Item 1.01 Entry into a Material Definitive Agreement.
The Business Combination Agreement and Plan of Merger
On January 20, 2022, Silver Spike Acquisition Corp II, an exempted company
incorporated in the Cayman Islands with limited liability ("Silver Spike" or
"SPAC"), entered into a Business Combination Agreement and Plan of Merger (the
"Business Combination Agreement") by and among Silver Spike, Silver Spike Merger
Sub II, Inc., a Delaware corporation and a direct, wholly owned subsidiary of
Silver Spike ("Merger Sub 1"), Eleusis Inc., a Delaware corporation ("HoldCo"),
Eclipse Merger Sub, Inc., a Delaware corporation and a direct, wholly owned
subsidiary of HoldCo ("Merger Sub 2"), and Eleusis Holdings Limited, a company
incorporated under the laws of England and Wales with company number 10809365
("Eleusis").
The Business Combination
Pursuant to the Business Combination Agreement and on the terms and subject to
the conditions set forth therein, (i) Silver Spike will merge with and into
Merger Sub 1, with Merger Sub 1 surviving such merger and continuing as a
Delaware corporation ("SPAC Successor") (the "Domestication Merger"), (ii)
HoldCo will acquire all of the outstanding shares of Eleusis from Eleusis's
shareholders in exchange for the issuance to such shareholders of HoldCo stock,
(iii) holders of options of Eleusis will roll over such options into replacement
options to acquire shares of common stock of HoldCo ("HoldCo Common Stock"),
(iv) HoldCo will be recapitalized such that its authorized and outstanding
capital stock will consist solely of HoldCo Common Stock and, prior to the
closing of the transactions contemplated by the Business Combination Agreement
(the "Closing"), HoldCo will complete a stock split of the HoldCo Common Stock,
and (v) Merger Sub 2 will merge with and into SPAC Successor, with SPAC
Successor surviving such merger as a direct, wholly owned subsidiary of HoldCo
(the "Business Combination Merger" and, together with the Domestication Merger,
the "Mergers", and the Mergers, together with the other transactions
contemplated by the Business Combination Agreement, the "Business Combination").
As a result of the Business Combination, each issued and outstanding SPAC Class
A Ordinary Share and SPAC Class B Ordinary Share will be cancelled and converted
into a share of HoldCo Common Stock, and subject to the Warrant Agreement, dated
as of March 10, 2021, between SPAC and its warrant agent and the Business
Combination Agreement, each warrant to acquire one SPAC Class A Ordinary Share
(a "SPAC Warrant") will be cancelled and converted into a warrant to acquire one
share of HoldCo Common Stock. Each unit of SPAC consisting of one SPAC Class A
Ordinary Share and one-fourth of a SPAC Warrant that has not previously been
separated into the underlying SPAC Class A Ordinary Share and SPAC Warrant will
be separated immediately prior to the Business Combination.
The Business Combination is expected to close in the second or third quarter of
2022, following the receipt of the required approval of Silver Spike's
shareholders and the fulfillment of other customary closing conditions.
Business Combination Consideration
As a result of the Business Combination, existing equityholders of Eleusis,
including holders of Eleusis options (each, an "Eleusis Equityholder"), will
receive a number of shares of HoldCo Common Stock (or restricted stock units, in
the case of holders of Eleusis options) determined based on an implied equity
value for Eleusis of $350 million, at a value of $10.00 per share of HoldCo
Common Stock. In the event that Eleusis obtains equity financing prior to the
Closing as permitted by the Business Combination Agreement, the implied equity
value of the HoldCo Common Stock (or restricted stock units) received by Eleusis
Equityholders will be increased by the amount of such financing, at a value of
$10.00 per share of Holdco Common Stock.
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Eleusis Equityholders will also receive a number of earnout shares in connection
with the Closing approximately equal to 14% of an adjusted measure of the pro
forma value of HoldCo immediately following the Closing (the "Earnout Shares"),
subject to vesting and forfeiture based on achievement of post-closing share
price targets, in each case for any 20 trading days within any 30 trading day
period commencing on the date on which the Closing occurs (the "Closing Date")
and ending on the third anniversary of the Closing Date:
• 20% of the Earnout Shares will vest if and when the closing trading price of
HoldCo Common Stock equals or exceeds $12.50 per share;
• 30% of the Earnout Shares will vest if and when the closing trading price of
HoldCo Common Stock equals or exceeds $15.00 per share; and
• 50% of the Earnout Shares will vest if and when the closing trading price of
HoldCo Common Stock equals or exceeds $17.50 per share.
