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Western Acquisition Ventures Corp. *

Western Acquisition Ventures Corp. *

Oct 20, 2021 by Anthony Sozzi

PROPOSED BUSINESS COMBINATION: Cycurion, Inc.

ENTERPRISE VALUE: $170.44 million
ANTICIPATED SYMBOL: tbd

Western Acquisition Ventures Corp. proposes to combine with Cycurion, Inc., a McLean, Virginia-based technology-enabled cybersecurity company, providing proprietary innovative solutions to Federal, State and Local government agencies and commercial partners.

The Company’s software-based technology provides multiple layers of defense to stop penetrations on the front end, as well as monitors and detections on the back end. Leveraging its team of deeply skilled technology veterans with high-level security clearances, Cycurion combines its unique platform with a suite of services for Government agencies, C-Suite executives and Boards of Directors to access and process information allowing them to monitor the security profile of their network.

EXTENSION – 1/8/25 – LINK

  • The SPAC approved the extension from January 11, 2025 to April 11, 2025.
    • 21,345 shares were redeemed.
    • $100 will be deposited into the trust account.

EXTENSION – 10/10/24 – LINK

  • The SPAC approved the extension from October 11, 2024, to January 11, 2025.
    • Redemptions not disclosed.
    • $100 will be deposited into the trust account.

NON-REDEMPTION AGREEMENT – 10/9/24 – LINK

  • The Sponsor will transfer 5,000 shares to RiverNorth SPAC Arbitrage Fund in exchange for not redeeming 99,800 Shares before the business combination.

NON-REDEMPTION AGREEMENT – 8/7/24 – LINK

  • The Sponsor will transfer 5,000 shares to RiverNorth SPAC Arbitrage Fund in exchange for not redeeming 99,800 Shares before the business combination.

SUBSEQUENT EVENT – 7/12/24 – LINK

  • On July 10, 2024, the Company approved the dismissal of Marcum LLP as the Company’s independent registered public accounting firm and also approved the appointment of WWC, P.C.

EXTENSION – 7/2/24 – LINK

  • The SPAC approved the extension from July 11, 2024 to October 11, 2024.
    • Redemptions not disclosed.
    • $100 will be deposited into the trust account.

EXTENSION – 4/12/24 – LINK

  • The SPAC approved the extension from April 11, 2024 to July 11, 2024.
    • Redemptions not disclosed.
    • $100 will be deposited into the trust account.

EXTENSION – 1/11/24 – LINK

  • The SPAC approved the extension from January 11, 2024 to April 11, 2024.
    • Redemptions not disclosed.
    • $100 will be deposited into the trust account.

EXTENSION – 7/13/23 – LINK

  • The SPAC approved the extension from July 11, 2023 to January 11, 2024.
    • 464,811 shares were redeemed for $10.53 per share.
    • $100 will be deposited into the trust account.

