Proxy Soliciting Materials (revised) (prer14a)

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements included in this proxy statement that are not historical facts are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may generally be identified by the use of the 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 and projections of market opportunity and market share, the satisfaction of closing conditions to the Business Combination, the level of redemptions by SLAC’s public stockholders, SLAC’s ability to obtain any incremental PIPE Investment or Transaction Financing, the Company’s ability to obtain any private capital financing, and the timing of the completion of the Business Combination, including the anticipated closing date and the use of the cash proceeds therefrom. These statements are based on various assumptions, whether or not identified in this proxy statement, and on the current expectations of the Company’s and SLAC’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 SLAC.

These forward-looking statements are subject to a number of risks and uncertainties, including:

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In addition, the following important factors could affect the future results of New W3BCLOUD following the Business Combination and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements in this proxy statement:

Other sections of this proxy statement describe additional factors that could adversely affect the business, financial condition or results of operations of SLAC and the Company prior to the Business Combination, and New W3BCLOUD following the Business Combination. If any of these risks materialize or SLAC’s or the Company’s assumptions prove incorrect, actual results of SLAC and the Company prior to the Business Combination, and New W3BCLOUD following the Business Combination, could differ materially from the results implied by these forward-looking statements.

There may be additional risks that neither SLAC nor the Company presently know or that SLAC and the Company currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. New risk factors emerge from time to time and it is not possible to predict all such risk factors, nor can SLAC or the Company assess the impact of all such risk factors on the business of SLAC and the Company prior to the Business Combination, and New W3BCLOUD following the Business Combination, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. In addition, forward-looking statements reflect SLAC’s and the Company’s expectations, plans or forecasts of future events and views as of the date of this proxy statement. These statements are based upon information available to SLAC or the Company, as applicable, as of the date of this proxy statement, and while such party believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and statements should not be read to indicate that SLAC or the Company, as applicable, has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. SLAC and the Company anticipate that subsequent events and developments will cause SLAC’s and the Company’s assessments to change. However, while SLAC and the Company prior to the Business Combination, and New W3BCLOUD following the Business Combination, may elect to update these forward-looking statements at some point in the future, SLAC and the Company prior to the Business Combination, and New W3BCLOUD following the Business Combination, specifically disclaim any obligation to do so, unless required by applicable law. These forward-looking statements should not be relied upon as representing SLAC’s and the Company’s assessments as of any date subsequent to the date of this proxy statement.

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RISK FACTORS

In addition to the other information contained in this proxy statement, including the matters addressed under the heading “Cautionary Note Regarding Forward-Looking Statements,” you should carefully consider the following risk factors in deciding how to vote on the Proposals presented in this proxy statement. The risk factors described below disclose both material and other risks, and are not intended to be exhaustive and are not the only risks facing us. Additional risks not currently known to us or that we currently deem to be immaterial, or which are not identified because they are generally common to businesses, also may materially adversely affect our business, financial condition, results of operations and cash flows in future periods. You are encouraged to perform your own investigation with respect to our business, financial condition and prospects.

Unless the context otherwise requires, all references in this section to the “Company,” “W3BCLOUD,” “we,” “us,” or “our” refer to W3BCLOUD Holdings Inc. and its subsidiaries prior to the consummation of the Business Combination, and to W3BCLOUD, Inc. and its subsidiaries following the consummation of the Business Combination.

Risks Related to Our Business and Industry

We have a limited operating history in an evolving and highly volatile industry, which makes it difficult to evaluate our current business and future prospects, and we may not be able to realize our business plan or manage our growth.

We were established in 2018 and began our operations in 2019 as a joint venture between AMD and ConsenSys. We began generating revenue in 2021 from our operations. While we currently utilize storage and compute infrastructure to support the Ethereum Classic, Filecoin, Pocket and Zilliqa Proof-of-Work blockchains, over the long-term, we plan to deploy our compute and storage resources to serve a variety of Web3 protocols and their dApps’ ecosystems, such as Web3-enabled gaming, NFTs, DeFi, and the Metaverse. Over time, we plan to offer products and services to enterprises seeking access to Web3 products and services (B2B) and eventually consumers seeking the same (B2C). Our limited operating history, the rapidly evolving nature of the blockchain and digital asset markets in which we operate, substantial uncertainty concerning how these markets may develop, and other economic factors beyond our control, reduce our ability to accurately forecast quarterly or annual revenue, to evaluate our current business and future prospects, and to plan for and model future growth.

To effectively manage and capitalize on our growth, we must continue to expand our information technology and financial, operating, and administrative systems and controls, and continue to manage headcount, capital, and processes efficiently. Our continued growth could strain our existing resources, and we could experience ongoing operating difficulties in managing our business as it expands across numerous jurisdictions, including difficulties in hiring, training, and managing a diffuse and growing employee base. If we do not adapt to meet these evolving challenges, or if our management team does not effectively scale with our growth, our business may be harmed. Moreover, the failure of our systems and processes could undermine our ability to provide accurate, timely, and reliable reports on our financial and operating results, and could impact the effectiveness of our internal controls over financial reporting. In addition, our systems and processes may not prevent or detect all errors, omissions, or fraud. Any of the foregoing operational failures could lead to noncompliance with laws, and loss of any operating licenses or other authorizations that may be required in the future, or loss of partnership relationships that could substantially impair or even suspend company operations. Failure to manage our current and future growth effectively could have an adverse effect on our business, financial condition and results of operations. Successful implementation of our growth strategy may also require significant expenditures and we cannot guarantee that these increased expenditures will result in corresponding and offsetting revenue growth.

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If we fail to successfully execute on our business plan or if digital assets and blockchain do not become widely used on a mass scale through Web3 as we anticipate, our results of operations could be adversely affected.

We currently provide storage and compute infrastructure for some of the most impactful Web3 protocols such as Ethereum Classic, Filecoin, Pocket and Zilliqa Proof-of-Work. We have made business to protocol (B2P) the focus of our initial growth and are expanding into business to business (B2B), with significant resources allocated to the effort. Expanding from business to consumer (B2C) will follow our B2B build-out.

Our ability to achieve our financial projections and the diversification of revenue streams that those projections anticipate depends on the success of our continued expansion from B2P to B2B and then to B2C. There are various risks related to these efforts, including the risk that these efforts may not provide the expected benefits in our anticipated time frame, if at all, and may prove costlier than expected; and the risk of adverse effects to our business, results of operations and liquidity if past and future undertakings, and the associated changes to our business, do not prove to be cost effective or do not result in benefits at the levels that we anticipate.

We have an evolving business model that is subject to various uncertainties. Our model is predicated on digital assets and blockchain becoming more widely used on a mass scale through Web3. As this occurs, we anticipate that the services and products arising from digital assets and blockchain will continue to evolve. Our historical focus has been on our Ethereum and Filecoin protocols and building out our footprint of storage and compute servers. Since “the Merge” (as defined below), we have shifted those servers to support uses other than Ethereum, such as Ethereum Classic, while significantly ramping our Filecoin storage protocol operations. There is no assurance that Web3 will develop as we anticipate or develop on a mass scale at all. There also is no assurance that our business model will achieve the expected results. To be successful over time, we may need to change our business model to respond to the evolution of Web3 and the results we have achieved. Any such efforts may not be successful.

Our intentions and expectations with regard to the execution of our business plan, and the timing of any related initiatives, are subject to change at any time based on management’s subjective evaluation of our overall business needs. If we are unable to successfully execute our business plan, whether due to failure to realize the anticipated benefits from our various business initiatives in the anticipated time frame or otherwise, we may be unable to achieve our financial targets.

We have a business plan which is primarily dependent on our ability to deploy our storage and compute infrastructure to support a broad range of Web3 protocols. An inability to do so could result in us not being able to realize our business plan or operate a profitable business.

We have utilized our storage and compute resources to support the Ethereum Classic, Filecoin, Pocket and Zilliqa Proof-of-Work protocols, which we believe has been the most efficient use of our capital expenditures in our early stages of growth. Changes and updates to protocols such as implementation of “the Merge” may disrupt our business plan. We also are deploying our storage and compute resources to support other Web3 use cases, such as Web3-enabled gaming, NFTs, DeFi, and the Metaverse. There can be no assurance that we will succeed in our effort to support the Ethereum Classic, Filecoin, Pocket or Zilliqa Proof-of-Work protocols and to support other Web3 use cases.

We have a business plan that relies on our strategic relationship with AMD and ConsenSys. A disruption of either or both of these strategic relationships could have a material adverse effect on our business and prospects.

We believe our strategic relationship with AMD provides us access to best-in-class servers, CPUs, GPUs and FPGAs, as well as access to the expertise to optimize our hardware. Our strategic relationship with ConsenSys further provides us access to optimized software and valuable protocol insights as we deploy our

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hardware to other protocols. There can be no assurance that either the AMD or ConsenSys relationship will continue or continue in its current form, and any disruption of either or both of these strategic relationships could have a material adverse effect on our business and prospects.

We have a business plan which is affected by the prices of the digital assets that we may hold. A decline in the prices of such digital assets could result in significant losses to us.

Web3 blockchain protocols use digital assets to reward developers, creators and infrastructure providers. As a Web3 infrastructure provider, we have historically held digital assets that we do not otherwise sell to fund our operating expenses. As a result, our operating results will be affected by the value of Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and other digital assets that we may hold. See “Information About the Company—Introduction” for the other digital assets that we may hold in the future. Specifically, our revenues are primarily based upon the number digital assets we receive for providing storage and compute resources, and the value of those digital assets at the time of receipt. In addition, our operating results are directly impacted by changes in the value of those digital assets that we hold. On a monthly basis, we will assess our digital asset holdings for impairment and record any impairment. A decline in the prices of those digital assets could result in significant losses to us. Digital assets, including Ethereum Classic, Filecoin, Pocket and Zilliqa Proof-of-Work, have historically experienced high levels of volatility far in excess of that experienced in other financial assets. See “—Risks Related to the Company’s Financial Condition—The prices of digital assets are extremely volatile, and price fluctuations may adversely impact the value of digital assets that we hold.”

From time to time we may provide a certain amount of digital assets as collateral under certain loan agreements. Currently, there are no such digital assets loans outstanding. See “Description of Certain Company Indebtedness—Digital Currency Loan Agreements.” If the price of digital assets declines, we may need to provide additional collateral in the form of digital assets, from time to time, to comply with certain loan to collateral ratios. As a result, if the price of digital assets declines, we could incur losses and these losses could be significant.

To the extent that the profit margins of digital assets are not high, validators are more likely to immediately sell token rewards earned by validating in the market, thereby constraining the growth of the price of the digital assets that could adversely impact us.

