable to
PIPE Investors
|
| |
3(h)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(1,000)
|
| |
—
|
| |
—
|
| |
(1,000)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Elimination of historical Corcentric common stock
|
| |
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(13,343,058)
|
| |
(12)
|
| |
—
|
| |
—
|
| |
12
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Elimination of historical accumulated deficit of North
Mountain
|
| |
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(13,060)
|
| |
—
|
| |
13,060
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Elimination of historical Corcentric treasury stock
|
| |
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(2,067,031)
|
| |
21,893
|
| |
(21,893)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Vesting of equity awards at the Closing of the Business
Combination
|
| |
3(l)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
669
|
| |
—
|
| |
(669)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Compensation expense related to earnout for vested equity
awards holders
|
| |
3(m)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
881
|
| |
—
|
| |
(881)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Tax liability related to net settlement of vested options
|
| |
3(d)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(15,939)
|
| |
—
|
| |
—
|
| |
(15,939)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Tax effect of pro forma adjustments
|
| |
3(f)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(417)
|
| |
(417)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Total Transaction Accounting Adjustments
|
| |
|
| |
108,410,574
|
| |
11
|
| |
(3,306,250)
|
| |
—
|
| |
2,103,124
|
| |
(13,343,058)
|
| |
(12)
|
| |
(2,067,031)
|
| |
21,893
|
| |
29,755
|
| |
—
|
| |
10,895
|
| |
62,542
|
| |
(13,225,000)
|
| |
(132,250)
|
| |
(2,700,967)
|
| |
(109,531)
|
| |
(3,502,268)
|
| |
(5,419)
|
Post-Business Combination equity balance
|
| |
|
| |
108,410,574
|
| |
$11
|
| |
—
|
| |
$—
|
| |
2,103,124
|
| |
—
|
| |
$—
|
| |
—
|
| |
$—
|
| |
$88,977
|
| |
$175
|
| |
$(40,874)
|
| |
$48,289
|
| |
—
|
| |
$—
|
| |
—
|
| |
$—
|
| |
—
|
| |
$—
|
Name
|
| |
Age
|
| |
Title
|
Charles B. Bernicker
|
| |
56
|
| |
Chief Executive Officer, President and Director
|
Nicholas Dermatas
|
| |
37
|
| |
Chief Financial Officer and Secretary
|
Robert L. Metzger
|
| |
53
|
| |
Director
|
Scott O’Callaghan
|
| |
58
|
| |
Director
|
Douglas J. Pauls
|
| |
63
|
| |
Director
|
•
|
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 “North Mountain 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 FASB, 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 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.
|
•
|
Source-to-Pay solutions: Through our suite of S2P solutions, we offer
customers the ability to identify their suppliers, run procurement processes, diligence potential suppliers, manage contract lifecycles, initiate purchase orders, automate invoicing receipt, enhance reconciliation and approval processes,
and initiate payment, all through our highly automated and intuitive software and advisory services. Our customers also leverage our analytics software to consolidate and cleanse data that resides in our customers’ systems. In addition,
we offer payments and financing capabilities to power multimodal payment disbursement.
|
•
|
Order-to-Cash solutions: Through our suite of O2C solutions, we offer
powerful lifecycle software that enables our customers to gain new customers, receive purchase orders, automate invoicing and eBilling,
|
•
|
B2B Payments Network: As we gain more customers through our S2P and
O2C solutions, we create powerful network effects, as more and more buyers and suppliers leverage our solutions and join our network. We are building network density within our core customer verticals, which provides enhanced value to
existing customers and strengthens our market position relative to our competitive set. These network effects drive more transaction volume and makes us uniquely positioned to monetize this volume with multimodal payment solutions. Today,
we have over $100 billion in transaction volume flowing through our network, and we believe this will grow significantly over time as businesses invest in digital procurement and payment solutions.
|
•
|
Sourcing: Our Sourcing solution provides collection and analysis capabilities to optimize
supplier selection that meets business requirements, lowers costs, reduces cycle time, leverages best practices, and ensures participation and visibility. The solution supports auctions of many types, bid analysis, and awards. We also
offer a variety of advisory and managed services to fully run sourcing events on behalf of a client to drive efficiencies and outcomes.
|
•
|
Supplier Management: Our supplier management solution provides end-to-end workflows that
helps clients establish and maintain stronger supplier relationships, ensure compliance, and mitigate risk. It supports supplier registration, profile information and certificate management, internal and external performance management,
action planning, and collaboration to ensure performance against contracted procurement goals and business outcomes.
|
•
|
Contract Lifecycle Management (CLM): Our CLM solution offers an efficient and self-service
model to request, author, collaborate, approve, sign, store, search, renew, amend, and terminate contracts. It provides all users, from procurement to legal to sales, the visibility and insights to turn every contract into a powerful
decision-making tool. It offers powerful features such as contract extraction and import, hierarchy assignments, task management, template and clause library, and eSignatures.
|
•
|
Procurement: Our procurement solution simplifies the entire requisition-to-Purchase Order
(PO) workflow, driving better user adoption to gain greater control over maverick spend, risk and compliance. It features robust catalog management – locally hosted, punch-out or federated via API; requisition management via an intuitive
shopping experience and an automated approval workflow; PO automation that helps error free electronic PO submission with suppliers; and integration of purchasing with contracts, receipt and dispute management. We can also offer
pre-negotiated GPO programs as well as a host of managed services.
|
•
|
Invoice Management: Our invoice management solution improves accuracy, eliminates manual
processes, and vastly increases productivity of AP staff. The solution includes features such as fully managed mailroom operations and data capture; automatic and manual matching; approval workflow with straight through processing;
compliant eInvoice validation and archiving; and re-invoicing.
|
•
|
Financial Management: Our financial management solution allows stakeholders to make
informed decisions about budget and spend management forecasting. Budget management includes budget allocation, real-time monitoring, support for multi-level budgets and OpEx, CapEx, project-based and contract-based budgets. We use open
API integration with budget planning, and ERP systems. We additionally provide tax management software that allow for accurate management of tax obligations, exemptions, reconciliations, and reporting.
|
•
|
Payments and Financing: Our payment solution allows a client to efficiently manage the
last mile payment execution, resulting in more advantageous payment cycles, a significant reduction in fraud, and improved relationships with suppliers. Our payment solutions can handle a multitude of payment methods, including ACH,
virtual cards, checks, wire, among others. We can also offer accelerated payment options to suppliers that are funded by Corcentric or by the Buyer. Our solution also includes robust system capabilities as well as managed services around
supplier enrollment into various payment programs
|
•
|
Analytics: Our Analytics solution empowers clients to collect, consolidate and cleanse
spend data across their organization. With a holistic view of all spend-related activities via KPIs, reports and dashboards, stakeholders can influence spend behavior, deliver savings, lower risk, and improve compliance. Our advisory team
can also perform spend analyses for clients to identify and prioritize savings opportunities and execute on them to help realize such savings.
|
•
|
Credit Management: Credit management solution provides the technology and business process
to fully handle a client’s credit management needs. Whether making bulk credit checks, or ongoing credit verification and monitoring, Our solution has the ability to integrate with leading credit bureaus and apply advanced credit
decisioning criteria to offer a seamless credit qualification and onboarding
|
•
|
Invoicing / eBilling: Our Invoicing and eBilling solution enables clients to accurately
and efficiently deliver invoices to their customers, regardless of the invoice formats and protocols like email, or even paper. Beyond saving time and cost, it provides a risk-free and seamless shift to electronic invoicing and online
payments. It drastically reduces invoicing errors, guarantees delivery and offers one centralized, automated and highly resilient process with real-time end-to-end visibility. It enhances the end customer experience with electronic
document delivery, access to historical invoices / statements, easy online payments, as well as the ability to amend contact details and preferences.
|
•
|
Dispute Management: Dispute management solution capabilities simplify the management of
disputed invoices. Dispute management solution allows buyers to initiate a dispute with a few simple clicks from within a transaction. It offers extensive support for notifications, notes, attachments, and history, allowing robust
self-service capabilities. Our highly experienced managed services team acts as the single point of contact to resolve disputes. A full audit of all activities is captured and available for reporting and analysis.
|
•
|
Collections Management: With our Credit and Collections managed service, AR teams spend
less time prioritizing accounts, researching information, and chasing customer payments. They can now focus on strategic business activities. We have an established system for following up on late payments. We take early actions on
outstanding invoices to prevent problems that can cause rifts in customer relationships. The methods we use are: Reminder calls - contacting customers shortly after certain due dates. Dunning letters - automate dunning via email, fax,
print, and email correspondence. Follow up phone calls - assigned collection managers who follow up with customers by phone.
|
•
|
Cash Application: Cash application solution lifts the burden of cash application from the
client’s team, managing payment information, centralized receipt, remittance, invoice matching, deduction management, and reconciliation across the payment process. Our portal offers a full range of reports to help sellers and buyers keep
track of payments and invoice status. Aging details and open balance reports are available for different aging buckets. Remittance Advice reports can be delivered for automatic processing and reconciliation.
|
•
|
Supply Chain Financing: We offer flexible, non-recourse financing options that ensure
guaranteed on-time payments for sellers, leading to DSO reduction, improving cash-flow, and offering greater control over working capital. We can offer fixed payment terms or acceleration on top of existing payment terms between seller
and buyer. We eliminate credit risk and bad debt expense with no more unpaid invoices. We can also offer term extensions to buyers as desired.
|
•
|
Managed AR Services: From enrollment support to program marketing and customer success
management, we offer a whole suite of managed services that is key to ensuring a client’s financial and operational success. Our managed AR services complement our credit management, discrepancy management, disputes management, and
collections management teams.
|
•
|
Analytics: Our Analytics solution offers business insights into the entire O2C process
from sales patterns to dispute metrics and collection efficiency. Using our solution, users can drill down into individual cohorts or transactions, which provides for a rich decisioning process.
|
•
|
Multiple Payment Modalities: Once customers are part of our B2B payments network, they are
offered many ways to pay including, among others, ACH, virtual cards, checks, wire. Corcentric monetizes a percentage of each transaction and our take rate varies depending on the specific payment modality and on whether we also offer
auxiliary services (e.g., extending credit).
|
•
|
Indirect GPO: Corcentric Indirect GPO increases savings on customer indirect spend through
the collective buying power of Corcentric’s fast, streamlined marketplace. For organizations that lack a sufficient scale of buying power, one of the most efficient paths to procure-to-pay savings is the management of indirect spend
through a GPO. The Corcentric Indirect GPO is a turnkey purchasing solution that quickly boosts customer spend under management by sidestepping resource constraints, giving customers instant expertise in key categories, and eliminating
unnecessary spend. By replacing the cost of supplier and pricing inconsistencies with the simplicity of leveraged buying power, Corcentric customers can optimize indirect spend management and procure confidently.
|
•
|
Fleet GPO: Corcentric Fleet GPO is a solution that specifically caters to our customers
who need to leverage the buying power of Corcentric for fleet parts procurement. From tires to parts to lubricants to supplies, we connect buyers to industry leading suppliers. Through the marketplace, Corcentric connects buyers to latest
products, negotiates pricing and terms on behalf of customers, and provides flexible credit and payment services.
|
•
|
Cloud-native infrastructure: Our stack uses Amazon Web Services for
Infrastructure-as-a-Service. We use virtual private clouds in different regions of the world to host customers based on their region of preference. Individual services in each virtual private cloud are distributed among availability zones
for reliability and scalability.
|
•
|
Single code base: Our primary tech stack that powers our S2P solutions
is built with a single code base, which enables us to innovate faster and deliver high quality software. We are able to qualify our releases more efficiently, with faster deployment of code. Our platform is a fully redundant deployment
stack with real-time database replication, using Percona. Our platform is hosted in Amazon Web Services and leverages best practices for scalability and redundancy. Our platform provides a self-service deployment tool called Online
Builder that enables our customers to deploy and manage different versions of products using minimal configurations. Our Online Builder tool also enables us to roll out new releases in a sandbox environment for a customer to test and
validate before moving to production.
|
•
|
Business Process Management engine: We offer rich, customizable and
easily integrated business process management. Our proprietary business process management engine allows for integrated workflow, data management and interface construction. We provide several
out-of-the-box business process management templates that can be used to satisfy the needs of a wide variety of customer-specific workflows.
|
•
|
Robust extension framework: Our platform provides a robust extension
framework, which enables us to natively integrate new technologies within our existing stack. This enables our customers to customize our base product offerings to cater to their specific business requirements. Customers can tailor
standardized functions to their own requirements in a simple and powerful way.
|
•
|
Network of Networks: As opposed to many competitors, who treat
connectivity between any two entities as a “walled garden”, we have pioneered open connectivity within our network. For instance, when a supplier joins our network, their trading relationship is available to every buyer within our
network. This is unlike other competitor networks, in which a supplier is often required to forge a unique connection with each buyer, which is a costly, expensive, and time-consuming process. This is due to the unique way in which we
have enabled a high degree of configurability.
|
•
|
Seamless integrations: Our tech platform provides a wide variety of
integration options to customers. We are agnostic to third-party software and technology vendors used by our customers. We support numerous industry standard transport protocols such as HTTPS, AS2, and sFTP along with rest-based and
soap-based APIs. Our platform also supports a diverse range of file formats and custom mappings for customers. We have standardized connections to third-party business networks like Ariba Network, Coupa and other partners like ReadSoft,
Numen, Dun & Bradstreet, CreditSafe, Beroe, etc., to enhance the network of networks effect of our platform. We also provide integration to some of the most common ERP systems, including SAP, Oracle, Netsuite, Sage, and Microsoft
Dynamics. Our technology platform has standardized integrations with third-party providers like Beroe, Readsoft, Numen, and more to extend and enrich our standard product functionality so that customers have a seamless and unified
experience.
|
•
|
Business Innovation Lab: We have a team of highly dedicated,
industry-leading professionals who are engaged in developing a variety of technologies with breakthrough innovative features and functions. These technologies include the use of machine learning, natural language processing and artificial
intelligence in the areas of invoice/data extraction and interpretation, predictive analytics, business process mining, business intelligence capability, and intelligent digital assistants. Our lab is also engaged in researching the use
of blockchain as a key platform technology to allow for immutable transactions, full transparency, enhanced security, and fraud prevention.
|
•
|
Fortune 500 global chemical and ingredients manufacturer - S2P customer:
We began working with a Fortune 500 global chemical and ingredients distributor in March 2020. The customer operated a lean sourcing, and procurement team that had limited expertise, and the customer had fragmented procurement activities
across its group. We were able to differentiate ourselves in the RFP process by offering true, end-to-end capabilities. The customer leveraged all of our S2P software, payments, and advisory services capabilities to drive significant
savings and optimize its lean procurement process. We have delivered more than $6.5 million in realized savings, processed over $300 million in spend, and generated more than a 4x ROI for our customer. All of our customer’s supplier
invoices are now processed through our platform.
|
•
|
One of the world’s largest tire and rubber companies - O2C customer:
One of the world’s largest tire and rubber companies added Corcentric as a solution in August 2018. The customer was confronted by complex integration requirements with key strategic customers. Challenged with enrollment delays, slow
response times, poor customer experiences, and decreasing sales, our customer engaged us to analyze supplier and credit data, while improving billing management and O2C services. By deploying all of our software, payments and advisory
services capabilities, our customer experienced a 10% increase in sales, significant decrease in DSO, working capital improvements, and increased customer engagement.
|
•
|
Daimler - B2B Payments Network customer: Corcentric has worked with
Daimler, a leading global supplier of premium and luxury cars and commercial vehicles, since February 2012. Daimler has implemented both S2P and O2C solutions to create a personalized private commerce network, which consists of its dealer
and distributor relationships. Daimler has highly complex integration requirements because of the 17,600 unique system connections between ERP, point-of-sale and S2P systems, among other point solutions. We have helped Daimler enable
eBilling, digitize its payment system and radically improve its support services. By implementing our solutions, Daimler has experienced a 59% decrease in DSO, 86% reduction in disputes, and significant revenue expansion since 2012.
|
•
|
New Customer Acquisition. Our direct sales team consists of sales
representatives that have designated portfolios of accounts. We use account-based selling and marketing. This includes personal identification such as individual influencers, gatekeepers, and decision makers. We also take a classic funnel
approach to marketing based on a large number of targets that drives activity to the top of our sales funnel. Our business development team quickly manages this activity to qualify leads and transition opportunities to our sales
executives.
|
•
|
Existing Customer Expansion. We follow a land and expand strategy and
regularly seek to grow our business by expanding within our existing customer base. We accomplish this in collaboration with our customer success organization synchronized with renewal cycles, customer delight metrics, and quarterly
business reviews to keep pulse on delight and opportunity. This provides a natural mechanism to sell new capabilities into our customer base, penetrating additional divisions or related parties, thereby identifying incremental processing
activity. Our respective teams identify the expansion opportunity within each account based on capability purchased and proclivity to purchase additional solutions based on industry and company dynamics. This enables disciplined account
planning, targeting, execution, and success measurement.
|
•
|
Complexity in B2B payments resulting in poor cash flow management
|
•
|
Inefficient legacy systems and processes
|
•
|
Proliferation of point solutions driving high costs
|
•
|
Multitude of accounting and reporting systems posing integration challenges
|
•
|
Transaction fees - We generate fees from transaction processing which are based upon either a fixed amount per transaction or a
percentage of the underlying transaction value. Such fees are recognized at the time that the transaction is processed and validated in our system.
|
•
|
Rebates - We receive volume-based rebates from certain suppliers within our payment network, a portion of which is shared with the
customer and a portion of which we retain as compensation. Rebate revenue is recognized net of expected payouts to customers and is based upon the actual volume achieved in a period.
|
•
|
The subscription model provides for a fixed monthly fee that covers a certain allotment of transactions to be processed through
our system.
|
•
|
Fixed fees are recognized on a monthly basis when we provide service under the terms of a contractual agreement.
|
•
|
Overage fees for transactions processed in excess of a customer’s allotment are recognized as they occur.
|
•
|
Consulting fees are typically the result of cost-savings or software development engagements and are generated on a (1)
contingent, (2) fixed or (3) time & materials basis.
|
•
|
Implementation and training fees are based on the amount of work required to configure systems and solutions specific to
customers’ needs and provide subsequent trainings to customers.
|
•
|
We receive fees for brokering leases between our customers and members of our lending network which are recognized when the
underlying lease is consummated and assigned to a lender.
|
•
|
Revenue on equipment sales is recognized when the customer has taken title to and possession of the equipment which occurs
after an agreement of sale has been executed and payment has been received.
|
•
|
Our model for such transactions generally limits the amount of time inventory is held to 1-3 business days, resulting in high
rates of inventory turnover and low inventory risk.