SUBSEQUENT EVENT – 1/17/23 – LINK

  • Western Acquisition Ventures Corp., Cycurion, Inc, and Alpha Capital Anstalt, entered into a Forward Share Purchase Agreement 
    • Alpha has agreed not to redeem 300,000 shares of Common Stock.
    • The Forward Purchase Agreement provides that subject to conditions under the Forward Purchase Agreement on the date that is 12 months after the closing of the Business Combination (the “BC Closing”); provided that, Alpha, at Alpha’s sole discretion, may accelerate such date to any of six (6) months after the BC Closing and nine (9) months after the BC Closing by providing notice to WAVS of its election to so accelerate at least two (2) calendar days prior to such date (any such date, the “Put Date”), Alpha may elect to sell and transfer to WAVS up to that number of Shares that are then held by Alpha, but not to exceed 300,000 Shares in the aggregate at a price per Recycled Share equal to the Redemption Price.
      • The Put Date may be accelerated by Alpha if
        • (i) the Shares are delisted from the New York Stock Exchange of NASDAQ,
        • (ii) the Agreement is terminated for any reason after the date redemption requests are due in connection with the stockholder vote to approve the Business Combination, or
        • (iii) during any 30 consecutive trading day period following the closing of the Business Combination, the VWAP Price for 20 trading days during such period shall be less than $3.00 per Share.
      • The Forward Purchase Agreement also provides that WAV shall reimburse Alpha for all reasonable and necessary brokerage commissions incurred in connection with the Alpha’s acquisition of Shares, in an amount not to exceed $0.05 per Share and $0.02 per disposition of each Share.
    • Simultaneously with the BC Closing, WAVS shall transfer into an escrow account for the benefit of Alpha with American Stock Transfer & Trust Company, subject to the terms of a customary written escrow agreement to be entered into on or prior to the BC Closing, an amount equal to the Shares Purchase Price multiplied by the number of Shares held by Alpha as of the closing of the Business Combination.
      • The Escrow Agreement shall irrevocably cause the Escrow Agent to release from the Escrow Account the aggregate Shares Purchase Price on the Put Date, and the additional payments to be made to Alpha described below, if applicable.
    • Within three business days of receipt by the Escrow Agent and WAVS of written notice that Alpha has sold Recycled Shares the Escrow Agent will release to WAVS an aggregate cash amount equal to
      • (x) the number of Shares sold multiplied by the Reset Price (as defined below) at the time of such sale, and shall release to Alpha an amount in cash equal to the product of
        • (I) the number of Shares sold in the open market multiplied by
        • (II) the difference of
          • (A) the Shares Purchase Price minus
          • (B) the Reset Price.
      • The Reset Price shall initially equal $8.00.
      • The Reset Price shall be adjusted first on the one month anniversary of the BC Closing, and then every three month anniversary of the most recent reset date (each such date, a “Reset Date”) to be the lowest of
        • (a) the then-current Reset Price,
        • (b) $8.00 and
        • (c) an amount equal to the product of
          • (i) 1.05 multiplied by
          • (ii) the VWAP Price of the last five (5) trading days immediately preceding the applicable Reset Date, but not lower than $2.00; provided, however, that if WAVS offers and sells or issues any shares or debt or securities that are convertible into or exchangeable or exercisable for shares, at a price lower than, or upon any conversion or exchange or exercise price of currently outstanding or future issuances of any securities convertible or exchangeable or exercisable for shares being equal to a price lower than, the then-current Reset Price (the “Offering Price”), then immediately after such event, the Reset Price shall be further reduced to equal the Offering Price.
    • In the event that Alpha elects not to sell to WAVS any Recycled Shares held by Alpha on the Put Date, WAVS may promptly issue instructions to the Escrow Agent to release from the Escrow Account to WAVS an amount equal to
      • (x) Shares Purchase Price multiplied by
      • (y) the number of Shares such Investor so elects not to sell to WAVS.

EXTENSION – 1/9/23 – LINK

  • The extension was approved for a one-month period up to six times, and the Company now has until July 11, 2023, to complete the transaction.
    • Western amended the Company’s charter and is now expected to deposit into the Trust Account of the Company $10,000 for each one-month extension up to an aggregate $60,000.

TRANSACTION

  • The business combination values Cycurion at an implied enterprise value of approximately $170.44 million. Upon the transaction’s closing, and assuming no redemptions by Western’s stockholders, Cycurion will have approximately $115.91 million in cash, resulting in a total pro forma equity value of approximately $271.63 million.
  • Cash proceeds raised in the transaction will be used to fund operations, support growth, strategic acquisitions and for general corporate purposes.
  • The proceeds will be funded through a combination of Western’s approximately $116.77 million cash in trust, assuming no redemptions by its stockholders, and up to $5.00 million in the form of a PIPE investment from institutional investors.

western overview

PIPE

  • The Company and the Acquiror are entering into subscription agreements with certain investors, pursuant to which the PIPE Investors have agreed to subscribe for shares of the Company’s Series A Convertible Preferred Stock and to grant to the PIPE Investors common stock purchase warrants for an aggregate investment by the PIPE Investors of up to $5,000,000 on the Closing Date immediately prior to the Effective Time, on the terms and subject to the conditions set forth in the Subscription Agreements (the “PIPE Investment”)

LOCK-UP

Company & Sponsor:

  • 6 months after the Closing Date

NOTABLE CONDITIONS TO CLOSING

  • The obligation Cycurion to consummate the Merger is subject to the satisfaction or waiver, at or prior to the Closing of additional conditions, including Registrant having at least $5,000,001 of net tangible assets.

NOTABLE CONDITIONS TO TERMINATION

  • The Merger Agreement may be terminated at any time prior to the consummation of the Merger by mutual written consent of Cycurion, as applicable, and Registrant and in certain other limited circumstances, including if the Merger has not been consummated by May 31, 2023 (the “Outside Date”) (as such date may be extended pursuant to the Merger Agreement).
    • The Outside date was extended to December 31, 2024 – LINK
    • The Outside date was extended to April 11, 2025 – LINK
  • Or by either Registrant or the Cycurion may also terminate the Merger Agreement if a Governmental Authority issues an Order or takes any other action which restrains, enjoins or otherwise prohibits the Merger.

