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Social Leverage Acquisition Corp I *

Social Leverage Acquisition Corp I *

Jan 25, 2021 by Kristi Marvin

LIQUIDATION – 2/12/24 – LINK

  • The Company anticipates that the last day of trading in the Class A ordinary shares will be February 26, 2024.
    • The per-share redemption price will be approximately $10.31.

The below-announced combination was terminated on 9/22/23.  It will remain on the page for reference purposes only. Once a new combination is announced it will be added to the top of the page.

PROPOSED BUSINESS COMBINATION: W3BCLOUD Holdings Inc.

ENTERPRISE VALUE: $700 million
ANTICIPATED SYMBOL: tbd

Social Leverage Acquisition Corp I proposes to combine with W3BCLOUD Holdings Inc.

W3BCLOUD provides the compute and storage infrastructure to power the decentralized application layer for Web3 protocols.

Founded in 2018, W3BCLOUD is a joint venture among AMD, ConsenSys, and the company’s founders.

With today’s transaction, W3BCLOUD aims to accelerate its investment in its platform to drive adoption by the blockchain developer community. Additionally, the company expects to benefit from emerging Web3 use cases such as Web3-enabled gaming, NFTs, Defi, and the Metaverse, further reinforcing its position as a leading Web3 infrastructure provider and diversifying revenue.

SUBSEQUENT EVENT – 5/26/23 – LINK

  • The SPAC entered into a non-redemption agreement with several unaffiliated third parties in exchange for them agreeing not to redeem an aggregate of 297,767 shares
    • The SPAC will issue between 1,025,640 and 1,189,089 shares of Class A common stock upon the closing of the Business Combination to the non-redeeming shareholders
  • One of the non-redeeming shareholders agreed to purchase up to approximately 47,453 additional shares of the Company’s Class A common stock

EXTENSION – 5/17/23 – LINK

  • The SPAC approved the extension from May 17, 2023 to February 17, 2024.
    • 95,152 shares were redeemed at the meeting for $10.17 per share.
    • No contribution will be made into the trust account.

SUBSEQUENT EVENT – 4/21/23 – LINK

  • New Business Combination transaction terms adjust W3BCLOUD’s pro forma enterprise value from $1.25 billion to $700 million, ~44% reduction
  • SLAC also announced that W3BCLOUD has agreed to lower the minimum cash balance condition required to be satisfied at the closing of the Business Combination from $150 million to $40 million.
  • Shareholders holding a total of 650,000 shares of common stock will be issued an unknown number of additional shares at closing to not redeem.
    • In consideration of the agreements described above, the Company agreed, subject to the respective Holder’s compliance with their obligations under the Non-Redemption Agreement, to issue to the Holders (or designees of such Holders) an aggregate of 2,238,890 shares of Class A common stock upon the closing of the Business Combination.
    • The Holders will have the option to terminate the Non-Redemption Agreements on July 1, 2023, if and only if the Company or W3BCLOUD do not, by June 30, 2023, execute definitive agreements with respect to any private placement transactions, debt financings or other funding to the Company or W3BCLOUD in the form of equity or convertible or non-convertible debt, which together provide for an aggregate of at least $40 million in funding to the Company or W3BCLOUD.
  • W3BCLOUD and SLAC had entered into a non-binding term sheet with B. Riley for a $150 million committed equity facility to further support W3BCLOUD’s growth strategy.
    • The term sheet covers a committed equity facility that provides W3BCLOUD with the right, without obligation, to sell and issue up to $150 million of its Class A common stock over a period of 24 months to B. Riley at W3BCLOUD’s sole discretion, subject to certain limitations and conditions.
    • The availability of the B. Riley facility remains subject to definitive documentation.
  • W3BCLOUD Partners Limited, W3BCLOUD and ConsenSys amended their commitment letter to provide for ConsenSys’ commitment being subject to customary due diligence investigations satisfactory to ConsenSys, the entrance into subscription agreements by other PIPE investors for the purchase of an aggregate of at least $35 million and no company material adverse effect occurring.

