Social Leverage Acquisition Corp I and W3BCLOUD Announce Revised Business Combination Transaction Terms

Publicly traded special purpose acquisition company Social Leverage Acquisition Corp I and W3BCLOUD Holdings, a leading storage and compute infrastructure provider for Web3, announced they have revised the valuation of their previously announced business combination transaction (the “Business Combination”). This strategic decision was made in recognition of W3BCLOUD’s commitment to driving long-term value creation for all shareholders. The new transaction terms, effected through an amendment to the business combination agreement executed today, adjust the pro forma enterprise value of W3BCLOUD from approximately $1.25 billion to approximately $700 million, a ~44% reduction.

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“W3BCLOUD is the emerging Web3 storage and compute infrastructure leader. Having financial flexibility is key to successfully executing our growth strategy”

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. As previously announced on August 1, 2022, W3BCLOUD has received commitments for $50 million from certain existing securityholders for new investments in connection with the Business Combination, subject to certain conditions.

Additionally, SLAC announced today that it entered into voting, share purchase and non-redemption agreements (the “Non-Redemption Agreements”) with certain holders of SLAC’s Class A common stock, who have agreed to vote in favor of the proposal to extend the time SLAC has to complete an initial business combination by nine months, from May 17, 2023 to February 17, 2024 (the “Extension”). The purpose of the Extension is to provide additional time for SLAC and W3BCLOUD to complete the Business Combination. SLAC stockholders of record as of April 20, 2023 will be asked to approve the Extension at the special meeting of its stockholders to be held with respect to the Extension (the “Extension Meeting”). In connection with the Extension Meeting, SLAC has filed with the Securities and Exchange Commission (the “SEC”) a preliminary proxy statement, which will be mailed (if and when available) to all SLAC stockholders once definitive, and certain other related documents, which will be distributed to all SLAC stockholders in connection with SLAC’s solicitation of proxies for the vote by SLAC’s stockholders with respect to the Extension.

Under the Non-Redemption Agreements, stockholders holding a total of 650,000 shares of SLAC’s Class A common stock, representing approximately $6,500,000 of funds in SLAC’s trust account, agreed not to redeem their shares in connection with the Extension Meeting and certain other votes of SLAC’s stockholders, and to vote in favor of the Extension and the Business Combination. In exchange for the foregoing commitments, SLAC has agreed to issue to such non-redeeming stockholders shares of SLAC’s Class A common stock upon the closing of the Business Combination, provided such non-redeeming stockholders continue to hold the non-redeemed shares through the vote of SLAC stockholders on the consummation of the Business Combination. The Non-Redemption Agreements are intended to secure capital in SLAC’s trust account so that SLAC can meet the minimum cash balance condition and continue to negotiate the Business Combination. No assurances can be made that SLAC’s proposed Business Combination with W3BCLOUD will be consummated.

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W3BCLOUD also announced today that W3BCLOUD and SLAC had entered into a non-binding term sheet with B. Riley Principal Capital II, LLC (“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 is the emerging Web3 storage and compute infrastructure leader. Having financial flexibility is key to successfully executing our growth strategy,” said Sami Issa, CEO of W3BCLOUD. “We have evaluated the capital markets and believe that the B. Riley facility is the most cost-effective option to provide incremental capital needed to thoughtfully fuel our growth.”

Perella Weinberg Partners is acting as exclusive financial advisor to W3BCLOUD. B. Riley Securities is acting as capital markets advisor and PIPE placement agent 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. Duane Morris LLP is acting as legal advisor to B. Riley Securities.

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