ADVISORS

  • A.G.P./Alliance Global Partners is serving as the exclusive financial advisor to Western.
  • Clark Hill LLP is serving as the legal advisor to Cycurion
  • J.P. Galda & Co. is serving as the legal advisor to Western.
  • Financial Profiles, Inc. is serving as investor relations advisor to Cycurion and Western.

MANAGEMENT & BOARD

Executive Officers

James P. McCormick, 57 [Appointed]
Chief Executive Officer, Chief Financial Officer and Director

Mr. McCormick previously served as Chief Operating Officer and Chief Financial Officer of KushCo Holdings Inc. from August 2017 to January 2019 and CEO of Ignite International Inc. from February 2019 to December 2019. Mr. McCormick has also served as a management consultant for UMBRLA, Inc. from December 2019 to September 2020, Redbird Bioscience from April 2021 to August 2021, Cars & Credit Master from November 2021 to December 2022, Abstrax Tech Inc. from January 2023 to April 2023, and Thought Leaders, Inc. since April 2023. Mr. McCormick had no affiliation with the Company prior to his appointments.

Stephen Christoffersen, 36 [Resigned]
Chief Executive Officer and Director

As Chief Financial Officer of KushCo Holdings Inc. (OTCQX:KSHB), where he has worked since 2018, Mr. Christoffersen spearheaded KushCo’s strategic plan to right-size the business, align with the leading operators in the legal cannabis industry, and help KushCo achieve profitability for the first time in more than three years. Mr. Christoffersen led the negotiations of a definitive merger agreement between KushCo and Greenlane Holdings (NASDAQ: GNLN) which was announced March 2021 and actively led KushCo’s capital raising efforts, partnerships and strategic investments, including securing KushCo’s line of credit with Monroe Capital LLC, its partnership with C.A. Fortune, and its investment in and partnership with XS Financial, Inc., where Mr. Christoffersen currently serves as a Board member (CSE: XSF). Prior to joining KushCo, Mr. Christoffersen served as Vice President, Investment Strategist for Comerica Asset Management Inc. (NYSE: CMA), from 2017 to 2018, where he managed a $500 million equity portfolio, oversaw asset allocation and investments. During that time he also advised on M&A and fundraising initiatives for several seed and growth stage companies, such as SkinnyFats, LLC and Summit Innovations LLC.  From 2015 to 2018, Mr. Christoffersen served as the Chief Financial Officer and Chief Operating Officer of Lawless Jerky, LLC, where he led its financing rounds and was the financial architect behind an exit to a strategic partnership with Monogram Foods Solutions, LLC. Mr. Christoffersen has also been active in several volunteering and philanthropic initiatives, including serving as a Math and Science tutor with the Save a Child Foundation at the YMCA Boys and Girls Club. He is also an Executive Sponsor for Project Mission Green, an initiative of The Weldon Project that advocates on behalf of currently or formerly incarcerated cannabis offenders who were sentenced to prison for nonviolent cannabis offenses. Mr. Christoffersen received his Chartered Financial Analyst designation in 2015 and holds a Bachelor of Science degree in Finance from the University of Nevada, Las Vegas.