|
|
| |
Year ended
December 31,
|
||||||
|
| |
2021
|
| |
2020
|
| |
2019
|
DBNRR
|
| |
106.2%
|
| |
100.8%
|
| |
108.0%
|
|
| |
Year ended
December 31,
|
||||||
(in thousands)
|
| |
2021
|
| |
2020
|
| |
2019
|
Revenue:
|
| |
|
| |
|
| |
|
Payments, software and advisory revenue
|
| |
$109,789
|
| |
$101,231
|
| |
$102,830
|
Equipment sales
|
| |
43,905
|
| |
73,445
|
| |
41,755
|
Total revenues
|
| |
153,694
|
| |
174,676
|
| |
144,585
|
Direct costs of revenues (excluding depreciation and
amortization shown separately below):
|
| |
|
| |
|
| |
|
Direct costs of payments, software and advisory revenue
|
| |
35,788
|
| |
34,145
|
| |
34,521
|
Direct costs of equipment sales
|
| |
39,504
|
| |
71,012
|
| |
38,911
|
Total direct costs of revenue
|
| |
75,292
|
| |
105,157
|
| |
73,432
|
Operating expenses:
|
| |
|
| |
|
| |
|
Research and development
|
| |
3,081
|
| |
1,678
|
| |
1,594
|
Sales and marketing
|
| |
26,646
|
| |
27,064
|
| |
29,368
|
General and administrative
|
| |
47,301
|
| |
17,751
|
| |
17,904
|
Depreciation and amortization
|
| |
23,577
|
| |
18,664
|
| |
16,850
|
Change in fair value of contingent consideration
|
| |
—
|
| |
—
|
| |
1,655
|
|
| |
Year ended
December 31,
|
||||||
(in thousands)
|
| |
2021
|
| |
2020
|
| |
2019
|
Total operating expenses
|
| |
100,605
|
| |
65,157
|
| |
67,371
|
Operating (loss) income
|
| |
(22,203)
|
| |
4,362
|
| |
3,782
|
Interest expense
|
| |
(9,418)
|
| |
(6,930)
|
| |
(9,076)
|
Interest income
|
| |
65
|
| |
111
|
| |
175
|
Foreign exchange gain (loss)
|
| |
60
|
| |
(34)
|
| |
461
|
Loss before income taxes and equity in income (loss) of affiliate
|
| |
(31,496)
|
| |
(2,491)
|
| |
(4,658)
|
(Provision) benefit for income taxes
|
| |
(1,404)
|
| |
5,193
|
| |
926
|
Equity in income (loss) of affiliate
|
| |
112
|
| |
72
|
| |
(46)
|
Net (loss) income
|
| |
$(32,788)
|
| |
$2,774
|
| |
$(3,778)
|
|
| |
Year ended
December 31,
|
| |
Change from
Prior Period
|
||||||
(in thousands)
|
| |
2021
|
| |
2020
|
| |
$
|
| |
%
|
Payments
|
| |
$61,789
|
| |
$49,575
|
| |
$12,214
|
| |
25%
|
Software as a service
|
| |
32,649
|
| |
30,709
|
| |
1,940
|
| |
6%
|
Advisory
|
| |
15,351
|
| |
20,947
|
| |
(5,596)
|
| |
-27%
|
Equipment sales
|
| |
43,905
|
| |
73,445
|
| |
(29,540)
|
| |
-40%
|
Total revenues
|
| |
$153,694
|
| |
$174,676
|
| |
$(20,982)
|
| |
-12%
|
|
| |
Year ended
December 31,
|
| |
Change from
Prior Period
|
| |
Percentage of
Total Revenue
|
|||||||||
(in thousands)
|
| |
2021
|
| |
2020
|
| |
$
|
| |
%
|
| |
2021
|
| |
2020
|
Direct costs of payments, software and advisory revenue
|
| |
$35,788
|
| |
$34,145
|
| |
$1,643
|
| |
5%
|
| |
23%
|
| |
20%
|
Direct costs of equipment sales
|
| |
39,504
|
| |
71,012
|
| |
(31,508)
|
| |
-44%
|
| |
26%
|
| |
41%
|
Total direct costs of revenue
|
| |
$75,292
|
| |
$105,157
|
| |
$(29,865)
|
| |
-28%
|
| |
49%
|
| |
60%
|
|
| |
Year ended
December 31,
|
| |
Change from
Prior Period
|
| |
Percentage of
Total Revenue
|
|||||||||
(in thousands)
|
| |
2021
|
| |
2020
|
| |
$
|
| |
%
|
| |
2021
|
| |
2020
|
Research and development
|
| |
$3,081
|
| |
$1,678
|
| |
$1,403
|
| |
84%
|
| |
2%
|
| |
1%
|
|
| |
Year ended
December 31,
|
| |
Change from
Prior Period
|
| |
Percentage of
Total Revenue
|
|||||||||
(in thousands)
|
| |
2021
|
| |
2020
|
| |
$
|
| |
%
|
| |
2021
|
| |
2020
|
Sales and marketing
|
| |
$26,646
|
| |
$27,064
|
| |
$(418)
|
| |
-2%
|
| |
17%
|
| |
15%
|
|
| |
Year ended
December 31,
|
| |
Change from
Prior Period
|
| |
Percentage of
Total Revenue
|
|||||||||
(in thousands)
|
| |
2021
|
| |
2020
|
| |
$
|
| |
%
|
| |
2021
|
| |
2020
|
General and administrative
|
| |
$47,301
|
| |
$17,751
|
| |
$29,550
|
| |
166%
|
| |
31%
|
| |
10%
|
|
| |
Year ended
December 31,
|
| |
Change from
Prior Period
|
| |
Percentage of
Total Revenue
|
|||||||||
(in thousands)
|
| |
2021
|
| |
2020
|
| |
$
|
| |
%
|
| |
2021
|
| |
2020
|
Depreciation and amortization
|
| |
$23,577
|
| |
$18,664
|
| |
$4,913
|
| |
26%
|
| |
15%
|
| |
11%
|
|
| |
Year ended
December 31,
|
| |
Change from
Prior Period
|
| |
Percentage of
Total Revenue
|
|||||||||
(in thousands)
|
| |
2021
|
| |
2020
|
| |
$
|
| |
%
|
| |
2021
|
| |
2020
|
Interest expense
|
| |
$(9,418)
|
| |
$(6,930)
|
| |
$(2,488)
|
| |
36%
|
| |
6%
|
| |
4%
|
Interest income
|
| |
$65
|
| |
$111
|
| |
$(46)
|
| |
-41%
|
| |
0%
|
| |
0%
|
Foreign exchange gain (loss)
|
| |
$60
|
| |
$(34)
|
| |
$94
|
| |
-276%
|
| |
0%
|
| |
0%
|
(Provision) benefit for income taxes
|
| |
$(1,404)
|
| |
$5,193
|
| |
$(6,597)
|
| |
-127%
|
| |
1%
|
| |
3%
|
|
| |
Year ended
December 31,
|
| |
Change from
Prior Period
|
||||||
(in thousands)
|
| |
2020
|
| |
2019
|
| |
$
|
| |
%
|
Payments
|
| |
$49,575
|
| |
$51,054
|
| |
$(1,479)
|
| |
-3%
|
Software as a service
|
| |
30,709
|
| |
21,639
|
| |
9,070
|
| |
42%
|
Advisory
|
| |
20,947
|
| |
30,137
|
| |
(9,190)
|
| |
-30%
|
Equipment sales
|
| |
73,445
|
| |
41,755
|
| |
31,690
|
| |
76%
|
Total revenues
|
| |
$174,676
|
| |
$144,585
|
| |
$30,091
|
| |
21%
|
|
| |
Year ended
December 31,
|
| |
Change from
Prior Period
|
| |
Percentage of
Total Revenue
|
|||||||||
(in thousands)
|
| |
2020
|
| |
2019
|
| |
$
|
| |
%
|
| |
2020
|
| |
2019
|
Direct costs of payments, software and advisory revenue
|
| |
$34,145
|
| |
$34,521
|
| |
$(376)
|
| |
-1%
|
| |
20%
|
| |
24%
|
Direct costs of equipment sales
|
| |
71,012
|
| |
38,911
|
| |
32,101
|
| |
82%
|
| |
41%
|
| |
27%
|
Total direct costs of revenue
|
| |
$105,157
|
| |
$73,432
|
| |
$31,725
|
| |
43%
|
| |
60%
|
| |
51%
|
|
| |
Year ended
December 31,
|
| |
Change from
Prior Period
|
| |
Percentage of
Total Revenue
|
|||||||||
(in thousands)
|
| |
2020
|
| |
2019
|
| |
$
|
| |
%
|
| |
2020
|
| |
2019
|
Research and development
|
| |
$1,678
|
| |
$1,594
|
| |
$84
|
| |
5%
|
| |
1%
|
| |
1%
|
|
| |
Year ended
December 31,
|
| |
Change from
Prior Period
|
| |
Percentage of
Total Revenue
|
|||||||||
(in thousands)
|
| |
2020
|
| |
2019
|
| |
$
|
| |
%
|
| |
2020
|
| |
2019
|
Sales and marketing
|
| |
$27,064
|
| |
$29,368
|
| |
$(2,304)
|
| |
-8%
|
| |
15%
|
| |
20%
|
|
| |
Year ended
December 31,
|
| |
Change from
Prior Period
|
| |
Percentage of
Total Revenue
|
|||||||||
(in thousands)
|
| |
2020
|
| |
2019
|
| |
$
|
| |
%
|
| |
2020
|
| |
2019
|
General and administrative
|
| |
$17,751
|
| |
$17,904
|
| |
$(153)
|
| |
-1%
|
| |
10%
|
| |
12%
|
|
| |
Year ended
December 31,
|
| |
Change from
Prior Period
|
| |
Percentage of
Total Revenue
|
|||||||||
(in thousands)
|
| |
2020
|
| |
2019
|
| |
$
|
| |
%
|
| |
2020
|
| |
2019
|
Depreciation and amortization
|
| |
$18,664
|
| |
$16,850
|
| |
$1,814
|
| |
11%
|
| |
11%
|
| |
12%
|
|
| |
Year ended
December 31,
|
| |
Change from
Prior Period
|
| |
Percentage of
Total Revenue
|
|||||||||
(in thousands)
|
| |
2020
|
| |
2019
|
| |
$
|
| |
%
|
| |
2020
|
| |
2019
|
Change in fair value of contingent consideration
|
| |
$—
|
| |
$1,655
|
| |
$(1,655)
|
| |
-100%
|
| |
0%
|
| |
1%
|
|
| |
Year ended
December 31,
|
| |
Change from
Prior Period
|
| |
Percentage of
Total Revenue
|
|||||||||
(in thousands)
|
| |
2020
|
| |
2019
|
| |
$
|
| |
%
|
| |
2020
|
| |
2019
|
Interest expense
|
| |
$(6,930)
|
| |
$(9,076)
|
| |
$2,146
|
| |
-24%
|
| |
4%
|
| |
6%
|
Interest income
|
| |
$111
|
| |
$175
|
| |
$(64)
|
| |
-37%
|
| |
0%
|
| |
0%
|
Foreign exchange (loss) gain
|
| |
$(34)
|
| |
$461
|
| |
$(495)
|
| |
-107%
|
| |
0%
|
| |
0%
|
Benefit for income taxes
|
| |
$5,193
|
| |
$926
|
| |
$4,267
|
| |
461%
|
| |
3%
|
| |
1%
|
•
|
adjusted revenue (non-GAAP) does not reflect the full value of the equipment sold for which we took risk of loss while in
inventory; and
|
•
|
other companies, including companies in our industry, may calculate adjusted revenue or similarly titled measures differently,
which reduces its usefulness as a comparative measure.
|
|
| |
Year ended
December 31,
|
||||||
(in thousands)
|
| |
2021
|
| |
2020
|
| |
2019
|
Total revenues
|
| |
$153,694
|
| |
$174,676
|
| |
$144,585
|
Less: direct cost of equipment sales
|
| |
39,504
|
| |
71,012
|
| |
38,911
|
Adjusted revenue (Non-GAAP)
|
| |
$114,190
|
| |
$103,664
|
| |
$105,674
|
|
| |
|
| |
|
| |
|
Gross profit(1)
|
| |
59,751(2)
|
| |
55,220(3)
|
| |
58,805(4)
|
Depreciation and amortization
|
| |
18,651
|
| |
14,299
|
| |
12,348
|
Stock-based compensation expense included in cost of revenues
|
| |
323
|
| |
240
|
| |
103
|
Adjusted Gross Profit (Non-GAAP)
|
| |
$78,725
|
| |
$69,759
|
| |
$71,256
|
|
| |
|
| |
|
| |
|
Gross margin
|
| |
38.9%
|
| |
31.6%
|
| |
40.7%
|
Adjusted gross margin (Non-GAAP)
|
| |
68.9%
|
| |
67.3%
|
| |
67.4%
|
(1)
|
Gross profit is calculated as total revenues less cost of revenues (excluding depreciation and amortization), amortization of
acquired technologies, and amortization of internally developed software.
|
(2)
|
For the year ended December 31, 2021, gross profit represents total revenues of $153.7 million less cost of revenues (excluding
depreciation and amortization) of $75.3 million, amortization of acquired technologies of $6.8 million, and amortization of internally developed software of $11.9 million.
|
(3)
|
For the year ended December 31, 2020, gross profit represents total revenues of $174.7 million less cost of revenues (excluding
depreciation and amortization) of $105.2 million, amortization of acquired technologies of $5.0 million, and amortization of internally developed software of $9.3 million.
|
(4)
|
For the year ended December 31, 2019, gross profit represents total revenues of $144.6 million less cost of revenues (excluding
depreciation and amortization) of $73.4 million, amortization of acquired technologies of $4.3 million, and amortization of internally developed software of $8.1 million.
|
•
|
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in
the future, and adjusted EBITDA (non-GAAP) does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
|
•
|
adjusted EBITDA (non-GAAP) does not reflect interest income or expense;
|
•
|
adjusted EBITDA (non-GAAP) does not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
adjusted EBITDA (non-GAAP) does not reflect the potentially dilutive impact of stock-based compensation;
|
•
|
adjusted EBITDA (non-GAAP) does not reflect income tax expense that may represent a reduction in cash available to us; and
|
•
|
other companies, including companies in our industry, may calculate adjusted EBITDA (non-GAAP) or similarly titled measures
differently, which reduces its usefulness as a comparative measure.
|
|
| |
Year ended
December 31,
|
||||||
(in thousands)
|
| |
2021
|
| |
2020
|
| |
2019
|
Net (loss) income
|
| |
$(32,788)
|
| |
$2,774
|
| |
$(3,778)
|
Adjustments:
|
| |
|
| |
|
| |
|
Interest expense, net
|
| |
9,353
|
| |
6,819
|
| |
8,901
|
Provision (benefit) for income taxes
|
| |
1,404
|
| |
(5,193)
|
| |
(926)
|
Depreciation and amortization
|
| |
23,577
|
| |
18,664
|
| |
16,850
|
Earnings Before Interest Taxes Depreciation and Amortization
|
| |
$1,546
|
| |
$23,064
|
| |
$21,047
|
|
| |
|
| |
|
| |
|
Adjustments:
|
| |
|
| |
|
| |
|
Stock-based compensation expense
|
| |
$24,097
|
| |
$2,228
|
| |
$1,058
|
Foreign currency (gain) loss
|
| |
(60)
|
| |
34
|
| |
(461)
|
Equity in (income) loss of affiliate
|
| |
(112)
|
| |
(72)
|
| |
46
|
Change in Contingent Consideration
|
| |
—
|
| |
—
|
| |
1,655
|
Acquisition costs(1)
|
| |
100
|
| |
1,250
|
| |
2,964
|
Acquisition Accounting Adjustments(2)
|
| |
—
|
| |
(886)
|
| |
4,932
|
Restructuring and strategic project expenses(3)
|
| |
3,088
|
| |
1,431
|
| |
330
|
Adjusted EBITDA (Non-GAAP)
|
| |
$28,659
|
| |
$27,049
|
| |
$31,571
|
(1)
|
Represents legal, accounting and other professional fees incurred in connection with the acquisitions of Determine (2019),
Netsend Ltd (2019) and Vendorin LLC (2020).
|
(2)
|
For the year ended December 31, 2019, represents purchase accounting adjustments for the Determine acquisition related to the
step down of deferred revenue on the opening balance sheet. For the year ended December 31, 2020, represents a benefit related to reduction in contingent liabilities recorded on the opening balance sheet of the Determine acquisition.
|
(3)
|
For the year ended December 31, 2021, represents transaction costs associated with the Business Combination see (Note 1) as well
as charges associated with severance and employer taxes due upon the exercise of stock options. For the years ended December 31, 2020 and 2019, represents costs associated with special projects, including the Company's legal
reorganization and brand consolidation, as well as charges associated with severance and employer taxes due upon the exercise of stock options.
|
|
| |
Year ended
December 31,
|
||||||
(in thousands)
|
| |
2021
|
| |
2020
|
| |
2019
|
Net cash (used in) provided by operating activities
|
| |
$(10,012)
|
| |
$19,444
|
| |
$31,623
|
Net cash used in investing activities
|
| |
(16,377)
|
| |
(93,035)
|
| |
(63,260)
|
Net cash provided by financing activities
|
| |
25,637
|
| |
72,775
|
| |
34,119
|
Increase (decrease) in cash and cash equivalents
|
| |
$(752)
|
| |
$(816)
|
| |
$2,482
|
•
|
Maximum Senior Leverage Ratio of 6.50:1.00
|
•
|
Fixed Charge Coverage Ratio of 1.00:1.00
|
•
|
Minimum EBITDA of $25 million (as defined)
|
•
|
Principal payments on our Term loan, Revolving Line of Credit, and Vendorin seller note of $166.6 million are expected to be
paid out as follows: $1.4 million in 2022 and $154.7 million in 2023, and $10.5 million in 2024.
|
•
|
Interest payments related to our Term loan, Revolving Line of Credit, and Vendorin seller note of $14.2 million are expected to
be paid out as follows: $ 6.9 million in 2022, $6.1 million in 2023, and $1.2 million in 2024.
|
•
|
Lease payments as described in Note 17 of the audited consolidated financial statements included elsewhere in this proxy
statement/prospectus.
|
•
|
Payments under a software service agreement to be paid as follows: $0.6 million in 2022 and $0.5 million in 2023.
|
•
|
Capital expenditures to improve and maintain our technology platforms. Our historical spending on an annual basis during the
last three years has ranged from $10.1 million to $16.0 million related to investments in internally developed software and $1.0 million to $2.8 million related to purchases of property and equipment. We currently expect the level of
capital spending to increase in whole dollar terms but remain consistent as a percentage of our revenue.
