Business Context and Reporting Period
This Form 8-K, dated June 28, 2021, reports the consummation of the Initial Public Offering (IPO) and a concurrent Private Placement by Northern Lights Acquisition Corp., a Delaware corporation and Special Purpose Acquisition Company (SPAC). The filing details the closing of the public offering and the placement of units to the company's sponsor, 5AK, LLC.
Key Financial Metrics
- Public Offering Proceeds: The company sold 10,000,000 Units at $10.00 per Unit, generating $100,000,000 in gross proceeds. The underwriters exercised an over-allotment option for 1,500,000 additional Units, generating an additional $15,000,000 in gross proceeds.
- Private Placement Proceeds: The company sold 528,175 Private Placement Units to the Sponsor at $10.00 per Unit, generating $5,281,750 in gross proceeds. No underwriting discounts were paid on this portion.
- Total Gross Proceeds: $120,281,750 (combining public offering, over-allotment, and private placement).
- Trust Account Funding: A total of $117,300,000 was deposited into a U.S.-based trust account. This amount represents the proceeds from the Offering and Private Placement, net of underwriting commissions, discounts, and offering expenses.
- Debt and Liquidity: The filing does not provide specific data on existing debt or operating cash flows, as the company is in the pre-business combination phase. Liquidity is primarily held in the trust account pending a business combination.
Material Changes
This filing represents the initial capitalization event for Northern Lights Acquisition Corp. There is no prior comparable period for revenue or operating profit as the company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination. The material change is the transition from a private entity to a public company with $117.3 million in trust assets.
Outlook, Risks, and Contingencies
- Business Combination Timeline: The company must complete its initial business combination within 12 months from the closing of the Offering (June 28, 2021), or up to 18 months pursuant to its Charter or as extended by stockholders.
- Redemption Rights: Public shareholders have the right to redeem their shares for a pro rata portion of the trust account if the company fails to complete a business combination within the specified timeframe or in connection with certain charter amendments.
- Trust Account Restrictions: Funds in the trust account generally cannot be released until the completion of a business combination, a redemption event, or the dissolution of the company. Interest earned may be released to pay taxes, with up to $100,000 reserved for dissolution expenses.
- Warrant Terms: Each whole warrant entitles the holder to purchase one share of Class A Common Stock at an exercise price of $11.50 per share. Warrants in the Private Placement have specific cashless exercise and registration rights.
Investor Verification Checklist
- Verify the exact date of the business combination deadline (12 or 18 months from June 28, 2021) and any extension mechanisms available to stockholders.
- Confirm the specific underwriting commissions and offering expenses deducted to arrive at the $117,300,000 trust balance.
- Review the Sponsor's lock-up restrictions on the Private Placement Units and the specific conditions for cashless exercise of warrants.
- Monitor the company's progress in identifying a target business combination within the mandated timeframe to avoid liquidation.