William Lischak, 64 [Resigned]
Chief Financial Officer and Director

His credentials include being a CPA and having earned a master’s degree in Taxation. Mr. Lischak has extensive M&A, corporate finance, accounting, tax, and strategic planning experience. Bill has developed a strong network of relationships with commercial and investment banks, law firms, accounting firms, and consulting firms, and is known as a dynamic team player strongly committed to working with colleagues to achieve transactional and operational goals. Mr. Lischak has been the Chief Executive Officer of RightsTrade, LLC since June 2020 and worked as a consultant to the company since April 2019. Concurrently, starting in February 2020, Mr. Lischak has acted as interim CFO for Johnson Management Group, a privately held television movie production company. From February 2017 to October 2018, Mr. Lischak served as interim CFO at PIXOMONDO STUDIOS Gmbh & Company KG, a multi-national visual effects company. Working in conjunction with Houlihan Lokey, Inc., Mr. Lischak managed the company through the process of preparing for, seeking, securing and concluding a majority stake sale to private equity, which closed in July 2018. From 2007 to 2015 Mr. Lischak worked with OddLot Entertainment LLC, a film and television production company founded by Gigi Pritzker, where he established the company’s position as a prominent independent production company by securing, structuring and managing corporate joint ventures and complex multi-party project financing for award winning and commercially successful films such as Hell or High Water (nominated for a Best Picture Academy Award), Ender’s Game (at the time, the largest independent film ever made, with a budget of $115 million), and Drive (which won Best Director at the Cannes Film Festival). Additionally, Mr. Lischak was instrumental in the company’s expansion into television production with National Geographic’s Genius: Einstein mini-series (based upon the Walter Isaacson biography), produced in conjunction with Ron Howard’s Imagine Entertainment. Corporately, Mr. Lischak created a multi-picture production and distribution arrangement with Lions Gate Entertainment Corporation (NYSE: LGF); spearheaded a multi-picture production and distribution arrangement with STX Financing LLC (NYSE: ESGC) in conjunction with an equity investment by Ms. Pritzker’s family office and JPMorgan Chase Bank, N.A.; and created the joint venture international sales company, Sierra/Affinity (acquired by Entertainment One Ltd. and Hasbro, Inc.).  Prior to joining Oddlot Entertainment LLC, Mr. Lischak worked with First Look Media, a multi-faceted production and distribution operation. Joining the company in 1988 as CFO, Mr. Lischak later assumed the roles of COO and President and was instrumental in the development and growth of the company, including its’ merger into a SPAC. In addition to the SPAC transaction, Mr. Lischak spearheaded multiple rounds of additional capital (pre and post public company status), various corporate acquisitions and established a multitude of debt financing arrangements including both lines of credit and project financing with financial institutions including JPMorgan Chase Bank, N.A (NYSE: JPM)., Comerica, Inc. (NYSE: CMA), Merrill Lynch Wealth Management and NatWest Group, among others. During Bill’s tenure annual revenues increased from $6 million to $125 million. Mr. Lischak graduated from NYU’s Stern School of Business, where he also studied film at NYU’s Tisch School of the Arts.

Board of Directors

Ade Okunubi, 38 [Resigned]
Director

Mr. Okunubi is also a Private Equity investor in Industrial services businesses. Prior to acquiring Industrial Battery, Mr. Okunubi served as Chief Operating Officer of Techni-Tool, part of TestEquity LLC, a distributor of equipment for electronic production assembly, and Investment Associate for Arcis Equity Partners LLC, a leisure and hospitality focused private equity fund. Prior to working in private equity and in operation roles, Mr. Okunubi worked in the Mergers & Acquisitions group at Credit Suisse Group AG (NYSE: CS) and advised private equity firms and corporations on approximately $2.5 billion in transactions in the telecom, healthcare, retail and renewable energy sectors. Prior to Credit Suisse Group AG, Mr. Okunubi was a Merger Arbitrage and High Yield Credit Trader at Taconic Capital Advisors LP, a New York-based event driven hedge fund. Mr. Okunubi, a Queens, NY native, received an AB in Economics from Princeton University, and a MBA from the Harvard Business School. Mr. Okunubi is also a CFA Charter holder and member of the CFA Society of Dallas-Ft. Worth. We believe Mr. Okunubi is well qualified to serve as an independent member of our board of directors because of his management experience and his extensive financial experience as an investor.

Ali Jahangiri, 46 [Resigned]
Director

He is also the founder of Eb5investors and Uglobal in 2012, which serve the investment immigration industry as the industry trade publication and one of the largest international conference series. Mr. Jahangiri is also the CEO of Outclick Media, which among the other publishing sites also manages and operates colonoscopy.com and Hotelsmag.com. Mr. Jahangiri began his career practicing corporate law at Stradling Yocca Carlson & Rauth, but shifted his focus to publishing, where he pioneered multiple digital portals in healthcare and law, which were acquired in 2009 and 2011, respectively. Mr. Jahangiri also serves on the Film Commission of California and board of overseers of Loyola Law School. Mr. Jahangiri received a Bachelors degree from UC Irvine and a law degree from Loyola Law School.