|
•
|
Contingency fees – We perform cost savings projects on a contingent basis. Under these arrangements we are entitled to a
percentage of the savings generated through the engagement. The billings for such projects can occur over a period of up to 24 months following the completion of a project, as the actual savings are realized by the customers. Revenue
for these projects is initially measured based upon an estimate of the future savings to be achieved. Significant judgment is required in estimating the savings. The customer’s historical usage patterns as well as contractual price
reductions achieved as part of the engagement are used to develop the estimate. Actual savings realized may vary from the estimates. The savings estimates are updated each reporting period based upon actual savings realized.
|
•
|
Fixed fees – We perform cost savings projects at a fixed rate. Revenue for such projects is recognized over time based upon the
proportional performance of our obligations under the contract. Fixed fee contracts are generally less than 1 year in duration.
|
•
|
Time and materials – We perform cost savings and client requested software development projects that are recognized as hours are
incurred on a project.
|
Name
|
| |
Age
|
| |
Position
|
Executive Officers
|
| |
|
| |
|
Douglas Clark
|
| |
79
|
| |
Chief Executive Officer and Chairman of the New Corcentric Board
|
Matthew Clark
|
| |
42
|
| |
President and Chief Operating Officer
|
Thomas Sabol
|
| |
62
|
| |
Chief Financial Officer
|
Mark Joyce
|
| |
51
|
| |
Executive Vice President and Chief Accounting Officer
|
|
| |
|
| |
|
Non-Employee Directors
|
| |
|
| |
|
|
| |
|
| |
Director
|
|
| |
|
| |
Director
|
|
| |
|
| |
Director
|
|
| |
|
| |
Director
|
|
| |
|
| |
Director
|
|
| |
|
| |
Director
|
(1)
|
Member of the New Corcentric audit committee, effective upon the consummation of the Business Combination.
|
(2)
|
Member of the New Corcentric compensation committee, effective upon the consummation of the Business Combination.
|
(3)
|
Member of the New Corcentric nominating and corporate governance committee, effective upon the consummation of the Business
Combination.
|
•
|
Class I, which Corcentric and North Mountain anticipate will consist of , whose terms will expire at New Corcentric’s first
annual meeting of stockholders to be held after the completion of the Business Combination;
|
•
|
Class II, which Corcentric and North Mountain anticipate will consist of , whose terms will expire at New Corcentric’s second
annual meeting of stockholders to be held after the completion of the Business Combination; and
|
•
|
Class III, which Corcentric and North Mountain anticipate will consist of , whose terms will expire at New Corcentric’s third
annual meeting of stockholders to be held after the completion of the Business Combination.
|
•
|
evaluating the performance, independence and qualifications of New Corcentric’s independent auditors and determining whether to
retain New Corcentric’s existing independent auditors or engage new independent auditors;
|
•
|
helping ensure the independence and performance of New Corcentric’s independent auditors;
|
•
|
helping to maintain and foster an open avenue of communication between management and New Corcentric’s independent auditors;
|
•
|
discussing the scope and results of the audit with New Corcentric’s independent auditors, and reviewing, with management, New
Corcentric’s interim and year-end operating results;
|
•
|
developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;
|
•
|
administering risk oversight of New Corcentric’s risk management process, reviewing New Corcentric’s policies on risk assessment
and risk management;
|
•
|
reviewing related party transactions;
|
•
|
obtaining and reviewing a report by New Corcentric’s independent auditors at least annually, that describes New Corcentric’s
internal quality control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and
|
•
|
approving (or, as permitted, pre-approving) all audit and all permissible non-audit services to be performed by New Corcentric’s
independent auditors.
|
•
|
approving the retention of compensation consultants and outside service providers and advisors;
|
•
|
reviewing and approving, or recommending that the New Corcentric Board approve, the compensation, individual and corporate
performance goals and objectives and other terms of employments of New Corcentric’s executive officers, including evaluating the performance of New Corcentric’s chief executive officer, and, with his assistance, that of New Corcentric’s
other executive officers;
|
•
|
reviewing and recommending to the New Corcentric Board the compensation of New Corcentric’s directors;
|
•
|
administering New Corcentric’s equity and non-equity incentive plans;
|
•
|
reviewing New Corcentric’s practices and policies of employee compensation as they relate to risk management and risk-taking
incentives;
|
•
|
reviewing and evaluating succession plans for the executive officers;
|
•
|
reviewing and approving, or recommending that the New Corcentric Board approve, incentive compensation and equity plans;
|
•
|
helping the New Corcentric Board oversee New Corcentric’s human capital management policies, plans and strategies; and
|
•
|
reviewing and establishing general policies relating to compensation and benefits of New Corcentric’s employees and reviewing New
Corcentric’s overall compensation philosophy.
|
•
|
identifying, evaluating, and selecting, or recommending that the New Corcentric Board approve, nominees for election to the New
Corcentric Board and its committees;
|
•
|
approving the retention of director search firms;
|
•
|
evaluating the performance of the New Corcentric Board and of individual directors;
|
•
|
considering and making recommendations to the New Corcentric Board regarding the composition of the New Corcentric Board and its
committees;
|
•
|
evaluating the adequacy of New Corcentric’s corporate governance practices and reporting; and
|
•
|
overseeing an annual evaluation of the New Corcentric Board’s performance.
|
•
|
for any transaction from which the director derives an improper personal benefit;
|
•
|
for any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
|
•
|
for any unlawful payment of dividends or redemption of shares; or
|
•
|
for any breach of a director’s duty of loyalty to the corporation or its stockholders.
|
•
|
Douglas W. Clark, Chief Executive Officer and Chairman;
|
•
|
Mark P. Joyce, Executive Vice President and Chief Accounting Officer;1 and
|
•
|
Matthew D. Clark, President and Chief Operating Officer.
|
Name and Principal Position
|
| |
Year
|
| |
Salary
($)(1)
|
| |
Bonus(2)
|
| |
Stock
Awards
($)(3)
|
| |
Option
Awards
($)(3)
|
| |
Non-Equity
Incentive Plan
Compensation
|
| |
All Other
Compensation
($)(4)
|
| |
Total
($)
|
Douglas W. Clark
Chief Executive Officer and Chairman
|
| |
2021
|
| |
$490,364
|
| |
$0
|
| |
$156,139
|
| |
$13,625,537
|
| |
$0
|
| |
$20,734
|
| |
$14,292,774
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Mark P. Joyce
Executive Vice President and Chief
Accounting Officer
|
| |
2021
|
| |
$307,742
|
| |
$52,700
|
| |
$58,800
|
| |
$6,793,495
|
| |
$63,550
|
| |
$13,726
|
| |
$7,290,013
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Matthew D. Clark
President and Chief Operating Officer
|
| |
2021
|
| |
$374,096
|
| |
$68,000
|
| |
$1,415,426
|
| |
$67,286
|
| |
$82,000
|
| |
$16,017
|
| |
$2,022,825
|
(1)
|
The amounts set forth in this column reflect each named executive officer’s annual base salary earned in fiscal 2021.
|
(2)
|
Represents the amounts that the Board determined to pay over and above the amounts earned by meeting the performance criteria
under Corcentric’s Incentive Compensation Plan for fiscal 2021, in recognition of the extraordinary efforts of the Company in a challenging business climate. Mr. D. Clark elected not to receive a bonus for fiscal year 2021.
|
(3)
|
Amounts represent the grant date fair value of the restricted stock and stock options granted to the named executive officers,
as computed in accordance with FASB ASC 718, excluding estimated forfeitures. See Note 15 Stock-Based Compensation to our Consolidated Financial Statements contained in this
registration statement for assumptions used in computing fair value. In the case of Messrs. D. Clark and Joyce, amounts also include the incremental fair value, computed in accordance with FASB ASC 718, of the remaining 20% unvested
portion of stock options granted on January 1, 2012 under the AmeriQuest Transportation Services, Inc. Equity and Incentive Plan, as amended and restated March 27, 2008 (the “2008 Plan”), that were accelerated and
vested by the Board on December 29, 2021 and exercised by Messrs. D. Clark and Joyce. No awards remained outstanding under the 2008 Plan as of December 31, 2021.
|
1
|
Mark Joyce was named Executive Vice President and Chief Accounting Officer in October 2021. Mr.
Joyce previously served as the Company’s Executive Vice President and Chief Financial Officer.
|
(4)
|
The amounts reported in the All Other Compensation column consist of the following Company-paid portions of premiums for
coverage under Company benefit plans, as well as a car allowance provided only to Mr. D. Clark:
|
Name
|
| |
Life and AD&D
Insurance
Premiums
|
| |
Long-Term and
Short-Term
Disability
Premiums
|
| |
Dental, Vision and
Medical Care
Premiums
|
| |
Car
Allowance
|
| |
Total
|
Douglas W. Clark
|
| |
$156
|
| |
$558
|
| |
$11,020
|
| |
$9,000
|
| |
$20,734
|
Mark P. Joyce
|
| |
$240
|
| |
$558
|
| |
$12,928
|
| |
—
|
| |
$13,726
|
Matthew D. Clark
|
| |
$240
|
| |
$558
|
| |
$15,219
|
| |
—
|
| |
$16,017
|
|
| |
|
| |
Option Awards
|
| |
Stock Awards
|
|||||||||||||||
Name
|
| |
Date of
Grant
|
| |
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
| |
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
| |
Equity
Incentive Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
| |
Option
Exercise
Price ($)
|
| |
Option
Expiration
Date
|
| |
Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
|
| |
Market Value
of Shares or
Units of Stock
That Have
Not Vested ($)
|
Douglas W. Clark
|
| |
06-Dec-2016(1)
|
| |
48,428
|
| |
—
|
| |
—
|
| |
$8.50
|
| |
30-Jun-2026
|
| |
—
|
| |
—
|
|
01-Jul-2017(2)
|
| |
43,369
|
| |
—
|
| |
—
|
| |
$9.25
|
| |
01-Jul-2027
|
| |
—
|
| |
—
|
||
|
01-Jul-2018(2)
|
| |
35,829
|
| |
6,102
|
| |
—
|
| |
$10.50
|
| |
01-Jul-2028
|
| |
—
|
| |
—
|
||
|
05-Dec-2019(3)
|
| |
21,726
|
| |
13,048
|
| |
—
|
| |
$13.40
|
| |
05-Dec-2029
|
| |
—
|
| |
—
|
||
|
01-Jul-2020(2)
|
| |
13,893
|
| |
25,337
|
| |
—
|
| |
$12.25
|
| |
01-Jul-2030
|
| |
—
|
| |
—
|
||
|
01-Jul-2021(6)
|
| |
—
|
| |
36,738
|
| |
—
|
| |
$12.25
|
| |
01-Jul-2031
|
| |
—
|
| |
—
|
||
|
01-Jul-2018(1)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
3,488
|
| |
$138,962
|
||
|
03-Dec-2019(5)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
5,826
|
| |
$232,108
|
||
|
01-Jul-2020(1)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
9,559
|
| |
$380,831
|
||
|
01-Jul-2021(7)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
12,746
|
| |
$507,801
|
||
|
||||||||||||||||||||||||
Mark P. Joyce
|
| |
06-Dec-2016(1)
|
| |
17,996
|
| |
—
|
| |
—
|
| |
$8.50
|
| |
30-Jun-2026
|
| |
—
|
| |
—
|
|
01-Jul-2017(2)
|
| |
16,260
|
| |
—
|
| |
—
|
| |
$9.25
|
| |
01-Jul-2027
|
| |
—
|
| |
—
|
||
|
01-Jul-2018(2)
|
| |
13,495
|
| |
2,319
|
| |
—
|
| |
$10.50
|
| |
01-Jul-2028
|
| |
—
|
| |
—
|
||
|
05-Dec-2019(3)
|
| |
8,188
|
| |
4,907
|
| |
—
|
| |
$13.40
|
| |
05-Dec-2029
|
| |
—
|
| |
—
|
||
|
01-Jul-2020(2)
|
| |
5,233
|
| |
9,540
|
| |
—
|
| |
$12.25
|
| |
01-Jul-2030
|
| |
—
|
| |
—
|
||
|
01-Jul-2021(6)
|
| |
—
|
| |
13,834
|
| |
—
|
| |
$12.25
|
| |
01-Jul-2031
|
| |
—
|
| |
—
|
||
|
01-Jul-2018(1)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,316
|
| |
$52,429
|
||
|
03-Dec-2019(5)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
2,194
|
| |
$87,409
|
||
|
01-Jul-2020(1)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
3,599
|
| |
$143,384
|
||
|
01-Jul-2021(7)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
4,800
|
| |
$191,232
|
||
|
||||||||||||||||||||||||
Matthew D. Clark
|
| |
01-Jul-2018(2)
|
| |
14,724
|
| |
2,528
|
| |
—
|
| |
$10.50
|
| |
01-Jul-2028
|
| |
—
|
| |
—
|
|
07-Oct-2019(4)
|
| |
55,498
|
| |
27,750
|
| |
—
|
| |
$11.60
|
| |
07-Oct-2029
|
| |
—
|
| |
—
|
||
|
05-Dec-2019(3)
|
| |
9,362
|
| |
5,623
|
| |
—
|
| |
$13.40
|
| |
05-Dec-2029
|
| |
—
|
| |
—
|
||
|
01-Jul-2020(2)
|
| |
5,987
|
| |
10,919
|
| |
—
|
| |
$12.25
|
| |
01-Jul-2030
|
| |
—
|
| |
—
|
||
|
01-Jul-2021(6)
|
| |
—
|
| |
15,832
|
| |
—
|
| |
$12.25
|
| |
01-Jul-2031
|
| |
—
|
| |
—
|
||
|
01-Jul-2018(1)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,435
|
| |
$57,170
|
||
|
07-Oct-2019(4)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
9,339
|
| |
$372,066
|
||
|
03-Dec-2019(5)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
2,511
|
| |
$100,038
|
||
|
01-Jul-2020(1)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
4,119
|
| |
$164,101
|
||
|
01-Jul-2021(7)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
5,493
|
| |
$218,841
|
(1)
|
Stock options or shares of restricted stock, as applicable, will vest in four equal annual installments on each of the first,
second, third and fourth anniversaries of the grant date, subject to the named executive officer’s continued employment through each applicable vesting date.
|
(2)
|
Twenty-five percent (25%) of the stock options will vest on the one (1) year anniversary of the Vesting Commencement Date, and
one forty-eighth (1/48th) of the shares will vest each month thereafter on the same day of the month as the Vesting Commencement Date, subject to the named executive officer’s continual employment through each such vesting date.
|
(3)
|
Twenty-five percent (25%) of the stock options vested on June 30, 2020, and one forty-eighth (1/48th) of the shares subject to
the stock option will vest each month thereafter on the same day of the month as the applicable vesting commencement date, subject to the named executive officer’s continued employment through each such vesting date.
|
(4)
|
Stock options or shares of restricted stock, as applicable, vest in equal annual installments over the three-year period ending
October 7, 2022, and will immediately vest in full upon the occurrence of a change in control, subject in each case to Mr. M. Clark’s continued employment through each applicable vesting date.
|
(5)
|
Twenty-five percent (25%) of the shares of restricted stock will vest on June 30 on each calendar year of 2020, 2021, 2022 and
2023, subject to the named executive officer’s continued employment through each vesting date.
|
(6)
|
Twenty-five percent (25%) of the stock options will vest on June 30, 2022, and one forty-eighth (1/48th) of the shares subject
to the stock option will vest each month thereafter on the same day of the month as the applicable vesting commencement date, subject to the named executives officer’s continued employment through each such vesting date.
|
(7)
|
Twenty-five percent (25%) of the shares of restricted stock will vest on June 30 on each calendar year of 2022, 2023, 2024 and
2025, subject to the named executive officer’s continued employment through each vesting date.
|
Name
|
| |
Fees Earned or
Paid
in Cash ($)
|
| |
Stock
Awards
($)(1)(2)
|
| |
Total
($)
|
Brian Hogan
|
| |
$80,000
|
| |
$59,988
|
| |
$139,988
|
Tom Brown
|
| |
$45,000
|
| |
$59,988
|
| |
$104,988
|
Michael Enright
|
| |
$57,000
|
| |
$59,988
|
| |
$116,988
|
Jack Gavin
|
| |
$57,000
|
| |
$69,997
|
| |
$126,997
|
Kirk Tilley
|
| |
$45,000
|
| |
$59,988
|
| |
$104,988
|
Gene Yoon
|
| |
—
|
| |
—
|
| |
—
|
(1)
|
Represents the aggregate grant date fair value calculated in accordance with FASB ASC Topic 718 of each grant of restricted
stock, which restricted stock awards would vest in full on January 2, 2022 subject to continued service. Restricted stock awards granted to our non-employee directors in fiscal 2021 were granted under the 2011 Plan.
|
(2)
|
The amounts set forth in this column represent the aggregate number of stock awards held by each non-employee director
outstanding as of December 31, 2021.
|
•
|
repayment of an aggregate of up to $300,000 in loans made to North Mountain by its Sponsor to cover IPO-related and organizational
expenses;
|
•
|
payment to an affiliate of North Mountain’s 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 Sponsor, an affiliate of Sponsor or North Mountain’s 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.
|
•
|
Corcentric Stockholder Support Agreements (see the section entitled “Agreements Related To The
Business Combination—Corcentric Stockholder Support Agreements”);
|
•
|
PIPE Subscription Agreements (see the section entitled “Agreements Related To The Business
Combination—PIPE Subscription Agreements”);
|
•
|
Share Vesting and Warrant Surrender Agreement (see the section entitled “Agreements Related To
The Business Combination—Share Vesting and Warrant Surrender Agreement”);
|
•
|
Registration Rights Agreement (see the section entitled “Agreements Related To The Business
Combination—Amended and Restated Registration Rights Agreement”); and
|
•
|
Lock-up Agreements (see the section entitled “Agreements Related To The Business
Combination—Lock-up Agreements”).
|
•
|
any person who is, or at any time during the applicable period was, one of New Corcentric’s executive officers or a member of New
Corcentric’s Board;
|
•
|
any person who is known by New Corcentric to be the beneficial owner of more than 5% of our voting stock;
|
•
|
any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse,
sibling, mother-in-law, father-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, officer or a beneficial owner of more than 5% of our voting stock, and any person (other than a tenant or employee) sharing the
household of such director, executive officer or beneficial owner of more than 5% of our voting stock; and
|
•
|
any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or
in which such person has a 10% or greater beneficial ownership interest.
