NLS Equipment Finance and Leasing Expenses Company Attempted to Perpetuate Same Scheme Blocked by OAG’s Prior Suit and Victory

NEW YORK – New York Attorney General Letitia James has won another major victory to protect small business owners in New York and across the country from predatory and deceptive business practices. A decision and order, issued yesterday afternoon, granted a petition filed by Attorney General James last November, which sought to — among other things — permanently block NLS Equipment Finance LLC; Leasing Expenses Company, LLC; and several related entities and individuals from engaging in fraudulent practices and enforcing fraudulent equipment leases that were rescinded under a June 2020 court order in an earlier proceeding brought by the Office of the Attorney General (OAG), since 1991, and until the OAG’s earlier proceeding halted its fraudulent schemerthern Leasing deceptively and illegally induced small businesses into abusive and overpriced financing leases for inexpensive credit card processing equipment.

Attorney General James said: “This decision demonstrates that efforts to evade the rule of law will not be tolerated and that we will continue to hold fraudulent businesses’ feet to the fire, even after a victory. Despite being ordered to shut down last year, Northern Leasing and the individuals behind it attempted to continue their fraudulent practices, but this order sends a clear message that creating new corporate entities to continue deceptive and illegal practices that have been outlawed will never be acceptable practice. Much-needed money will now be put back into the pockets of struggling small business owners around the country, many of which continue to suffer from the impacts of the COVID-19 public health crisis.”

In the earlier proceeding, the OAG alleged that Northern Leasing Systems, Inc. (Northern Leasing), its affiliated companies, and its principal, Jay Cohen, engaged in fraudulent conduct by targeting small, family-owned businesses — such as flower shops, hair salons, automotive repair shops, bodegas, delis, restaurants, and bars — and trapped them into overpriced, never-ending lease agreements for credit card processing equipment. The lawsuit further alleged that Northern Leasing abused the judicial process by suing to collect on these leases in the New York City Civil Court. Deputy Chief Administrative Judge George J. Silver — as a co-petitioner in the proceeding — sought to vacate default judgments obtained by fraud, deception, or other improper means.

The June 2020 New York County State Supreme Court ruling found that the OAG proved that Northern Leasing engaged in fraudulent and illegal conduct, including finding that Northern Leasing’s method of procuring its lease agreements was deceptive and “created an enterprise conducive to fraud.” The court granted sweeping relief, including rescissioning hundreds of thousands of leases and restitution to defrauded merchants. Additionally, the court ordered a permanent injunction against Northern Leasing and the other entities from conducting the business of equipment finance leasing or the collection of debts under equipment finance leases. It blocked them from purchasing, financing, transferring, servicing, or enforcing equipment finance leases. That decision was recently affirmed by the New York State Appellate Division of the Supreme Court, First Department.

In November 2020, the OAG brought forward another separate proceeding after discovering that Northern Leasing’s owners and officers had created two new entities — NLS Equipment Finance and Leasing Expenses Company — to continue defrauding small businesses using the same scheme barred by the court in the prior litigation, as well as to continue collecting on leases rescinded by the June 2020 court order.

The companies found liable by this ruling — also issued by the New York County State Supreme Court — were operated by former Northern Leasing Chief Financial Officer Ariel Schachter and former Northern Leasing Officer Sara Krieger and were owned by trusts that benefited the families of Northern Leasing’s owners, Jay Cohen, and Leonard Mezei. The court found that these companies had “risen on [Northern Leasing’s] ashes” in an earlier December ruling granting a temporary restraining order barring them from collecting on equipment leases.

In yesterday’s decision and order, the court found that the different entities’ efforts to differentiate their business operations from those of Northern Leasing Systems did not “negate their liability” and — if allowed to prevail — “would all but obliterate the spirit and purpose” of the June order granted by Justice Lucy Billings. The court ordered Northern Leasing and the other entities to disgorge any funds acquired due to their fraudulent practices and to make restitution to victims of their scheme.

