Social Leverage Acquisition Corp I (NASDAQ: SLAC) announced this afternoon that it has reduced the valuation for its target W3BCLOUD, entered into non-redemption agreements with certain investors, and a non-binding term sheet for a $150 million committed equity facility with B.Riley.
SLAC originally valued the Web3 infrastructure provider at $1.25 billion, but today’s new transaction terms have reduced the pro forma enterprise valuation to approximately $700 million, representing a 44% reduction.
The parties noted that this strategic decision was made in recognition of W3BCLOUD’s commitment to driving long-term value creation for all shareholders.
Social Leverage also announced that W3BCLOUD has agreed to lower the minimum cash balance condition from $150 million to $40 million. As previously announced at deal announcement, W3BCLOUD has received commitments for $50 million from certain existing security holders for new investments in connection with the proposed merger.
Additionally, the SPAC disclosed that it entered into voting, share purchase and non-redemption agreements with certain holders of its Class A common stock. As a part of these agreements, the stockholders have agreed to vote in favor of SLAC’s proposal to extend the completion deadline by nine months, from May 17, 2023 to February 17, 2024.
Under the non-redemption agreements, stockholders holding a total of 650,000 shares of SLAC’s Class A common stock, representing approximately $6.5 million of funds in the trust account, agreed not to redeem their shares in connection with the extension meeting. In exchange for the foregoing commitments, SLAC has agreed to issue 2,238,890 shares of SLAC’s Class A common stock upon the closing of the business combination.
Social Leverage noted that it has entered into these non-redemption agreements in order to secure capital in its trust in an effort to meet its minimum cash balance condition and continue to negotiate its business combination.
Further, the parties also announced that they have entered into a non-binding term sheet with B. Riley Principal Capital II, LLC 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 to sell and issue up to $150 million of its Class A common stock over a period of 24 months to B. Riley.
In addition, as previously reported in July 2022, W3BCLOUD Partners Limited and ConsenSys entered into a commitment letter pursuant to which ConsenSys agreed to subscribe to $15 million of equity and/or convertible securities. ConsenSys’ commitment may be increased in its sole discretion to up to $40 million. 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.
Social Leverage announced its deal with W3BCLOUD in August 2022. The SPAC originally brought $345 million into the deal through its trust supplemented by a $50 million PIPE with committed funds from strategic investors ConsenSys and AMD (NASDAQ:AMD) alongside institutional investor SK Inc.
But, SLAC saw 95.21% redeemed through a previous extension meeting, leaving it with $16.68 million in its trust post-vote.
Dublin-based W3BCLOUD has built up a global network of high-performance data centers to support Web 3.0 and the blockchain economy.
Terms Tracker for the Week Ending June 2, 2023 Welcome to our weekly column where we discuss the findings from our IPO terms tracker based on the previous week’s pricings. As is typical of slow holiday weeks, this past week for SPACs was no exception. To wit, there were zero new S-1s filed, zero amendments...
Trajectory Alpha Acquisition Corp. (NYSE:TCOA) announced this afternoon that it has entered into a purchase and contribution agreement with its sponsor and J. Streicher Holdings, LLC. As a result, the SPAC will undergo a change in management. As part of the agreement, J. Streicher will pay $250,000 to Trajectory Alpha and $1.00 to the sponsor. In return,...
Latest SPAC Liquidations: Sound Point I, Bullpen Parlay, and Zimmer Energy Transition Sound Point Acquisition Corp I (SPCM) to Liquidate on June 4 Sound Point Acquisition Corp I, Ltd (NASDAQ: SPCM) announced today that it intends to liquidate and dissolve, effective as of June 4, 2023, and will redeem all of the outstanding Class A...
Latest Non-Redemption Agreements: GSR II Meteora Acquisition Corp. GSR II Meteora Acquisition Corporation (GSRM) Adds Non-Redemption Agreement On May 31, 2023, GSR II Meteora Acquisition Corp., (NASDAQ:GSRM), entered into certain non-redemption agreements with certain third parties in connection with the special meeting of stockholders. Pursuant to such Non-Redemption Agreements, each Non-Redeeming Stockholder agreed that it will...
Athena Technology Acquisition Corp. II (NYSE:ATEK) announced this afternoon that it is postponing its extension vote scheduled for June 12 until June 13. Shareholders at the special meeting are to vote on a proposal to allow Athena Technology II to extend its transaction deadline on a monthly basis up to nine times from June 14,...