Sponsor Agreement

  • Of the 8,625,000 shares of SLAC’s Class B common stock (the “Sponsor Shares”), 4,312,500 Sponsor Shares shall be transferred (or otherwise forfeited and new shares of the Company’s Class A common stock) to non-redeeming stockholders of the Company, to certain investors in a potential PIPE financing in connection with the consummation of the Business Combination or for other purposes agreed to by the Sponsor, SLAC and W3BCLOUD (the “Incentive Shares”).
    • Any Incentive Shares which are not utilized in connection with non-redemption agreements, PIPE financings or for other purposes agreed to by the Sponsor, SLAC and W3BCLOUD will be surrendered by the Sponsor at the closing of the Business Combination without consideration.
    • Prior to this amendment, the Sponsor had agreed to utilize (or otherwise surrender) 2,587,500 Sponsor Shares for this purpose.

EXTENSION – 12/27/22 – LINK

  • The SPAC confirmed the extension from February 17, 2023 to May 17, 2023
    • 32,847,714 shares were redeemed at the meeting.

TRANSACTION

  • The transaction values the combined company at an enterprise value of $1.25 billion.
  • The company will receive up to $345 million in proceeds from SLAC’s cash in trust (assuming no redemptions).
  • W3BCloud has received commitments for $40 million from ConsenSys, SK Inc., and others for new investments in connection with the transaction
  • W3VBCloud also has an agreement with AMD for an additional equity investment of $10 million, each of which is subject to certain conditions.
  • The parties intend to raise additional capital of up to $100 million post-announcement, though there is no guarantee that such funds will be able to be raised on favorable terms or at all.

Social Leverage 1 Transaction Overview

SPAC FUNDING

  • W3BCloud has received commitments for up to $40 million from ConsenSys, SK Inc., and others for new investments in connection with the transaction
  • W3VBCloud also has an agreement with AMD for an additional equity investment of $10 million, each of which is subject to certain conditions.
    • Together totaling $50M
  • Intend to raise $100M post-announcement (not guaranteed)
  • On April 21, W3BCLOUD Partners Limited, W3BCLOUD and ConsenSys amended this commitment letter to provide for ConsenSys’ commitment being subject to customary due diligence investigations satisfactory to ConsenSys, the entrance into subscription agreements by other PIPE investors for the purchase of an aggregate of at least $35 million and no company material adverse effect occurring.

Equity Facility

  • W3BCLOUD and SLAC had entered into a non-binding term sheet with B. Riley for a $150 million committed equity facility to further support W3BCLOUD’s growth strategy.
    • The term sheet covers a committed equity facility that provides W3BCLOUD with the right, without obligation, to sell and issue up to $150 million of its Class A common stock over a period of 24 months to B. Riley at W3BCLOUD’s sole discretion, subject to certain limitations and conditions.
    • The availability of the B. Riley facility remains subject to definitive documentation.

Non-Redemption Agreement

  • Shareholders holding a total of 650,000 shares of common stock will be issued an unknown number of additional shares at closing to not redeem.
    • In consideration of the agreements described above, the Company agreed, subject to the respective Holder’s compliance with their obligations under the Non-Redemption Agreement, to issue to the Holders (or designees of such Holders) an aggregate of 2,238,890 shares of Class A common stock upon the closing of the Business Combination.
    • The Holders will have the option to terminate the Non-Redemption Agreements on July 1, 2023, if and only if the Company or W3BCLOUD do not, by June 30, 2023, execute definitive agreements with respect to any private placement transactions, debt financings or other funding to the Company or W3BCLOUD in the form of equity or convertible or non-convertible debt, which together provide for an aggregate of at least $40 million in funding to the Company or W3BCLOUD.