Professional infrastructure operations may use proprietary hardware or specialized machines. Acquiring specialized hardware at scale requires the investment of significant up-front capital, and infrastructure providers incur significant expenses related to the operation of this hardware at scale, such as the leasing of operating space (often in data centers or warehousing facilities), incurring of electricity costs to run the infrastructure equipment and the employment of technicians to operate the data centers. As a result, professional infrastructure operations are of a greater scale and have more defined and regular expenses and liabilities. These regular expenses and liabilities require professional infrastructure operations to maintain profit margins on the sale of digital assets. To the extent the price of a digital asset declines and such profit margin is constrained, professional infrastructure operators are incentivized to more immediately sell digital assets earned from operations, whereas it is believed that these operators in past years were more likely to hold newly earned digital asset for more extended periods. The immediate selling of a newly earned digital asset greatly increases the trading volume of the digital asset, creating downward pressure on the market price of digital asset rewards. Lower prices of digital assets could result in further tightening of profit margins for professional infrastructure operations, creating a network effect that may further reduce the price of the digital assets until infrastructure operations with higher operating costs become unprofitable, thus forcing them to reduce or cease operations temporarily. For example, Ethereum blockchain’s transition to a Proof-of-Stake consensus mechanism has resulted in, and may further result in, lower prices of Ethereum. Such circumstances could have a material adverse effect on our business, financial condition and results of operations, and potentially the value of Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and any other digital assets we hold.

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If the token reward for solving blocks and transaction fees are not sufficiently high or the transaction fees become too high, operators may not have an adequate incentive to continue operations or it may decrease the demand for the blockchains on which we provide services and we may not be able to realize our business plan.

A decrease in the number of tokens awarded (decreased issuance) in a blockchain may adversely affect operators’ incentive to expand their infrastructure. Operators reducing or ceasing operations would reduce the collective storage and/or compute power supporting said blockchain in a manner that adversely affects our activities. Such events could have a material adverse effect on our business, financial condition and results of operations, and potentially the value of any digital asset we hold.

If blockchain transaction fees paid for executing transactions become too high, the market’s adoption of Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work or other digital assets may be adversely affected and existing users may be motivated to switch from Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and other digital assets to another digital asset or to fiat currencies. For example, a software upgrade that automatically charges fees for all transactions may decrease demand for Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work or other digital assets and prevent the expansion of these blockchain networks to retail merchants and/or commercial businesses, resulting in a reduction in the price of Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and other digital assets that could adversely affect our business, financial condition and results of operations.

Profitability may be adversely affected by competition.

We compete with companies that focus on some or all of the same aspects of providing storage and compute infrastructure to Web3 protocols, including, but not limited to, identifying commercially promising Web3 protocols, building relationships with Web3 developers and communities, supporting Web3 developers and creators, optimizing hardware, developing custom hardware and purchasing hardware for Web3 uses, optimizing software and developing custom software for Web3 uses, leasing facilities to host hardware and software, accessing low-cost clean power, developing Web3-related software/tools and efficiently managing a treasury that includes Web3 protocols’ tokens.

We operate in a highly competitive industry in which the current Web2 incumbents have significant resources and operational reach which they can bring to bear if they choose to expand into Web3 in any meaningful way. We believe the Web3 market opportunity will expand at a rapid pace which will afford us the opportunity to capture market share as an early leader in the space. The sectors in which we currently operate and those we may enter in the future can become attractive to potential competitors with the requisite commercial and technical know-how. In addition to competing for market share, we must compete for access to the capital equipment needed to serve high-performance compute workloads, datacenter leases to house our equipment and the talent and staff to run datacenter operations and extend our technical innovation in the space. Competition may be exacerbated if the growth of Web3 use cases were to slow or stop. If we are unable to effectively respond to these risks, our business, financial condition and results of operations could be materially and adversely affected.

There is a lack of liquid markets and a risk of possible manipulation of digital assets.

Digital assets may not necessarily benefit from viable trading markets. Stock exchanges have listing requirements and vet issuers, requiring them to be subjected to rigorous listing standards and rules, and monitor investors transacting on such exchanges for fraud and other improprieties. These conditions may not necessarily be replicated on a centralized or decentralized market for digital assets, depending on the platform’s controls and other policies. The laxer a digital assets market is about vetting issuers of digital assets or users that transact on the platform, the higher the potential risk for fraud or the manipulation of the digital assets. These factors may decrease liquidity or volume or may otherwise increase volatility of investment securities or other assets trading on a digital assets market, which may have a material adverse effect on our business, financial condition and results of operations, and potentially the value of any Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work or other digital assets we hold.

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Digital assets may have concentrated ownership and large sales or distributions by holders of such digital assets could have an adverse effect on the market price of such digital asset.

Certain persons or entities might control multiple wallets that collectively hold a significant amount of Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work or other digital assets, even if they individually only hold a small amount, and it is possible that some of these wallets are controlled by the same person or entity. Similar or greater levels of concentrated ownership may exist for other digital assets as well. As a result of this concentration of ownership, large sales or distributions by such holders could have an adverse effect on the market price of Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and other digital assets and therefore affect the value of the Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work or other digital asset inventory we hold. Such events could have a material adverse effect on our business, financial condition and results of operations, and potentially the value of any digital asset we hold.

Digital assets that we hold may be subject to loss, theft, or restriction on access. Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and other digital asset transactions are irrevocable and stolen or incorrectly transferred digital assets may be irretrievable. As a result, any incorrectly executed transactions in such digital assets could adversely affect an investment in us.

There is an inherent risk that some or all of the digital assets we hold could be lost or stolen. Our digital assets are currently held in our digital asset trading accounts with Kraken Bank, which may be more vulnerable to cybercrime.

Additionally, Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and other digital asset transactions are not reversible. Once a transaction has been verified and recorded in a block that is added to the digital asset’s blockchain, an incorrect transfer of digital asset, such as Ethereum Classic, Filecoin, Pocket or Zilliqa Proof-of-Work, or theft of Ethereum Classic, Filecoin, Pocket or Zilliqa Proof-of-Work generally will not be reversible, and we may not be capable of seeking compensation for any such transfer or theft. To the extent that we or Kraken Bank are unable to successfully seek redress for such error or theft, such loss could adversely affect our business, financial condition and results of operations.

Concerns about the environmental impacts of blockchain technology could adversely impact usage and perceptions of Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work, other digital assets or us.

The energy usage and environmental impact of certain blockchain technologies, particularly in relation to Proof-of-Work blockchains, has attracted considerable recent attention. Government scrutiny related to restrictions on Proof-of-Work facilities and their energy consumption may increase, resulting in additional regulation that could adversely impact usage of digital assets relying on Proof-of-Work consensus mechanisms and harm our business. For example, in June and July of 2021, the Chinese government prohibited the operation of mining machines and supply of energy to mining businesses, citing concerns regarding high levels of energy consumption. United States legislation and increased regulation regarding climate change could impose significant costs on us and our suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting, and other costs to comply with such regulations. Specifically, imposition of a carbon tax or other regulatory fee in a jurisdiction where we operate or on electricity that we purchase could result in substantially higher energy costs. Any future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such limitations.

Because we are unable to influence or predict future regulatory actions taken by federal, state, local or foreign governments, we may have little opportunity or ability to respond to rapidly evolving regulatory positions which may have a materially adverse effect on our industry and, therefore, our business and results of operations. If further extreme regulatory action is taken by various government entities, our business may be negatively affected. The considerable consumption of electricity by Proof-of-Work operators may also have a negative environmental impact, including contribution to climate change, which could create a negative perception of digital assets generally and adversely affect our business, financial condition and results of operations.

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As of the date of this proxy statement, the Ethereum Classic and Zilliqa Proof-of-Work blockchains rely on Proof-of-Work mechanisms and the Pocket blockchain utilizes a Proof-of-Stake consensus mechanism. The Filecoin blockchain relies on a Proof-of-Spacetime consensus mechanism.

As a remote-first company, we may be subject to heightened operational and cybersecurity risks.

We are a remote-first company, meaning that for all existing roles our employees work from their homes or other non-company locations. This may subject us to heightened operational risks. For example, technologies in our employees’ and service providers’ homes may not be as robust as those used in corporate offices and could cause the networks, information systems, applications, and other tools available to employees and service providers to be more limited or less reliable. Further, the security systems in place at our employees’ and service providers’ homes may be less secure than those used in corporate offices, and while we have implemented technical and administrative safeguards to help protect our systems as our employees and service providers work from home, we may be subject to increased cybersecurity risk which could expose us to risks of data or financial loss, and could disrupt our business operations. There is no guarantee that the data security and privacy safeguards we have put in place will be completely effective or that we will not encounter risks associated with employees and service providers accessing company data and systems remotely.

Our revenue for storage and compute infrastructure services relies heavily on payment from protocol smart contracts and/or third-party pool operators and may be negatively impacted by cyber-attacks against protocol smart contracts or pool operators and/or our limited recourse against protocol smart contracts or pool operators with respect to rewards payable to us.

We receive digital asset rewards from providing our storage and compute resources to protocol smart contracts and/or third-party pools. Protocol smart contracts pay rewards directly to providers of storage and/or processing power. Pools allow participants to combine their storage/processing power, increasing their chances of solving a block and getting paid by the protocol. The rewards are distributed by the pool operator, proportionally to a participant’s contribution to the pool’s overall power, used to generate each block. See “Information About the Company—Blockchain Consensus Mechanisms” for details of the basis on which we earn rewards from the protocols. Our proportion of the rewards are temporarily held by the operator of the pool for approximately 24 to 48 hours until they are distributed to our digital asset trading account at Kraken Bank. During this time, digital assets held by the pool operator may be subject to risk of loss due to theft or loss of private keys, among other things, and distributions of such digital assets from the pool operator to its custodian or other wallets may be intercepted by malicious actors. To the extent the pool operators maintain insurance for such loss or theft, the total value of digital assets in their possession and control may be significantly greater than the total value of insurance coverage that would compensate a pool operator in the event of theft or other loss. In addition, for Proof-of-Work protocols, we earn rewards in proportion to the hash rate we contribute to a successful validating transaction, therefore if a protocol smart contract or a pool operator’s system suffer downtime due to a cyber-attack, software malfunction or other similar issues, it will negatively impact the ability of the pool to successfully generate a block and to yield returns, in which case our ability to receive revenue from providing our storage and compute infrastructure to the protocol or the pool will be negatively affected. Furthermore, we are dependent on the accuracy of the protocol smart contract in recording solved blocks and the ability of the pool operator to accurately record the total storage/processing power provided to the pool for a given digital asset application in order to assess the proportion of that total storage/processing power we provided. While we have internal methods of tracking both our contribution to the protocol smart contract and to the pool, as well as the total used by the pool, the protocol smart contract makes its own record and the pool operator uses its own recordkeeping to determine our proportion of a given reward. We have little means of recourse against the smart contract or the pool operator if we determine the reward paid out to us by the protocol smart contract or the pool operator, as the case may be, is incorrect, other than leaving the pool and/or the protocol. If we are unable to consistently obtain accurate proportionate rewards from our protocol smart contracts or pool operators, we may experience reduced reward for our efforts, which would have an adverse effect on our business and operations.

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Finally, protocol smart contracts are controlled by a community of developers who can elect to change the smart contract’s rewards schema which could impact our revenues negatively.

Digital Asset, Equipment and Technology Related Risks

The future development and growth of Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and other digital assets for which we may provide services are subject to a variety of factors that are difficult to predict and evaluate and may be in the hands of third parties to a substantial extent. If these digital assets do not grow as we expect, our business, financial condition and results of operations could be adversely affected.

The further growth and development of any digital asset and their underlying networks and other cryptographic and algorithmic protocols governing the creation, transfer, and usage of such digital assets represent a new and evolving paradigm that is subject to a variety of factors that are difficult to evaluate, including:

These risks are fundamentally beyond our control and could materially and adversely affect Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work or other digital assets and our business, financial condition and results of operations.

