Item 8.01 Other Events.
On
As disclosed in the Registration Statement, two putative shareholder lawsuits
have been filed against the Company in the
The defendants and the Board deny that they have violated any laws or breached any duties to the Company's shareholders and believe that the claims asserted in these lawsuits are without merit. The Company believes that the Definitive Proxy Statement/Prospectus contains all material information required to be disclosed and that no supplemental disclosure is required to the Definitive Proxy Statement/Prospectus under any applicable law, rule or regulation. Nevertheless, since the outcome of these lawsuits and shareholder demands is uncertain, may cause delays to the closing of the merger, and litigation may be burdensome and expensive, the Company has decided to make the following supplemental disclosures. Nothing in this Form 8-K shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the disclosures set forth herein.
SUPPLEMENT TO DEFINITIVE PROXY STATEMENT/PROSPECTUS
This supplemental information should be read in conjunction with the Definitive Proxy Statement/Prospectus which should be read in its entirety. Page references in the below disclosures are to pages in the Definitive Proxy Statement/Prospectus, and defined terms used but not defined herein have the meanings set forth in the Definitive Proxy Statement/Prospectus. To the extent the following information differs from or conflicts with the information contained in the Definitive Proxy Statement/Prospectus, the information set forth below shall be deemed to supersede the respective information in the Definitive Proxy Statement/Prospectus. The Company denies any alleged violations of law or any legal or equitable duty. Without admitting in any way that the disclosures below are material or otherwise required by law, the Company makes the following supplemental disclosure solely for the purpose of mooting any alleged disclosure issues asserted in the Legal Actions.
The following underlined language supplements the fourth paragraph of text on page 127 of the Definitive Proxy Statement/Prospectus under the heading "Background of the Business Combination":
After the IPO, Silver Spike commenced an active search for prospective business combination candidates. Silver Spike contacted, and was contacted by, a number of individuals and entities with respect to business combination opportunities. During this search process, Silver Spike reviewed, and entered into preliminary discussions with respect to, a number of acquisition opportunities other than WMH.
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During that process, Silver Spike's management:
• developed an initial list of potential business combination candidates;
potential business combination candidates were primarily identified through
Silver Spike's general industry knowledge and network;
• considered and conducted analyses of approximately sixty-five (65) potential
business combination candidates, primarily in the cannabis and related health
and wellness industries;
• engaged in preliminary, high-level discussions of illustrative transaction
structure to effect an initial business combination with ten (10) potential
business combination candidates or their representatives; and
• engaged in meaningful and detailed discussions, due diligence, and negotiations
with six (6) potential business combination candidates or their representatives, one of which was WMH.
With respect to the five (5) other potential business combination candidates, three (3) were in the CBD brands and processors field, one (1) was in high tech engineering and one (1) was in consumer retail. Silver Spike did not pursue further a potential transaction with the other potential business combination targets with which it engaged in discussions for a variety of factors, including the impact of the COVID-19 crisis on the target companies, weaknesses in projected financial performance, inability to reach an agreement on valuation, structuring challenges, a potential target's failure to satisfy the 80% test included in Silver Spike's memorandum and articles of association (which requires any business acquired by Silver Spike to have a fair market value equal to at least 80% of the balance of the funds in the trust account) and mutual decisions to pursue potential alternative transactions.
The following underlined language supplements the second paragraph of text on page 129 of the Definitive Proxy Statement/Prospectus under the heading "Background of the Business Combination":
In the following weeks, Silver Spike executed an engagement letter with
The following language supplements the text on page 133 of the Definitive Proxy Statement/Prospectus under the heading "Silver Spike's Board of Directors' Reasons for Approval of the Business Combination":
Summary of Silver Spike Financial Analysis
The following is a summary of the material financial analyses prepared for and reviewed by the board of directors of Silver Spike in connection with the valuation of WMH. The summary set forth below does not purport to be a complete description of the financial analyses performed or factors considered by Silver Spike nor does the order of the financial analyses described represent the relative importance or weight given to those financial analyses by the board of directors of Silver Spike. Silver Spike may have deemed various assumptions more or less probable than other assumptions, so the value resulting from any particular portion of the analyses summarized below should not be taken to be Silver Spike's view of the actual value of WMH. Some of the summaries of the financial analyses set forth below include information presented in tabular format. Considering the data in the tables below without considering all financial analyses or factors or the full narrative description of such analyses or factors, including the methodologies and assumptions underlying such analyses or factors, could create a misleading or incomplete view of the processes underlying Silver Spike's financial analyses and the board of directors of Silver Spike's recommendation.
None of WMH, Silver Spike or any other person assumes responsibility if future
results are materially different from those discussed. Any estimates contained
in these analyses are not necessarily indicative of actual values or predictive
of future results or values, which may be significantly more or less favorable
than as set forth below. In addition, analyses relating to the value of WMH do
not purport to be appraisals or reflect the prices at which the common stock may
actually be valued. Accordingly, the results derived from the financial analyses
are inherently subject to substantial uncertainty. Except as otherwise noted,
the following quantitative information, to the extent that it is based on market
data, is based on market data as it existed on or before
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Comparable Company Analysis
The board of directors of Silver Spike reviewed certain financial information of WMH and compared it to certain publicly traded companies, selected based on the experience and the professional judgment of Silver Spike's board of directors.