|
•
|
a financial institution or financial services entity;
|
•
|
a tax-exempt organization;
|
•
|
a real estate investment trust;
|
•
|
an S corporation or other pass-through entity (or an investor in an S corporation or other pass-through entity);
|
•
|
an insurance company;
|
•
|
a regulated investment company or a mutual fund;
|
•
|
a “controlled foreign corporation” or a “passive foreign investment company”;
|
•
|
a dealer or broker in stocks and securities or currencies;
|
•
|
a trader in securities that elects mark-to-market treatment;
|
•
|
a holder of Corcentric Common Stock that received Corcentric Common Stock through the exercise of an employee stock option,
through a tax qualified retirement plan or otherwise as compensation;
|
•
|
a holder of Corcentric Common Stock or Public Shares that has a functional currency other than the U.S. dollar;
|
•
|
a holder of Corcentric Common Stock that holds Corcentric Common Stock, or a Public Stockholder that holds Public Shares, as part
of a hedge, straddle, constructive sale, conversion or other integrated transaction;
|
•
|
a holder of Corcentric Common Stock that is not a U.S. Holder;
|
•
|
a government or agency or instrumentality thereof;
|
•
|
a holder that owns more than five percent of Corcentric Common Stock;
|
•
|
a holder who holds its shares as “qualified small business stock” within the meaning of Section 1202(c) of the Code;
|
•
|
a holder of Corcentric Common Stock or Public Shares that is a U.S. expatriate; or
|
•
|
a holder of Corcentric Common Stock that exercises its appraisal rights.
|
i.
|
U.S. Holders of Corcentric Common Stock who receive solely North Mountain Class A Common Stock in the Mergers will not
recognize gain or loss in the exchange. Each U.S. Holder’s aggregate tax basis in the North Mountain Class A Common Stock received in the Mergers will equal the aggregate adjusted tax basis in the shares of Corcentric Common Stock
surrendered in the Mergers. The holding period of the North Mountain Class A Common Stock received in the Mergers by such U.S. Holder will include the holding period of the shares of Corcentric Common Stock surrendered in the Mergers in
exchange therefor.
|
ii.
|
U.S. Holders of Corcentric Common Stock who receive both North Mountain Class A Common Stock and cash in the Mergers will
recognize gain, if any, but not loss, in amount equal to the lesser of: (i) the amount of cash received in the exchange and (ii) the amount of gain realized in the exchange (computed as the excess of the sum of the cash received in the
Mergers plus the fair market value of the North Mountain Class A Common Stock received in the Mergers over such U.S. Holder’s adjusted tax basis of the shares of Corcentric Common Stock surrendered in the exchange). Generally, the
aggregate tax basis in the North Mountain Class A Common Stock that a U.S. Holder receives pursuant to the Mergers will equal such U.S. Holder’s aggregate adjusted tax basis in the shares of the Corcentric Common Stock surrendered by
such U.S. Holder, increased by the amount of gain, if any, recognized by such U.S. Holder in the Mergers (other than with respect to cash received in lieu of fractional shares of North Mountain Class A Common Stock), and decreased by
the amount of cash, if any, received by such U.S. Holder in the Mergers (other than cash received in lieu of fractional shares of North Mountain Class A Common Stock). The holding period for shares of North Mountain Class A Common Stock
received by such U.S. Holder, including any fractional shares deemed received by such U.S. Holder, will include such U.S. Holder’s holding period for the Corcentric Common Stock surrendered by such U.S. Holder in exchange for the North
Mountain Class A Common Stock. If a U.S. Holder acquired shares of Corcentric Common Stock at different times, such U.S. Holder must calculate gain or loss separately for each identifiable block of shares (i.e., shares acquired at the
same cost in a single transaction) of Corcentric Common Stock surrendered by such U.S. Holder pursuant to the Mergers, and such U.S. Holder’s tax basis and holding period in the North Mountain Class A Common Stock received by such U.S.
Holder in the Mergers may be determined with reference to each identifiable block of Corcentric Common Stock surrendered.
|
iii.
|
U.S. Holders of Corcentric Common Stock who receive solely cash in the Mergers will recognize gain or loss equal to the
difference between the amount of cash received in the exchange and such U.S. Holder’s adjusted tax basis of the shares of Corcentric Common Stock surrendered in the exchange. Such recognized gain or loss will be long-term capital gain
or loss if the Corcentric Common Stock has been held for more than one year as of the date of the exchange, and will be short-term capital gain or loss if the Corcentric Common Stock has been held for one year or less as of such date.
Long-term capital gains of non-corporate U.S. Holders may be eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations. A U.S. Holder generally will have an aggregate tax basis in the shares
of North Mountain Class A Common Stock received equal to the fair market value of such shares as of the date such shares are received, and such U.S. Holder’s holding period in such shares of North Mountain Class A Common Stock would
begin on the day following the date of the Mergers
|
•
|
such gain is effectively connected with the conduct by you of a trade or business in the United States (and, if required by an
applicable income tax treaty, is attributable to a permanent establishment or fixed base that you maintain in the United States), in which case you generally will be subject to U.S. federal income tax on such gain at the same regular U.S.
federal income tax rates applicable to a comparable U.S. Holder and, if you are a corporation for U.S. federal income tax purposes, also may be subject to an additional branch profits tax at a 30% rate or a lower applicable tax treaty
rate;
|
•
|
you are an individual who is present in the United States for 183 days or more in the taxable year of the redemption and certain
other conditions are met, in which case you will be subject to a 30% tax on your net capital gain for the year; 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 the redemption or the period during which you held Public Shares, and you have owned, directly or constructively, more than 5% of our North Mountain Class A Common Stock at any
time within the shorter of the five-year period or your holding period for our Public Shares. We do not believe that we are or have been a United States real property holding corporation for U.S. federal income tax purposes.
|
•
|
each person who is the beneficial owner of more than 5% of issued and outstanding shares of North Mountain Common Stock or of
Corcentric Capital Stock;
|
•
|
each of our current executive officers and directors;
|
•
|
each person who will (or is expected to) become an executive officer or director of New Corcentric following the Closing; and
|
•
|
all executive officers and directors of North Mountain as a group pre-Business Combination and all executive officers and
directors of New Corcentric post-Business Combination.
|
(i)
|
no exercise of the 6,612,500 Public Warrants that will remain outstanding post-Business Combination, which will become exercisable
at the holder’s option 30 days after Closing at an exercise price of $11.50 per share, provided that New Corcentric has an effective registration statement under the Securities Act covering the shares of New Corcentric Common Stock
issuable upon exercise of the Public Warrants or Private Placement Warrants and a current prospectus relating to them is available, which are not expected to occur within 60 days of the date of this proxy statement/prospectus;
|
(ii)
|
the issuance, pursuant to the Share Vesting and Warrant Surrender Agreement, of 1,400,000 shares of North Mountain Class A Common
Stock upon the Closing; and
|
(iii)
|
5,000,000 shares of North Mountain Class A Common Stock are issued in connection with the PIPE Financing immediately prior to the
Closing.
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
After the Business Combination
|
|||||||||
|
| |
Before the Business Combination
|
| |
Assuming
No Redemption
|
| |
Assuming Redemption
|
|||||||||||||||||||||
Name and Address of
Beneficial Owner(1)
|
| |
Number of
shares of
North
Mountain
Class A
Common Stock
|
| |
%
|
| |
Number of
shares of
North
Mountain
Class B
Common Stock
|
| |
%
|
| |
Number of
Shares of
Corcentric
Capital Stock
|
| |
%
|
| |
Number of
shares of New
Corcentric
Common Stock
|
| |
%
|
| |
Number of
shares of New
Corcentric
Common Stock
|
| |
%
|
Directors and Named
Executive Officers of North Mountain:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Charles B. Bernicker(2)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,500,000
|
| |
1.3%
|
| |
1,500,000
|
| |
1.36%
|
Nicholas Dermatas(2)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Robert L. Metzger(2)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Scott O’Callaghan(2)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Douglas J. Pauls(2)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
All Directors and Executive Officers of North Mountain as a
Group (5 Individuals)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,500,000
|
| |
1.3%
|
| |
1,500,000
|
| |
1.36%
|
Five Percent Holders
of North Mountain:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
North Mountain LLC (our Sponsor)(2)
|
| |
—
|
| |
—
|
| |
3,306,250
|
| |
100%
|
| |
—
|
| |
—
|
| |
4,706,250
|
| |
4.2%
|
| |
4,706,250
|
| |
4.3%
|
Wellington Management Group LLP(3)
|
| |
1,447,350
|
| |
11.2%
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
2,947,350
|
| |
2.4%
|
| |
2,947,350
|
| |
2.7%
|
Millais Limited(4)
|
| |
1,138,500
|
| |
8.6%
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
3,138,500
|
| |
2.8%
|
| |
3,138,500
|
| |
2.8%
|
Linden Capital L.P.(5)
|
| |
968,870
|
| |
7.3%
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
968,870
|
| |
*
|
| |
968,870
|
| |
*
|
Adage Capital Partners, L.P.(6)
|
| |
827,417
|
| |
6.3%
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
827,417
|
| |
*
|
| |
827,417
|
| |
*
|
Millennium Management, LLC(7)
|
| |
757,614
|
| |
5.7%
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
757,614
|
| |
*
|
| |
757,614
|
| |
*
|
The Goldman Sachs Group, Inc.(8)
|
| |
722,078
|
| |
5.5%
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
722,078
|
| |
*
|
| |
722,078
|
| |
*
|
Directors and Named
Executive Officers of New Corcentric After Consummation of the Business Combination:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Douglas Clark
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Matthew Clark
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Thomas Sabol
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Mark Joyce
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
All Directors and Executive Officers of New Corcentric as a
Group ( Individuals)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Five Percent Holders
of New Corcentric After Consummation of the Business Combination:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
*
|
Less than one percent.
|
(1)
|
Unless otherwise noted, the business address of our Sponsor and each of the directors and executive officers of North Mountain is
767 Fifth Avenue, 9th Floor, New York, NY 10153. Unless otherwise noted, the business address of each of the executive officers and directors of New Corcentric is 200 Lake Drive East, Cherry Hill, NJ 08002.
|
(2)
|
Represents North Mountain Class B 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 member of Harbour Reach. Messrs. Bernicker, Dermatas, Metzger, O’Callaghan and Pauls are non-managing members of our Sponsor. Accordingly, all of the shares held by
our Sponsor may be deemed to be beneficially held by Harbour Reach and Mr. Platt. SMMC Sponsor Interests, LLC, an affiliate of North Mountain and an entity controlled by Charles Bernicker (Chief Executive Officer and a director of North
Mountain) and of which Douglas J. Pauls (a director of North Mountain) is a non-managing member, agreed to purchase 1,500,000 shares of North Mountain Class A Common Stock in the PIPE Financing.
|
(3)
|
According to Schedule 13G/A filed on February 10, 2022 by Wellington Management Group LLP, Wellington Group Holdings LLP,
Wellington Investment Advisors Holdings LLP and Wellington Management Company LLP. The shares of North Mountain Class A Common Stock are owned of record by clients of the Wellington Investment Advisers. Wellington Investment Advisors
Holdings LLP controls directly, or indirectly through Wellington Management Global Holdings, Ltd., the Wellington Investment Advisers. Wellington Investment Advisors Holdings LLP is owned by Wellington Group Holdings LLP. Wellington
Group Holdings LLP is owned by Wellington Management Group LLP. The business address of each such party is 280 Congress Street, Boston, MA 02210. Investment funds managed by Wellington Management Company LLP agreed to purchase 1,500,000
shares of North Mountain Class A Common Stock in the PIPE Financing.
|
(4)
|
Millais Limited, the indirect majority owner of our Sponsor, purchased 1,138,500 North Mountain units in the IPO and has agreed
to purchase 2,000,000 shares of North Mountain Class A Common Stock in the PIPE Financing. Mr. Michael Platt may be deemed to beneficially own the shares held by Millais Limited.
|
(5)
|
According to Schedule 13G/A filed on January 31, 2022 by Linden Capital L.P., a Bermuda limited partnership (“Linden Capital”),
Linden Advisors LP, a Delaware limited partnership (“Linden Advisors”), Linden GP LLC, a Delaware limited liability company (“Linden GP”), and Mr. Siu Min (Joe) Wong. Each of Linden Advisors and Mr. Wong may be deemed the beneficial
owner of 968,870 shares, consisting of 894,476 Shares held by Linden Capital and 74,394 shares held by separately managed accounts. Each of Linden GP and Linden Capital may be deemed the beneficial owner of the 894,476 shares held by
Linden Capital. The principal business address for Linden Capital is Victoria Place, 31 Victoria Street, Hamilton HM10, Bermuda. The principal business address for each of Linden Advisors, Linden GP and Mr. Wong is 590 Madison Avenue,
15th Floor, New York, New York 10022.
|
(6)
|
According to Schedule 13G/A filed on February 10, 2022 by Adage Capital Partners, L.P., Adage Capital Partners GP, L.L.C., Adage
Capital Advisors, L.L.C., Robert Atchinson and Phillip Gross. Adage Capital Partners, L.P., a Delaware limited partnership (“ACP”), has the power to dispose of and the power to vote the shares of Class A Common Stock beneficially owned
by it, which power may be exercised by its general partner, Adage Capital Partners GP, L.L.C., a Delaware limited liability company (“ACPGP”). Adage Capital Advisors, L.L.C., a Delaware limited liability company (“ACA”), as managing
member of ACPGP, directs ACPGP's operations. Robert Atchinson and Philip Gross are managing members of ACA, managing members of ACPGP and general partners of ACP. The business address of each such party is 200 Clarendon Street,
52nd Floor, Boston, Massachusetts 02116.
|
(7)
|
According to Schedule 13G filed on January 11, 2022 by Millennium Management LLC, Millennium Group Management LLC and Israel A.
Englander. The securities disclosed as beneficially owned by Millennium Management LLC, Millennium Group Management LLC and Mr. Englander are held by entities subject to voting control and investment discretion by Millennium Management
LLC and/or other investment managers that may be controlled by Millennium Group Management LLC (the managing member of Millennium Management LLC) and Mr. Englander (the sole voting trustee of the managing member of Millennium Group
Management LLC). The business address of each of Millennium Management LLC, Millennium Group Management LLC and Israel A. Englander is 399 Park Avenue, New York, New York 10022.
|
(8)
|
According to Schedule 13G filed on February 4, 2022 by The Goldman Sachs Group, Inc. and Goldman Sachs & Co. LLC. The
business address of each of The Goldman Sachs Group, Inc. and Goldman Sachs & Co. LLC is 200 West Street, New York, New York 10282.
|
•
|
in whole and not in part;
|
•
|
at a price of $0.01 per Public 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 North Mountain 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 North Mountain send the notice of redemption
to the warrant holders.
|
•
|
a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”);
|
•
|
an affiliate of an interested stockholder; or
|
•
|
an associate of an interested stockholder, for three years following the date that the stockholder became an interested
stockholder.
|
•
|
the New Corcentric Board approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the
transaction;
|
•
|
after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder
owned at least 85% of New Corcentric’s voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or
|
•
|
on or subsequent to the date of the transaction, such transaction is approved by an affirmative vote of at least two-thirds of the
outstanding voting stock not owned by the interested stockholder.
|
•
|
1% of the total shares of New Corcentric Common Stock then outstanding; or
|
•
|
the average weekly reported trading volume of New Corcentric 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 Form 8-K reports; and
|
•
|
at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC, which is expected
to be filed promptly after completion of the Business Combination, reflecting its status as an entity that is not a shell company.