The transition of Ethereum to Proof-of-Stake consensus as part of the implementation of “The Merge” could make our Ethereum-related activities less competitive and ultimately adversely affect our business, financial condition and results of operations.

In the second half of 2020, Ethereum began the first of several stages of an upgrade called Serenity, or Ethereum 2.0. In January 2022, the upgrades that comprised Ethereum 2.0 were officially reprioritized and the update renamed as “The Merge,” which was completed on September 15, 2022. Among other things, the Merge amended the Ethereum network’s consensus mechanism to Proof-of-Stake, but delayed the addition of other features originally included in Ethereum 2.0, such as “sharding,” to a later date. As a result of the Merge, the Ethereum protocol shifted from a Proof-of-Work validation method to a Proof-of-Stake method. After the Merge, validating Ethereum transactions now requires vastly less energy (according to the Ethereum Foundation, the Ethereum network’s energy consumption was reduced by ~99.95%) and may render any company that maintained advantages in the pre-Merge climate (for example, from lower priced electricity, processing, real estate, or hosting) less competitive. We consider our ability to bolster the storage and compute power of blockchain network by combining customized hardware and proprietary software to be a competitive advantage. While we currently do not support Ethereum Proof-of-Stake, we plan to use the amount of Ethereum accumulated in our treasury for staking services, and for this Proof-of-Stake protocol we will seek to derive staking revenue from making our computing capabilities available for transaction validation when a node successfully creates or validates a block. Staking revenue would be driven by the quantity, price, and rewards

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rate of the staked digital asset, instead of the capacity of the hardware. As a result, the switch to Proof-of-Stake could have a negative impact on our competitive advantage and our revenues from Ethereum, our business, financial condition and results of operations.

Technological risks associated with updating the Ethereum blockchain may cause the value of Ethereum to decline. If the Ethereum blockchain is unable to identify, troubleshoot and resolve any such issues successfully, we may no longer be able to support such digital assets. In addition, the Merge, as well as other future developments to the Ethereum protocol, are highly experimental, and as a result, could lead to failures in implementation or in the code itself, and could result in a permanent fork. The Merge may also cause the centralization of staking power in a relatively small number of validators which could occur, for example, as a result of validators ceasing operations or if staked Ethereum is otherwise concentrated in a small number of validators. As a result, it may adversely affect the confirmation process for transactions (i.e., temporarily decreasing the speed at which blocks are added to a blockchain until the next scheduled adjustment in difficulty for block solutions) or otherwise be possible for a bad actor to manipulate a blockchain and hinder transactions. To the extent we provide infrastructure services to the Ethereum blockchain, technological issues associated with updating the Ethereum blockchain and reduction in confidence in the confirmation process or processing power of the Ethereum blockchain may adversely affect an investment in us.

Due to unfamiliarity and some negative publicity associated with digital asset and blockchain technology, the general public may lose confidence in digital asset or blockchain technology.

Products and services that are based on Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and other digital assets are relatively new. Many players in the industry are unlicensed, unregulated, operate without supervision by any governmental authorities, or do not provide the public with significant information regarding their ownership structure, management team, corporate practices, cybersecurity, and regulatory compliance. As a result, the general public may lose confidence in digital asset and blockchain technology, including associated data center operations like ours.

Since the inception of the cryptoeconomy, numerous digital asset and digital asset businesses and platforms have been sued, investigated, or shut down due to fraud, illegal activities, the sale or issuance of unregistered securities, manipulative practices, business failure, and security breaches.

In addition, there have been reports that a significant amount of digital asset trading volume is fabricated and false in nature, with a specific focus on unregulated platforms, products and services located outside the United States. Such reports may indicate that the market for products and services utilizing digital assets and other digital assets is significantly smaller than otherwise understood.

Negative perception, a lack of stability and standardized regulation in the cryptoeconomy, and the closure or temporary shutdown of platforms utilizing digital assets due to fraud, business failure, hackers or malware, or government mandated regulation may reduce confidence in the cryptoeconomy and result in greater volatility of the prices of assets, including significant depreciation in value. Any of these events could have a material and adverse impact on our business, financial condition and results of operations.

The cost of obtaining new and replacement hardware and parts has historically been and is likely to continue to be capital intensive and may increase along with the market price of and demand for digital assets, which may have a material and adverse effect on our business, financial condition and results of operations.

Our operations can only be successful and ultimately profitable if the costs, including software, hardware and electricity costs, associated with the operations of our data centers are lower than the price of the digital assets we accumulate. Our hardware experiences ordinary wear and tear from the operation of our data centers and may also face more significant malfunctions caused by factors that may be beyond our control. Additionally, as the technology evolves, we may acquire newer models to remain competitive in the market. This upgrading

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process requires substantial capital investment, and we may face challenges in doing so on a timely and cost-effective basis based on the availability of new hardware and our access to adequate capital resources. We may face challenges obtaining new and replacement hardware and parts on a timely and cost-effective basis based on the availability of new hardware and our access to adequate capital resources. We have observed a significant increase in the demand for hardware as digital asset prices increase. As a result, the cost of new machines could also be significantly higher than the historical cost for our older equipment. At times, we may have to obtain hardware at significantly higher prices, to the extent it is available. If we are unable to obtain adequate numbers of new and replacement hardware at scale in a cost-effective manner, we may be unable to remain competitive in our highly competitive and evolving industry. If this occurs, our business, financial condition and results of operations could be materially and adversely affected. On the other hand, we incur significant up-front capital costs each time we acquire new equipment, and, if future prices of Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work or other digital assets we hold are not sufficiently high, we may not realize the benefit of these capital expenditures.

We face intense and increasing competition and, if we do not compete effectively, our competitive positioning and our operating results will be harmed.

We operate in a rapidly changing and highly competitive industry, and we expect our competition to continue to increase. The Web3 industry is nascent, fast growing and constantly evolving with new companies and technologies that could impact the way we do business. We expect that new and existing competitors may look to build and/or increase the scope of the storage and compute infrastructure resources that they offer to Web3 use cases as the market grows. We compete with companies that focus on some or all of the same aspects of providing storage and compute infrastructure to Web3 protocols, including, but not limited to, identifying commercially promising Web3 protocols, building relationships with Web3 developers and communities, supporting Web3 developers and creators, optimizing hardware, developing custom hardware and purchasing hardware for Web3 uses, optimizing software and developing custom software for Web3 uses, leasing facilities to host hardware and software, accessing low-cost clean power, developing Web3-related software/tools and efficiently managing a treasury that includes Web3 protocols’ tokens. Several public companies may be considered to compete with us. These include, but are not limited to, Equinix and Digital Realty in the data center sector, Circle and Coinbase in the crypto and digital assets sector and Core Scientific and Marathon Digital in the mining sector. Moreover, the Web3 industry is growing quickly and we expect that we will face competition from new entrants in the future that may increase competition in the markets we operate. In addition to established enterprises, we may also face competition from early-stage companies attempting to capitalize on the same, or similar, opportunities as we are.

Some of our current and potential competitors have longer operating histories, significantly greater financial, technical, marketing and other resources. Competition from existing and future competitors could result in our inability to secure acquisitions and partnerships that we may need to expand our business in the future. This competition from other entities with greater resources, experience and reputations may result in our failure to maintain or expand our business, as we may never be able to successfully execute our business plan. Our current and future business prospects demand that we act to meet these competitive challenges but, in doing so, our revenue and results of operations could be adversely affected if we, for example, increase marketing expenditures or make other expenditures. All of the foregoing factors and events could adversely affect our business, financial condition, results of operations, cash flows and future prospects.

Delays or difficulty in us obtaining new hardware or price increases of hardware due to increased demand or global supply chain constrains could materially and adversely affect our business and results of operations.

Many of the competitors in our industry have been purchasing hardware at scale, which has caused a worldwide shortage of hardware and extended the corresponding delivery schedules for new hardware purchases. It is uncertain how manufacturers will respond to this increased global demand and whether they can deliver on the schedules promised to all of their customers.

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The global supply chain for hardware is presently constrained due to unprecedented demand coupled with a global semiconductor shortage. China, a major supplier of digital asset hardware, has seen a production slowdown as a result of COVID-19. In response to China-based supply chain disruptions, many companies in our industry have shifted manufacturing outside of China, which usually results in longer shipping delays and unit cost increases. For example, we shifted manufacturing from China to Taiwan in 2021 and this shift resulted in a 10% increase in the cost of our equipment during 2021. Should similar outbreaks or other disruptions to the China-based global supply chain for hardware occur, we may not be able to obtain adequate replacement parts for our existing hardware or to obtain additional hardware on a timely basis, if at all, or we may only be able to acquire hardware at premium prices. Such events could have a material adverse effect on our ability to pursue our strategy, which could have a material adverse effect on our business.

Flaws in the source code of blockchain networks may be unknown to us and may negatively affect our business in multiple ways.

In the past, flaws in the source code for digital asset networks have been exposed and exploited, including flaws that disabled some functionality for users and/or resulted in the theft of users’ digital assets. For example, in 2016, The Decentralized Autonomous Organization (the “DAO”) raised $150 million worth of Ethereum in one of the earliest crowdfunding efforts and high-profile projects built on the Ethereum blockchain. Less than three months after its launch, the DAO was hacked and $60 million of Ethereum was stolen. The Ethereum blockchain, on which the DAO was built, was later controversially forked to restore the stolen funds. The hard network fork split the Ethereum blockchain into two. The original chain continued as Ethereum Classic, while the new one was called Ethereum Proof-of-Stake. In addition, in July 2017, a vulnerability in a smart contract for a multi-signature wallet software developed by Parity led to a $30 million theft of Ethereum, and in November 2017, a new vulnerability in Parity’s wallet software led to roughly $160 million worth of Ethereum being indefinitely frozen in an account. The cryptography underlying a digital asset network could prove to be flawed, ineffective or potentially insufficiently tested, or developments in mathematics and/or technology, such as advances in digital computing, algebraic geometry, and quantum computing, could result in such cryptography becoming ineffective. In any of these circumstances, a malicious actor may be able to steal the digital assets held by others, which could adversely affect the demand for such digital assets and therefore adversely impact their price and the results of our operations. Even if a digital asset other than Ethereum Classic, Filecoin, Pocket or Zilliqa Proof-of-Work were affected by similar circumstances, any reduction in confidence in the robustness of the source code or cryptography underlying digital assets generally could negatively affect the demand for all digital assets, including Ethereum Classic, Filecoin, Pocket and Zilliqa Proof-of-Work, and therefore adversely affect our business, financial condition and results of operations.

We may not be able to realize the benefits of forks.

To the extent that a significant majority of users, validators and/or mining operators on a digital asset network install software that changes the digital asset network or properties of a digital asset, including the irreversibility of transactions and limitations on the mining of new digital asset, the digital asset network would be subject to new protocols. However, if less than a significant majority of users, validators and/or mining operators on the digital asset network consent to the proposed modification, and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a “fork” of the network, with one prong running the pre-modified software and the other running the modified software. The effect of such a fork would be the existence of two distinct versions of the digital asset existing in parallel, yet lacking interchangeability. Additionally, it may be unclear following a fork which fork represents the original asset and which is the new asset. Different metrics adopted by industry participants to determine which is the original asset include: referring to the wishes of the core developers of a digital asset, blockchains with the greatest amount of hashing power contributed by mining equipment or validators; or blockchains with the longest chain.

