Business Context and Reporting Period
Alkami Technology, Inc. (ALKT) filed this Form 8-K on September 10, 2021, to report the entry into and closing of a Material Definitive Agreement. The Company acquired substantially all assets of MK Decisioning Systems, LLC, a provider of digital account opening, credit card, and loan origination solutions.
Key Financial Metrics and Transaction Terms
- Base Purchase Price: Approximately $20 million paid at closing.
- Holdback Provision: $2 million of the base price is held back, with $1 million released at the 12-month anniversary and the remaining $1 million at the 18-month anniversary.
- Earn-Out Potential: Up to $25 million total contingent on revenue milestones achieved by the Seller over two 12-month periods (2022 and 2023).
- First Earn-Out Period (2022): Maximum $7.5 million.
- Second Earn-Out Period (2023): Maximum $17.5 million.
- Payment Method: Earn-out amounts payable in a mix of cash and common stock, subject to Seller election in certain circumstances.
- Financial Statements: Not filed with this report as the acquisition did not meet the significance thresholds under Regulation S-X.
Material Changes and Outlook
This filing represents a strategic expansion of Alkami's technology platform through the acquisition of MK Decisioning Systems. The transaction introduces contingent future liabilities tied to the acquired entity's revenue performance. The filing does not provide specific revenue, profit, or cash flow metrics for the Company or the acquired business, nor does it contain updated forward-looking guidance or management commentary beyond the transaction details.
Investor Verification Checklist
- Verify the full text of the Asset Purchase Agreement (Exhibit 2.1) for specific revenue milestones required to trigger earn-out payments.
- Confirm the exact mix of cash versus stock for earn-out payments and any conditions allowing Seller election.
- Review the press release (Exhibit 99.1) for additional strategic context regarding the integration of MK Decisioning Systems.
- Monitor future filings for the release of the $2 million holdback and any earn-out payments due in 2023 and 2024.