|
|
| |
Page
|
Audited Financial Statements
|
| |
|
| | ||
| | ||
| | ||
| | ||
| | ||
| |
|
| |
Page
|
Audited Financial Statements
|
| |
|
| | ||
| | ||
| | ||
| | ||
| | ||
| |
|
| |
December 31,
2021
|
| |
December 31,
2020
|
ASSETS
|
| |
|
| |
|
Current Assets
|
| |
|
| |
|
Cash
|
| |
$
|
| |
$
|
Prepaid expenses
|
| |
|
| |
|
Total Current Assets
|
| |
|
| |
|
|
| |
|
| |
|
Marketable securities held in Trust Account
|
| |
|
| |
|
TOTAL ASSETS
|
| |
$
|
| |
$
|
|
| |
|
| |
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
| |
|
| |
|
Accounts payable and accrued expenses
|
| |
|
| |
|
Total Current Liabilities
|
| |
|
| |
|
|
| |
|
| |
|
Deferred underwriting fee payable
|
| |
|
| |
|
Warrant liabilities – Private Warrants
|
| |
|
| |
|
Warrant liabilities – Public Warrants
|
| |
|
| |
|
Total Liabilities
|
| |
|
| |
|
|
| |
|
| |
|
Commitments and Contingencies (Note 6)
|
| |
|
| |
|
|
| |
|
| |
|
Class A common stock subject to possible redemption,
|
| |
|
| |
|
|
| |
|
| |
|
Stockholders’ Deficit
|
| |
|
| |
|
Preferred Stock, $
|
| |
|
| |
|
Class A common stock, $
|
| |
|
| |
|
Class B common stock, $
|
| |
|
| |
|
Additional paid-in capital
|
| |
|
| |
|
Accumulated deficit
|
| |
(
|
| |
(
|
Total Stockholders’ Deficit
|
| |
(
|
| |
(
|
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
| |
$
|
| |
$
|
|
| |
Year
Ended
December 31,
|
| |
For the
Period from
July 14, 2020
(inception)
through
December 31,
|
|
| |
2021
|
| |
2020
|
Operating and formation costs
|
| |
$
|
| |
$
|
Loss from operations
|
| |
(
|
| |
(
|
|
| |
|
| |
|
Other income (expense):
|
| |
|
| |
|
Transaction costs allocated to warrants
|
| |
|
| |
(
|
Interest earned on marketable securities held in Trust Account
|
| |
|
| |
|
Other offering expense related to warrant liabilities
|
| |
|
| |
(
|
Change in fair value of warrant liability
|
| |
|
| |
(
|
Other income (expense), net
|
| |
|
| |
(
|
|
| | | | ||
Net income (loss)
|
| |
$
|
| |
$(
|
|
| |
|
| |
|
Basic and diluted weighted average shares outstanding, Class A common stock
|
| |
|
| |
|
Basic and diluted net income (loss) per share, Class A
common stock
|
| |
$
|
| |
$(
|
Basic and diluted weighted average shares outstanding, Class B common stock
|
| |
|
| |
|
Basic and diluted net income (loss) per share, Class B
common stock
|
| |
$
|
| |
$(
|
|
| |
Class B
Common Stock
|
| |
Additional
Paid-in
Capital
|
| |
Accumulated
Deficit
|
| |
Total
Stockholders’
Deficit
|
|||
|
| |
Shares
|
| |
Amount
|
| ||||||||
Balance – July 14, 2020 (Inception)
|
| |
|
| |
$
|
| |
$
|
| |
$
|
| |
$
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
Issuance of Class B common stock to Sponsor
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
Measurement Adjustment for Class A ordinary shares to
redemption amount
|
| |
—
|
| |
—
|
| |
(
|
| |
(
|
| |
(
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
Net loss
|
| |
—
|
| |
|
| |
|
| |
(
|
| |
(
|
Balance – December 31, 2020
|
| |
|
| |
$
|
| |
$
|
| |
$(
|
| |
$(
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
Net income
|
| |
—
|
| |
|
| |
|
| |
|
| |
|
Balance – December 31, 2021
|
| |
|
| |
$
|
| |
$
|
| |
$(
|
| |
$(
|
|
| |
Year
Ended
December 31,
|
| |
For The
Period From
July 14, 2020
(Inception)
Through
December 31,
|
|
| |
2021
|
| |
2020
|
Cash Flows from Operating Activities:
|
| |
|
| |
|
Net income (loss)
|
| |
$
|
| |
$(
|
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
|
| |
|
| |
|
Interest earned on marketable securities held in Trust Account
|
| |
(
|
| |
(
|
Change in fair value of warrant liability
|
| |
(
|
| |
|
Transaction costs allocated to warrants
|
| |
|
| |
|
Other offering expenses related to warrant liabilities—
|
| |
|
| |
|
Changes in operating assets and liabilities:
|
| |
|
| |
|
Prepaid expenses
|
| |
|
| |
(
|
Accounts payable and accrued expenses
|
| |
|
| |
|
Net cash used in operating activities
|
| |
(
|
| |
(
|
|
| |
|
| |
|
Cash Flows from Investing Activities:
|
| |
|
| |
|
Investment of cash in Trust Account
|
| |
|
| |
(
|
Net cash used in investing activities
|
| |
|
| |
(
|
|
| |
|
| |
|
Cash Flows from Financing Activities:
|
| |
|
| |
|
Proceeds from issuance of Class B common stock to Sponsor
|
| |
|
| |
|
Proceeds from sale of Units, net of underwriting discounts paid
|
| |
|
| |
|
Proceeds from sale of Private Placement Warrants
|
| |
|
| |
|
Proceeds from promissory note – related party
|
| |
|
| |
|
Repayment of promissory note – related party
|
| |
|
| |
(
|
Payment of offering costs
|
| |
|
| |
(
|
Net cash provided by financing activities
|
| |
|
| |
|
|
| |
|
| |
|
Net Change in Cash
|
| |
(
|
| |
|
Cash – Beginning of period
|
| |
|
| |
|
Cash – End of period
|
| |
$
|
| |
$
|
|
| |
|
| |
|
Non-Cash investing and financing activities:
|
| |
|
| |
|
Remeasurement adjustment for Class A ordinary shares to redemption amount
|
| |
$
|
| |
$
|
Deferred underwriting fee payable
|
| |
$
|
| |
$
|
Supplemental Disclosure: | ||||||
Cash Paid for franchise taxes | $
|
$
|
Gross proceeds
|
| |
$
|
Less:
|
| |
|
Proceeds allocated to Public Warrants
|
| |
$(
|
Issuance costs allocated to Class A Common Stock
|
| |
(
|
Plus:
|
| |
|
Remeasurement adjustment of carrying value to redemption value
|
| |
$
|
|
| |
|
Class A common stock subject to possible redemption
|
| |
$
|
|
| |
Year Ended
December 31,
2021
|
| |
For the Period from
July 14,
2020 (Inception)
Through December 31,
2020
|
||||||
|
| |
Class A
|
| |
Class B
|
| |
Class A
|
| |
Class B
|
Basic and diluted net income (loss) per common stock
|
| |
|
| |
|
| |
|
| |
|
Numerator:
|
| |
|
| |
|
| |
|
| |
|
Allocation of net income (loss), as adjusted
|
| |
$
|
| |
$
|
| |
$(
|
| |
$(
|
Denominator:
|
| |
|
| |
|
| |
|
| |
|
Basic and diluted weighted average shares outstanding
|
| |
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
Basic and diluted net income (loss) per common stock
|
| |
$
|
| |
$
|
| |
$(
|
| |
$(
|
(a)
|
each share of Corcentric common stock, par value $
|
(b)
|
each share of Corcentric Series A preferred stock, par value $
|
(c)
|
each share of Corcentric Preferred Stock expressly identified as receiving merger consideration in the form of cash pursuant
to the terms of the Merger Agreement (each such share of Corcentric Preferred Stock, a “Cash Consideration Share”) will be converted into the right to receive an amount of cash, without interest, equal to the
product of (A) the Per Share Merger Consideration Value (as defined in the Merger Agreement), multiplied by (B) the number of shares of Corcentric Common Stock that such shares of Corcentric Preferred Stock would be converted into if
converted in accordance with the terms of Corcentric’s certificate of incorporation immediately prior to the Effective Time (with the aggregate amount of cash payable in respect of the Cash Consideration Shares not to exceed $
|
(d)
|
each vested Corcentric stock option, to the extent then outstanding and unexercised, will automatically be cancelled, and the
holder will be entitled to receive in respect of such cancelled vested Corcentric stock option (i) a number of shares of North Mountain Common Stock equal to the quotient obtained by dividing (A) the result of (1) the product of
(x) the number of shares of Corcentric Common Stock subject to such vested Corcentric stock option immediately prior to the Effective Time, multiplied by (y) the excess, if any, of (a) the Per Share Merger Consideration Value, over
(b) the per share exercise price for the shares of Corcentric Common Stock subject to such vested Corcentric stock option immediately prior to the Effective Time, minus (2) the
applicable withholding taxes payable in respect of such cancelled vested Corcentric stock option, by (B)
|
(e)
|
each unvested Corcentric stock option, to the extent then outstanding and unexercised, will automatically be converted into
an option to acquire, on the same terms and conditions as were applicable to such unvested Corcentric stock option immediately prior to the Effective Time, including applicable vesting conditions, a number of shares of North Mountain
Common Stock determined in accordance with the terms of the Merger Agreement (after such conversion, each a “Rollover Option”), and the contingent right to receive a number of Earnout Shares following the Closing
in accordance with the terms of the Merger Agreement; and
|
(f)
|
each share of Corcentric restricted stock, to the extent then unvested and outstanding, will automatically be converted into
the number of shares of restricted North Mountain Common Stock, subject to the same terms and conditions as were applicable to such Corcentric restricted stock immediately prior to the Effective
|
•
|
at a price of $
|
•
|
upon a minimum of
|
•
|
if, and only if, the closing sale price of the Company’s Class A common stock equals or exceeds $
|
|
| |
December 31,
2021
|
| |
December 31,
2020
|
Federal
|
| |
|
| |
|
Current
|
| |
$
|
| |
$
|
Deferred
|
| |
(
|
| |
(
|
|
| |
|
| |
|
State and Local
|
| |
|
| |
|
Current
|
| |
|
| |
|
Deferred
|
| |
|
| |
|
|
| |
|
| |
|
Change in valuation allowance
|
| |
|
| |
|
|
| |
|
| |
|
Income tax provision
|
| |
$
|
| |
$
|
|
| |
December 31,
2021
|
| |
December 31,
2020
|
Deferred tax assets
|
| |
|
| |
|
Start-up Costs
|
| |
$
|
| |
$
|
Net operating loss carryforward
|
| |
|
| |
|
Total deferred tax assets
|
| |
|
| |
|
Valuation Allowance
|
| |
(
|
| |
(
|
Deferred tax assets, net of allowance
|
| |
$
|
| |
$
|
|
| |
December 31,
2021
|
| |
December 31,
2020
|
Statutory federal income tax rate
|
| |
|
| |
|
State taxes, net of federal tax benefit
|
| |
|
| |
|
Change in FV of Warrant Liabilities
|
| |
(
|
| |
(
|
Transaction costs allocable to warrant liabilities
|
| |
|
| |
(
|
Compensation expense related to warrant liabilities
|
| |
|
| |
(
|
Valuation allowance
|
| |
|
| |
(
|
Income tax provision
|
| |
|
| |
|
Level 1:
|
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market
in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
Level 2:
|
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar
assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
|
Level 3:
|
Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or
liability.
|
Description
|
| |
Level
|
| |
December 31,
2021
|
| |
December 31,
2020
|
Assets:
|
| |
|
| |
|
| |
|
Marketable securities held in Trust Account
|
| |
1
|
| |
$
|
| |
$
|
|
| |
|
| |
|
| |
|
Liabilities:
|
| |
|
| |
|
| |
|
Warrant Liability – Public Warrants
|
| |
1
|
| |
$
|
| |
|
Warrant Liability – Private Placement Warrants
|
| |
3
|
| |
$
|
| |
|
Input
|
| |
September 22,
2020
|
| |
December 31,
2020
|
| |
December 31,
2021
|
Common Stock Price
|
| |
$
|
| |
$
|
| |
$
|
Expected term (years)
|
| |
|
| |
|
| |
|
Expected Volatility (Private Placement Warrants)
derived from Monte Carlo Simulation
|
| |
|
| |
|
| |
|
Estimated probability of successful business combination
|
| |
|
| |
|
| |
|
Exercise Price
|
| |
$
|
| |
$
|
| |
$
|
Risk-free rate of interest
|
| |
|
| |
|
| |
|
|
| |
Private
Placement
|
| |
Public
|
| |
Warrant
Liabilities
|
Fair value as of July 13, 2020 (inception)
|
| |
$
|
| |
$
|
| |
$
|
Initial measurement on September 22, 2020
|
| |
|
| |
|
| |
|
Transfers out of Level 3 to Level 1
|
| |
|
| |
(
|
| |
(
|
Change in fair value of warrant liabilities
|
| |
|
| |
|
| |
|
Fair value as of December 31, 2020
|
| |
$
|
| |
$
|
| |
$
|
Change in fair value of warrant liabilities
|
| |
(
|
| |
|
| |
(
|
Fair value as of December 31, 2021
|
| |
$
|
| |
$
|
| |
$
|
|
| |
December 31,
|
||||||
|
| |
2021
|
| |
2020
|
| |
2019
|
Revenue:
|
| |
|
| |
|
| |
|
Payments, software and advisory revenue
|
| |
$109,789
|
| |
$101,231
|
| |
$102,830
|
Equipment sales
|
| |
43,905
|
| |
73,445
|
| |
41,755
|
Total revenues
|
| |
153,694
|
| |
174,676
|
| |
144,585
|
Direct costs of revenues (excluding depreciation and
amortization shown separately below):
|
| |
|
| |
|
| |
|
Direct costs of payments, software and advisory revenue
|
| |
35,788
|
| |
34,145
|
| |
34,521
|
Direct costs of equipment sales
|
| |
39,504
|
| |
71,012
|
| |
38,911
|
Total direct costs of revenue
|
| |
75,292
|
| |
105,157
|
| |
73,432
|
Operating expenses:
|
| |
|
| |
|
| |
|
Research and development
|
| |
3,081
|
| |
1,678
|
| |
1,594
|
Sales and marketing
|
| |
26,646
|
| |
27,064
|
| |
29,368
|
General and administrative (refer to Note 15)
|
| |
47,301
|
| |
17,751
|
| |
17,904
|
Depreciation and amortization
|
| |
23,577
|
| |
18,664
|
| |
16,850
|
Change in fair value of contingent consideration
|
| |
—
|
| |
—
|
| |
1,655
|
Total operating expenses
|
| |
100,605
|
| |
65,157
|
| |
67,371
|
Operating (loss) income
|
| |
(22,203)
|
| |
4,362
|
| |
3,782
|
Interest expense
|
| |
(9,418)
|
| |
(6,930)
|
| |
(9,076)
|
Interest income
|
| |
65
|
| |
111
|
| |
175
|
Foreign exchange gain (loss)
|
| |
60
|
| |
(34)
|
| |
461
|
Loss before income taxes and equity in income (loss) of
affiliate
|
| |
(31,496)
|
| |
(2,491)
|
| |
(4,658)
|
(Provision) benefit for income taxes
|
| |
(1,404)
|
| |
5,193
|
| |
926
|
Equity in income (loss) of affiliate
|
| |
112
|
| |
72
|
| |
(46)
|
Net (loss) income
|
| |
$(32,788)
|
| |
$2,774
|
| |
$(3,778)
|
Less preferred stock dividends and accretion of preferences
|
| |
(21,336)
|
| |
(13,070)
|
| |
$—
|
Net loss available for common stockholders
|
| |
$(54,124)
|
| |
$(10,296)
|
| |
$(3,778)
|
Net loss per common share, basic and diluted (refer to Note 16)
|
| |
$(4.07)
|
| |
$(0.82)
|
| |
$(0.31)
|
Weighted average common shares outstanding:
|
| |
|
| |
|
| |
|
Basic and diluted shares
|
| |
13,301,808
|
| |
12,523,827
|
| |
12,053,525
|
Comprehensive (loss) income Net (loss) income
|
| |
$(32,788)
|
| |
$2,774
|
| |
$(3,778)
|
Cumulative translation adjustment
|
| |
(678)
|
| |
350
|
| |
503
|
Comprehensive (loss) income
|
| |
$(33,466)
|
| |
$3,124
|
| |
$(3,275)
|
|
| |
December 31,
|
|||
|
| |
2021
|
| |
2020
|
Assets
|
| |
|
| |
|
Current assets:
|
| |
|
| |
|
Cash and cash equivalents
|
| |
$9,856
|
| |
$10,721
|
Accounts receivable, net
|
| |
239,404
|
| |
195,552
|
Rebates, fees, and other receivables
|
| |
10,735
|
| |
10,334
|
Inventories, prepaid expenses, and other current assets
|
| |
17,705
|
| |
19,938
|
Total current assets
|
| |
277,700
|
| |
236,545
|
Property and equipment, net
|
| |
26,499
|
| |
22,211
|
Goodwill
|
| |
114,497
|
| |
114,613
|
Other intangible assets, net
|
| |
37,483
|
| |
48,825
|
Other assets
|
| |
12,753
|
| |
4,660
|
Total assets
|
| |
$468,932
|
| |
$426,854
|
Liabilities, mezzanine equity and stockholders' equity
(deficit)
|
| |
|
| |
|
Current liabilities:
|
| |
|
| |
|
Current portion of long-term debt, net
|
| |
$751
|
| |
$1,268
|
Accounts payable
|
| |
152,540
|
| |
135,699
|
Rebates payable
|
| |
6,785
|
| |
6,617
|
Accrued expenses and other current liabilities
|
| |
27,298
|
| |
21,861
|
Total current liabilities
|
| |
187,374
|
| |
165,445
|
Long-term debt, net
|
| |
164,625
|
| |
134,089
|
Deferred income taxes
|
| |
2,092
|
| |
215
|
Other liabilities
|
| |
1,084
|
| |
847
|
Total liabilities
|
| |
355,175
|
| |
300,596
|
Commitments and contingencies (Note 17)
|
| |
|
| |
|
Mezzanine equity:
|
| |
|
| |
|
Redeemable preferred stock - $0.001 par value per share;
2,700,967 shares authorized; 2,700,967 shares issued and outstanding at December 31, 2021 and December 31, 2020
|
| |
109,531
|