The earn-out shares will be issued and outstanding as of the Closing, and any
earn-out shares that have not vested as of the third anniversary of the Closing
Date will be forfeited for no consideration at that time. Holders of earn-out
shares will be entitled to exercise the voting rights carried by the earn-out
shares while the earn-out shares are subject to vesting conditions and the risk
of forfeiture.
The transaction will result in approximately $258 million being contributed to
the balance sheet of Eleusis, assuming no redemptions and net of estimated
transaction expenses.
Eleusis's obligations to complete the Business Combination are contingent upon
proceeds of the trust account (net of redemptions) and any financing
arrangements being greater than or equal to $50,000,000 (the "Minimum Cash
Condition"). Under the Business Combination Agreement, if Silver Spike fails to
meet the Minimum Cash Condition, Eleusis may waive the Minimum Cash Condition.
Sponsor Promote
In the event that the amount of cash available to be released from the trust
account of Silver Spike (after giving effect to all payments made as a result of
the completion of all Silver Spike share redemptions) and the net amount of
proceeds actually received by HoldCo or Eleusis pursuant to certain financing
arrangements is, in the aggregate, between $50,000,000 and $100,000,000, then up
to 3.25 million of the SPAC Class B Ordinary Shares held by Silver Spike
Sponsor, LLC (the "Sponsor") will be forfeited. Additionally, in the event that
the Minimum Cash Condition is not satisfied but is waived by Eleusis, the
Sponsor will forfeit up to 250,000 of its SPAC Class B Ordinary Shares at the
Closing.
Covenants of the Parties
Each party agreed in the Business Combination Agreement to use commercially
reasonable efforts to take all appropriate actions to consummate and make
effective, in the most expeditious manner practicable, the Business Combination.
The Business Combination Agreement also contains certain customary covenants by
Eleusis and Silver Spike during the period between the signing of the Business
Combination Agreement and the Closing, including the conduct of their respective
businesses, obtaining governmental consents, as well as certain customary
covenants, such as publicity, some of which may continue after the Closing. Each
of the parties also agreed not to solicit or enter into any alternative
competing transactions during the period from the date of the Business
Combination Agreement and the Closing. Silver Spike also agreed that it will
ensure Silver Spike remains listed as a public company and that Silver Spike's
ordinary shares remain listed on Nasdaq.
Directors of Holdco
The board of directors of HoldCo as of immediately following the Closing will
consist of either seven (7) or nine (9) directors, as determined by Eleusis, of
whom two (2) individuals will be designated by Silver Spike (one of which must
be selected from a list of prospective independent directors that is mutually
agreed upon by Silver Spike and the other of which will be Scott Gordon), and of
whom seven (7) individuals will be designated by Eleusis. Pursuant to an
Investor Rights Agreement (a form of which is attached as an exhibit to the
Business Combination Agreement) to be entered into by HoldCo and certain
stockholders of HoldCo at the Closing, Shlomi Raz, the founder and chief
executive office of Eleusis, will have certain rights to nominate individuals
for election or appointment as directors of HoldCo following the Closing.
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Closing Conditions
The obligations of the parties to complete the Closing are subject to various
conditions, including customary conditions of each party and the following
mutual conditions of the parties, unless waived:
• the approval of the Silver Spike shareholders shall have been obtained?
• the Domestication Merger shall have been consummated;
• the shares of registration statement on Form S-4 shall have become effective,
no stop order shall have been issued by the SEC with respect to the
registration statement and no legal proceeding seeking such stop order shall
have been initiated and remain pending;
• the absence of any law or governmental order that would enjoin or prohibit the
consummation of the Business Combination?
• Silver Spike shall have at least $5,000,001 of net tangible assets remaining
after giving effect to redemptions and any financing arrangements; and
• the HoldCo Common Stock shall have been approved and listed on Nasdaq, subject
to official notice of the issuance thereof.