If we hold a digital asset at the time of a hard fork into two digital assets, industry standards would dictate that we would be expected to hold an equivalent amount of the old and new assets following the fork. However,

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we may not be able, or it may not be practical, to secure or realize the economic benefit of the new asset for various reasons. For instance, we may determine that there is no safe or practical way to custody the new asset, that trying to do so may pose an unacceptable risk to our holdings in the old asset, or that the costs of taking possession and/or maintaining ownership of the new digital asset exceed the benefits of owning the new digital asset. Additionally, laws, regulations, or other factors may prevent us from benefitting from the new asset even if there is a safe and practical way to custody and secure the new asset. The implementation of new forks could also introduce bugs or flaws into the software for any digital asset we service, or have unintended and unforeseen consequences, each of which may adversely affect the value of such digital asset.

The COVID-19 pandemic has disrupted and may continue to disrupt international shipping and we may not be able to obtain new hardware or replacement parts for our existing hardware in a timely or cost-effective manner, which could materially and adversely affect our business, financial condition and results of operations.

The novel strain of the coronavirus (“COVID-19”) has spread as a global pandemic throughout the world and has resulted in authorities imposing, and businesses and individuals implementing, numerous unprecedented measures to try to contain the virus. Although the United States and countries around the world have been releasing a vaccine, there are no assurances that the vaccine will be effective, including with respect to the new variants, and what impact it will have on reducing the spread or containment of COVID-19. In addition to vaccinations, these efforts include travel bans and restrictions, quarantines, shelter-in-place/stay-at-home and social distancing orders, and shutdowns. These measures have impacted and may further impact our workforce and operations, and the operations of our vendors, suppliers, and hardware and software partners. Although in the United States work-from-home and shelter-in-place recommendations and requirements are being removed, any future variant of COVID-19, or another epidemic, could cause such measures to be reinstated. The extent to which the COVID-19 pandemic will continue to affect our business, results of operations and financial condition is difficult to predict and depends on numerous evolving factors, including: the duration and scope of the pandemic and its impact on overall global uncertainty; government, social, business and other actions that have been and will be taken in response to the pandemic; and the effect of the pandemic on short- and long-term general economic conditions, including as a result of the potential for resurgences or the emergence of new variants to set back the global economic recovery or trigger future economic slowdowns or recessions. Current and future restrictions or disruptions of transportation, such as reduced availability of air and ground transport, port closures or congestion and increased costs, and increased border controls or closures, can also impact our ability to meet demand and could materially adversely affect us. These increased costs could have a material adverse effect on our business, financial condition and results of operations, particularly if the effects of COVID-19 are prolonged.

The COVID-19 global pandemic has been unprecedented and unpredictable and may continue to result in significant national and global economic disruption, which may adversely affect our business. Based on our current assessment, however, we do not expect any material impact on our long-term strategic plans, operations, or liquidity due to the worldwide spread of COVID-19. Our management and employees are operating remotely, and our facilities are operating as normal. We have not furloughed any of our employees and have not participated in any of the other COVID-19 related government assistance programs for which we may have been eligible. We have not sought or obtained any other funding as a result of the COVID-19 pandemic.

Digital asset networks are subject to cyber-security risks, which could adversely affect our business and operations, and therefore affect an investment in us.

Digital asset networks that are secured by a Proof-of-Work algorithm depend on the strength of the processing power of participants to protect the network. If a malicious actor or botnet (a volunteer or hacked collection of computers controlled by networked software coordinating the actions of the computers) obtains a majority of the processing power dedicated to mining on a digital asset network, it may be able to alter the blockchain on which the network and most transactions rely by constructing fraudulent blocks or preventing

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certain transactions from completing in a timely manner, or at all. To the extent that such malicious actor or botnet did not yield its control of the processing power on the digital asset network or the network community did not reject the fraudulent blocks as malicious, reversing any changes made to the blockchain may not be possible. Further, a malicious actor or botnet could create a flood of transactions in order to slow down confirmations of transactions on the relevant digital asset network.

A malicious actor may also obtain control over a digital asset network through its influence over core or influential developers. For example, this could allow the malicious actor to stymie legitimate network development efforts or attempt to introduce malicious code to the network under the guise of a software improvement proposal by such a developer.

An increasing number of organizations, including large businesses, technology companies and financial institutions, as well as government institutions, have disclosed breaches of their information security systems, some of which have involved sophisticated and highly targeted attacks, including on their websites, mobile applications, and infrastructure. Attacks upon systems across a variety of industries, including the digital asset industry, are increasing in their frequency, persistence, and sophistication, and, in many cases, are being conducted by sophisticated, well-funded, and organized groups and individuals, including state actors. The techniques used to obtain unauthorized, improper, or illegal access to systems and information, disable or degrade services, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target. These attacks may occur on our systems or those of our third-party service providers or partners. Certain types of cyberattacks could harm us even if our systems are left undisturbed. Any actual or perceived breach or cybersecurity attack directed at other digital asset or blockchain companies, whether or not we are directly impacted, could lead to a general loss of confidence in the digital asset economy or in the use of technology to conduct financial transactions, which could negatively impact us, including the market perception of the effectiveness of our security measures and technology infrastructure.

There can be no assurance that our security measures will provide absolute security or prevent or detect breaches or attacks. As of the date of this proxy statement, we have not to our knowledge experienced any security breaches. We may experience in the future breaches of our security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities, or other irregularities. Unauthorized parties may attempt to gain access to our systems and facilities, through various means, including hacking, social engineering, phishing, and attempting to fraudulently induce individuals into disclosing usernames, passwords or other sensitive information, which may in turn be attempted to be used to access our information technology systems. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders. Certain threat actors may be supported by significant financial and technological resources, making them even more sophisticated and difficult to detect. As a result, our costs and the resources we devote to protecting against these advanced threats and their consequences may continue to increase over time.

Although we maintain insurance coverage that we believe is adequate for our business, it may not be sufficient to protect us against all losses and costs stemming from security breaches, cyberattacks, and other types of unlawful activity, or any resulting disruptions from such events. Outages and disruptions of our systems, including any caused by cyberattacks, may harm our reputation and our business, financial condition and results of operations.

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The open source structure of the digital asset network protocols means that the core developers and other contributors are generally not directly compensated for their contributions in maintaining and developing such network protocols. A failure to properly monitor and upgrade the Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work or other digital assets blockchain network protocol could damage such blockchain network and our business.

The Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and other digital assets blockchain networks operate based on an open-source protocol maintained by the core developers and other contributors. As the Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and other digital assets blockchain network protocols are not sold or made available subject to licensing or subscription fees and their use does not generate revenues for the development team, developers are generally not guaranteed compensation for maintaining and updating such network protocols. Consequently, there could be a lack of financial incentive for developers to maintain or develop the Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and other digital assets blockchain networks and developers may lack the resources to adequately address emerging issues with such network protocols. However, many “core developers” hold a significant amount of the digital assets native to the networks on which they work and are compensated by non-profit foundations formed to support the ongoing development and maintenance of those networks. Although the Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and other digital assets blockchain networks are currently supported by core developers, there can be no guarantee that such support will continue or be sufficient in the future. Alternatively, some developers may be funded by entities whose interests are at odds with other participants in the Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and other digital assets blockchain networks. In addition, the foregoing risks associated with Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and other digital assets blockchain networks could be applicable to other digital asset networks, whether existing now or introduced in the future. To the extent that material issues arise with the Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work or other digital asset network protocols and the core developers and open-source contributors are unable to address the issues adequately or in a timely manner, the Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work or other digital asset network protocols and our business may be adversely affected.

Our use of open source software code may subject our software to general release or require us to re-engineer our software, which could harm our business.

Our technology platform uses open source software code. Companies that incorporate open source software into their products have, from time to time, faced claims challenging the ownership of open source software. As a result, we could be subject to suits by parties claiming ownership of what we believe to be open source software. In addition, some open source software licenses require users who distribute open source software as part of their software to publicly disclose all or part of the source code in their software and make any derivative works of the open source code available on unfavorable terms or at no cost. Open source license terms may be ambiguous, and many of the risks associated with usage of open source software cannot be eliminated. We believe that our use of open source software is in compliance with the relevant open source software licenses and does not require disclosure of any of our source code. However, if we were found to have inappropriately used open source software, we may be required to release our proprietary source code, re-engineer or discontinue use of our software or take other remedial action any or all of which could cause disruptions in, or impose significant costs on, our business.

Any significant disruption in our technology could adversely impact our business, financial condition and results of operations.

Our systems, the systems of our third-party service providers and partners, and certain digital asset and blockchain networks, have experienced from time to time and may experience in the future interruptions or degradation because of hardware and software defects or malfunctions, distributed denial-of-service and other cyberattacks, insider threats, break-ins, sabotage, human error, vandalism, earthquakes, hurricanes, floods, fires, and other natural disasters, power losses, disruptions in telecommunications services, fraud, military or political conflicts, acts of war, terrorist attacks, computer viruses or other malware, or other events.

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To discourage malicious validator behavior and to incentivize network participation, as well as node security and availability, some blockchain protocols implement a mechanism that subjects bad behaviors, inactivity and dishonest validations to a penalty called slashing. The particularities of slashing vary from one protocol to another. In many cases, a predefined percentage of a validator’s tokens are lost when it does not behave consistently or as expected on the network. Some protocols even apply a complete slashing of the stake or remove the validator from the group either for the current epoch or permanently. As a result, if we experience downtimes and are unable to sign transactions on a blockchain for a certain time, we may not be able to earn token rewards and may be subject to other slashing penalties.

In addition, we are continually improving and upgrading our information systems and technologies. Implementation of new systems and technologies is complex, expensive, time-consuming, and may not be successful. If we fail to timely and successfully implement new information systems and technologies, or improvements or upgrades to existing information systems and technologies, or if such systems and technologies do not operate as intended, it could have an adverse impact on our business, internal controls (including internal controls over financial reporting), financial condition and results of operations.

Our partners’ data centers where we host our operations, including the facilities in which our hardware is operated, may experience damages, including damages that are not covered by insurance.

Current data center operations are, and any future data center operation we establish will be, subject to a variety of risks relating to physical condition and operation, including, but not limited to:

For example, data center sites could be rendered inoperable, temporarily or permanently, as a result of a fire or other natural disaster or by a terrorist or other attack on such sites. The security and other measures we take to protect against these risks may not be sufficient. Our insurance covers the replacement cost of any lost or damaged hardware, as well as any interruption of our operating activities. In the event of an uninsured loss, including a loss in excess of insured limits, at any of the data center sites in our network, such sites may not be adequately repaired in a timely manner or at all and we may lose some or all of the future revenues anticipated to be derived from such data center.

We are subject to risks associated with our need for significant electrical power and stable, high-speed internet connections.

Our operations have required significant amounts of electrical power and access to high-speed internet to be successful. As we continue to expand our operations, we anticipate our demand for electrical power will continue to grow. If we are unable to continue to obtain sufficient electrical power to operate our hardware on a cost-effective basis, we may not realize the anticipated benefits of our significant capital expenditures.

