Filing Details

South Mountain Merger Corp.

(Name of Issuer)

Class A Common Stock, par value $0.0001 per share

(Title of Class of Securities)

838884203

(CUSIP Number)

Robert Heaselgrave South Mountain LLC 767 Fifth Avenue, 9th Floor New York, NY 10153 (212) 451-2500

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

June 24, 2019

(Date of Event which Requires Filing of this Statement)

 

This Schedule 13D relates to the Class A common stock, par value $0.0001 per share (the “Class A Common Stock”) of South Mountain Merger Corp., a Delaware corporation (the “Issuer”). The address of the Issuer’s principal executive offices is 767 Fifth Avenue, 9^th Floor, New York, NY 10153.

Item 2.  Identity and Background.

(a) (c) (f) This Schedule 13D is being filed by BlueCrest Capital Management Limited (the “Management Company”), as investment manager to a Cayman Islands exempted company (the “Fund”); South Mountain LLC (the “Sponsor”), a Delaware limited liability company; the Sponsor’s Managing Member, Harbour Reach Holdings LLC (“Harbour Reach”), a Delaware limited liability company: Harbour Reach’s managing member, Netherton Investments Limited (“NIL”), a Guernsey, Channel Islands limited company; the sole shareholder of NIL, Netherton Holdings Limited (“NHL”), a Guernsey, Channel Islands limited company; and Michael E. Platt, a natural person and citizen of the United Kingdom (“Mr. Platt” and, together with the Management Company, the Sponsor, Harbour Reach, NIL, and NHL, the Reporting Persons”).

(d) (e) During the last five years, none of the Reporting Persons (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

 

Item 3.  Source and Amount of Funds or Other Consideration.

 

The Sponsor acquired the Founder Shares (as defined below), and the Private Placement Warrants (as defined below), in exchange for capital contribution of $25,000 and $6,954,500, respectively.  Such funds were derived from available working capital of the Sponsor. The Fund expended $22,275,000 of its own investment capital to acquire the Units (as defined below) reported herein as being held on its behalf.

Sponsor and the Issuer (the “Securities Subscription Agreement”), as more fully described in Item 6 of this Schedule 13D, which information is incorporated herein by reference. As described in the Issuer’s registration statement on Form S-1 (File No. 333-231881) under the heading “Description of Securities—Founder Shares,” the shares of Class B common stock will automatically convert into shares of Class A Common Stock at the time of the Issuer’s initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and certain anti-dilution rights and have no expiration date.

 

Units

 

On June 24, 2019, in connection with the Issuer’s initial public offering, the Management Company acquired for the account of the Fund, 2,227,500 units (“Units”) of the Issuer at $10.00 per Unit. Each Unit consists of one share of Class A Common Stock and one-half of one warrant, each whole warrant entitling the holder to purchase one share of Class A Common Stock at $11.50 per share (as described more fully in the Issuer’s Final Prospectus dated June 20, 2018). The warrants included in the Units will become exercisable on the later of 30 days after the completion of the issuer’s initial business combination or 12 months from the closing of the Issuer’s initial public offering. The warrants included in the Units will expire five years after the completion of the Issuer’s initial business combination or earlier upon redemption or liquidation.

 

Private Placement Warrants

 

Simultaneously with the closing of the Issuer’s initial public offering, pursuant to the Private Placement Warrants Purchase Agreement, the Sponsor acquired 6,954,500 warrants (the “Private Placement Warrants”) at a purchase price of $1.00 per Private Placement Warrant. The Private Placement Warrants are identical to the warrants included in the Units sold in the Issuer’s initial public offering, except that the Sponsor has agreed not to transfer, assign or sell any of the Private Placement Warrants (except to certain permitted transferees) until 30 days after the completion of the Issuer’s initial business combination. The summary of such Private Placement Warrants Purchase Agreement contained herein is qualified in its entirety by reference to the full text of such agreement, a copy of which was filed by the Issuer as an exhibit to the Current Report on Form 8-K filed by the Issuer with the SEC on June 25, 2018.

