Item 1.01. Entry into a Material Definitive Agreement.
Business Combination Agreement
On July 31, 2022, Social Leverage Acquisition Corp I ("Social Leverage," "SLAC"
or the "Company"), entered into a business combination agreement, by and among
Social Leverage, SLAC Merger Sub, Inc., a wholly owned subsidiary of Social
Leverage ("Merger Sub"), and W3BCLOUD Holdings Inc. ("W3BCLOUD") (as it may be
amended, supplemented or otherwise modified from time to time, the "Business
Combination Agreement"). The Business Combination Agreement and the business
combination were unanimously approved by Social Leverage's board of directors on
July 8, 2022. If the Business Combination Agreement is approved by Social
Leverage's stockholders and the transactions contemplated by the Business
Combination Agreement are consummated, Merger Sub will merge with and into
W3BCLOUD (the "Merger"), with W3BCLOUD surviving the Merger as a wholly owned
subsidiary of New W3BCLOUD (as defined below). In addition, upon the
effectiveness of the Proposed Charter (as defined below), Social Leverage will
be renamed W3BCLOUD, Inc. and is referred to herein as "New W3BCLOUD" following
the consummation of the transactions described below (collectively, the
"Business Combination").
The Business Combination
The Business Combination Agreement provides for, among other things, the
following: (i) (a) on the closing date of the Business Combination, Social
Leverage will file the proposed amended and restated certificate of
incorporation to be adopted by Social Leverage stockholders pursuant to the
Business Combination Agreement (the "Proposed Charter") with the Secretary of
State of the State of Delaware, such Proposed Charter to be effective
simultaneous with the effective time of the Merger (the "Effective Time") and
(b) as a consequence of adopting the Proposed Charter, at the Effective Time,
the governing documents of Social Leverage will be amended and restated and
become the Proposed Charter and the bylaws of New W3BCLOUD to be adopted
pursuant to the Business Combination Agreement, and Social Leverage's name will
be changed to "W3BCLOUD, Inc."; (ii) the parties to the Business Combination
Agreement will cause a certificate of merger to be executed and filed with the
Secretary of State of the State of Delaware, pursuant to which Merger Sub will
merge with and into W3BCLOUD at the Effective Time, with W3BCLOUD as the
surviving corporation in the Business Combination and, after giving effect to
the Merger, W3BCLOUD will be a wholly owned subsidiary of Social Leverage; (iii)
as a consequence of the Merger, at the Effective Time, the governing documents
of W3BCLOUD will be the governing documents of the surviving company; (iv) as a
consequence of the Merger, at the Effective Time, the directors and officers of
W3BCLOUD as of immediately prior to the Effective Time will be the initial
directors and officers of the surviving corporation, each to hold office in
accordance with the governing documents of the surviving company, until such
director's or officer's successor is duly elected or appointed and qualified, or
until the earlier of their death, resignation or removal; and (v) as a
consequence of adopting the Proposed Charter, New W3BCLOUD will adopt a dual
class structure, comprised of New W3BCLOUD class A common stock, which will
carry one vote per share, and New W3BCLOUD class B common stock, held only by
the two founders of W3BCLOUD, which will carry 10 votes per share. Other than
the foregoing voting structure, the New W3BCLOUD class B common stock will have
the same economic terms as the New W3BCLOUD class A common stock.
Effect of the Business Combination on Existing Social Leverage Equity
As a consequence of the Business Combination, each of the holders of Social
Leverage Class B common stock that is issued and outstanding as of immediately
prior to the Effective Time will automatically receive, on a one-for-one basis,
shares of New W3BCLOUD Class A common stock in accordance with the terms of
Social Leverage's certificate of incorporation. Aside from as provided in the
Sponsor Letter Agreement (as defined below), the Business Combination will have
no effect on the Social Leverage Class A common stock that is issued and
outstanding as of immediately prior to the Effective Time, which will continue
to remain outstanding. In addition, each warrant to purchase one share of Social
Leverage Class A common stock at an exercise price of $11.50 per share that is
outstanding immediately prior to the Effective Time shall remain outstanding
pursuant to the terms of the original warrant agreement, except that effective
as of and conditioned on the closing of the Business Combination (the
"Closing"), 2 million of the private placement warrants, each to purchase one
share of Social Leverage Class A common stock, will be exchanged for 2 million
new private placement warrants with substantially the same terms as the original
private placement warrants, except that such new private placements warrants
will be subject to redemption at a reference price of $18.00 per share, subject
to conditions set forth in a new warrant agreement to be entered into in
connection with the Closing.
