On January 15, 2021, Silver Spike Acquisition Corp., a Cayman Islands exempted company (the “Company” or “Silver Spike”), filed a registration statement on Form S-4 (File No. 333-252186) (as amended on March 11, 2021,
April 1, 2021, May 14, 2021 and May 25, 2021, the “Registration Statement”) in connection with the Company’s proposed business combination with WM Holding Company, LLC, a Delaware limited liability company (“WMH”) pursuant to that certain Agreement
and Plan of Merger, dated as of December 10, 2020 (as amended or modified from time to time, the “Merger Agreement”), by and among Silver Spike, Silver Spike Merger Sub LLC, a Delaware limited liability company and a wholly owned direct subsidiary of
Silver Spike (“Merger Sub”’), WMH, and Ghost Media Group, LLC, a Nevada limited liability company, solely in its capacity as the securityholder representative thereunder (the “Holder Representative”). On May 25, 2021, the Registration Statement was
declared effective by the Securities and Exchange Commission (the “SEC”) and the Company filed a Definitive Proxy Statement/Prospectus relating to the Company’s extraordinary general meeting of shareholders scheduled to be held on June 10, 2021 (the
“Definitive Proxy Statement/Prospectus”) to, among other things, obtain the approvals required for the merger and the other transactions and ancillary agreements contemplated by the Merger Agreement.
As disclosed in the Registration Statement, two putative shareholder lawsuits have been filed against the Company in the Supreme Court of the State of New York, captioned, Brait v.
Silver Spike Acquisition Corp., et al., Index No. 650629/2021 (N.Y. Sup. Ct.), and Stout v. Silver Spike Acquisition Corp., et al., No. 650686/2021 (N.Y. Sup. Ct.) (the “Legal Actions”). The Legal
Actions allege that the members of the board of directors of the Company (the “Board”) breached their fiduciary duties in connection with the merger by omitting material information with respect to the merger from the Definitive Proxy
Statement/Prospectus, and that certain other defendants aided and abetted such breaches. The Company has also received similar demands from other purported shareholders of the Company, containing similar allegations.
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.
During that process, Silver Spike’s management:
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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;
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considered and conducted analyses of approximately sixty-five (65) potential business combination candidates, primarily in the cannabis and related health and wellness industries;
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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
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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.
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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 Stifel Nicolaus & Company (“Stifel”), pursuant to which Stifel was engaged as Silver Spike’s financial advisor and financing agent to provide
certain financial advisory and investment banking services in connection with the business combination and the PIPE financing. Silver Spike also executed an engagement letter with Piper Sandler & Co. (“Piper”), pursuant to which Piper was engaged
as Silver Spike’s financial advisor and financing agent to provide certain financial advisors and investment banking services in connection with the business combination and the PIPE subscription financing. Silver Spike hired each of Stifel and
Piper because of their expertise and familiarity with the industry.
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 December 7, 2020 and is not necessarily indicative of current market conditions.
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:
Online marketplace companies:
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Fiverr International Ltd.
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E-Commerce enablement platform companies:
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BigCommerce Holdings, Inc.
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ZoomInfo Technologies Inc.
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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.
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: Scott Gordon, Christopher Beals, Justin
Hartfield, Douglas Francis, Tony Aquila, Fiona Tan, Olga Gonzalez and Brenda Freeman. See ‘‘Proposal No. 10 – The Director Election Proposal.’’ In addition, there will be one vacancy on New WMH’s board directors upon the closing, which such vacancy
will be filled by an affirmative vote of a majority of New WMH’s board directors. Except for Mr. Gordon, no person affiliated with Silver Spike will serve as a director or officer of New WMH.