Item 5.  Interest in Securities of the Issuer.

 

(a) (b) (d) Except as set forth below, the aggregate number and percentage of Class A Common Stock beneficially owned by the Reporting Persons on the basis of a total of 25,000,000 shares of Class A Common Stock outstanding, as reported in Exhibit 99.1 to the Current Report on Form 8-K filed by the Issuer on June 28, 2019, are as follows:

 

i.

South Mountain LLC, Harbour Reach Holdings LLC, Netherton Investments Limited and Netherton Holdings Limited

 

The Sponsor may be deemed to beneficially own 6,468,750 shares of Class A Common Stock as a result of the Sponsor’s

 

 

 

ownership of 6,468,750 Founder Shares, which includes up to 218,750 shares subject to forfeiture in the event that the underwriter’s overallotment option is not exercised in full.  The Founder Shares automatically convert into shares of Class A Common Stock at the time of the Issuer’s initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment as described in this Schedule 13D. This ownership represents 20.6% of the Issuer’s Class A Common Stock. 

 

Harbour Reach Holdings LLC, Netherton Investments Limited and Netherton Holdings Limited, may also be deemed to beneficially own the shares owned by the Sponsor. The Sponsor, Netherton Investments Limited and Netherton Holdings Limited may also be deemed to beneficially own 6,954,500 Private Placement Warrants, which are not exercisable until the later of 30 days after the completion of the issuer’s initial business combination or 12 months from the closing of the IPO.

 

The Management Company may be deemed to beneficially own for the account of the Fund 2,227,500 shares of Class A Common Stock included in the Units, or 8.9% of the Issuer’s Class A Common Stock outstanding. The Management Company may also be deemed to beneficially own 1,113,750 warrants included in the Units, which are not exercisable until the later of 30 days after the completion of the issuer’s initial business combination or 12 months from the closing of the IPO.

 

Mr. Platt may be deemed to beneficially own 8,696,250 shares of Class A Stock, or 27.6% of the Issuer’s Class A Common Stock outstanding, which consists of the Founder Shares owned by the Sponsor and the shares included in the Units purchased by the Management Company for the account of the Fund. Of the Founder Shares, up 218,750 are subject to forfeiture in the event that the underwriter’s overallotment option is not exercised in full. Mr. Platt may also be deemed to own 1,113,750 warrants included in the Units and the 6,954,500 Private Placement Warrants, which are not exercisable until the later of 30 days after the completion of the issuer’s business combination or 12 months from the closing of the IPO.

(c) None of the Reporting Persons has effected any transactions in the Issuer’s Class A Common Stock during the 60 days preceding the date of this report, except as described in Item 4 and Item 6 of this Schedule 13D which information is incorporated by reference.

(e) Not applicable.

 

 

 Item 6.  Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

The responses to Items 3, 4 and 5 of this Schedule 13D are incorporated by reference into Item 6 of this Schedule 13D.

Pursuant to Rule 13d-1(k) promulgated under the Exchange Act, the Reporting Persons have entered into a Joint Filing Agreement, a copy of which is filed with this Schedule 13D as Exhibit 1, with respect to the joint filing of this Schedule 13D and any amendment or amendments thereto.

Securities Subscription Agreement between the Issuer and Sponsor

In connection with the organization of the Issuer, 6,468,750 shares of Class B common stock (after giving effect to a 1.125-for-1 stock split that took effect on June 19, 2019) were purchased by the Sponsor for the amount of $25,000, pursuant to the Securities Subscription Agreement. Under the Securities Subscription Agreement, up to 218,750 Founder Shares remain subject to forfeiture to the extent that the underwriter of the Issuer’s initial public offering does not exercise its overallotment option in full.

The description of the Securities Subscription Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which is filed as an exhibit hereto.