Additionally, our data center operations could be materially adversely affected by prolonged power or internet outages. Although our equipment may be powered by backup generators on a temporary basis, it would not be feasible or cost-effective to run such equipment on backup power generators for extended periods of time. Therefore, we may have to reduce or cease our operations in the event of an extended power or internet outage, or as a result of the unavailability or increased cost of electrical power or internet access. If this were to occur, our business, financial condition and results of operations could be materially and adversely affected.

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The decentralized nature of blockchain may lead to slow or inadequate responses to crises, which may negatively affect our business.

The decentralized nature of the governance of blockchain systems may lead to ineffective decision making that slows development or prevents a network from overcoming emergent obstacles. Governance of many blockchain systems is by voluntary consensus and open competition with no clear leadership structure or authority. To the extent lack of clarity in corporate governance of the Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work or other digital asset system leads to ineffective decision making that slows development and growth of Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work or other digital assets, the value of our securities may be adversely affected.

The loss or destruction of private keys required to access any digital assets held for our account may be irreversible. If we are unable to access our private keys or if we or any third-party holding private keys for accounts holding our digital assets experiences a hack or other data loss relating to our ability to access any digital assets, it could cause regulatory scrutiny, reputational harm, and other losses.

Digital assets are generally controllable only by the possessor of the unique private key relating to the digital wallet in which the digital assets are held. While blockchain protocols typically require public addresses to be published when used in a transaction, private keys must be safeguarded and kept private in order to prevent a third party from accessing the digital assets held in such a wallet. Kraken Bank holds the private keys for the accounts that hold our digital assets. To the extent that any of the private keys held by Kraken Bank relating to our digital assets is lost, destroyed, or otherwise compromised or unavailable, and no backup of the private key is accessible, we will be unable to access the digital assets held by Kraken Bank.

Further, we cannot provide assurance that the wallet used to store our digital assets will not be hacked or compromised. Digital assets and blockchain technologies have been, and may in the future be, subject to security breaches, hacking, or other malicious activities. Any loss, or hack or other compromise, of private keys relating to digital wallets used to store our digital assets could adversely affect our ability to access or sell our digital assets, and subject us to significant financial losses. As such, any loss of private keys due to a hack, employee or service provider misconduct or error, or other compromise by third parties could hurt our brand and reputation, result in significant losses, and adversely impact our business. We do not carry insurance for the loss or theft of digital assets held in our digital assets trading accounts.

Digital assets face significant scaling obstacles that can lead to high fees or slow transaction settlement times.

Digital assets face significant scaling obstacles that can lead to high fees or slow transaction settlement times, and attempts to increase the volume of transactions may not be effective. Scaling digital assets is essential to the widespread acceptance of digital assets, which widespread acceptance is necessary for the continued growth and development of our business.

The prices of digital assets generally may be distorted by developments related to stablecoins.

Although we do not currently intend to hold stablecoins, we may be exposed to risks that stablecoins pose to the cryptoeconomy. Stablecoins are digital assets designed to have a stable value over time as compared to typically volatile digital assets and are typically marketed as being pegged to a fiat currency, such as the U.S. dollar. Although the prices of stablecoins are intended to be stable, in many cases their prices fluctuate, sometimes significantly. This volatility has in the past impacted the price of other digital assets. The majority of transactions in the digital asset ecosystem are pairs of stablecoins with other tokens. Because stablecoins are systemically important to the digital asset ecosystem, volatility in the price of stablecoins has in the past and could foreseeably have an outsized impact on the market that is difficult to predict.

Stablecoins are a relatively new phenomenon, and it is impossible to know all of the risks that they could pose to participants in the digital asset markets. Volatility in stablecoins, operational issues with stablecoins (for

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example, technical issues that prevent settlement), concerns about the sufficiency of any reserves that support stablecoins, or regulatory concerns about stablecoin issuers or intermediaries, such as exchanges, that support stablecoins, could impact individuals’ willingness to trade on exchanges that rely on stablecoins and could impact the price of digital assets in general, and in turn, the value of the Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and any other digital assets we hold.

Our transactions, or those of our partners, vendors or other third-parties on which we rely, may expose us to countries, territories, regimes, entities, organizations and individuals that are subject to sanctions and other restrictive laws and regulations.

The Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) and the U.S. Department of State administer and enforce economic and financial sanctions programs based on foreign policy and national security goals against targeted countries, territories, regimes, entities, organizations and individuals. In the United Kingdom, whereas of the date of this proxy statement we do not conduct business, the Foreign, Commonwealth and Development Office is responsible for the United Kingdom’s international sanctions policy, including all international sanctions regimes and designations; the Office of Financial Sanctions Implementation (“OFSI”), which is a part of HM Treasury, is responsible for ensuring that financial sanctions are properly understood, implemented and enforced (as well as maintaining OFSI’s Consolidated List of Financial Sanctions Targets); the Department for International Trade is responsible for implementing trade sanctions and embargoes, HM Revenue & Customs is responsible for enforcing breaches of trade sanctions; and the National Crime Agency is responsible for investigating and enforcing breaches of financial sanctions. In Canada, Global Affairs Canada, Public Safety Canada and the Department of Justice administer and enforce Canada’s sanctions regime. EU sanctions are administered and enforced by individual member states. These laws and regulations may be implicated by a number of activities, including investing or trading. Because of the pseudonymous nature of blockchain transactions, we may not be able to determine the ultimate identity of the individuals with whom we transact with respect to buying or selling digital assets or of other members in mining pools in which we participate. Additionally, we may be the target of random or other unwanted “dusting” or similar attacks originating from digital wallets affiliated with sanctions targets such as Tornado Cash, which may result in our wallets being restricted or flagged as suspicious by third parties.

Moreover, U.S. federal law prohibits any U.S. person from knowingly or unknowingly possessing any visual depiction commonly known as child pornography. Recent media reports have suggested that persons have imbedded such depictions on one or more blockchains. Because our business requires us to download and retain one or more blockchains to effectuate our ongoing business, it is possible that such blockchains contain prohibited depictions without our knowledge or consent. To the extent government enforcement authorities enforce these and other laws and regulations that are impacted by blockchain technology, we may be subject to investigation, administrative or court proceedings, and civil or criminal monetary fines and penalties, all of which could harm our reputation and affect the value of our securities.

Any failure by us or our partners, vendors or other third-parties acting on our behalf to comply with applicable anti-corruption and anti-money laundering laws, including the Foreign Corrupt Practices Act (the “FCPA”) and similar applicable laws associated with our or their activities outside of the United States could subject us to penalties and other adverse consequences.

We operate an international business and may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We are subject to the FCPA and other applicable anti-corruption and anti-money laundering laws in those countries in which we conduct activities. The FCPA prohibits us and our officers, directors, employees and business partners acting on our behalf, including joint venture partners and agents, from corruptly providing, offering, promising, or authorizing, directly or indirectly, anything of value to government officials, political parties, or political candidates for the purpose of influencing official decisions or obtaining or retaining business or securing any improper business advantage. If we were to conduct business in the United Kingdom in the future, we would also be subject to the UK Bribery

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Act 2010. The provisions of the UK Bribery Act extend beyond bribery of government officials and create offenses in relation to commercial bribery including private sector recipients. The provisions of the UK Bribery Act also create offenses for accepting bribes in addition to bribing another person. In addition, U.S. public companies are required to maintain records that accurately and fairly represent their transactions and have an adequate system of internal accounting controls.

In many foreign countries, including countries in which we may conduct business, it may be a local custom

that businesses engage in practices that are prohibited by the FCPA, UK Bribery Act, or other applicable laws and regulations. We face significant risks if we or any of our directors, officers, employees, contractors, agents or other partners or representatives acting on our behalf fail to comply with these laws, and governmental authorities in the United States, United Kingdom and elsewhere could seek to impose substantial civil and/or criminal fines and penalties, including, imprisonment, disgorgement of profits, and injunctions, which could have a material adverse effect on our business, reputation, operating results, prospects and financial condition.

Any alleged violation of the FCPA, UK Bribery Act, other applicable anti-corruption laws, or anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, severe criminal or civil sanctions and, in the case of the FCPA, suspension or debarment from U.S. government contracts, any of which could have a materially adverse effect on our reputation, business, operating results, prospects and financial condition. In addition, responding to any enforcement action or internal investigation related to alleged misconduct may result in a significant diversion of management’s attention and resources and significant defense costs and other professional fees.

Risks Related to the Company’s Financial Condition

There is no assurance that we will achieve profitability or that our revenue and business models will be successful.

We have incurred net losses in our past and we may incur net losses in the future. While we had net income of $54.4 million in the six months ended June 30, 2022, we had a net loss of $54.2 million and $2.9 million in the years ended December 31, 2021 and 2020, respectively. Our ability to achieve and maintain profitability is based on numerous factors, many of which are beyond our control. We may not be able to generate sufficient revenue or diversify sources of revenue to achieve or maintain profitability in the short or long-term. Our revenue growth may slow, or our revenue may decline for a number of other reasons, including reduced prices of Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and other digital assets, increased competition, a decrease in the growth or size of the digital asset economy, or any failure to capitalize on growth opportunities. We are continually refining our revenue and business model, and there is no assurance that these efforts will be successful or that we will generate revenues commensurate with our efforts and expectations or become or stay profitable. We may be forced to make significant changes to our revenue and business model to compete with our competitors or adapt to market conditions, and even if such changes are undertaken, there is no guarantee that they will be successful or profitable. Failure to successfully implement revenue and business models or manage related expenses could cause us to be unprofitable and have an adverse effect on our business, financial condition and results of operations.

We may experience fluctuations in our quarterly operating results.

We could experience significant fluctuations in our quarterly operating results due to a number of factors, many of which are beyond our control. You should not rely on period-to-period comparisons of our operating results as an indication of our future performance. Factors that may cause fluctuations in our quarterly operating results include, but are not limited to, the following:

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Our operating results may fall below the expectations of market analysts and investors in some future periods, which could cause the market price of our securities to decline substantially.

We might require additional capital to support business growth, and this capital might not be available on favorable terms or at all, or may require shareholder approval to obtain.

We have funded our operations since inception primarily through loan facilities, convertible notes, Ethereum loans, loan notes and revenue generated by sales of Ethereum and other digital assets we hold. We have also invested our digital assets into DeFi liquidity pools to generate a return on investment. We intend to continue to make investments in our business to respond to business challenges, including enhancing our operating infrastructure, and acquiring complementary businesses and technologies, all of which may require us to secure additional funds. Additional financing may not be available on terms favorable to us, if at all. If we incur additional debt, the debt holders would have rights senior to holders of our shares to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends on our shares. If we issue additional shares, holders of our common stock will experience dilution and the new shares could have rights senior to those of our common stock. The trading prices for our common stock may be highly volatile, which may reduce our ability to access capital on favorable terms or at all. In addition, a slowdown or other sustained adverse downturn in the general economic or digital asset and digital asset markets could adversely affect our business and the value of our common stock. Because our decision to raise capital in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future issuances of shares. As a result, holders of our common stock bear the risk of future issuances of debt or shares reducing the value of our common stock and diluting their interests. Our inability to obtain adequate financing or financing on terms satisfactory to us, when we require it, could significantly limit our ability to continue supporting our business growth and responding to business challenges.