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Consideration to W3BCLOUD Equityholders in the Business Combination
As a consequence of the Merger, at the Effective Time, the consideration to be
paid in respect of each share of W3BCLOUD common stock issued and outstanding as
of immediately prior to the Effective Time, will be:
? each share of W3BCLOUD Class A common stock will be converted into the right to
receive a number of shares of newly-issued New W3BCLOUD Class A common stock
(with each share valued at $10.00) equal to the product of the Aggregate
Company Consideration (as defined in the Business Combination Agreement)
multiplied by a fraction, the numerator of which is the number of shares of
W3BCLOUD Class A common stock issued and outstanding at the Effective Time and
the denominator of which is the number of shares of W3BCLOUD common stock
issued and outstanding at the Effective Time, divided by the number of shares
of W3BCLOUD common stock issued and outstanding at the Effective Time (such
amount, the "W3BCLOUD Class A Per Share Consideration"), and
? each share of W3BCLOUD Class B common stock will be converted into the right to
receive a number of shares of newly-issued New W3BCLOUD Class B common stock
(with each share valued at $10.00) equal to the product of the Aggregate
Company Consideration multiplied by a fraction, the numerator of which is the
number of shares of W3BCLOUD Class B common stock issued and outstanding at the
Effective Time and the denominator of which is the number of shares of W3BCLOUD
common stock issued and outstanding at the Effective Time, divided by the
number of shares of W3BCLOUD common stock issued and outstanding at the
Effective Time.
As a consequence of the Merger, at the Effective Time, each option to purchase B
ordinary shares, nominal value $0.001, in the capital of W3BCLOUD Limited, a
subsidiary of W3BCLOUD ("B Ordinary Shares"), whether vested or unvested, that
is outstanding and unexercised as of immediately prior to the Effective Time
. . .
Item 3.02. Unregistered Sales of Equity Securities.
The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K
with respect to the issuance of shares of Social Leverage common stock is
incorporated by reference herein.
Item 5.02 Appointment of Principal Officers; Compensatory Arrangements with
Certain Officers.
On July 31, 2022, concurrently with the execution of the Business Combination
Agreement, each of Sami Issa and Wael Aburida entered into employment agreements
with the Company (the "Executive Employment Agreements"), pursuant to which Mr.
Issa will serve as the Company's Chief Executive Officer and Mr. Aburida will
serve as the Company's Chief Financial Officer and Chief Investment Officer.
Pursuant to the Executive Employment Agreements, the Company will also use its
best efforts to cause each of Messrs. Issa and Aburida to be nominated for
election to the board of directors of the Company. The Executive Employment
Agreements will become effective upon, and subject to, the Closing.
Mr. Issa, age 54, has served as Chief Executive Officer of W3BCLOUD since
cofounding the company in June 2018. Prior to cofounding W3BCLOUD, Mr. Issa
served in executive roles at International Business Machines Corporation,
publicly traded multinational technology corporation, and Mubadala Development
Company, an investment firm. Prior to Mubadala Development Company, Mr. Issa
spent over 15 years in the semiconductor industry with Intel Corporation,
Broadcom Inc., Texas Instruments Incorporated and National Semiconductor. Mr.
Issa holds 30 patents. Mr. Issa holds a Master of Science in Electrical
Engineering, with a focus on semiconductor device physics, from Arizona State
University and a Bachelor of Science in Electrical Engineering, with a focus on
electronics, from Cairo University.