SPONSOR AGREEMENT

  • Of the 8,625,000 shares of SLAC’s Class B common stock (the “Sponsor Shares”), 4,312,500 Sponsor Shares shall be transferred (or otherwise forfeited and new shares of the Company’s Class A common stock) to non-redeeming stockholders of the Company, to certain investors in a potential PIPE financing in connection with the consummation of the Business Combination or for other purposes agreed to by the Sponsor, SLAC and W3BCLOUD (the “Incentive Shares”).
    • Any Incentive Shares which are not utilized in connection with non-redemption agreements, PIPE financings or for other purposes agreed to by the Sponsor, SLAC and W3BCLOUD will be surrendered by the Sponsor at the closing of the Business Combination without consideration.
    • Prior to this amendment, the Sponsor had agreed to utilize (or otherwise surrender) 2,587,500 Sponsor Shares for this purpose.

EARNOUT

  • Sponsor
    • 20% of the founder’s shares (1,725,000 shares) will vest until trading at or above $12.50/Share and $15.00/Share
  • Company
    • 25M shares into three tranches:
      • $12.50, $15.00, $17.50

LOCK-UP

  • Sponsor
    • 12 months from the Closing Date.
  • Company
    • 180 days from the Closing Date.

NOTABLE CONDITIONS TO CLOSING

  • The obligation of W3BCLOUD to consummate the Business Combination is subject to the aggregate cash proceeds available for release from Social Leverage’s trust account (after giving effect to any redemptions of public shares, if any), together with the proceeds from the Subscription Agreements, Transaction Financing and any private capital funded to W3BCLOUD, equaling no less than $150,000,000.
  • SLAC also announced that W3BCLOUD has agreed to lower the minimum cash balance condition required to be satisfied at the closing of the Business Combination from $150 million to $40 million. – LINK

NOTABLE CONDITIONS TO TERMINATION

  • The Business Combination Agreement may be terminated by either Social Leverage or W3BCLOUD if the business combination is not consummated by July 31, 2023.
  • If any governmental entity has issued an order or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by the Business Combination Agreement and such order or other action has become final and non-appealable.

ADVISORS

  • Perella Weinberg Partners is acting as exclusive financial advisor to W3BCLOUD
  • Barclays is acting as exclusive M&A advisor to SLAC.
  • Barclays and B. Riley Securities are acting as capital markets advisors and joint placement agents to SLAC.
  • Blueshirt Capital Advisors is serving as an investor relations advisor to W3BCLOUD.
  • Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to W3BCLOUD.
  • Ropes & Gray LLC is acting as legal counsel to SLAC.
  • Latham & Watkins LLP is acting as legal advisor to Barclays and B. Riley Securities.

MANAGEMENT & BOARD

Executive Officers

Howard Lindzon, 55
Chief Executive Officer and Director

As a founder and managing partner of Social Leverage since 2009, Mr. Lindzon has made numerous early-stage investments in the fintech sector including investments in Robinhood, Rally Road, eToro and Alpaca. He has invested in over 125 companies and has collaborated and built deep relationships with hundreds of co-investors and entrepreneurs. Prior to founding Social Leverage in 2009, his early-stage investment exits included sales to Comcast, Google, Pandora, Salesforce, Twitter and several other public listings. Mr. Lindzon co-founded StockTwits, a social media platform with over four million registered users where investors and traders share investment ideas, in 2008 and served as its Chief Executive Officer from 2008 to 2013. Prior to StockTwits, Mr. Lindzon founded WallStrip, a daily news video podcast which attracted investments from Roger Ehrenberg, Brad Feld and Mark Pincus and was later purchased by CBS after airing over 300 episodes. With over 20 years of experience, he is regarded as an astute deal maker based on his track record of starting, managing and identifying promising opportunities and further nurturing their growth to become established players. He is a public figure with over 265,000 Twitter followers, 220,000 Stocktwits followers and 8,000 e-mail subscribers as of December 31, 2020, a daily blog and a weekly podcast. He graduated with a Master of Business Administration degree from Arizona State University and a Master of Arts degree in International Management from the Thunderbird School of Global Management.