Registration Rights Agreement

On June 19, 2019, in connection with the Issuer’s initial public offering, the Issuer, the Sponsor and the Management Company entered into a registration rights agreement, pursuant to which the Holders (as defined therein) are entitled to request that the Issuer register certain of its securities held by them for sale under the Securities Act and to have the securities covered thereby registered for resale pursuant to Rule 415 under the Securities Act. In addition, the holders have the right to include their securities in other registration statements filed by the Issuer. The summary of such registration rights agreement contained herein is qualified in its entirety by reference to the full text of such agreement, a copy of which is filed as an exhibit hereto.

Insider Letter

On June 19, 2019, the Issuer entered into a letter agreement (the “Letter Agreement”) with the Sponsor and the Issuer’s directors and officers. Pursuant to the Letter Agreement, the Sponsor has agreed that if the Issuer seeks stockholder approval of a proposed business combination it will vote all shares held by it in favor of such proposed business combination.

Pursuant to the Letter Agreement, the Sponsor has agreed not to transfer any Founder Shares (or shares of Common Stock issuable upon conversion thereof) until one year after the completion of the Issuer’s initial business combination or earlier if, subsequent to such business combination, (x) if the last sale price of the Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-

 

 

 

trading day period commencing at least 150 days after the Issuer’s initial business combination or (y) the Issuer consummates a subsequent liquidation, merger, share exchange or other similar transaction that results in all of the Issuer’s stockholders having the right to exchange their Common Stock for cash, securities or other property. Notwithstanding the foregoing, the Letter Agreement provides exceptions pursuant to which the Sponsor can transfer such shares to certain permitted transferees as further described in the Letter Agreement. Under the Letter Agreement, neither the Private Placement Warrants nor the shares underlying such warrants may be transferred (except to certain permitted transferees) until 30 days after the consummation of the initial business combination.

Pursuant to the Letter Agreement, the Sponsor has also agreed not to propose any amendment to the Issuer’s Amended and Restated Certificate of Incorporation that would modify the substance or timing of the Issuer’s obligation to redeem the public shares if the Issuer does not complete an initial business combination within 24 months from the closing of the IPO. Under the Letter Agreement, the Sponsor also agreed it will not propose any amendment to the Issuer’s Amended and Restated Certificate of Incorporation that would affect the substance or timing of the Issuer’s obligation to redeem the shares of Common Stock underlying the units sold in the Issuer’s IPO if the Issuer does not complete a business combination within 24 months from the closing of its initial public offering unless the Issuer provides its public stockholders with the opportunity to redeem their shares upon approval of any such amendment.

Under the Letter Agreement, the Sponsor agreed to waive, with respect to any shares of the Common Stock held by it, any redemption rights it may have in connection with the consummation of a business transaction, including, without limitation, any such rights available in the context of a stockholder vote to approve such business transaction or in the context of a tender offer made by the Issuer to purchase shares of the Common Stock.

The Sponsor also agreed that in the event of the liquidation of the Trust Account of the Issuer (as defined in the Letter Agreement), it will indemnify and hold harmless the Issuer against any and all loss, liability, claims, damage and expense whatsoever which the Issuer may become subject as a result of any claim by any third party for services rendered or products sold to the Issuer, or by any prospective target business with which the Issuer has entered into a letter of intent, confidentiality or other similar agreement for a business combination, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount of funds in the Trust Account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the Trust Account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes; provided that such indemnity shall not apply if such third party or prospective target business executes an agreement waiving any claims against the Trust Account.

The description of the Letter Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which was filed as an exhibit hereto.

 

 

Item 7.  Material to Be Filed as Exhibits.

 

 

 

 

 

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated:  July 5, 2019

 

	SOUTH MOUNTAIN LLC
	By:	Harbour Reach Holdings LLC, its Managing Member
	By:	Netherton Investments Limited, its Managing Member
	By:	/s/ Robert Heaselgrave
		Name:	Robert Heaselgrave
		Title:	Director

 

	BLUECREST CAPITAL MANAGEMENT LIMITED
	By:	/s/ Robert Heaselgrave
		Name:	Robert Heaselgrave
		Title:	Director

 

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