The parties named in this proceeding include Leasing Expenses Company LLC; NLS Equipment Finance LLC; Leonard Mezei; Ariel Schacter; Sara Krieger; Jay Cohen; a Jay Cohen Family Trust; Fieldston Capital LLC; and JS Ventures Holding LLC.

This matter was handled by Assistant Attorney General Mark Ladov and Special Counsel Mary Alestra, under the supervision of Deputy Bureau Chief Laura J. Levine and Bureau Chief Jane M. Azia — all of the Consumer Frauds and Protection Bureau. The Consumer Frauds and Protection Bureau is a part of the Division for Economic Justice, overseen by Chief Deputy Attorney General Chris D’Angelo and First Deputy Attorney General Jennifer Levy.

Source: Press Release
Date: February 27, 2021
Attorney General’s Press Office/212-416-8060 
nyag.pressoffice@ag.ny.gov

Berkshire Grey is a pure-play robotics company offering fully integrated, artificial intelligence-based software and hardware solutions to automate business operations in warehouses and logistics fulfilment centres – meeting consumer demands and exponential e-commerce growth.

 Combined Company to have an estimated post-transaction equity value of up to $2.7 billion

 Transaction expected to provide up to $413 million in cash proceeds, including a fully committed PIPE of $165 million anchored by Chamath Palihapitiya, Founder and CEO of Social Capital, Hedosophia, and funds and accounts managed by BlackRock.

 Current Berkshire Grey shareholders Khosla Ventures, New Enterprise Associates, Canaan Partners, and SoftBank Group Corp. are rolling 100% of their equity in the combined Company.

Berkshire Grey expects to have $507 million cash, which will be used to fund operations and support new and existing growth initiatives, and no debt on its balance sheet following the combination.

Bedford, MA & Washington, D.C. – February 24, 2021 – Berkshire Grey (“B.G.” or the “Company”), a developer of integrated artificial intelligence (“A.I. “) and robotic solutions for e-commerce, retail replenishment, and logistics, has entered into a definitive agreement with Revolution Acceleration Acquisition Corp (Nasdaq: RAAC) “RAA”), a particular purpose acquisition company, to create a leading publicly listed robotics and automation solutions company with a post-transaction equity value of up to $2.7 billion.

 Founded in 2013 by the current Chief Executive Officer, Tom Wagner, PhD, the Former Chief Technology Officer at iRobot, B.G. is a pure-play robotics company offering fully integrated, AI-based software and hardware solutions to automate warehouse and logistics fulfilment centres business operations. The Company’s robust solutions help retailers and logistics companies meet the exponential growth of e-commerce and ever-increasing consumer demands. B.G.’s management, engineering, and commercial teams have extensive robotics expertise and deep industry experience.

 The Company has achieved strong momentum since emerging from stealth mode in 2018, propelled by the accelerating consumer shift toward e-commerce and the resulting need for retailers to adapt their supply chain and warehouse operations to meet consumer demands for better selection, lower prices, and faster shipping. Roughly 5% of warehouses are automated today, highlighting the substantial market opportunity for solutions. B.G.’s AI-enabled robotics solutions are scalable, adaptable, and reliable – providing businesses with a holistic approach to automating tasks that speed the flow of goods to consumers. The Company’s offerings combine proprietary A.I. with differentiated hardware to create robotic picking systems and multiple types of automated mobility systems, incorporated in an orchestrated fashion to drive operational efficiencies. Differentiated hardware includes complete robots, sensing, gripping, and machine vision systems. More than 300 patent filings protect the intellectual property supporting BG.’s market-leading solutions. Operational efficiencies achieved by B.G. customers typically result in a return on their investment in as little as two to three years.

 Order backlog and ongoing negotiations with tCompany’sy’s current customers, which include multi-national retail, e-commerce, and package logistics companies, provide meaningful visibility into projected revenues for 2021 and 2022. Additionally, B.G. intends to grow its commercial organization to meet the increasing service demand, deepen its relationships in key industry sectors, and build new value-added services.

 John Delaney, the Chief Executive Officer of RAAC, will remain on the Board of Directors of the combined Company upon completion of the transaction”.