Our operations require substantial investment, and our expenses are likely to increase in the future as we scale our operations. To effectively manage and capitalize on our growth, we must continue to expand our information technology and financial, operating, and administrative systems and controls, and continue to manage headcount, capital, and processes efficiently. Our continued growth could strain our existing resources, and we could experience ongoing operating difficulties in managing our business as it expands across numerous jurisdictions, including difficulties in hiring, training, and managing a diffused and growing employee base. If we do not adapt to meet these evolving challenges, or if our management team does not effectively scale with our growth, our business may be harmed.

We hold certain investments in DeFi protocols and may suffer losses if they do not function as expected.

We hold investments in various DeFi protocols. These protocols achieve their investment purposes through self-executing smart contracts that allow users to invest crypto assets in a pool from which other users can borrow without requiring an intermediate party to facilitate these transactions. These investments earn interest to the investor based on the rates at which borrowers repay the loan, and can generally be withdrawn with no restrictions. However, these DeFi protocols are subject to various risks, including the risk that the underlying

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smart contract is insecure, the risk that borrowers may default and the investor will not be able to recover its investment, the risk that any underlying collateral may experience significant volatility, and the risk that certain core developers with protocol administration rights may make unauthorized or harmful changes to the underlying smart contract or conduct other fraudulent or illegal activities. For example, In January 2022, we lost approximately $0.1 million or 20% of our DeFi investment as a result of an illicit cryptocurrency scam. We had approximately 1.53 Bitcoin and 38.69 Ethereum in a yield farming protocol. Although we confirmed the DeFi protocol was audited and approved by a security audit firm, the developers subsequently abandoned the project after receiving substantial investments and absconded with a total of $10 million in user funds.

Our digital assets holdings in interest-bearing deposit accounts and our digital assets granted as collateral are subject to various risks.

We have digital asset deposit accounts with a regulated counterparty that provides interest-bearing deposit accounts for digital assets as well as digital asset-based lending solutions. Interest income is paid in the native digital asset on the last day of the month. As of September 30, 2022, -0- of our Ethereum were deposited with interest-bearing accounts. For the six months ended June 30, 2022 and the year ended December 31, 2021, we earned interest income of $0.05 million and $0.4 million, respectively. Companies offering interest-bearing accounts for digital assets do not provide investors with the same protections as banks or credit unions do, and digital assets sent to those companies are not protected by a government-sponsored insurance scheme. Digital assets held in an interest-bearing account may be used to invest in various digital asset-related products, schemes or other activities, including lending programs in which the digital assets are loaned to borrowers. The interest being paid to us is based on these investment activities. In addition, while we currently do not have any digital asset loans outstanding, we may from time to time borrow certain digital currency, dollars or alternative currency, and provide a lien on certain amounts of digital currency, dollars or alternative currency as collateral. We do not have access to the collateral during the term of the loan and do not have the right to transact in such digital assets. Such collateral may be used by the lender for certain investing, lending or rehypothecation activities, such as those described above. These activities by our counterparties are subject to various risks, including volatility and illiquidity in the digital asset markets; the risk that such counterparty holding our digital assets might fail or go bankrupt, in which case we may not retrieve our deposited digital assets or digital assets granted as collateral; unpredictability, including that the market for a particular digital asset may disappear altogether or the digital asset may no longer be tradable anywhere; changes in regulation by federal, state or foreign governments that may restrict the use and exchange of digital assets; the inability to be made whole should fraud, default or a mistake occur; and potential fraud, technical glitches, hackers or malware. Should any of these risks be realized, our holdings of digital assets may be adversely affected which may have a material adverse impact on our financial condition as digital assets account for the majority of our assets. It is also possible that the SEC and its staff take the position that these digital asset loans fall within the definition of a “security” under the U.S. federal securities laws. See “—Risks Related to Government Regulation—If a digital asset is deemed to be a “security” or a “regulated financial instrument” in any relevant jurisdiction, that may have an adverse impact on the transferability of and market demand for the digital asset, may expose us to regulatory scrutiny, investigations, fines and requirements, including registration and licensure, which may adversely affect our business, financial condition and results of operations.” In the event that digital or other assets held by us are considered “investment securities” under the Investment Company Act and exceed 40% of our total assets (exclusive of government securities and cash items) on an unconsolidated basis, we would inadvertently become an investment company. See also “—Risks Related to Government Regulation—Our status under the Investment Company Act of 1940 could be challenged.”

Our financial forecasts that were presented to SLAC’s board of directors and are included in this proxy statement, may not prove accurate.

In connection with the Business Combination, SLAC management presented certain forecasted financial information for us to its board of directors, which information was internally prepared and provided by us. The forecasts were based on numerous variables and assumptions known to us at the time of preparation. Such

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variables and assumptions are inherently uncertain and many are beyond our control or the control of SLAC. Important factors that may affect actual results and cause the forecasts to not be achieved include, but are not limited to, risks and uncertainties relating to our business, industry performance, the competitive environment, changes in technology, and general business and economic conditions. Various assumptions underlying the forecasts may prove to not have been, or may no longer be, accurate. The forecasts may not be realized, and actual results may be significantly higher or lower than projected in the forecasts. The forecasts also reflect assumptions as to certain business strategies or plans that are subject to change. As a result, the inclusion of such forecasts in this proxy statement should not be relied on as “guidance” or otherwise predictive of actual future events, and actual results may differ materially from the forecasts.

Future developments regarding the treatment of digital assets for U.S. federal, state, local and foreign tax purposes could adversely impact our business.

Due to the new and evolving nature of digital assets, their tax treatment under U.S. federal, state and foreign law remains unclear in many respects. In 2014, the IRS released a notice, or IRS Notice, discussing certain aspects of “convertible virtual currency” (that is, a digital asset that has an equivalent value in fiat currency or that acts as a substitute for fiat currency) for U.S. federal income tax purposes and, in particular, stating that such digital asset (i) is “property” (ii) is not “currency” for purposes of the rules relating to foreign currency gain or loss and (iii) may be held as a capital asset. In 2019, the IRS released a revenue ruling and a set of “Frequently Asked Questions,” or the Ruling & FAQs, that provide some additional guidance, including guidance to the effect that, under certain circumstances, hard forks of digital assets are taxable events giving rise to ordinary income and guidance with respect to the determination of the tax basis of digital asset. The Irish Tax authority (“Revenue”) released guidance about taxation of cryptocurrency in 2021, titled “Taxation of cryptocurrency transactions.” Revenue concluded that no special tax rules for cryptocurrency transactions are required.

There can be no assurance that the IRS or other foreign tax authority will not alter or clarify its position with respect to digital assets in the future. It is also unclear what additional guidance may be issued in the future on the treatment of existing digital asset and other digital asset transactions and future innovations for purposes of U.S. federal income tax or other foreign tax regulations. Any such alteration of existing IRS and foreign tax authority positions or additional guidance regarding digital asset products and transactions could result in adverse tax consequences for holders and issuers of digital assets and could have an adverse effect on the value of digital assets and the broader digital assets markets. Future technological and operational developments that may arise with respect to digital assets may increase the uncertainty with respect to the treatment of digital assets for U.S. federal income and foreign tax purposes. The uncertainty regarding tax treatment of digital asset and other digital asset transactions could impact our business, both domestically and abroad.

We believe we are in compliance with U.S. federal income tax reporting and withholding requirements with respect to Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and other operational transactions. The Infrastructure Investment and Jobs Act (the “Bill”) is a U.S. federal statute enacted by Congress and signed into law by President Biden on November 15, 2021. The Bill imposes new reporting requirements on persons that effectuate transfers of digital assets. The exact scope and application of such reporting and withholding requirements, including, but not limited to, U.S. onboarding requirements through Form W, backup withholding, and Form 1099 reporting obligations, is not specifically addressed for our business transactions. The IRS could introduce new rules related to tax reporting and withholding obligations. Changes to the tax law surrounding this issue may require revisions to our current compliance protocols. The IRS may issue additional regulations related to tax reporting and withholding obligations. We will refine compliance procedures surrounding withholding and reporting for U.S. federal income tax reporting purposes as needed to ensure compliance.

Our ability to use any current or future net operating loss to offset future taxable income may be subject to certain limitations under U.S. or foreign law.

As of December 31, 2021, we had net operating loss carryforwards (“NOLs”) for U.S. federal and foreign purposes of $3.7 million and $132,000, respectively, which may be available to offset taxable income in the

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future, and portions of which expire in various years beginning in 2034. Our net operating losses in the U.S. and Ireland do not expire and can be carried forward indefinitely to the extent they are unused. A lack of future taxable income would adversely affect our ability to utilize these NOLs. Under the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), as modified by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), federal NOLs incurred in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal NOLs in tax years beginning after December 31, 2020, is limited to 80% of taxable income.

In addition, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” (as defined under Sections 382 and 383 of the Code and applicable Treasury Regulations) is subject to limitations on its ability to utilize its pre-change NOLs and certain other tax attributes to offset post-change taxable income or taxes. An “ownership change” pursuant to Section 382 of the Code generally occurs if one or more stockholders or groups of stockholders who own at least 5% of a company’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period.

We may experience a future ownership change under Section 382 of the Code, including in connection with the Business Combination or other transactions, that could affect our ability to utilize our NOLs to offset our income. Similar rules may apply under state tax laws. If we earn taxable income, such limitations could result in increased future income tax liability to us and our future cash flows could be adversely affected.

The nature of our business requires the application of complex financial accounting rules, and there is limited guidance from accounting standard setting bodies. If financial accounting standards undergo significant changes, our operating results could be adversely affected.

The accounting rules and regulations that we must comply with are complex and subject to interpretation by the PCAOB, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results and may even affect the reporting of transactions completed before the announcement or effectiveness of a change. Recent actions and public comments from the PCAOB and the SEC have focused on the integrity of financial reporting and internal controls. In addition, many companies’ accounting policies are being subject to heightened scrutiny by regulators and the public. Further, there has been limited precedents for the financial accounting of Ethereum, other digital assets and other digital assets and related valuation and revenue recognition considerations. As such, there remains significant uncertainty on how companies can account for Ethereum, other digital assets and other digital asset transactions, value, and related revenue. Uncertainties in or changes to in regulatory or financial accounting standards could result in the need to changing our accounting methods and restate our financial statements and impair our ability to provide timely and accurate financial information, which could adversely affect our financial statements, result in a loss of investor confidence, and more generally impact our business, operating results, and financial condition.

If our estimates or judgment relating to our critical accounting policies prove to be incorrect, our operating results could be adversely affected.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “W3BCLOUD Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates.” The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Significant estimates and judgments involve the identification of performance obligations in revenue recognition, evaluation of tax positions, inter-company transactions, and the valuation of share-based awards and the digital assets we hold,

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among others. Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of analysts and investors, resulting in a decline in the trading price of our securities.

The prices of digital assets are extremely volatile, and price fluctuations may adversely impact the value of digital assets that we hold.

Our operating results currently depend in large part upon the value of Ethereum, Filecoin and other digital assets. Prices of digital assets can be volatile and pricing trends can be subject to reversal. Management cannot predict whether, or to what extent, the value of any digital asset will increase or decrease in value. Declines in digital asset prices could cause us to incur losses and those losses could be significant.