| |
88,195
|
Redeemable common stock - $.001 par value; 3,502,268
issued and outstanding at December 30, 2021 and December 31, 2020
|
| |
5,419
|
| |
5,419
|
Stockholders' equity (deficit):
|
| |
|
| |
|
Common stock - $0.001 par value per share; 35,000,000
shares authorized; 13,343,058 shares issued and 11,276,027 shares outstanding at December 31, 2021; 11,614,800 shares issued and 9,693,353 shares outstanding at December 31, 2020
|
| |
12
|
| |
10
|
Additional paid-in capital
|
| |
59,222
|
| |
34,651
|
Cumulative translation adjustments
|
| |
175
|
| |
853
|
Retained earnings (accumulated deficit)
|
| |
(38,709)
|
| |
15,415
|
Treasury stock at cost, 2,067,031 and 1,921,447 shares at
December 31, 2021 and December 31, 2020, respectively
|
| |
(21,893)
|
| |
(18,285)
|
Total stockholders' equity (deficit)
|
| |
(1,193)
|
| |
32,644
|
Total liabilities, mezzanine equity and stockholders' equity (deficit)
|
| |
$468,932
|
| |
$426,854
|
|
| |
Mezzanine Equity
|
| |
Stockholders’ Equity (Deficit)
|
||||||||||||||||||||||||||||||
|
| |
Redeemable
Preferred Stock
|
| |
Redeemable
Common Stock
|
| |
Common Stock
|
| |
Additional
Paid-
In Capital
|
| |
Cumulative
Translation
Adjustments
|
| |
Retained
Earnings
(Accumulated
Deficit)
|
| |
Treasury Stock at
Cost
|
| |
Total
|
||||||||||||
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |||||||||||
Balance at December 31, 2018
|
| |
—
|
| |
—
|
| |
10,254,266
|
| |
7,988
|
| |
3,175,191
|
| |
3
|
| |
28,424
|
| |
—
|
| |
29,489
|
| |
1,200,347
|
| |
(9,865)
|
| |
48,051
|
Employee stock purchases
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
22,690
|
| |
—
|
| |
224
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
224
|
Stock-based compensation
|
| |
—
|
| |
—
|
| |
11,652
|
| |
—
|
| |
132,192
|
| |
—
|
| |
1,058
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,058
|
Repurchases of common stock
|
| |
—
|
| |
—
|
| |
(15,296)
|
| |
(5)
|
| |
15,296
|
| |
—
|
| |
5
|
| |
—
|
| |
—
|
| |
96,942
|
| |
(930)
|
| |
(925)
|
Net exercise of stock options
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
40,000
|
| |
—
|
| |
10
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
10
|
Other share activity
|
| |
—
|
| |
—
|
| |
(122,876)
|
| |
(59)
|
| |
123,220
|
| |
—
|
| |
59
|
| |
—
|
| |
—
|
| |
(1,661)
|
| |
—
|
| |
59
|
Cumulative translation adjustments
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
503
|
| |
—
|
| |
—
|
| |
—
|
| |
503
|
Net loss
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(3,778)
|
| |
—
|
| |
—
|
| |
(3,778)
|
Balance at December 31, 2019
|
| |
—
|
| |
—
|
| |
10,127,746
|
| |
7,924
|
| |
3,508,589
|
| |
3
|
| |
29,780
|
| |
503
|
| |
25,711
|
| |
1,295,628
|
| |
(10,795)
|
| |
45,202
|
Employee stock purchases
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
13,875
|
| |
—
|
| |
145
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
145
|
Stock-based compensation
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
146,415
|
| |
—
|
| |
2,228
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
2,228
|
Repurchases of common stock
|
| |
—
|
| |
—
|
| |
(155,415)
|
| |
(29)
|
| |
155,415
|
| |
—
|
| |
29
|
| |
—
|
| |
—
|
| |
625,819
|
| |
(7,490)
|
| |
(7,461)
|
Net exercise of stock options
|
| |
—
|
| |
—
|
| |
245,709
|
| |
—
|
| |
1,074,734
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Issuance of preferred stock
|
| |
2,700,967
|
| |
80,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Preferred stock issuance costs
|
| |
—
|
| |
(4,875)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Accretion of redemption preference and issuance costs
|
| |
—
|
| |
5,983
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(5,983)
|
| |
—
|
| |
—
|
| |
(5,983)
|
Accumulated dividends
|
| |
—
|
| |
7,087
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(7,087)
|
| |
—
|
| |
—
|
| |
(7,087)
|
Conversion of redeemable common stock to common stock
|
| |
—
|
| |
—
|
| |
(6,715,772)
|
| |
(2,476)
|
| |
6,715,772
|
| |
7
|
| |
2,469
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
2,476
|
Cumulative translation adjustments
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
350
|
| |
—
|
| |
—
|
| |
—
|
| |
350
|
Net Income
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
2,774
|
| |
—
|
| |
—
|
| |
2,774
|
Balance at December 31, 2020
|
| |
2,700,967
|
| |
$88,195
|
| |
3,502,268
|
| |
$5,419
|
| |
11,614,800
|
| |
$10
|
| |
$34,651
|
| |
$853
|
| |
$15,415
|
| |
1,921,447
|
| |
$(18,285)
|
| |
$32,644
|
Employee stock purchases
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
38,277
|
| |
—
|
| |
398
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
398
|
Stock-based compensation
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
268,525
|
| |
—
|
| |
24,097
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
24,097
|
Repurchases of common stock
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
145,584
|
| |
(3,608)
|
| |
(3,608)
|
Net exercise of stock options
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,421,456
|
| |
1
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1
|
Accretion of redemption preference and issuance costs
|
| |
—
|
| |
8,975
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(8,975)
|
| |
—
|
| |
—
|
| |
(8,975)
|
Accumulated dividends
|
| |
—
|
| |
12,361
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(12,361)
|
| |
—
|
| |
—
|
| |
(12,361)
|
Other share activity
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1
|
| |
76
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
77
|
Cumulative translation adjustments
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(678)
|
| |
—
|
| |
—
|
| |
—
|
| |
(678)
|
Net loss
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(32,788)
|
| |
—
|
| |
—
|
| |
(32,788)
|
Balance at December 31, 2021
|
| |
2,700,967
|
| |
$
109,531
|
| |
3,502,268
|
| |
$5,419
|
| |
13,343,058
|
| |
$12
|
| |
$59,222
|
| |
$175
|
| |
$
(38,709)
|
| |
2,067,031
|
| |
$
(21,893)
|
| |
$(1,193)
|
|
| |
December 31,
|
||||||
|
| |
2021
|
| |
2020
|
| |
2019
|
Cash flows from operating activities:
|
| |
|
| |
|
| |
|
Net (loss) income
|
| |
$(32,788)
|
| |
$2,774
|
| |
$(3,778)
|
Adjustments to reconcile net (loss) income to net cash
flows (used in) provided by operating activities:
|
| |
|
| |
|
| |
|
Depreciation and amortization
|
| |
23,577
|
| |
18,664
|
| |
16,850
|
Gain on sale of assets
|
| |
(262)
|
| |
(4)
|
| |
(12)
|
Bad debt expense
|
| |
1,863
|
| |
925
|
| |
1,823
|
Stock-based compensation
|
| |
24,097
|
| |
2,228
|
| |
1,058
|
Other share activity
|
| |
77
|
| |
—
|
| |
—
|
Deferred income tax expense
|
| |
1,877
|
| |
1,407
|
| |
(2,469)
|
Amortization of debt issuance costs
|
| |
1,431
|
| |
1,278
|
| |
1,242
|
Change in fair value of contingent consideration
|
| |
—
|
| |
—
|
| |
1,655
|
Payment of contingent consideration on acquisitions
|
| |
—
|
| |
(2,197)
|
| |
(1,133)
|
Equity in loss (income) of affiliate
|
| |
(112)
|
| |
(72)
|
| |
46
|
Changes in operating assets and liabilities:
|
| |
|
| |
|
| |
|
Accounts receivable and other receivables
|
| |
(46,118)
|
| |
(498)
|
| |
(4,793)
|
Other current assets
|
| |
1,391
|
| |
(5,816)
|
| |
(5,973)
|
Accounts payable
|
| |
16,840
|
| |
17,817
|
| |
8,633
|
Accrued expenses and other current liabilities
|
| |
2,999
|
| |
(17,027)
|
| |
17,980
|
Other assets and liabilities
|
| |
(4,884)
|
| |
(35)
|
| |
494
|
Net cash (used in) provided by operating activities
|
| |
(10,012)
|
| |
19,444
|
| |
31,623
|
Cash flows from investing activities:
|
| |
|
| |
|
| ||
Purchases of property and equipment (including software
development)
|
| |
(17,029)
|
| |
(14,117)
|
| |
(11,480)
|
Proceeds from the sale of property and equipment
|
| |
652
|
| |
39
|
| |
103
|
Payments for acquisition (net of cash acquired)
|
| |
—
|
| |
(78,957)
|
| |
(51,883)
|
Net cash used in investing activities
|
| |
(16,377)
|
| |
(93,035)
|
| |
(63,260)
|
Cash flows from financing activities:
|
| |
|
| |
|
| |
|
Proceeds from line of credit
|
| |
2,233,146
|
| |
1,983,853
|
| |
2,017,280
|
Repayments on line of credit
|
| |
(2,202,363)
|
| |
(1,996,254)
|
| |
(1,978,697)
|
Proceeds from term loan
|
| |
—
|
| |
19,700
|
| |
—
|
Repayment of term loan
|
| |
(1,400)
|
| |
(1,000)
|
| |
(1,118)
|
Payment of contingent consideration on acquisitions
|
| |
—
|
| |
(1,303)
|
| |
(2,367)
|
Proceeds from issuance of common stock
|
| |
398
|
| |
145
|
| |
234
|
Repurchases of common stock
|
| |
(3,608)
|
| |
(7,490)
|
| |
(930)
|
Proceeds from issuance of preferred stock
|
| |
—
|
| |
79,638
|
| |
—
|
Preferred stock issuance costs
|
| |
—
|
| |
(4,329)
|
| |
—
|
Debt issuance costs
|
| |
(151)
|
| |
(185)
|
| |
(283)
|
Payment of offering costs (Note 1)
|
| |
(385)
|
| |
—
|
| |
—
|
Net cash provided by financing activities
|
| |
25,637
|
| |
72,775
|
| |
34,119
|
Net (decrease) increase in cash and cash equivalents
|
| |
(752)
|
| |
(816)
|
| |
2,482
|
Effect of exchange rate on cash
|
| |
(113)
|
| |
(176)
|
| |
168
|
Cash and cash equivalents, beginning of year
|
| |
10,721
|
| |
11,713
|
| |
9,063
|
Cash and cash equivalents, end of year
|
| |
$9,856
|
| |
$10,721
|
| |
$11,713
|
Supplemental schedule of non-cash investing and financing activities:
|
| |
|
| |
|
| |
|
Non-cash acquisition consideration
|
| |
$—
|
| |
$10,000
|
| |
$—
|
Supplemental disclosures of cash flow information
(continuing operations)
|
| |
|
| |
|
| |
|
Cash paid for interest
|
| |
$7,399
|
| |
$7,068
|
| |
$8,129
|
Cash paid (received) for income taxes, net of cash refunds
|
| |
$297
|
| |
$(33)
|
| |
$1,347
|
Consideration
|
| |
|
Cash paid at closing (net of cash acquired)
|
| |
$78,957
|
Notes payable
|
| |
$10,000
|
Total consideration
|
| |
$88,957
|
Recognized amounts of identifiable assets acquired and liabilities assumed:
|
| |
|
Accounts receivable
|
| |
$711
|
Prepaid expenses and other assets
|
| |
96
|
Property and equipment
|
| |
18
|
Identifiable intangible assets
|
| |
22,550
|
Accounts payable
|
| |
(454)
|
Accrued expenses
|
| |
(558)
|
Deferred revenue
|
| |
(73)
|
Paycheck Protection Program loan
|
| |
(516)
|
Net identifiable assets acquired
|
| |
$21,774
|
Goodwill
|
| |
$67,183
|
Consideration
|
| |
|
Cash paid at closing (net of cash acquired)
|
| |
$31,778
|
Total consideration
|
| |
$31,778
|
Recognized amounts of identifiable assets acquired and liabilities assumed:
|
| |
|
Accounts receivable
|
| |
$4,347
|
Prepaid expenses and other assets
|
| |
1,538
|
Property and equipment
|
| |
93
|
Identifiable intangible assets
|
| |
21,510
|
Accounts payable
|
| |
(2,322)
|
Accrued expenses
|
| |
(3,753)
|
Deferred revenue
|
| |
(3,431)
|
Contingent liabilities
|
| |
(1,708)
|
Deferred taxes
|
| |
(1,627)
|
Net identifiable assets acquired
|
| |
$14,647
|
Goodwill
|
| |
$17,131
|
Consideration
|
| |
|
Cash paid at closing (net of cash acquired)
|
| |
$20,105
|
Total consideration
|
| |
$20,105
|
Recognized amounts of identifiable assets acquired and liabilities assumed:
|
| |
|
Accounts receivable
|
| |
$842
|
Prepaid expenses and other assets
|
| |
45
|
Property and equipment
|
| |
108
|
Identifiable intangible assets
|
| |
9,267
|
Accounts payable
|
| |
(230)
|
Deferred revenue and accrued expenses
|
| |
(303)
|
Deferred taxes
|
| |
(1,825)
|
Net identifiable assets acquired
|
| |
$7,904
|
Goodwill
|
| |
$12,201
|
•
|
Contingency fees – The Company performs cost savings projects on a contingent basis. Such engagements are considered to be one
performance obligation whereby the Company is required to
|
•
|
Fixed fees – The Company performs cost savings projects at a fixed rate. Such engagements are considered to be one performance
obligation whereby the Company is required to deliver sourcing services to a customer for a fixed fee. Revenue for such projects is recognized over time based upon the proportional performance of the Company’s obligations under the
contract. The measurement of proportional performance under the contract involves significant judgments including estimating the amount of labor and other support costs that will be needed to complete the contract. Fixed fee contracts
are generally less than 1 year in duration.
|
•
|
Time and materials – The Company performs cost savings and client requested software development projects. Such engagements are
considered to be one performance obligation whereby the Company is required to deliver professional service hours based on the client’s needs. The Company recognizes revenue for such engagements over time upon reaching the contractual
right to invoice the customer which corresponds to the time that hours are incurred.
|
|
| |
Years ended December 31,
|
||||||
|
| |
2021
|
| |
2020
|
| |
2019
|
Payments
|
| |
$61,789
|
| |
$49,575
|
| |
$51,054
|
Software as a service
|
| |
32,649
|
| |
30,709
|
| |
21,639
|
Advisory
|
| |
15,351
|
| |
20,947
|
| |
30,137
|
Equipment sales
|
| |
43,905
|
| |
73,445
|
| |
41,755
|
|
| |
Years ended December 31,
|
||||||
|
| |
2021
|
| |
2020
|
| |
2019
|
Total Revenue
|
| |
$153,694
|
| |
$174,676
|
| |
$144,585
|
|
| |
Years ended December 31,
|
||||||
|
| |
2021
|
| |
2020
|
| |
2019
|
United States
|
| |
$141,540
|
| |
$162,259
|
| |
$138,580
|
United Kingdom
|
| |
5,200
|
| |
4,477
|
| |
1,630
|
France
|
| |
6,954
|
| |
7,940
|
| |
4,375
|
Total Revenue
|
| |
$153,694
|
| |
$174,676
|
| |
$144,585
|
|
| |
Years ended December 31,
|
|||
|
| |
2021
|
| |
2020
|
Contract assets, beginning of year
|
| |
$2,522
|
| |
$4,162
|
Contract assets at beginning of year transferred to accounts receivable
|
| |
(1,740)
|
| |
(2,044)
|
Contract assets due to acquisitions and adjustments
|
| |
—
|
| |
(781)
|
Contract asset additions, net of reclassification to accounts receivable
|
| |
835
|
| |
1,185
|
Contract assets, end of year
|
| |
$1,617
|
| |
$2,522
|
|
| |
Years ended December 31,
|
|||
|
| |
2021
|
| |
2020
|
Contract liabilities, beginning of year
|
| |
$8,199
|
| |
$8,848
|
Recognition of revenue included in beginning of year contract liability
|
| |
(7,922)
|
| |
(8,771)
|
Contract liabilities due to acquisitions and adjustments
|
| |
—
|
| |
70
|
Contract liability additions, net of revenue recognized
on new billings during the period
|
| |
7,392
|
| |
8,052
|
Contract liabilities, end of year
|
| |
$7,669
|
| |
$8,199
|
|
| |
December 31,
|
|||
|
| |
2021
|
| |
2020
|
United States
|
| |
$26,355
|
| |
$22,151
|
United Kingdom
|
| |
117
|
| |
37
|
France
|
| |
27
|
| |
23
|
Total assets
|
| |
$26,499
|
| |
$22,211
|
•
|
Level 1 - inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at
the measurement date
|
•
|
Level 2 - inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar
assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability
|
•
|
Level 3 - inputs are unobservable inputs for the asset or liability
|
•
|
The “package of practical expedients,” which permits the Company not to reassess under the new standard prior conclusions on
lease identification, lease classification and initial direct costs originally recorded under ASC 840.
|
•
|
The practical expedient not to apply the recognition requirements in ASC 842 to short-term leases which are leased assets with
less than 12 month terms.
|
•
|
The practical expedient not to separate lease and non-lease components within each lease and account for all lease components
as a single lease component.