Robin L. Smith, 56 [Resigned]
Director

She is a trailblazer in the fields of regenerative medicine and predictive analytics and has focused on turnarounds, M&A and disruptive innovations driving interest and growth. From 2006 until 2015, Dr. Smith was chairman and chief executive officer of the NeoStem, Inc. (NASDAQ: NBS), where she pioneered the company’s innovative business model combining proprietary cell therapy development with successful contract development and manufacturing organization that was sold to Hitachi, Ltd. (TYO: 6501) at 8x the price at which it had been acquired. During her 9 years of tenure, the company completed five acquisitions, one divestiture and won an array of industry awards and received business recognition including a first-place ranking in the tri-state area (two years in a row), and eleventh place nationally, on Deloitte’s Technology Fast 500, and Frost & Sullivan’s North American Cell Therapeutics Technology Innovation Leadership Award. In 2015, Dr. Smith was asked to become chair of the board of directors of Mynd Analytics, Inc. (NASDAQ: MYND) and successfully turn the business around through acquisitions and divestitures and brought liquidity to investors. In 2017, she founded Spiritus Therapeutics, Inc., a company in the exosome therapeutic area. Dr. Smith has extensive experience serving on the boards of directors and board committees, including, audit, nominating and governance, compensation and science and technology committees, of multiple public companies and private companies. She serves as a director of: Sorrento Therapeutics, Inc. (NASDAQ: SRNE); Celularity, Inc. (soon to de-SPAC with NASDAQ: GXGX); Vicinity, Inc.; and, Spiritus Therapeutics, Inc. Dr. Smith has also served on the board of ServiceSource International, Inc. (NASDAQ: SREV), of Seelos Therapeutics, Inc. (NASDAQ: SEEL), Rockwell Medical, Inc. (NASDAQ: RMTI), and BioXcel Corp. Dr. Smith co-authored Cells Are the New Cure (2017) and The Healing Cell: How the Greatest Revolution in Medical History Is Changing Your Life (2013). She has also been widely recognized for her leadership in health care and as a female entrepreneur. Most recently, Dr. Smith received the Regenerative Medicine Foundation (RMF) 2019 Stem Cell and Regenerative Medicine Action Award for International Diplomacy in 2019 and the 2018 HEALinc Future Health Humanitarian Award, the Business Intelligence Group’s Woman of the Year Award in 2018 and the 2018 Gold Stevie® Award for Woman of the Year – Government or Non-Profit. In May 2016, Pope Francis awarded Dr. Smith Dame Commander with Star Pontifical Equestrian Order of Saint Sylvester Pope and Martyr. In May 2017, she was awarded the Lifetime Achievement in Healthcare and Science Award by The National Museum of Catholic Art and Library. Dr. Smith is also active in many nonprofit organizations. She is the founder, president and chairperson of the board of the Cura Foundation, a charitable organization, and a member, serves on the board of overseers of the New York University Langone Medical Center and on the board of trustees of Sanford Health. She currently serves on the board of Alliance for Cell Therapy and served on the board of the Alliance for Regenerative Medicine (ARM) Foundation, Unite to Prevent Cancer (UTPC) Foundation now OPA and on the board of trustees of the New York University Langone Medical Center and was chairperson of our board of directors of the New York University Hospital for Joint Diseases. Dr. Smith received her B.A. degree from Yale University and her M.D. degree from the Yale School of Medicine. Dr. Smith holds an M.B.A. degree from the Wharton School of Business and completed the Stanford University Directors Program. In 2019, Dr. Smith received an honorary doctor of science degree from Thomas Jefferson Medical College.

Adam K. Stern, 57 [Resigned]
Director

Prior to SternAegis, from 1997 to 2012, he was Senior Managing Director at Spencer Trask Ventures, Inc., where he managed the structured finance group focusing primarily on technology and life science companies. From 1989 to 1997, Mr. Stern was at Josephthal & Co., Inc., Members of the New York Stock Exchange, where he served as Head of Private Equity and Managing Director. He has been a FINRA licensed securities broker since 1987 and a Registered General Securities Principal since 1991. Mr. Stern has been a founding investor in numerous private and public companies and currently serves as a Director of DarioHealth Corp. (Nasdaq: DRIO) since March 2020, Organovo Holdings Inc., (Nasdaq: ONVO) since July 2020, and privately held Aerami Therapeutics, Inc. since 2014. Adam previously served on the board of directors for Matinas BioPharma Holdings, Inc. (NYSE: MTNB) from 2012-2020, and HydroFarm Holdings, Inc. (Nasdaq: HYFM) from 2018-2020.  Mr. Stern graduated from the University of South Florida in 1987.

Ryan Selewicz, 32 [Appointed 1/18/24]
Independent Director

Mr. Selewicz, 32, currently serves as the Vice President of E-Commerce at Greenlane Holdings, Inc., a seller of vaporizers and other products to businesses and consumers, where he oversees the company’s direct-to-consumer online businesses and the technology platforms that support those businesses. Prior to taking this role, Mr. Selewicz served as Greenlane’s Vice President of Technology Transformation following their merger with KushCo Holdings. In this role, Mr. Selewicz was responsible for the company’s enterprise systems and played a key role in the integration of the IT systems post-merger. Prior to their merger with Greenlane, Mr. Selewicz served as Executive Vice President of Technology at KushCo Holdings, Inc., where he was responsible for the company’s overall technology vision and strategy.

 

ByAnthony Sozzi