Digital assets have historically experienced high levels of volatility far in excess of that experienced in other financial assets. For instance, there were steep increases in the value of certain digital assets, including Ethereum, over the course of 2017, and multiple market observers asserted that digital assets were experiencing a “bubble.” These increases were followed by steep drawdowns throughout 2018 in digital asset trading prices, including for Ethereum. These drawdowns notwithstanding, digital asset prices, including Ethereum, increased significantly again during 2019, decreased significantly again in the first quarter of 2020 amidst broader market declines as a result of the coronavirus outbreak and increased significantly again over the remainder of 2020 and the first quarter of 2021. Digital asset prices continued to experience significant and sudden changes throughout 2021 followed by steep drawdowns in the fourth quarter of 2021 and to date in 2022. For example, Ethereum’s price broke $1 at the beginning of 2016, and reached a new all-time high of about $1,396 in early 2018, before declining all throughout 2018 and closed the year at around $141. Ethereum price fluctuated between $150 and $730 between 2019 and 2020, and significantly increased from around $730 in late 2020 to $4,000 by May of 2021, followed by another all-time high at around $4,800 in November 2021. Since 2022, Ethereum’s price dropped back below $3,000, and has been trading between $1,000 and $2,000 for the recent months. Similarly, Filecoin’s price experienced extreme volatility since mid-2020. On October 17, 2022, Filecoin’s price was more than 95% below the all-time high of $237.24 in April 2021. Extreme volatility may persist and the value of digital assets may significantly decline in the future without recovery. The digital asset markets may still be experiencing a bubble or may experience a bubble again in the future.

A number of factors contribute to changes in digital asset prices and volatility, including changes in the supply and demand for a particular digital asset, market sentiment, macroeconomic factors, utility of a particular digital asset, regulatory or legislative activity, and idiosyncratic events such as exchange outages or commentary on social media. While we plan to weather price volatility by optimally allocating resources across protocols, we make not be able to do so successful. A decline in price may require us to take an impairment charge on our digital assets, and a decline in the value of the digital assets we hold in higher concentrations may have a material adverse impact on our operating results in any given period. Volatility in the value of digital assets or other market factors may limit our ability to convert digital assets into fiat currency at attractive prices or at all. In addition, such volatility may limit our ability to sell digital assets at attractive prices or at all.

Changes in general economic conditions may adversely affect our financial performance.

Our business is subject to risks arising from adverse changes in domestic and global macroeconomic conditions. Macroeconomic changes such as rising interest rates, tightening credit markets and inflation may adversely impact our business or results of operations. Inflationary pressures and rising interest rates have negatively affected the price of digital assets as rising interest rates have reduced the demand for speculative investment assets and slowed down overall investor activity by suppressing liquidity. Inflation and capital constraints may also accelerate the selling of digital assets for cash, resulting in further decreases in the price of digital assets. Rising inflation and interest rates and the conflict between Russia and Ukraine have also resulted in, and may continue to result in, significant disruption and volatility in the global financial markets, which affects our ability to obtain financing on favorable terms or at all. If we are unable to raise additional funds when or on the terms desired, our business, financial condition and results of operations could be adversely affected. The rate

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of inflation has also increased our expenses, including electricity costs, communications and information processing and data center space and support costs. Uncertainty about future economic conditions may make it difficult for us to forecast operating results and to make decisions about future investments. Our success in periods of economic uncertainty may also be dependent, in part, on our ability to reduce costs in response to such changes.

Geopolitical instability due to the ongoing military conflict between Russia and Ukraine has contributed to economic uncertainty and capital markets disruption. Our business, financial condition and results of operations may be materially adversely affected by any negative impact on the global economy and capital markets resulting from the conflict in Ukraine or any other geopolitical tensions.

On February 24, 2022, Russia began its invasion of Ukraine, leading to geopolitical instability, resulting in economic uncertainty and capital markets disruption. Our business, financial condition, and results of operations may be materially adversely affected by the conflict in Ukraine, particularly the high inflation and thus higher energy costs incurred during compute infrastructure services. Moreover, cryptocurrency activity is restricted in Russia and there are heightened cybersecurity risks.

Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine has led to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions for some of our mining equipment components. Our operations would be particularly vulnerable to potential interruptions in the supply of certain critical materials and metals, such as neon gas and palladium, which are used in semiconductor manufacturing. Any interruption to semiconductor chip supply could significantly impact our ability to receive the mining equipment and timely roll-out of our operations. Furthermore, any potential increase in geopolitical tensions in Asia, particularly in the Taiwan Strait, could also significantly disrupt existing semiconductor chip manufacturing and increase the prospect of an interruption to the semiconductor chip supply across the world. The world’s largest semiconductor chip manufacturer is located in Taiwan and a large part of equipment and materials for our cryptocurrency miners, including ASIC chips, is manufactured in, and imported from, Taiwan. A setback to the current state of relative peace and stability in the region could compromise existing semiconductor chip production and have downstream implications for our company.

In response to the military action by Russia, various countries, including the United States, the United Kingdom, and European Union imposed broad-ranging economic and financial sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russian companies, large financial institutions, officials and oligarchs; the removal of certain Russian banks from the Society for Worldwide Interbank Financial Telecommunications (“SWIFT”), the electronic banking that connects banks globally; and restrictive measures to prevent the Russian Central Bank from undermining the impact of the sanctions. Additional sanctions may be imposed in the future. Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially making it more difficult for us to obtain additional funds.

The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify the impact of other risks described in this proxy statement.

The loss of one or more of our key personnel, or our failure to attract and retain other highly qualified personnel in the future, could adversely impact our business, financial condition and results of operations.

We operate in a relatively new industry that is not widely understood and requires highly skilled and technical personnel. We believe that our future success is highly dependent on the talents and contributions of our senior management team, including Sami Issa, our Co-Founder & Chief Executive Officer, and Wael Aburida, our Co-Founder & Chief Financial Officer, members of our executive leadership team, and other key employees across finance, business development, information technology, decentralized storage and DeFi.

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Our future success depends on our ability to attract, develop, motivate, and retain highly qualified and skilled employees. Due to the nascent nature of the cryptoeconomy, the pool of qualified talent is extremely limited, particularly with respect to executive talent, engineering, risk management, and financial regulatory expertise. We face intense competition for qualified individuals from numerous software and other technology companies. To attract and retain key personnel, we incur significant costs, including salaries and benefits and equity incentives. Even so, these measures may not be enough to attract and retain the personnel we require to operate our business effectively. The loss of qualified employees, or an inability to attract, retain and motivate additional highly skilled employees required for the planned expansion of our business, could adversely impact our operating results and impair our ability to grow.

Our officers, directors, employees and large shareholders may encounter potential conflicts of interests with respect to their positions or interests in certain entities, and other initiatives, which could adversely affect our business and reputation.

We frequently engage with a wide variety of crypto and blockchain industry participants, as well as startups and growth companies, and maintain relationships with a significant number of crypto projects, their developers, members of their ecosystem, and investors. Certain of our officers, directors, and employees may be active investors in digital asset and other growth companies themselves, and may make decisions that favor projects that they have personally invested in. These transactions and relationships could create potential conflicts of interests in management decisions that we make.

Our current and historical use of independent contractors could result in certain liabilities.

We have engaged, and continue to engage, independent contractors to perform work for our business. To the extent that independent contractors were or are misclassified, we could incur certain liabilities, including penalties and fines, along with the potential for unpaid overtime and wages, unpaid employment insurance premiums, and premiums for missed meal breaks and rest breaks, as well as employee benefits such as healthcare costs. Misclassified independent contractors may also be able to recover attorney’s fees and court costs and enrollment.

Risks Related to Government Regulation

We are subject to an extensive and rapidly evolving regulatory landscape, and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our brand, reputation, business, operating results, and financial condition.

Laws, regulations, and policies surrounding digital assets are subject to significant uncertainty and differ across U.S. federal, state and local and international jurisdictions. They evolve frequently and may be applied inconsistently from one jurisdiction to another. Considering this, we exercise significant judgment as to what specific laws, regulations, and rules apply to us and our customers, and the relevant governmental bodies and regulators may disagree with our conclusions and applications. To the extent that we are considered non-compliant, we could be subject to significant penalties and other regulatory consequences, which could adversely affect our financial performance.

As digital assets have grown in popularity and in market size, the Federal Reserve Board, U.S. Congress and certain U.S. agencies (e.g., the Commodity Futures Trading Commission, the SEC, the United States Department of the Treasury, and the United States Department of Justice) have begun to examine the operations of digital asset networks, digital asset users and digital asset exchange markets. Other countries around the world are likewise reviewing and, in some cases, increasing regulation of the digital asset industry.

Our business is subject to extensive laws, rules, regulations, policies, orders, determinations, directives, treaties, and legal and regulatory interpretations and guidance in the markets in which we operate, including those governing financial services and banking, securities, broker-dealers, commodities, credit, cross-border and

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domestic money and digital asset transmission, commercial lending, usury, foreign currency exchange, privacy, data governance, data protection, cybersecurity, intellectual property, fraud detection, payment services, escheatment, antitrust and competition, bankruptcy, tax, anti-bribery, economic and financial sanctions, trade embargoes, anti-money laundering, and counter-terrorist financing.

Many of these legal and regulatory regimes were adopted prior to the advent of the internet, mobile technologies, digital assets, and related technologies. As a result, they do not contemplate or address unique issues associated with the cryptoeconomy, are subject to significant uncertainty, and vary widely across U.S. federal, state, and local, and international, jurisdictions. These legal and regulatory regimes, including the laws, rules, regulations, guidelines, and guidance thereunder, evolve frequently and may be modified, interpreted, and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another.

While the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN has clarified that a party engaged in digital asset mining for the party’s own use is not considered a money services business (MSB) under FinCEN’s regulations, without more, certain related activities may constitute money transmission subjecting a party engaged in such services to treatment as an MSB, and a change in law or guidance could extend the scope of activities regulated under the Bank Secrecy Act and FinCEN’s regulations.

Our activities are not currently regulated in the United Kingdom under the UK Financial Services and Markets Act 2000 or under United Kingdom regulations governing payment services or e-money. Furthermore, we are not subject to any registration requirement with the UK Financial Conduct Authority in relation to anti-money laundering rules under The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, as amended, as we are not a digital asset exchange or custodian wallet provider. We do not offer digital asset derivatives nor do we engage with or advertise to retail consumers. Our business is to mine digital assets as principal, and we bear the risks and rewards of such endeavors. We have no current plans to engage in the offering of digital asset derivatives, to engage with retail consumers, or to conduct business in the United Kingdom.

Moreover, the complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of the cryptoeconomy requires us to exercise our judgement as to whether certain laws, rules, and regulations apply to us, and it is possible that governmental bodies and regulators may disagree with our conclusions. To the extent we have not complied with such laws, rules, and regulations, we could be subject to significant fines, revocation of licenses, limitations on our products and services, reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect our business, operating results, and financial condition.

In addition to existing laws and regulations, various governmental and regulatory bodies, including legislative and executive bodies in the United States and in other countries, may adopt new laws and regulations, or new interpretations of existing laws and regulations may be issued by such bodies or the judiciary, which may adversely impact the development of the cryptoeconomy as a whole and our legal and regulatory status in particular by changing how we operate our business, how our services are regulated, and what we and our competitors can offer and to whom, requiring changes to our compliance and risk mitigation measures, imposing new licensing requirements, or imposing a total ban on certain digital asset transactions, as has occurred in certain jurisdictions in the past.