“Berkshire Grey was founded to help our customers compete even more favourably in the rapidly evolving worlds of retail and logistics” s,” said Tom Wagner, Founder and Chief Executive Officer of B.”. “Consumer expectations have changed, putting more pressure on supply chain operations to get the right goods to the right places at the right times, as efficiently as possible. Over the last 12 months, the pandemic amplified the already high pressure to transform, so today, it is no longer a question of if companies might transform but how quickly. We are incredibly excited about this transaction, which will enable Berkshire Grey to accelerate growth and provide new and existing customers with our leading robotics solutions” s,” Wagner concluded. “Today’s consumers expect a better selection of goods, at lower prices, with immediate” e shipping” e,” said John Delaney, the Chief Executive Officer of RAA”. “In our judgment, BerkshiGrey’s best-in-class technology and uniquely integrated solutions provide a critical pathway for companies to adapt to these changing needs. TCompany’s strong relationships with an installed base of blue-chip clients are a testament to its ability to deliver tangible and measurable results that empower companies to compete even more effectively. Steve Case and I are honoured to partner with Tom and the rest of BerkshiGrey’s talented team and investors to realize this singular opportunity to revolutionize how businesses operate.

I look forward to joining their Board of Directors” s,” added Delaney.

Transaction Overview

The transaction is expected to provide up to $413 million in cash proceeds, including a fully committed PIPE of $165 million, with current B.G. shareholders Khosla Ventures, New Enterprise Associates, Canaan Partners, and SoftBank Group Corp. rolling 100% of their equity into the combined Company. The PIPE is anchored by Chamath Palihapitiya, founder and CEO of Social Capital, Hedosophia, and funds and accounts are managed by BlackRock.

 At closing, B.G. expects to have approximately $507 million cash, which will be used to fund operations and support new and existing growth initiatives, and no debt on its balance sheet. All references to available money from the trust account and retained transaction proceeds are subject to any redemptions by the public shareholders of RAAC and payment of transaction expenses.

 The transaction, which has been unanimously approved by RAAC’sC’s Board of Directors aB.G.’s. ‘s Board of Directors, is expected to close during the second quarter of 2021 and is subject to approval RAAC’sC’s stockholders and other customary closing conditions.

 Advisors

Credit Suisse Securities (USA) LLC served as an exclusive financial advisor and capital markets advisor to B.G. and acted as the sole placement agent on the PIPE. J.P. Morgan Securities LLC is serving as the exclusive financial advisor to RAAC. Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to RAAC. Goodwin Procter LLP acted as B.G.’s. G.’s ladvisorisor. Paul, Weiss, Rifkind, Wharton & Garrison LLP serves as legal advisor to Credit Suisse Securities (USA) LLC.

 Additional information about the proposed transaction, including a copy of the merger agreement and investor presentation, will be provided in a Current Report on Form 8-K containing an investor presentation to be filed by RAAC with the Securities and Exchange Commission and available at http://www.sec.gov.  

Investor Webcast

The investor webcast will be archived and available for replay at https://revolutionaac.com/ at 8:00 AM ET.

Cautionary Statement Regarding Forward-Looking Statements

 This communication contains certain forward-looking statements within the meaning of the federal securities laws concerning the proposed transactions between B.G. and RAAC. Forward-looking statements may be identified by the use of words such as “s “, estim “t”,” “p” a “,” “proj” c”,” “force” s”,” “int” n”,” “exp” c”,” “anticipate” t”,” “beli” v”,” “s” e”,” “start” g”,” “fut” r”,” “opportunity” t”,” “a”,” “tar” e”,” “sho” l”,” “w” l”,” “wo “l”,” “will “b”,” “will conti “u”,” “will likely res” lt,” or similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding the proposed transaction between B.G. and RAAC, including statements about the proposed transaction’s expected timing, completion, and effects. These statements are based on various assumptions, whether or not identified in this document, and on the current expectations of RRAAC and management. They are not predictions of actual performance and, as a result, are subject to risks and uncertainties. These forward-looking statements are provided for illustrative purposes only. They are not intended to serve and must not be relied on by any investor as a guarantee, an assurance, a prediction, or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of RAAC and B.G. These forward-looking statements are subject to several risks and uncertainties, including, but not limited to,