Mr. Aburida, age 54, has served as Chief Financial Officer and Chief Investment
Officer of W3BCLOUD since cofounding the company in June 2018. Prior to
cofounding W3BCLOUD, Mr. Aburida was Managing Partner of Halo Investment
Management, a multi-family office which he co-founded in 2015. Prior to Halo
Investment Management, Mr. Aburida was head of investments for Waha Capital, a
publicly traded global diversified investment company. Mr. Aburida has over 20
years of experience in finance, private equity, M&A, and board-level leadership
experience across companies in North America, Europe, Africa and Asia. Mr.
Aburida holds a Master of Business Administration from the Kellogg School of
Management at Northwestern University and a Bachelor of Arts in Business from
Lake Forest College.
Pursuant to the Executive Employment Agreements, Messrs. Issa and Aburida will
each be (i) paid an annual base salary of $635,000, (ii) eligible to receive an
annual target bonus of 96% of their annual base salary in accordance with the
Company's annual bonus program, and (iii) eligible to participate in the
Company's equity-based incentive programs as in effect from time to time with a
target value equal to 500% of their annual base salary. The Executive Employment
Agreements further provide that Messrs. Issa and Aburida will each receive a
one-time cash bonus of $2,030,000 in connection with the Closing.
The Executive Employment Agreements further provide that upon a termination of
employment by the Company without Cause or by Mr. Issa or Mr. Aburida for Good
Reason (each, as defined in the Executive Employment Agreements, a "Qualifying
Termination"), Messrs. Issa and Aburida will receive 18 months of base salary.
In addition, Messrs. Issa and Aburida will each receive any previously unpaid
annual bonus from any prior completed fiscal year, a prorated annual bonus for
the year of termination based on actual performance, 18 months of continued
medical benefits coverage, and vesting of all outstanding unvested equity-based
awards consistent with the vesting terms applicable to similarly-situated
officers and directors of the Company. In the event of Qualifying Termination
within six months prior to or within 24 months following a change in control,
Messrs. Issa and Aburida will each receive a lump sum amount equal to one and a
half times their current annual base salary plus target annual bonus, any
previously unpaid annual bonus from any prior completed fiscal year, a prorated
annual bonus for the year of termination based on actual performance, 18 months
of continued medical benefits coverage, and accelerated vesting of all
outstanding unvested equity-based awards on the date of termination. The
foregoing severance entitlements are subject to the execution of a general
release of claims in favor of the Company.
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The foregoing description of the Executive Employment Agreements does not
purport to be complete, and is qualified in its entirety by reference to the
terms and conditions of the Executive Employment Agreements, copies of which are
filed as Exhibits 10.4 and 10.5 hereto and are incorporated herein by reference.
Important Information about the Business Combination and Where to Find It
In connection with the Business Combination, the Company intends to file with
the SEC a proxy statement, which will be mailed (if and when available) to all
Company stockholders once definitive (the "Proxy Statement"), which will serve
as a preliminary proxy statement and certain other related documents, which will
be distributed to holders of shares of the Company's common stock in connection
with the Company's solicitation of proxies for the vote by the Company's
stockholders with respect to the Business Combination as well as other matters
as may be described in the Proxy Statement. The Company's stockholders and other
interested persons are advised to read, when available, the Proxy Statement, as
well as other documents filed with the SEC in connection with the Business
Combination, as these materials will contain important information about the
parties to the Business Combination Agreement, the Company and the Business
Combination. Copies of the definitive proxy statement and all other relevant
materials for the Business Combination filed or that will be filed with the SEC
may be obtained free of charge at the SEC's website at www.sec.gov. In addition,
the documents filed by the Company may be obtained for free by directing a
request to: Social Leverage Acquisition Corp I, 8390 E.Via De Ventura, Suite
F110-207, Scottsdale, Arizona 85258, Attention: Howard Lindzon.