Douglas Horlick, 48
President and Chief Operating Officer

Mr. Horlick is the founder of Estancia LLC, a strategy and advisory consulting firm based in Arizona established in 2015. Leveraging his industry expertise, he works closely with C-suite executives on both strategy and global sales initiatives. He has over 20 years of experience in the securities industry, specifically within sales and trading. Prior to Estancia LLC, Mr. Horlick held senior securities positions at Goldman Sachs (Managing Director, Securities Division, from 2009 to 2014), Bank of America (Managing Director, Securities Division, from 2005 to 2009) and Citigroup (Vice President, Securities Division, from 2002 to 2005). In these roles, Mr. Horlick’s responsibilities all within the Foreign Exchange Division included Managing Director in charge of Foreign Exchange Global Client Coverage, Global Prime Brokerage, Institutional Sales in the Americas, Consumer Sales and Hedge Fund Sales. He graduated from the University of Michigan with a degree in Organizational Studies.

Board of Directors

Paul Grinberg, 59
Chairman of the Board of Directors

Mr. Grinberg has over 17 years of experience as a Director, Chairman, President or Chief Financial Officer of several NASDAQ and NYSE companies and more than 35 years of experience spanning mergers and acquisitions, capital raising and financial management. He currently serves as the Chairman of Axos Financial, Inc., a nationwide, digital-first bank that provides consumer and business banking products through its low-cost distribution channels and affinity partner. He has served as a director of Axos Financial, Inc. since April 2004 and as the Chairman of its board of directors since February 2017. He played an important role in taking the company public and growing earnings from $2 million to $183 million from 2004 to 2020. Mr. Grinberg provides advisory services to private equity, credit funds and venture capital firms and their related businesses with a focus on financial services and financial technology. He also serves as a director to several credit funds and private companies. Prior to Axos, Mr. Grinberg served as President, Executive Vice President and Chief Financial Officer of Encore Capital Group and Chief Financial Officer of Telespectrum Worldwide, Inc. Mr. Grinberg also served as partner and a senior member of the M&A services group at Deloitte, where he was employed for 14 years. During his tenure at Deloitte and in his capacity as an executive at various public and private companies, he worked on dozens of transactions including IPOs, acquisitions and debt offerings and in his capacity as an executive at various companies, was responsible for raising more than $10 billion across the capital markets. He graduated from Columbia Business School with a Master of Business Administration degree and from Yeshiva University with a Bachelor of Arts degree in accounting.

Michael Lazerow, 46
Director 

Mr. Lazerow is a co-founder and general partner of Velvet Sea Ventures, a multi-stage venture capital firm established in 2019. Prior to Velvet Sea Ventures, he has been a serial entrepreneur and has founded numerous companies including University Wire, GOLF.com and Buddy Media which was sold to Salesforce in 2012 for approximately $700 million. Mr. Lazerow served as the Chief Strategy Officer at Salesforce from 2012 to 2015 and played a leadership role in the creation and growth of its Marketing Cloud business, which represents approximately 15% of Salesforce’s $20 billion annual subscription and services revenue as of the quarter ending October 31, 2020. Mr. Lazerow has made various investments and was in the initial investor groups of Scopely (valuation of $3.3 billion as of October 2020), Liquid Death and Map Anything (acquired by Salesforce in 2019) and was a pre-IPO investor in Facebook. His network includes 10 venture funds where he is a limited partner (eight of which have invested in one of Mr. Lazerow’s companies), numerous co-investors and hundreds of fellow entrepreneurs. He graduated from Northwestern University with Bachelor of Science and Master of Science degrees in Journalism.