1. the risk that the proposed transaction may not be completed promptly or at all, which may adversely affect the price ofRAAC’ss securities,
2. the risk that the proposed transaction may not be achieved byRAAC’ss business combination deadline and the potential failure to obtain an extension of the business combination deadline if sought by RAAC,
3. the inability to satisfy the conditions to the consummation of the proposed transaction, including the adoption of the merger agreement by the stockholders of RAAC, the satisfaction of the minimum trust account amount following redemptions byRAAC’ss public stockholders, and the receipt of certain governmental and regulatory approvals,
4. the inability to complete the PIPE investment in connection with the proposed transaction,
5. the lack of a third-party valuation in determining whether or not to pursue the proposed transactions,
6. the occurrence of any event, change, or other circumstance that could give rise to the termination of the merger agreement,
7. the amount of redemption requests made byRAAC’ss public stockholders,
8. the effect of the announcement or pendency of the proposed transaction on onB.G.’ss business relationships, operating results, and business generally,
9. Risks that the proposed transaction disrupts the current plans and operations of B.G. and potential difficulties in B.G. customer and employee retention as a result of the proposed transaction,
10. risks relating to the uncertainty of the projected financial information concerning B.G.,
11. risks relating to increasing expenses of B.G. in the future andB.G.’ss ability to generate revenues from a limited number of customers,
12. risks associated with B.G. developing the majority of its revenues from a limited number of products and customers,
13. the passing of new laws and regulations governing the robotics and artificial intelligence industries that potentially resB.G.’sB.G.’s business or increase its costs,
14. Potential litigation relating to the proposed transaction that could be instituted against B.G., RAAC, or their respective directors and officers, including the effects of any outcomes related to it,
15. the ability to maintain the listiRAAC’sRAAC’s securities on The Nasdaq Stock Market LLC, either before or after the consummation of the business combination,
16. priRAAC’sRAAC’s securities may be volatile due to a variety of factors, including changes in the competitive and highly regulated industries in which RAAC plans to operate, variations in operating performance across competitors, changes in laws and regulations affecting’s business, and changes in the combined capital structure,
17. the ability to implement business plans, forecasts, and other expectations after the completion of the proposed transaction and identify and realize additional opportunities,
18. unexpected costs, charges, or expenses resulting from the proposed transaction,
19. risks of downturns and a changing regulatory landscape, and
20. the effects of natural disasters, terrorist attacks, and the spread and reduction of infectious diseases, such as COVID-19, on the proposed transactions or on the ability to implement business plans, forecasts, and other expectations after the proposed transactions are completed.

The preceding list of factors is not exhaustive. You should carefully consider the primary factors and the other risks and uncertainties described in” the “Risk F “ctors” sectiRAAC’sRAAC’s registration statement on Form S-1 (File No. 333-250850)” (the “Fo” m S-1″), the registration statement on Form S-4 discussed below (when it becomes available) and other documents filed by RAAC from time to time with the U.S. Securities and Exchange Commission” (th” “SEC”). These filings identify and address other significant risks and uncertainties that could cause actual events and results to differ materially from those in the forward-looking statements. If any of these risks materialize or our assumptions prove incorrect, actual events and results could differ materially from those in the forward-looking statements. There may be additional risks that neither RAAC nor B.G. presently knows or that RAAC and B.G. currently believe are immaterial that could also cause actual events and results to differ from those contained in the forward-looking statements. Also, forward-looking statements reRAAC’sRAAC’B.G.’sB.G.’s expectations, plans, or forecasts of future events and views as of the date of this document. RAAC and B.G. anticipate that subsequent events and developments will cause RAAC’s assessments to change. While RAAC and B.G. may elect to update these forward-looking statements at some point in the future, RAAC and B.G. expressly disclaim any obligation to do so unless required by applicable law. These forward-looking statements should not be relied upon as representative of RAAC’s RAAC’B.G.’s B.G.’s assessments as of any date after this document. Accordingly, undue reliance should not be placed upon the forward-looking statements. Neither RAAC nor B.G. guarantees that either RAAC, B.G., or the combined Company will achieve the results or other matters outlined in the forward-looking statements.