. . .
Item 7.01. Regulation FD Disclosure.
On January 20, 2022, Silver Spike and Eleusis issued a joint press release (the
"Press Release") announcing the execution of the Business Combination Agreement.
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Also on January 20, 2022, Silver Spike and Eleusis released an investor
presentation that will be used by Silver Spike, Eleusis and HoldCo with respect
to the Business Combination (the "Investor Presentation").
Copies of the Press Release and Investor Presentation are furnished as Exhibits
99.1 and 99.2, respectively, to this Current Report and are incorporated by
reference herein.
The information in this Item 7.01 and Exhibits 99.1 and 99.2 attached hereto
shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to
liabilities under that section, nor shall it be deemed incorporated by reference
in any filing under the Securities Act or the Exchange Act, except as expressly
set forth by specific reference in such filing.
Forward-Looking Statements Legend
This document contains certain "forward-looking statements" within the meaning
of the federal securities laws, with respect to the proposed transaction between
Eleusis Holdings Limited ("Eleusis") and Silver Spike Acquisition Corp II
("Silver Spike"). These forward-looking statements are generally identified by
words such as "anticipate," "believe," continue," "could," "estimate," "expect,"
"intend," "may," "might," "plan," "possible," "potential," "predict," "project,"
"should," "strive," "would" or the negatives of these words or words of similar
meaning. These forward looking statements include, but are not limited to,
statements regarding the benefits of the transaction, the anticipated timing of
the transaction, Eleusis's product candidates and expected markets, and
Eleusis's projected future results. Forward-looking statements are predictions,
projections and other statements about future events that are based on current
expectations and assumptions and, as a result, are subject to risks and
uncertainties. Such forward-looking statements are based upon the current
beliefs and expectations of the management of each of Silver Spike and Eleusis
and are inherently subject to significant business, economic and competitive
risks, uncertainties and contingencies. Many factors could cause actual future
events to differ materially from the forward-looking statements in this
document, including but not limited to: (i) the risk that the transaction may
not be completed in a timely manner or at all, which may adversely affect the
price of Silver Spike's securities, (ii) the failure to satisfy the conditions
to the consummation of the transaction, including the adoption of the agreement
and plan of merger by the shareholders of Silver Spike, the satisfaction of the
minimum trust account amount following redemptions by Silver Spike's public
shareholders and the receipt of certain governmental and regulatory approvals,
(iii) the lack of a third party valuation in determining whether or not to
pursue the proposed transaction, (iv) the occurrence of any event, change or
other circumstance that could give rise to the termination of the agreement and
plan of merger, (v) the effect of the announcement or pendency of the
transaction on Eleusis's business relationships, performance, and business
generally, (vi) risks that the proposed transaction disrupts current plans of
Eleusis and potential difficulties in Eleusis employee retention as a result of
the proposed transaction, (vii) the outcome of any legal proceedings that may be
instituted against Eleusis or against Silver Spike or NewCo related to the
agreement and plan of merger or the proposed transaction, (viii) the ability of
NewCo's securities to qualify to list on The Nasdaq Capital Market, (ix)
volatility in the price of Silver Spike's securities due to a variety of
factors, including changes in the competitive and highly regulated industries in
which Eleusis plans to operate, variations in performance across competitors,
changes in laws and regulations affecting Eleusis's business and changes in the
combined capital structure, (x) the impact of the global COVID-19 pandemic, (xi)
the enforceability of Eleusis's intellectual property, including its trademarks,
and the potential infringement on the intellectual property rights of others,
cyber security risks or potential breaches of data security, (xii) the ability
of Eleusis to protect the intellectual property and confidential information of
its customers, (xiii) unexpected costs, charges, or expenses resulting from the
proposed business combination, (xiv) evolving legal, regulatory and tax regimes,
(xv) the possibility that Eleusis may be adversely affected by other economic,
business and/or competitive factors, (xvi) actions by third parties, including
government agencies, and (xvii) the ability to implement business plans,
forecasts, and other expectations after the completion of the proposed
transaction, and identify and realize additional opportunities. The foregoing
list of factors is not exhaustive. You should carefully consider the foregoing
factors and the other risks and uncertainties described in the "Risk Factors"
section of Silver Spike's Quarterly Reports on Form 10-Q, the registration
statement on Form S-4 and proxy statement/prospectus included therein discussed
below and other documents filed by Silver Spike and NewCo from time to time with
the U.S. Securities and Exchange Commission (the "SEC"). You are cautioned not
to place undue reliance on these forward-looking statements as a predictor of
future results, performance and/or achievements as projected financial
information and other information are based on estimates and assumptions,
whether or not identified in this document, that are inherently subject to
various significant risks, uncertainties, contingencies and other factors, many
of which are difficult to predict and generally beyond the control of the
parties. These filings identify and address other important risks and
uncertainties that could cause actual events and results to differ materially
from those contained in the forward-looking statements. Forward-looking
statements speak only as of the date they are made. Readers are cautioned not to
put undue reliance on forward-looking statements, and Eleusis, NewCo and Silver
Spike assume no obligation and do not intend to update or revise these
forward-looking statements, whether as a result of new information, future
events, or otherwise. Neither Eleusis, NewCo nor Silver Spike gives any
assurance that either Eleusis, NewCo or Silver Spike will achieve its
expectations.