|
|
| |
December 31,
|
|||
|
| |
2021
|
| |
2020
|
Accounts receivable
|
| |
$241,738
|
| |
$198,419
|
Allowance for doubtful accounts
|
| |
(2,334)
|
| |
(2,867)
|
Accounts receivable, net
|
| |
$239,404
|
| |
$195,552
|
Balance at December 31, 2018
|
| |
$1,861
|
Bad debt expense
|
| |
1,823
|
Write offs and other adjustments
|
| |
(958)
|
Balance at December 31, 2019
|
| |
2,726
|
Bad debt expense
|
| |
925
|
Write offs and other adjustments
|
| |
(784)
|
Balance at December 31, 2020
|
| |
2,867
|
Bad debt expense
|
| |
1,863
|
Write offs and other adjustments
|
| |
(2,396)
|
Balance at December 31, 2021
|
| |
$2,334
|
|
| |
December 31,
|
|||
|
| |
2021
|
| |
2020
|
At-risk receivables
|
| |
$14,901
|
| |
$12,910
|
Allowance for at-risk receivables
|
| |
(2,181)
|
| |
(2,523)
|
Net carrying value of at-risk receivables
|
| |
$12,720
|
| |
$10,387
|
|
| |
December 31,
|
|||
|
| |
2021
|
| |
2020
|
Prepaid expenses and other current assets
|
| |
$4,908
|
| |
$4,228
|
Debt issuance costs
|
| |
782
|
| |
782
|
Inventories
|
| |
2,015
|
| |
4,767
|
Unbilled receivables and work in process
|
| |
1,543
|
| |
2,444
|
Prepaid income taxes
|
| |
8,457
|
| |
7,717
|
Total
|
| |
$17,705
|
| |
$19,938
|
|
| |
December 31,
|
|||
|
| |
2021
|
| |
2020
|
Debt issuance costs
|
| |
$799
|
| |
$1,435
|
Investment in Canxxus
|
| |
1,643
|
| |
1,531
|
Deferred commissions and contract costs
|
| |
550
|
| |
728
|
Deferred offering costs (Note 1)
|
| |
3,499
|
| |
—
|
Loans to executive officers (Note 18)
|
| |
6,084
|
| |
—
|
Other long-term assets
|
| |
178
|
| |
966
|
Total
|
| |
$12,753
|
| |
$4,660
|
|
| |
Estimated
Useful Lives
(in years)
|
| |
December 31,
|
|||
|
| |
2021
|
| |
2020
|
|||
Internally developed software
|
| |
3
|
| |
$78,585
|
| |
$61,865
|
Computer hardware and software
|
| |
3 - 5
|
| |
3,582
|
| |
3,050
|
Equipment, furniture and leasehold improvements
|
| |
2 - 7
|
| |
836
|
| |
2,069
|
|
| |
|
| |
83,003
|
| |
66,984
|
Accumulated depreciation and amortization
|
| |
|
| |
(56,504)
|
| |
(44,773)
|
Property and equipment, net
|
| |
|
| |
$26,499
|
| |
$22,211
|
|
| |
December 31, 2021
|
|||||||||
|
| |
Weighted
average
amortization
period
(in years)
|
| |
Gross
carrying
amount
|
| |
Accumulated
amortization
|
| |
Net carrying
amount
|
Amortizable intangible assets
|
| |
|
| |
|
| |
|
| |
|
Customer relationships
|
| |
15
|
| |
$29,249
|
| |
$(10,888)
|
| |
$18,361
|
Acquired technologies
|
| |
6
|
| |
32,853
|
| |
(17,124)
|
| |
15,729
|
Vendor relationships
|
| |
5
|
| |
3,920
|
| |
(784)
|
| |
3,136
|
Trade name
|
| |
3
|
| |
1,707
|
| |
(1,707)
|
| |
—
|
Non-compete
|
| |
3
|
| |
565
|
| |
(408)
|
| |
157
|
Other
|
| |
1
|
| |
103
|
| |
(103)
|
| |
—
|
Non-amortizing intangibles
|
| |
|
| |
|
| |
|
| |
|
Trademarks
|
| |
|
| |
100
|
| |
—
|
| |
100
|
|
| |
|
| |
$68,497
|
| |
$(31,014)
|
| |
$37,483
|
|
| |
December 31, 2020
|
|||||||||
|
| |
Weighted
average
amortization
period
(in years)
|
| |
Gross
carrying
amount
|
| |
Accumulated
amortization
|
| |
Net carrying
amount
|
Amortizable intangible assets
|
| |
|
| |
|
| |
|
| |
|
Customer relationships
|
| |
15
|
| |
$29,618
|
| |
$(8,046)
|
| |
$21,572
|
Acquired technologies
|
| |
6
|
| |
32,866
|
| |
(10,377)
|
| |
22,489
|
Vendor relationships
|
| |
5
|
| |
3,920
|
| |
—
|
| |
3,920
|
Trade name
|
| |
3
|
| |
1,718
|
| |
(1,365)
|
| |
353
|
Non-compete
|
| |
3
|
| |
568
|
| |
(177)
|
| |
391
|
Other
|
| |
1
|
| |
103
|
| |
(103)
|
| |
—
|
Non-amortizing intangibles
|
| |
|
| |
|
| |
|
| |
|
Trademarks
|
| |
|
| |
100
|
| |
—
|
| |
100
|
|
| |
|
| |
$68,893
|
| |
$(20,068)
|
| |
$48,825
|
|
| |
Total
|
Balance at December 31, 2019
|
| |
47,249
|
Acquisition of Vendorin (Note 2)
|
| |
67,178
|
Cumulative Translation Adjustments
|
| |
186
|
Balance at December 31, 2020
|
| |
$114,613
|
Vendorin Acquisition Measurement Period Adjustment
|
| |
5
|
Cumulative Translation Adjustments
|
| |
(121)
|
Balance at December 31, 2021
|
| |
$114,497
|
|
| |
December 31,
|
|||
|
| |
2021
|
| |
2020
|
Employment-related accruals
|
| |
$7,171
|
| |
$2,505
|
Refundable deposits
|
| |
874
|
| |
907
|
Deferred revenue
|
| |
7,655
|
| |
8,122
|
Accrued interest expense
|
| |
10
|
| |
1
|
Deferred rent
|
| |
246
|
| |
286
|
Income taxes payable
|
| |
333
|
| |
275
|
Non-income taxes payable
|
| |
2,256
|
| |
2,514
|
Other accrued expenses
|
| |
8,304
|
| |
7,251
|
Total
|
| |
$26,849
|
| |
$21,861
|
|
| |
December 31,
|
|||
|
| |
2021
|
| |
2020
|
Revolving line of credit
|
| |
$89,459
|
| |
$58,677
|
Term loan
|
| |
66,600
|
| |
68,000
|
Vendorin notes payable
|
| |
10,507
|
| |
10,000
|
Paycheck protection program loan
|
| |
—
|
| |
516
|
Less: Unamortized debt issuance costs
|
| |
(1,190)
|
| |
(1,835)
|
Total debt, net of unamortized debt issuance costs
|
| |
165,376
|
| |
135,358
|
Less: current portion of long-term debt, net of unamortized debt issuance
costs
|
| |
(751)
|
| |
(1,268)
|
Long-term debt
|
| |
$164,625
|
| |
$134,089
|
2022
|
| |
$1,400
|
2023
|
| |
65,200
|
Total
|
| |
$66,600
|
•
|
Maximum Senior Leverage Ratio of 6.50:1.00
|
•
|
Fixed Charge Coverage Ratio of 1.00:1.00
|
•
|
Minimum EBITDA of $25.0 million
|
|
| |
Years Ended December 31,
|
||||||
|
| |
2021
|
| |
2020
|
| |
2019
|
United States
|
| |
$(30,724)
|
| |
$(1,865)
|
| |
$(5,047)
|
Foreign
|
| |
(772)
|
| |
(626)
|
| |
(388)
|
Loss before benefit from income taxes
|
| |
$(31,496)
|
| |
$(2,491)
|
| |
$(4,659)
|
|
| |
For the year ended December 31,
|
||||||
|
| |
2021
|
| |
2020
|
| |
2019
|
Current:
|
| |
|
| |
|
| |
|
Federal
|
| |
$(319)
|
| |
$(6,740)
|
| |
$914
|
State
|
| |
(255)
|
| |
77
|
| |
530
|
Foreign
|
| |
169
|
| |
63
|
| |
99
|
|
| |
(405)
|
| |
(6,600)
|
| |
1,543
|
Deferred:
|
| |
|
| |
|
| |
|
Federal
|
| |
3,765
|
| |
1,981
|
| |
(1,513)
|
State
|
| |
(1,962)
|
| |
(407)
|
| |
(370)
|
Foreign
|
| |
6
|
| |
(167)
|
| |
(586)
|
|
| |
1,809
|
| |
1,407
|
| |
(2,469)
|
Total income tax expense (benefit)
|
| |
$1,404
|
| |
$(5,193)
|
| |
$(926)
|
|
| |
Years Ended December 31,
|
||||||
|
| |
2021
|
| |
2020
|
| |
2019
|
Federal statutory tax rate
|
| |
21.0%
|
| |
21.0%
|
| |
21.0%
|
State income taxes, net of federal income tax benefit
|
| |
7.0
|
| |
13.9
|
| |
(1.1)
|
Foreign tax rate differential
|
| |
(0.1)
|
| |
(1.0)
|
| |
(6.3)
|
Tax credits
|
| |
1.2
|
| |
13.2
|
| |
7.5
|
Change in deferred tax assets and liabilities due to tax rate changes
|
| |
(1.1)
|
| |
18.7
|
| |
—
|
Permanent differences
|
| |
(0.1)
|
| |
(5.5)
|
| |
(1.0)
|
Tax benefit for stock option exercise
|
| |
2.4
|
| |
43.5
|
| |
—
|
Rate differential on loss carryback
|
| |
—
|
| |
96.3
|
| |
—
|
Valuation allowance
|
| |
(34.1)
|
| |
—
|
| |
—
|
Provision to return adjustment
|
| |
(0.7)
|
| |
—
|
| |
—
|
Other items, net
|
| |
—
|
| |
8.4
|
| |
(0.1)
|
Effective tax rate
|
| |
(4.5)%
|
| |
208.5%
|
| |
20.0%
|
|
| |
December 31,
|
|||
|
| |
2021
|
| |
2020
|
Deferred income tax assets:
|
| |
|
| |
|
Net operating loss carryforwards
|
| |
$11,825
|
| |
$1,177
|
Reserve accounts
|
| |
691
|
| |
799
|
Stock-based compensation
|
| |
657
|
| |
2,606
|
Accrued rent
|
| |
—
|
| |
76
|
Interest expense carryforward
|
| |
2,409
|
| |
—
|
Tax credits
|
| |
597
|
| |
—
|
Other
|
| |
1,160
|
| |
957
|
Less valuation allowance
|
| |
(10,785)
|
| |
(182)
|
Deferred income tax assets recognized
|
| |
6,554
|
| |
5,433
|
Deferred income tax liabilities:
|
| |
|
| |
|
Goodwill and intangible assets
|
| |
(799)
|
| |
(243)
|
Property and equipment
|
| |
(7,265)
|
| |
(4,874)
|
Other
|
| |
(582)
|
| |
(531)
|
Deferred income tax liabilities recognized
|
| |
$(8,646)
|
| |
$(5,648)
|
Net deferred income tax liabilities
|
| |
$(2,092)
|
| |
$(215)
|
|
| |
December 31,
|
|||
|
| |
2021
|
| |
2020
|
Valuation allowance, beginning of year
|
| |
$(182)
|
| |
$ (210)
|
(Additions) / Reductions
|
| |
(10,603)
|
| |
28
|
Valuation allowance, end of year
|
| |
$ (10,785)
|
| |
$ (182)
|
|
| |
2021
|
| |
2020
|
Valuation Assumptions:
|
| |
|
| |
|
Expected dividend yield
|
| |
—
|
| |
—
|
Expected volatility
|
| |
34.1%
|
| |
30.0%
|
Expected term (in years)
|
| |
6.75
|
| |
6.08
|
Risk-free interest rate
|
| |
1.1%
|
| |
0.5%
|
Weighted average grant date fair value
|
| |
$5.45
|
| |
$4.31
|
|
| |
Number of
shares
|
| |
Weighted
average
exercise price
|
| |
Weighted
average
remaining
contractual
term
|
Balance at December 31, 2019
|
| |
4,581,172
|
| |
$3.92
|
| |
*
|
Granted
|
| |
258,409
|
| |
12.25
|
| |
9.8
|
Exercised
|
| |
(1,640,000)
|
| |
2.43
|
| |
—
|
Forfeited and expired
|
| |
(293,920)
|
| |
5.96
|
| |
—
|
Balance at December 31, 2020
|
| |
2,905,661
|
| |
$4.98
|
| |
3.6*
|
Granted
|
| |
486,404
|
| |
14.76
|
| |
9.5
|
Exercised
|
| |
(1,680,000)
|
| |
2.43
|
| |
—
|
Forfeited and expired
|
| |
(86,300)
|
| |
13.07
|
| |
—
|
Balance at December 31, 2021
|
| |
1,625,765
|
| |
$10.11
|
| |
8.3*
|
Exercisable at December 31, 2021
|
| |
720,379
|
| |
$5.44
|
| |
6.8*
|
Expected to vest at December 31, 2021
|
| |
905,386
|
| |
$13.83
|
| |
8.9
|
|
| |
Shares
|
| |
Weighted
Average
Grant Date
Fair Value
|
Nonvested stock outstanding at December 31, 2019
|
| |
250,716
|
| |
$11.73
|
Granted
|
| |
146,415
|
| |
12.26
|
Forfeited
|
| |
(15,617)
|
| |
11.51
|
Vested
|
| |
(93,315)
|
| |
10.91
|
Nonvested stock outstanding at December 31, 2020
|
| |
288,199
|
| |
$12.10
|
Granted
|
| |
268,525
|
| |
12.25
|
Forfeited
|
| |
(20,101)
|
| |
12.49
|
Vested
|
| |
(230,965)
|
| |
11.98
|
Nonvested stock outstanding at December 31, 2021
|
| |
305,658
|
| |
$12.29
|
|
| |
Years ended December 31,
|
||||||
|
| |
2021
|
| |
2020
|
| |
2019
|
Direct costs of revenue
|
| |
$323
|
| |
$240
|
| |
$103
|
Research & development expenses
|
| |
167
|
| |
59
|
| |
—
|
Sales and marketing expenses
|
| |
318
|
| |
462
|
| |
263
|
General and administrative expenses
|
| |
23,289
|
| |
1,467
|
| |
692
|
|
| |
$24,097
|
| |
$2,228
|
| |
$1,058
|
|
| |
Years ended December 31,
|
||||||
|
| |
2021
|
| |
2020
|
| |
2019
|
Net (loss) income
|
| |
$(32,788)
|
| |
$2,774
|
| |
$(3,778)
|
Less: Dividends on preferred stock
|
| |
(12,361)
|
| |
(7,087)
|
| |
—
|
Less: Accretion of redemption preference and issuance costs
|
| |
(8,975)
|
| |
(5,983)
|
| |
—
|
Loss available to common stockholders for basic EPS
|
| |
$(54,124)
|
| |
$(10,296)
|
| |
$(3,778)
|
|
| |
|
| |
|
| |
|
Weighted average common shares - basic
|
| |
13,301,808
|
| |
12,523,827
|
| |
12,053,525
|
Effect of dilutive securities
|
| |
—
|
| |
—
|
| |
—
|
Weighted average common shares - diluted
|
| |
13,301,808
|
| |
12,523,827
|
| |
12,053,525
|
|
| |
|
| |
|
| |
|
Net loss per common share, basic and diluted
|
| |
$(4.07)
|
| |
$(0.82)
|
| |
$(0.31)
|
|
| |
Years ended December 31,
|
||||||
|
| |
2021
|
| |
2020
|
| |
2019
|
Options to purchase common stock
|
| |
1,641,765
|
| |
2,365,661
|
| |
3,861,172
|
Convertible preferred stock
|
| |
3,442,633
|
| |
2,700,967
|
| |
—
|
Restricted stock
|
| |
305,658
|
| |
288,199
|
| |
250,716
|
|
| |
5,390,056
|
| |
5,354,827
|
| |
4,111,888
|
2022
|
| |
$1,833
|
2023
|
| |
1,328
|
2024
|
| |
991
|
2025
|
| |
931
|
2026
|
| |
792
|
Thereafter
|
| |
2,128
|
Total
|
| |
$8,003
|
2022
|
| |
2,078
|
2023
|
| |
1,812
|
2024
|
| |
939
|
2025
|
| |
359
|
2026
|
| |
379
|
Thereafter
|
| |
183
|
Total
|
| |
$5,750
|
|
| |
|
| |
|
| |
Page
|
| | ||||||||
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|
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|
| | | | | | |||
|
| | | | | |
Exhibit A
|
| |
–
|
| |
Form of Subscription Agreement
|
Exhibit B
|
| |
–
|
| |
Form of Support Agreement
|
Exhibit C
|
| |
–
|
| |
Form of Registration Rights Agreement
|
Exhibit D
|
| |
–
|
| |
Form of Lock-Up Agreement
|
Exhibit E
|
| |
–
|
| |
Form of Share Vesting and Warrant Surrender Agreement
|
Exhibit F
|
| |
–
|
| |
Form of Letter of Transmittal
|
Exhibit G
|
| |
–
|
| |
Acquiror Closing Tax Certificate
|
Exhibit H
|
| |
–
|
| |
Acquiror Registration Statement Tax Certificate
|
Exhibit I
|
| |
–
|
| |
Company Closing Tax Certificate
|
Exhibit J
|
| |
–
|
| |
Company Registration Statement Tax Certificate
|
(a)
|
| |
If to Acquiror, Merger Sub I or Merger Sub II:
|
||||||
|
| |
|
| |
North Mountain Merger Corp.
|
|||
|
| |
|
| |
767 Fifth Avenue, 9th Floor
|
|||
|
| |
|
| |
New York, New York 10153
|
|||
|
| |
|
| |
Attn:
|
| |
Nick Dermatas
|
|
| |
|
| |
E-mail:
|
| |
ndermatas@smmergercorp.com
|
|
| |
|
| |
|
|
|
| |
|
| |
with a copy to:
|
|||
|
| |
|
| |
|
| |
|
|
| |
|
| |
Paul, Weiss, Rifkind, Wharton & Garrison LLP
|
|||
|
| |
|
| |
1285 Avenue of the Americas
|
|||
|
| |
|
| |
New York, NY 10019
|
|||
|
| |
|
| |
Attn:
|
| |
Jeffrey D. Marell
|
|
| |
|
| |
|
| |
Michael Vogel
|
|
| |
|
| |
E-mail:
|
| |
jmarell@paulweiss.com
|
|
| |
|
| |
|
| |
mvogel@paulweiss.com
|
(b)
|
| |
If to the Company to:
|
||||||
|
| |
|
| |
|
| |
|
|
| |
|
| |
Corcentric, Inc.
|
|||
|
| |
|
| |
200 Lake Drive East
|
|||
|
| |
|
| |
Cherry Hill, NJ 08002
|
|||
|
| |
|
| |
Attn:
|
| |
Tom Sabol
|
|
| |
|
| |
E-mail:
|
| |
tsabol@corcentric.com
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
and
|
|||
|
| |
|
| |
|
| |
|
|
| |
|
| |
Corcentric, Inc.
|
|||
|
| |
|
| |
2651 Warrenville Road, Suite 560
|
|||
|
| |
|
| |
Downers Grove, IL 60515
|
|||
|
| |
|
| |
Attn:
|
| |
Mark Joyce
|
|
| |
|
| |
E-mail:
|
| |
mjoyce@corcentric.com
|
|
| |
with a copy to:
|
||||||
|
| |
|
| |
|
| |
|
|
| |
|
| |
Kirkland & Ellis LLP
|
|||
|
| |
|
| |
1601 Elm Street
|
|||
|
| |
|
| |
Dallas, TX 75201
|
|||
|
| |
|
| |
Attn:
|
| |
Kevin T. Crews, P.C.
|
|
| |
|
| |
E-mail:
|
| |
kevin.crews@kirkland.com
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
and
|
|||
|
| |
|
| |
Kirkland & Ellis LLP
|
|||
|
| |
|
| |
601 Lexington Avenue
|
|||
|
| |
|
| |
New York, NY 10022
|
|||
|
| |
|
| |
Attn:
|
| |
Douglas DiMedio; Tamar Donikyan
|
|
| |
|
| |
E-mail:
|
| |
douglas.dimedio@kirkland.com; tamar.donikyan@kirkland.com
|
|
| |
NORTH MOUNTAIN MERGER CORP.
|
||||||
|
| |
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ Charles B. Bernicker
|
|||
|
| |
|
| |
Name:
|
| |
Charles B. Bernicker
|
|
| |
|
| |
Title:
|
| |
Chief Executive Officer
|
|
| |
|
| |
|
| |
|
|
| |
NORTH MOUNTAIN MERGER SUB INC.
|
||||||
|
| |
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ Charles B. Bernicker
|
|||
|
| |
|
| |
Name:
|
| |
Charles B. Bernicker
|
|
| |
|
| |
Title:
|
| |
Chief Executive Officer
|
|
| |
|
| |
|
| |
|
|
| |
NORTH MOUNTAIN MERGER SUB II, LLC,
|
||||||
|
| |
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ Charles B. Bernicker
|
|||
|
| |
|
| |
Name:
|
| |
Charles B. Bernicker
|
|
| |
|
| |
Title:
|
| |
Secretary
|
|
| |
|
| |
|
| |
|
|
| |
CORCENTRIC, INC.
|
||||||
|
| |
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ Douglas Clark
|
|||
|
| |
|
| |
Name:
|
| |
Douglas Clark
|
|
| |
|
| |
Title:
|
| |
Chairman and Chief Executive Officer
|
Name of Subscriber:
|
| |
State/Country of Formation or Domicile:
|
|
| |
|
By:
|
| |
|
| |
|
Name:
|
| |
|
| |
|
Title:
|
| |
|
| |
|
Name in which Shares and Warrants are to be
|
| |
Date: , 2021
|
||||||
registered (if different):
|
| |
Mailing Address-Street (if different):
|
||||||
|
| |
|
| |
City, State, Zip:
|
|||
Subscriber’s EIN:
|
| |
Attn:
|
||||||
Business Address-Street:
|
| |
Telephone No.:
|
||||||
City, State, Zip:
|
| |
Facsimile No.:
|
||||||
Attn:
|
| |
|
| |
Email Address:
|
|||
Telephone No.:
|
| |
Per Share Purchase Price: $10.00
|
||||||
Facsimile No.:
|
| |
|
| |
|
|||
Email Address:
|
| |
|
| |
|
|||
Number of Shares subscribed for:
|
| |
|
| |
|
|||
Number of Warrants to be delivered:
|
| |
|
| |
|
|||
Purchase Price: $
|
| |
|
| |
|
|
| |
NORTH MOUNTAIN MERGER CORP.