Michael Marquez, 47
Director 

Mr. Marquez has over 25 years of experience operating, investing, acquiring and advising throughout the high-tech sector. He is a co-founder of Code Advisors LLC, a technology and media-focused boutique investment bank headquartered in San Francisco, California established in 2010. Code Advisors has completed numerous M&A transactions and financings including late-stage growth equity financings in Spotify and Twitter, IPO processes for Twitter, Angie’s List and Survey Monkey, and the sale of Supercell to SoftBank, Buddy Media to Salesforce and Playtika to Giant. Mr. Marquez is also the co-founder of Morado Ventures, an early-stage venture capital fund established in 2010 that is focused in artificial intelligence, data infrastructure, robotics & autonomy, computer vision and health. Mr. Marquez has served as Morado Venture’s general partner since inception. During his career, Mr. Marquez has made more than 140 direct investments and built a broad network across technology company executives, entrepreneurs, founders and corporate development groups throughout the world and an extensive network in each stage of the venture capital industry. Mr. Marquez has invested in and advised on venture exits to a large number of sophisticated acquirers including sales to Adobe, Amazon, Apple, Comcast, Twitter, Citrix, US Bank, First Data, Facebook, Google, Samsung, Salesforce, Roche, Intel, Walmart, Rakuten, eBay, IBM, Intuit, Microsoft and McDonald’s and has led the acquisitions of numerous companies through his roles in the corporate development groups at Yahoo! and CBS, including the $1.8 billion acquisition of CNET. He graduated with a Master of Business Administration degree from the University of North Carolina at Chapel Hill and a Bachelor of Science degree in Managerial Economics from the University of California at Davis.

Ross Mason, 45
Director 

Mr. Mason is a top technology entrepreneur based in the United Kingdom. He founded MuleSoft in 2006, took it public on the NYSE in 2017 and sold it to Salesforce for $6.5 billion in 2018. Mr. Mason served as the Chief Technology Officer of MuleSoft from 2009 to 2014. Mr. Mason launched Dig Ventures in Europe in 2019, partnering with leading venture capital firms in the United States and backing exceptional founders in enterprise software and fintech. As the founder of Dig Ventures, he has made numerous investments in early-stage technology companies and has met with hundreds of founders and has invested alongside many of the top tier funds in the United States and Europe. His investment portfolio of companies ranges from next generation SaaS platforms to innovative developer platforms to fintech. Mr. Mason is also an author and has been a regular keynote speaker at technology conferences like WebSummit and Dreamforce. He has been repeatedly featured in the Wall Street Journal, Forbes, Business Insider, Entrepreneur, TechCrunch, CIO.com. Mr. Mason was named a Henry Crown Fellow by the Aspen Institute in 2020 and was deemed one of the Most Important People in Cloud Computing by Business Insider and one of the world’s ‘Top 10 Innovators & Influencers’ by Information Week. Mr. Mason graduated with a Bachelor of Science degree in Computer Science from University of the West of England.

Brian Norgard, 40
Director 

Mr. Norgard served as the Chief Product Officer at Tinder, Inc., owner of the Tinder global dating app, from 2016 to 2018. He helped lead Tinder from $0 to over $1 billion in revenue, in part driven by the creation of blockbuster features such as Tinder Gold, Tinder Boost and Tinder Super Like. Under his product leadership, Tinder became one of the top revenue-generating apps across the globe. Prior to being Tinder’s Chief Product Officer, Mr. Norgard served as Head of Revenue at Tinder from 2015 to 2016. Since 2018, he has been a board member at AngelList. With over 15 years in the technology industry, Mr. Norgard has successfully participated as an investor in many companies including SpaceX, Lyft, Notion, AngelList and Airtable. Mr. Norgard graduated from Brown University with a Public Private Sector Organizational Management degree.

Katherine Rosa, 50
Director 

Ms. Rosa previously served as Managing Director and Global Head of Alternative Investments for Wealth Management Solutions at JPMorgan Chase & Co. from 2017 to 2020. She led an over $80 billion platform and a global team of over 100 people with extensive relationships with a number of financial sponsors including private equity, growth equity, venture and hedge fund managers. From 2000 to 2017, Ms. Rosa served as Managing Director and Portfolio Manager for J.P. Morgan Asset Management’s Private Equity Group, a more than $20 billion business providing access to private equity, venture capital funds and direct investments. In this role, she was a member of the Management and Investment Committees and acted as fiduciary for over 100 global institutional investors. She also led the group’s establishment of a joint venture private equity business in China and played an instrumental role in its growth. Ms. Rosa graduated from Franklin and Marshall College with a Bachelor of Arts degree, majoring in Government with a minor in Economics.

ByKristi Marvin