Participants in the Solicitation
SLAC, W3BCLOUD and certain of their respective directors, executive officers and
certain employees and other persons may be deemed to be participants in the
solicitation of proxies from SLAC's stockholders in connection with the proposed
transaction. Security holders may obtain information regarding the names,
affiliations and interests of SLAC's directors and executive officers in SLAC's
Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which
was filed with the SEC on March 31, 2022. A list of the names, affiliations and
interests of SLAC's directors and executive officers in SLAC will be contained
in a proxy statement relating to the proposed transaction that will be filed
with the SEC. Investors may obtain additional information regarding the
interests of participants in the solicitation of proxies from SLAC's
stockholders in connection with in the proposed transaction, which may, in some
cases, be different than those of SLAC's stockholders generally, by reading the
proxy statement relating to the proposed transaction when it is filed with the
SEC and other materials that may be filed with the SEC in connection with the
proposed transaction when they become available. These documents (when
available) may be obtained free of charge from the SEC's website at www.sec.gov
or by directing a request to: Social Leverage Acquisition Corp I, 8390 E.Via De
Ventura, Suite F110-207, Scottsdale, Arizona 85258, Attention: Howard Lindzon.
Forward Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may generally be identified by the use of words such
as "believe," "may," "will," "estimate," "continue," "anticipate," "intend,"
"expect," "should," "would," "plan," "project," "forecast," "predict,"
"potential," "seem," "seek," "future," "outlook," "target" or other similar
expressions (or the negative versions of such words or 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 estimates and forecasts of other financial and performance
metrics (including Revenue, EBITDA, EBITDA Margin and Capex), projections of
industry supply and demand, pricing and market opportunity, the satisfaction of
closing conditions to the Business Combination and any related transactions, the
level of redemptions by the Company's public stockholders and the timing of the
completion of the Business Combination, including the anticipated closing date
of the Business Combination and the use of the cash proceeds therefrom. These
statements are based on various assumptions, whether or not identified in this
communication and on the current expectations of the Company's and W3BCLOUD's
management and are not predictions of actual performance. These forward-looking
statements are provided for illustrative purposes only and are not intended to
serve as 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 may differ from
assumptions, and such differences may be material. Many actual events and
circumstances are beyond the control of the Company and W3BCLOUD.
7
These forward-looking statements are subject to a number of risks and
uncertainties, including (i) changes in domestic and foreign business, market,
financial, political and legal conditions; (ii) the inability of the parties to
successfully or timely consummate the Business Combination, including the risk
that any required regulatory approvals are not obtained, are delayed or are
subject to unanticipated conditions that could adversely affect the combined
company or the expected benefits of the proposed business combination or that
the approval of the stockholders of the Company are not obtained; (iii) the
ability to maintain the listing of the combined Company's securities on the
stock exchange; (iv) the risk that the Business Combination disrupts current
plans and operations of the Company or W3BCLOUD as a result of the announcement
and consummation of the transaction described herein; (v) the risk that any of
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
2.1 † Business Combination Agreement, dated as of July 31, 2022, by and
among Social Leverage Acquisition Corp I, SLAC Merger Sub, Inc., and
W3BCLOUD Holdings Inc.
10.1 Transaction Support Agreement, dated as of July 31, 2022, by and among
Social Leverage Acquisition Corp I and certain stockholders of
W3BCLOUD.
10.2 Sponsor Letter Agreement, dated as of July 31, 2022, by and among
W3BCLOUD Holdings Inc., Social Leverage Acquisition Corp I, Social
Leverage Acquisition Sponsor I LLC and the other parties thereto.
10.3 Form of Voting Agreement, by and among W3BCLOUD, Inc., Halo Holdings
Limited and ConsenSys.
10.4 Executive Employment Agreement, dated as of July 31, 2022, by and
between the Company and Sami Issa
10.5 Executive Employment Agreement, dated as of July 31, 2022, by and
between the Company and Wael Aburida
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
† Certain of the exhibits and schedules to this Exhibit have been omitted in
accordance with Regulation S-K Item 601(a)(5) and 601(b)(2). The Registrant
agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon
its request.
The exhibits to this Current Report on Form 8-K may contain hypertext links to
information on our website or other parties' websites. The information on our
website and other parties' websites is not incorporated by reference into this
Current Report on Form 8-K and does not constitute a part of this Form 8-K.
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SOCIAL LEVERAGE ACQUISITION CORP I 