Additional Information and Where to Find It

This communication relates to the proposed business combination between RAAC and B.G.” (the “Business Combi “ation”). RAAC intends to file a registration statement on Form S-4 with the SEC, which will include a preliminary proxy statement to be distributed to holdeRAAC’sRAAC’s common stock in connectionRAAC’sRAAC’s solicitation of proxies for the voRAAC’sRAAC’s stockholders concerning the Business Combination. After the registration statement has been filed and declared effective, RAAC will mail a definitive proxy statement/prospectus to its stockholders as of the record date established for voting on the Business Combination and the other proposals regarding the Business Combination outlined in the registration statement. RAAC may also file other documents with the SEC regarding the proposed transaction. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND PROXY STATEMENT / PROSPECTUS WHEN THEY BECOME AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC AND THE DEFINITIVE VERSIONS THEREOF (WHEN THEY BECOME AVAILABLE), AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. When available, the documents filed by RAAC with the SEC, including the preliminary proxy statement/prospectus, may be obtained free of charge onthe SEC’s website at http://www.sec.gov. In addition, the documents filed by RAAC may be obtained free of charge upon written request to RAAC at 1717 Rhode Island Ave N.W., Suite 1000, Washington, DC 20036, Attn: Investor Relations.

Participants in the Solicitation

RAAC and B.G. and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from stockholders of RAAC in connection with the proposed transaction under the rules of theRAAC’sRAAC’s stockholders and other interested persons may obtain, without charge, more detailed information regarding the names, affiliations, and interests of directors and executive officers of RARAAC’sRAAC’s Form S-1 and its other filings with the SEC. Additional information regarding persons who may, under the rules of the SEC, be deemed the participants in the proxy solicitatiRAAC’sRAAC’s stockholders in connection with the proposed Business Combination and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the preliminary proxy statement/prospectus and will be contained in other relevant materials to be filed with the SEC regarding the proposed Business Combination (if and when they become available). You may obtain free copies of these documents onthe SEC’s website at http://www.sec.gov. Copies of documents filed with the SEC by RAAC using the contact information above will also be available free of charge from RAAC.

No Offer or Solicitation

This communication is not a proxy statement or solicitation or a proxy, consent or authorization concerning any securities or in respect of the proposed Business Combination. It shall not constitute an offer to sell or a solicitation of an offer to buy the securities of RAAC, B.G. or the combined Company, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful before registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be deemed to be made except using a prospectus meeting the requirements of Section 10 of the Securities Act and otherwise by applicable law.

4

About Berkshire Grey

Berkshire Grey helps customers radically change the essential way they do business by delivering game-changing technology that combines A.I. and robotics to automate fulfilment, supply chain, and logistics operations. Berkshire Grey solutions are a fundamental engine of change that transforms pick, pack, move, store, organize and sort operations to deliver a competitive advantage for enterprises with today’s connected consumers. Berkshire Grey customers include Global 100 retailers and logistics service providers. 

About Revolution Acceleration Acquisition Corp

 Revolution Acceleration Acquisition Corp focuses on value-creation opportunities at the forefront of rapid technological innovation and economic growth. We believe that alternatives to the traditional IPO process create an essential avenue for transformative, category-defining companies to quickly and efficiently access public markets. This enables them to scale their business and create value for a broad and diverse group of investors. 

Source: Press Release

Date: February 24, 2021

CONTACTS

 Tracy Zuckerman Van Grack
Revolution
Tracy.VanGrack@revolution.com
Sara Evans / Kerry Golds
Finsbury Glover Hering
RAAC-US@finsbury.com