Silver Spike considered certain financial and operating data for publicly traded (i) vertical SaaS companies, (ii) online marketplace companies and (iii) e-commerce enablement platform companies, in each case, that Silver Spike deemed relevant for analysis. The selected companies were:
Vertical SaaS companies: • Veeva Systems Inc. • Avalara, Inc. • AppFolio, Inc. • Chegg, Inc. • Aspen Technology, Inc.
Online marketplace companies:
• Fiverr International Ltd.
• GoodRX Holdings, Inc. • Match Group, Inc. • Etsy, Inc. • Zillow Group, Inc.
E-Commerce enablement platform companies:
• BigCommerce Holdings, Inc.
• Shopify Inc.
• ZoomInfo Technologies Inc.
• Lightspeed POS Inc. • HubSpot, Inc. • Sprout Social, Inc. • Digital Turbine, Inc. • Medallia, Inc. • Square, Inc.
Silver Spike observed that the median enterprise value to next twelve months' total revenue ("EV/Revenue") of the vertical SaaS, online marketplace and e-commerce enablement platform companies were 17.6x, 14.6x and 18.1x, respectively, which compared favorably to the EV/Revenue multiple of WMH of 6.8x (based on the WMH projections) implied by the proposed enterprise value for the transaction.
None of the selected companies has characteristics identical to WMH. Companies were selected because they have certain characteristics which may be deemed comparable to WMH. An analysis of selected publicly traded companies is not purely quantitative; rather it involves complex consideration and judgements concerning differences in financial and operating characteristics of the selected companies and other factors that could affect the public trading values of the companies reviewed. Silver Spike believed that it was inappropriate to, and therefore did not, rely solely on the quantitative results of the selected public company analysis. Accordingly, Silver Spike also made qualitative judgments, based on the experience and professional judgment of its board of directors, concerning differences between the operational, business and/or financial characteristics of Silver Spike and the selected companies to provide a context in which to consider the results of the quantitative analysis.
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The following underlined language supplements the text on page 138 of the Definitive Proxy Statement/Prospectus under the heading "Board of Directors of New WMH Following the Business Combination":
Upon the closing, assuming the election of each of the director nominees and
re-nominees, the board of directors of New WMH will consist of the following
eight (8) directors:
Item 7.01. Regulation FD Disclosure.
On or about
In connection with this notification, WMH promoted
There are no family relationships between
Forward Looking Statements
The information in this Current Report includes "forward-looking statements"
within the meaning of the "safe harbor" provisions of the United States Private
Securities Litigation Reform Act of 1995. Forward-looking statements may be
identified by the use of words such as "estimate," "plan," "project,"
"forecast," "intend," "will," "expect," "anticipate," "believe," "seek,"
"target" or other similar 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 financial and performance metrics, projections of market
opportunity and market share, expectations and timing related to commercial
product launches, potential benefits of the transaction and the potential
success of WMH's go-to-market strategy, and expectations related to the terms
and timing of the transaction. These statements are based on various
assumptions, whether or not identified in this Current Report, and on the
current expectations of WMH's and Silver Spike'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 will differ from assumptions. Many actual
events and circumstances are beyond the control of WMH and Silver Spike. These
forward-looking statements are subject to a number of risks and uncertainties,
including changes in domestic and foreign business, market, financial, political
and legal conditions; the inability of the parties to successfully or timely
consummate the proposed 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 shareholders of Silver Spike or the equityholders of WMH is not obtained;
failure to realize the anticipated benefits of the proposed business
combination; risks relating to the uncertainty of the projected financial
information with respect to WMH; future global, regional or local economic and
market conditions affecting the cannabis industry; the development, effects and
enforcement of laws and regulations, including with respect to the cannabis
industry; WMH's ability to successfully capitalize on new and existing cannabis
markets, including its ability to successfully monetize its solutions in those
markets; WMH's ability to manage future growth; WMH's ability to develop new
products and solutions, bring them to market in a timely manner, and make
enhancements to its platform and WMH's ability to maintain and grow its two
sided digital network, including its ability to acquire and retain paying
customers; the effects of competition on WMH's future business; the amount of
redemption requests made by Silver Spike's public shareholders; the ability of
Silver Spike or the combined company to issue equity or equity-linked securities
in connection with the proposed business combination or in the future; the
outcome of any potential litigation, government and regulatory proceedings,
investigations and inquiries; and those factors discussed in Silver Spike's
final prospectus dated
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Additional Information About the Proposed Business Combination and Where To Find It
In connection with the proposed business combination, Silver Spike filed the
Registration Statement with the
Participants in the Solicitation
Silver Spike, WMH and certain of their respective directors, executive officers
and other members of management and employees may, under
No Offer or Solicitation
This Current Report does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
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