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Additional Information and Where to Find It
This document relates to a proposed transaction between Eleusis and Silver
Spike. This document does not constitute an offer to sell or exchange, or the
solicitation of an offer to buy or exchange, any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer, sale or exchange
would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. Silver Spike and NewCo intend to file a
registration statement on Form S-4 that will include a preliminary proxy
statement for the solicitation of Silver Spike shareholder approval and
prospectuses of Silver Spike and NewCo. The proxy statement/prospectus will be
sent to all Silver Spike stockholders. Silver Spike and NewCo also will file
other documents regarding the proposed transaction with the SEC. BEFORE MAKING
ANY VOTING DECISION, INVESTORS AND SECURITY HOLDERS OF SILVER SPIKE ARE URGED TO
READ THE REGISTRATION STATEMENT, THE PROXY STATEMENT/ PROSPECTUS AND ALL OTHER
RELEVANT DOCUMENTS THAT ARE OR WILL BE FILED WITH THE SEC IN CONNECTION WITH THE
PROPOSED TRANSACTION AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain free copies of the proxy
statement/prospectus and all other relevant documents filed or that are or will
be filed with the SEC by Silver Spike and NewCo through the website maintained
by the SEC at www.sec.gov. In addition, the documents filed by Silver Spike and
NewCo may be obtained free of charge from their respective websites at
silverspikecap.com or by written request to Silver Spike at 660 Madison Ave,
Suite 1600, New York, New York 10065.
Participants in Solicitation
Silver Spike, NewCo and Eleusis and their respective directors and officers may
be deemed to be participants in the solicitation of proxies from Silver Spike's
stockholders in connection with the proposed transaction. Information about
Silver Spike's directors and executive officers and their ownership of Silver
Spike's securities is set forth in Silver Spike's filings with the SEC. To the
extent that holdings of Silver Spike's securities have changed since the amounts
printed in Silver Spike's proxy statement, such changes have been or will be
reflected on Statements of Change in Ownership on Form 4 filed with the SEC.
Additional information regarding the interests of those persons and other
persons who may be deemed participants in the proposed transaction may be
obtained by reading the proxy statement/ prospectus regarding the proposed
transaction when it becomes available. You may obtain free copies of these
documents as described in the preceding paragraph.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
2.1* Business Combination Agreement and Plan of Merger, dated January 20,
2022, by and among Silver Spike Acquisition Corp II, Silver Spike
Merger Sub II, Inc., Eleusis Inc., Eclipse Merger Sub, Inc., and
Eleusis Holdings Limited 10.1* Form of Deed of Irrevocable Undertaking
10.2 Form of Sponsor Support Agreement
99.1 Press Release, dated January 20, 2022.
99.2 Investor Presentation, dated January 20, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
* Certain exhibits and schedules to this Exhibit have been omitted in accordance
with Regulation S-K Item 601(b)(2). Silver Spike agrees to furnish
supplementally a copy of any omitted exhibit or schedule to the SEC upon its
request.
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