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
|
|
| |
Name:
|
| |
|
|
| |
Title:
|
| |
|
1
|
“Family of investment companies” means any two or more investment companies registered
under the Investment Company Act, except for a unit investment trust whose assets consist solely of shares of one or more registered investment companies, that have the same investment adviser (or, in the case of unit investment trusts,
the same depositor); provided that, (a) each series of a series company (as defined in Rule 18f-2 under the Investment Company Act) shall be deemed to be a separate investment company and (b) investment companies shall be deemed to have
the same adviser (or depositor) if their advisers (or depositors) are majority-owned subsidiaries of the same parent, or if one investment company’s adviser (or depositor) is a majority-owned subsidiary of the other investment company’s
adviser (or depositor)
|
|
| |
SUBSCRIBER:
|
|||
|
| |
Print Name:
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
|
|
| |
Name:
|
| |
|
|
| |
Title:
|
| |
|
1
|
NTD: To be included if the Stockholder is an entity
|
2
|
NTD: To be included if the Stockholder is a natural person.
|
3
|
NTD: To be included if the Stockholder is an entity
|
|
| |
if to Acquiror, to it at:
|
|||
|
| |
|
| |
|
|
| |
North Mountain Merger Corp.
|
|||
|
| |
767 Fifth Avenue, 9th Floor
|
|||
|
| |
New York, New York 10153
|
|||
|
| |
Attn:
|
| |
Nick Dermatas
|
|
| |
E-mail:
|
| |
ndermatas@smmergercorp.com
|
|
| |
|
| |
|
|
| |
with a copy to:
|
|||
|
| |
|
| |
|
|
| |
Paul, Weiss, Rifkind, Wharton & Garrison LLP
|
|||
|
| |
1285 Avenue of the Americas
|
|||
|
| |
New York, NY 10019
|
|||
|
| |
Attn:
|
| |
Jeffrey D. Marell
|
|
| |
|
| |
Michael Vogel
|
|
| |
E-mail:
|
| |
jmarell@paulweiss.com
|
|
| |
|
| |
mvogel@paulweiss.com
|
|
| |
NORTH MOUNTAIN MERGER CORP.
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
|
|
| |
|
| |
Name:
|
|
| |
|
| |
Title:
|
|
| |
|
| |
|
|
| |
NORTH MOUNTAIN MERGER SUB INC.
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
|
|
| |
|
| |
Name:
|
|
| |
|
| |
Title:
|
|
| |
|
| |
|
|
| |
NORTH MOUNTAIN MERGER SUB II, LLC
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
|
|
| |
|
| |
Name:
|
|
| |
|
| |
Title:
|
|
| |
[STOCKHOLDER]
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
|
|
| |
|
| |
Name:
|
|
| |
|
| |
Title:
|
|
| |
COMPANY:
|
|||
|
| |
|
| |
|
|
| |
NORTH MOUNTAIN MERGER CORP.,
a Delaware corporation
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
|
|
| |
|
| |
Name:
|
|
| |
|
| |
Title:
|
|
| |
SPONSOR HOLDERS:
|
|||
|
| |
|
| |
|
|
| |
NORTH MOUNTAIN LLC
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
Harbour Reach Holdings LLC,
its managing member
|
|
| |
|
| ||
|
| |
|
| |
By: Netherton Investments Limited,
its managing member
|
|
| |
|
| |
|
|
| |
By:
|
| |
|
|
| |
Name:
|
| |
Mike Bell
|
|
| |
Title:
|
| |
Director
|
|
| |
CORCENTRIC HOLDERS:
|
|||
|
| |
|
| |
|
|
| |
BREGAL SAGEMOUNT III L.P.
|
|||
|
| |
|
| ||
|
| |
By:
|
| |
|
|
| |
Name:
|
| |
|
|
| |
Title:
|
| |
|
|
| |
|
| |
|
|
| |
BREGAL SAGEMOUNT III-A L.P.
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
|
|
| |
Name:
|
| |
|
|
| |
Title:
|
| |
|
|
| |
|
| |
|
|
| |
BREGAL SAGEMOUNT III-B L.P.
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
|
|
| |
Name:
|
| |
|
|
| |
Title:
|
| |
|
|
| |
DIRECTOR HOLDER:
|
|||
|
| |
|
| |
|
|
| |
|
| |
|
|
| |
Name:
|
| |
Douglas Clark
|
|
| |
|
|
| |
Signature of Stockholder
|
|
| |
|
|
| |
Print Name of Stockholder
|
|
| |
Its:
|
|
| |
|
|
| |
Address:
|
|
| |
|
|
| |
|
Agreed and Accepted as of
|
| |
|
, 20
|
| |
|
[•]
|
| |
|
|
| |
|
By:
|
| |
|
Name:
|
| |
|
Its:
|
| |
|
|
| |
If to NMMC, to:
|
||||||
|
| |
|
| |
|
| |
|
|
| |
|
| |
North Mountain Merger Corp.
767 Fifth Avenue, 9th Floor
New York, New York 10153
|
|||
|
| |
|
| |
Attn:
|
| |
Nick Dermatas
|
|
| |
|
| |
E-mail:
|
| |
ndermatas@smmergercorp.com
|
|
| |
|
| |
|
| |
|
|
| |
with a copy to:
|
||||||
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Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
|
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Attn:
|
| |
Jeffrey D. Marell; Michael Vogel
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E-mail:
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| |
jmarell@paulweiss.com; mvogel@paulweiss.com
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If to Company (following the consummation of the Subsequent Merger), to:
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Corcentric, Inc.
200 Lake Drive East
Cherry Hill, NJ 08002
|
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Attn:
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Tom Sabol
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E-mail:
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tsabol@corcentric.com
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and
|
||||||
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Corcentric, Inc.
2651 Warrenville Road, Suite 560
Downers Grove, IL 60515
|
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Attn:
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Mark Joyce
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E-mail:
|
| |
mjoyce@corcentric.com
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with a copy (not constituting notice) to:
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||||||
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Kirkland & Ellis LLP
1601 Elm Street
Dallas, TX 75201
|
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Attn:
|
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Kevin T. Crews, P.C.
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E-mail:
|
| |
kevin.crews@kirkland.com
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and
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||||||
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Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
|
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Attn:
|
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Douglas DiMedio; Tamar Donikyan
|
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|
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E-mail:
|
| |
douglas.dimedio@kirkland.com; tamar.donikyan@kirkland.com
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|
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NORTH MOUNTAIN MERGER CORP.
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By:
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Name:
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Title:
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[STOCKHOLDER PARTIES]
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By:
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Name:
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Title:
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[NEW STOCKHOLDER PARTY]
|
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By:
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Name:
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Title
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NORTH MOUNTAIN MERGER CORP.
|
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By:
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|
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Name:
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|
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Title:
|
|
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NORTH MOUNTAIN MERGER CORP.
|
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By:
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|
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Name:
|
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|
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Title:
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NORTH MOUNTAIN LLC
|
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By:
|
| |
|
|
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Name:
|
| |
|
|
| |
Title:
|
| |
|
|
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CORCENTRIC, INC.
|
|||
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By:
|
| |
|
|
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Name:
|
| |
|
|
| |
Title:
|
| |
|
|
BOX A – Signature of Registered
Holder(s) to Letter of Transmittal
|
| |
BOX B – Shares to be cancelled
|
| ||||||
|
(Must be signed by all registered
shareholders; include legal capacity
if signing on behalf of an entity)
|
| |
Book-Entry
Share(s), as
Applicable
(Attach additional
signed list, if
necessary)
|
| |
Type, Class and/or
Series of shares (i.e.
Company Common
Stock and/or Company
Preferred Stock)
|
| |
Number of shares of
Company Common Stock
and/or Company Preferred
Stock, as Applicable
|
|
|
Signature(s)
|
| |
|
| |
|
| |
|
|
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|
| |
|
| |
|
| |||
|
Print Name Here (and capacity, if the
registered holder is an entity)
|
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|
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|
| |||
|
|
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|
| |
|
|
|
Telephone Number
|
| |
Total shares of Company Common Stock to be cancelled:
Total shares of Company Preferred Stock to be cancelled:
|
|
|
BOX C – New Registration Instructions
|
| |
BOX D – One Time Delivery Instructions
|
|
|
To be completed ONLY if the check and/or stock is to
be issued in the name(s) of (or wire transfer made to account of) someone other than the registered holder(s) in Box A. ISSUE TO:
|
| |
To be completed ONLY if the check and/or stock is to be
delivered to an address other than that listed in Box E. MAIL TO:
|
|
|
|
| |
|
|
|
Name
|
| |
Name
|
|
|
Street Address
|
| |
Street Address
|
|
|
City, State and Zip Code
|
| |
City, State and Zip Code
|
|
|
BOX E – Name and Address of Registered Holder(s)
|
| |
BOX F – Medallion Guarantee
|
|
|
Please confirm that your address below is correct or mark any corrections
|
| |
If (and only if) you have completed Box C, or all registered holders are not listed on the bank
account provided in Box G (if you elected a wire payment) your signature must be
Medallion Guaranteed by an eligible
financial institution.
|
|
|
☐ indicates permanent address change
|
| |
Note: A notarization by a notary public is not acceptable
|
|
|
BOX G – Optional Bank Wire Instructions
|
| |||
|
NOTE: This wire request
is optional. If you choose to receive a wire payment, a $50 wire fee will be deducted from your payment. If the name on the bank account does not include all registered holders, a medallion guarantee is required in Box F. If you
complete Box G and any of the information is incomplete, illegible or otherwise deficient, you will receive a check for your proceeds. In connection with the above referenced merger, please wire the entitled funds as follows:
|
| |||
|
*ABA Routing Number
|
| |
|
|
|
Bank Name
|
| |
|
|
|
Bank Address
|
| |
|
|
|
Name on Bank Account
|
| |
|
|
|
Bank Account Number
|
| |
|
|
|
For Further Credit To Name
|
| |
|
|
|
For Further Credit To Account Number
|
| |
|
|
|
SWIFT Code (if applicable/foreign)
|
| |
|
|
|
IBAN (if applicable/foreign)
|
| |
|
|
•
|
BOX A – Signatures: All registered holders must sign as indicated in Box A. If you are
signing on behalf of a registered holder or entity your signature must include your legal capacity.
|
•
|
BOX B – Share Detail: List all shares of Company Common Stock and/or Company Preferred
Stock, as applicable, submitted in Box B.
|
•
|
BOX C – New Registration: Provide the new registration instructions (name and address) in
Box C if your payment (of stock and/or cash) is to be made to anyone other than the registered holder of your shares of Company Common Stock and/or Company Preferred Stock, as applicable. Signature must be that of the new registration
indicated. All changes in registration require a Medallion Signature Guarantee. Joint registrations must include the form of tenancy. Custodial registrations must include the name of the custodian (only one). Trust account registrations
must include the names of all current acting trustees and the date of the trust agreement. If your payment (of stock and/or cash) is to be made to anyone other than the registered holder of your shares of Company Common Stock and/or
Company Preferred Stock, as applicable, and this transaction results in proceeds at or above $14,000,000 in value to such party, please contact Continental Stock Transfer & Trust Co at the number listed below. Continental Stock
Transfer & Trust Co will make all future payments (if any) to this new registration unless the payment instructions are updated by the new registered holder prior to any additional payment.
|
•
|
BOX D – One Time Delivery: Any address shown in Box D will be treated as a one-time only
mailing instruction, and your address in Box E will be used for any future payments and communications.
|
•
|
BOX E – Current Name and Address of Registered Holder: Please confirm that the address
here is the address that should be used for all future communications and payments. If your permanent address should be changed on Continental Stock Transfer & Trust Co records, please make the necessary changes in Box E. If your
permanent address should change in the future, please notify Continental Stock Transfer & Trust Co at the number listed below.
|
•
|
BOX F – Signature Guarantee: Box F (Medallion Guarantee) only needs to be completed if the name on the check, or on the account to which funds will be transferred, will be different from the current registration shown in Box E. This guarantee is a
form of signature verification which can be obtained through an eligible financial institution such as a commercial bank, trust company, securities broker/dealer, credit union or savings institution participating in a Medallion program
approved by the Securities Transfer Association.
|
•
|
BOX G – Wire Instructions: To elect a bank wire transfer please complete Box G in its
entirety. A bank wire transfer, rather than payment by check, will help to expedite your receipt of the funds. Please contact your bank for questions regarding the appropriate bank routing number and account number to be used.
|
•
|
Important Tax Information: Under current U.S. federal income tax laws, Continental Stock
Transfer & Trust Co (as payer) may be required under the backup withholding rules to withhold a portion of the amount of any payments made to certain holders (or other payees) pursuant to the Mergers. In order to avoid such backup
withholding, if the person receiving payment for the shares is a United States person (for U.S. federal income tax purposes), such payee must timely complete and sign the enclosed Internal Revenue Service (“IRS”) Form W-9 to certify the payee’s correct taxpayer identification number (“TIN”) and to certify that such payee is not subject to such backup withholding, or must otherwise
establish a basis for exemption from backup withholding (currently imposed at a rate of 24%). Certain holders or other payees (including, among others, corporations and tax-exempt organizations) are not subject to these backup withholding
and reporting requirements. Exempt payees should furnish their TIN, provide the applicable codes in the box labeled “Exemptions,” and sign, date and send the IRS Form W-9 to the Exchange Agent. A holder or other payee who is a foreign
individual or a foreign entity should complete, sign, and submit to Continental Stock Transfer & Trust Co the appropriate IRS Form W-8 (instead of an IRS Form W-9), signed under penalties of perjury, attesting to such person’s exempt
status. Holders and other payees are urged to consult their own tax advisors to determine
|
•
|
Deficient Presentments: If you request a registration change that is not in proper form,
the required documentation will be requested from you and this will delay processing of any funds.
|
•
|
Delivery of Letter of Transmittal: Return this Letter of Transmittal to Continental Stock
Transfer & Trust Co at the address below. The method of delivery is at your option and your risk, but it is recommended that documents be delivered via a registered method.
|
|
| |
NORTH MOUNTAIN MERGER CORP.
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
|
|
| |
|
| |
Name: Charles B. Bernicker
|
|
| |
|
| |
Title: Chief Executive Officer
|
|
| |
NORTH MOUNTAIN MERGER CORP.
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
|
|
| |
|
| |
Name:
|
|
| |
|
| |
Title:
|
Item 20.
|
Indemnification of Directors and Officers
|
Item 21.
|
Exhibits and Financial Statement Schedules
|
Exhibit
Number
|
| |
Exhibit Description
|
| |
Agreement and Plan of Merger, dated as of December 9, 2021, by and among North
Mountain Merger Corp., North Mountain Merger Sub Inc., North Mountain Merger Sub II, LLC and Corcentric, Inc. (included as Annex A to the proxy statement/prospectus)
|
|
| |
Amended and Restated Certificate of Incorporation of North Mountain Merger
Corp. (included as Annex C to the proxy statement/prospectus)
|
|
3.2*
|
| |
Amended and Restated Bylaws of North Mountain Merger Corp. (included as
Annex D to the proxy statement/prospectus)
|
| |
Warrant Agreement, dated September 17, 2020, by and between North Mountain
Merger Corp and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.4 to the registrant's Quarterly Report on Form 10-Q filed with the Commission on November 16, 2020)
|
|
5.1*
|
| |
Opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP as to the validity
of the securities being registered
|
| |
Opinion of Kirkland & Ellis LLP as to tax matters
|
|
| |
Form of Subscription Agreement (included as Exhibit A to Annex A to the proxy
statement/prospectus)
|
|
| |
Form of Support Agreement (included as Exhibit B to Annex A to the proxy
statement/prospectus)
|
|
| |
Form of Lock-up Agreement (included as Exhibit D to Annex A to the proxy
statement/prospectus)
|
|
| |
Amended and Restated Registration Rights Agreement, dated as of December 9,
2021, by and among North Mountain Merger Corp., North Mountain LLC, and certain equityholders of Corcentric, Inc.
|
|
| |
Share Vesting and Warrant Surrender Agreement, dated as of December 9, 2021,
by and among North Mountain Merger Corp., North Mountain LLC and Corcentric, Inc.
|
|
| |
Form of Equity Incentive Plan (included as Annex E to the proxy
statement/prospectus)
|
|
| |
Form of Employee Stock Purchase Plan (included as Annex F to the proxy
statement/prospectus)
|
|
10.8†*
|
| |
Form of Indemnification Agreement
|
| |
Consent of Marcum LLP, independent registered public accounting firm
|
|
| |
Consent of BDO USA, LLP, independent registered public accounting firm
|
|
23.3*
|
| |
Consent of Paul, Weiss, Rifkind, Wharton & Garrison LLP (included in
Exhibit 5.1)
|
| |
Powers of Attorney (included in signature page)
|
|
99.1*
|
| |
Form of Proxy Card
|
101.INS
|
| |
XBRL Instance Document
|
101.SCH
|
| |
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
| |
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
| |
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
| |
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
| |
XBRL Taxonomy Extension Presentation Linkbase Document
|
| |
Filing Fee Table
|
*
|
To be filed by amendment.
|
**
|
Previously filed.
|
†
|
Indicates management contract or compensatory plan.
|
Item 22.
|
Undertakings
|
A.
|
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
|
(i)
|
To include any prospectus required by section 10(a)(3) of the Securities Act;
|
(ii)
|
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
|
(iii)
|
To include any material information with respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration statement;
|
B.
|
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment 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.
|
C.
|
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at
the termination of the offering.
|
D.
|
That, for the purpose of determining liability under the Securities Act to any purchaser, 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.
|
E.
|
That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial
distribution of the securities, that in a primary offering of securities of the 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 the 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.
|
F.
|
That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.
|
G.
|
That every prospectus (i) that is filed pursuant to paragraph (F) immediately preceding, or (ii) that purports to meet the
requirements of section 10(a)(3) of the Securities Act and is used in connection
|
H.
|
Insofar as indemnification for liabilities arising under the Securities Act 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 SEC such indemnification is against public policy as expressed in the Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
|
I.
|
The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the
prospectus pursuant to Item 4, 10(b), 11, or 13 of this Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.
|
J.
|
To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved
therein, that was not the subject of and included in the registration statement when it became effective.
|
|
| |
NORTH MOUNTAIN MERGER CORP.
|
||||||
|
| |
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ Charles Bernicker
|
|||
|
| |
|
| |
Name:
|
| |
Charles Bernicker
|
|
| |
|
| |
Title:
|
| |
Chief Executive Officer and President
|
Signature
|
| |
Title
|
| |
Date
|
|
| |
|
| |
|
/s/ Charles Bernicker
|
| |
Chief Executive Officer, President and Director
(Principal Executive Officer)
|
| |
March 24, 2022
|
Charles Bernicker
|
| |||||
|
| |
|
| |
|
/s/ Nicholas Dermatas
|
| |
Chief Financial Officer and Secretary
(Principal Financial and Accounting Officer)
|
| |
March 24, 2022
|
Nicholas Dermatas
|
| |||||
|
| |
|
| |
|
*
|
| |
Director
|
| |
March 24, 2022
|
Robert L. Metzger
|
| |||||
|
| |
|
| |
|
*
|
| |
Director
|
| |
March 24, 2022
|
Scott O’Callaghan
|
| |||||
|
| |
|
| |
|
*
|
| |
Director
|
| |
March 24, 2022
|
Douglas J. Pauls
|
|
*By:
|
| |
/s/ Charles Bernicker
|
| |
|
Name:
|
| |
Charles Bernicker
|
| |
|
Title:
|
| |
Attorney-in-Fact
|
|