Further European legislation imposing additional regulatory requirements in relation to crypto-related activities is also expected in the intermediate term which, among other things, may impose new or additional regulatory requirements on both digital asset service providers and issuers of certain digital assets, which may impact our operations in the Europe.

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We process certain customer and employee data and may obtain and process additional customer data in the future. Any real or perceived improper use of, disclosure of, or access to such data could harm our reputation, as well as have an adverse effect on our business.

We currently process certain personal data relating to the individuals that use our website, as well as our employees (and employees of other businesses we work with). We also engage service providers and partners who also process such personal data either for us or on our behalf. Our future operations may involve the collection, processing, storage and/or transmission of additional personal customer data regarding our customers and employees. Consequently, we may be subject to and are working to comply with complex and evolving U.S., U.K., European, and other jurisdictions’ laws, rules, regulations, orders and directives (referred to as “data privacy laws”) relating to the collection, use, retention, security, processing and transfer (referred to as “process”) of personal data in the countries where we operate, including in the U.S., certain prescriptive state and federal data privacy laws, and in the E.U., the E.U. General Data Protection Regulation 2016/679 (the “GDPR”). Much of the personal data that we may process, especially financial information, is regulated by multiple data privacy laws and, in some cases, the data privacy laws of multiple jurisdictions. In many cases, these laws apply not only to third-party transactions, but also to transfers of information between or among us and our subsidiaries. Any new data privacy laws, regulations, other legal obligations or industry standards or any changed interpretation of existing laws, regulations or other standards may require us to incur additional costs and restrict our business operations. If the current trend in the development of such laws continues in relevant jurisdictions, such costs may increase further and may result in business practices changing in a manner that adversely impacts our business. Also, because data privacy laws are constantly changing and there are new laws in different jurisdictions constantly being implemented, it is difficult for us to understand which laws may be applicable at any given time, and we may not be able to accurately anticipate the ways in which regulators and the courts will apply or interpret such laws. For example, the California Privacy Rights Act (“CPRA”), which becomes effective in 2023, creates a new California data protection agency authorized to issue substantive regulations and enforce the CPRA, which makes it difficult to anticipate how the CPRA will be enforced. Also, four U.S. states have introduced data privacy laws, to be effective in 2023, all of which contain certain similarities to the CPRA, but all contain differences from one another. Similar laws have been proposed, and likely will be proposed, in other states and at the federal level, which further makes compliance challenging and enforcement uncertain.

Any failure, or perceived failure, by us , our service providers or partners, to comply with our privacy policies or with any applicable data privacy laws in one or more jurisdictions could result in proceedings or actions against us by governmental entities or others, including class action privacy litigation in certain jurisdictions, significant fines (which run several million dollars), penalties, judgments and reputational damages to us, requiring us to change our business practices and divert resources, increasing the costs and complexity of compliance, any of which could materially and adversely affect its business, financial condition, results of operations and prospects. If the current trend in the development of such laws continues in relevant jurisdictions, such costs may increase further and may result in business practices changing in a manner that adversely impacts our business.

Data protection, data privacy and information security have become the subject of increasing public, media and legislative concern. If customers were to reduce their use of our products and services as a result of these concerns, our business could be materially impacted or harmed. In addition, we are also subject to the possibility of security breaches, which themselves may result in a violation of these data privacy laws. In addition, any such attacks may trigger notification obligations under data privacy laws, in multiple jurisdictions. Any failure of us or our partners or others who use our services to adequately protect sensitive data could have a material and adverse effect on its reputation, business, financial condition, results of operations and prospects.

The cryptoeconomy is relatively new and its access to policymakers or lobbying organizations is evolving, which may harm our ability to effectively react to proposed legislation and regulation of digital assets or digital asset platforms adverse to our business.

The cryptoeconomy is relatively new and its access to policymakers or lobbying organizations is evolving. Competitors from other, more established industries, including traditional financial services, may have greater

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access to lobbyists or governmental officials, and regulators that are concerned about the potential that digital assets are being used for illicit purposes may effect statutory and regulatory changes with minimal or discounted inputs from participants in the cryptoeconomy. As a result, new laws and regulations may be proposed and adopted in the United States and internationally, or existing laws and regulations may be interpreted in new ways, that harm the cryptoeconomy or digital asset platforms, which could adversely impact our business.

The limited rights of legal recourse available to us expose us and our investors to the risk that any digital assets we hold may become missing, lost or stolen.

At this time, there is no specifically enumerated U.S. or foreign governmental, regulatory, investigative or prosecutorial authority or mechanism through which to bring an action or complaint regarding any missing or stolen digital assets. In the same vein, bankruptcy and insolvency legislation in many jurisdictions remains ill-suited to handle claims by creditors of companies in the cryptoeconomy principally due to uncertainty regarding the treatment of digital assets under applicable law and the volatility in the value of digital assets, potentially leading to perverse outcomes whereby creditors can be treated less favorably than shareholders. We may also face difficulties in identifying the party to bring an action or complaint against, or holding any party responsible for a software error that causes losses to us, particularly where an organization is decentralized. To the extent that we are unable to recover our losses from such action, error or theft, such events could have a material adverse effect on our business, prospects or operations and potentially the value of any Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work or other digital assets we may hold or otherwise acquire or hold for our own account.

It may be illegal now, or in the future, to acquire, own, hold, sell or use digital assets in one or more countries, and ownership of, holding, or trading in our securities may also be considered illegal and subject to sanction.

Although currently digital assets generally are not regulated or are lightly regulated in most countries, one or more countries such as China, India, and Russia may take regulatory actions in the future that severely restricts the right to acquire, own, hold, sell, or use digital assets or to exchange digital assets for fiat currency, or to engage in blockchain validation activities. In the People’s Republic of China, for instance, regulators declared all virtual currency-related activities to be illegal financial activities in September 2021. Further, the PRC previously issued bans on mining digital assets, and required banks and payment platforms to stop facilitating transactions. Other jurisdictions including India are currently considering legislation that could include a complete ban on private digital assets in favor of an official national digital currency. Such an action may also result in the restriction of ownership, holding, or trading in our securities. Such restrictions may adversely affect an investment in us. See also “—If a digital asset is deemed to be a “security” or a “regulated financial instrument” in any relevant jurisdiction, that may have an adverse impact on the transferability of and market demand for the digital asset, may expose us to regulatory scrutiny, investigations, fines and requirements, including registration and licensure, which may adversely affect our business, financial condition and results of operations” for details of the regulatory landscape in the United States.

Our compliance and risk management programs and methods might not be effective and may result in outcomes that could adversely affect our reputation, operating results, regulatory status and financial condition. We may outsource some of our Know Your Customer and other compliance obligations to third parties.

Our ability to comply with applicable complex and evolving laws, regulations, and rules is largely dependent on the establishment and maintenance of our compliance, audit, and reporting systems, as well as our ability to attract and retain qualified compliance and other risk management personnel. While we have devoted significant resources to develop policies and procedures to identify, monitor, and manage our risks, and expect to continue to do so in the future, we cannot assure you that our policies and procedures will always be effective or that we will always be successful in monitoring or evaluating the risks to which we are or may be exposed in all market environments or against all types of risks, including unidentified or unanticipated risks. Our risk management policies and procedures rely on a combination of technical and human controls and supervision that are subject to error and failure.

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Some of our methods for managing risk are discretionary by nature and are based on internally developed controls, observed historical market behavior, and standard industry practices. These methods may not adequately prevent losses, particularly as they relate to extreme market movements which may be significantly greater than historical fluctuations in the market. Our risk management policies and procedures also may not adequately prevent losses due to technical errors if our testing and quality control practices are not effective in preventing failures. In addition, we may elect to adjust our risk management policies and procedures to allow for an increased risk tolerance, which could expose us to the risk of greater losses.

Our businesses currently are not subject to periodic review by regulators of our compliance with our own policies and procedures and with a variety of laws and regulations. As a result of changes in laws or regulation, we could become subject to such regulatory oversight. In that event, we could receive examination reports from regulators citing violations of rules and regulations and inadequacies in existing compliance programs, and requiring us to enhance certain practices with respect to our compliance program, including due diligence, training, monitoring, reporting, and recordkeeping. If we were to fail to comply with these, or do not adequately remediate certain findings, regulators could take a variety of actions that could impair our ability to conduct our business, including delaying, denying, withdrawing, or conditioning approval of our licenses, or certain products and services. In addition, regulators have broad enforcement powers to censure, fine, require remedial activities or restitution, issue cease-and-desist orders or prohibit companies subject to their jurisdiction from engaging in some of their business activities. In the case of noncompliance or alleged non-compliance with applicable laws or regulations, we could be subject to investigations and proceedings that may result in substantial penalties or civil lawsuits for damages which can be significant. Any of these outcomes would adversely affect our reputation and brand and our business, operating results, and financial condition. Some of these outcomes could adversely affect our ability to conduct our business.

We are subject to risks associated with our need for significant electrical power. Government regulators may potentially restrict the ability of electricity suppliers to provide electricity to compute infrastructure providers, such as ours.

Our operations require significant amounts of electrical power and access to high-speed internet to be successful. As we expand our operations, we anticipate our demand for electrical power will continue to grow. If we are unable to obtain sufficient electrical power to operate our hardware on a cost-effective basis, we may not realize the anticipated benefits of our significant capital expenditures. Our datacenter operations could also be materially adversely affected by prolonged power or internet outages. Although our equipment may be powered by backup generators on a temporary basis, it would not be feasible or cost-effective to run such equipment on backup power generators for extended periods of time. Although we operate datacenters in multiple locations, our datacenters in other locations may not have the excess capacity needed to take on workloads from affected datacenters. Therefore, we may have to reduce or cease our operations in the event of an extended power or internet outage or the unavailability or increased cost of electrical power or internet access.

Our data center operations can only be successful if we can obtain sufficient electrical power for such data center on a cost-effective basis, and our establishment of new data centers requires us to find locations where that is the case. For more detail on our electrical power requirements, see also “—We are subject to risks associated with our need for significant electrical power and stable, high-speed internet connections.” There may be significant competition for suitable mine locations, and government regulators may potentially restrict or limit the ability of electricity suppliers to provide electricity to data center operations, or may otherwise potentially restrict or prohibit the provision or electricity to mining operations.

Regulators may move to ban or otherwise restrict digital asset mining operations on account of environmental reasons. For example, the People’s Republic of China banned digital asset mining on a national scale due to the industry’s intense electrical power demands and its negative environmental impacts (both in terms of the waste produced by mining the rare earth metals used to manufacture miners and the production of electrical power used in digital asset mining). If further regulation follows, it is possible that our industry may not be able to cope with the sudden and extreme loss of mining power.

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If a digital asset is deemed to be a “security” or a “regulated financial instrument” in any relevant jurisdiction, that may have an adverse impact on the transferability of and market demand for the digital asset, may expose us to regulatory scrutiny, investigations, fines and requirements, including registration and licensure, which may adversely affect our business, financial condition and results of operations.

The SEC and its staff have taken the position that certain digital assets fall within the definition of a “security” under the U.S. federal securities laws. Although public statements by one former senior official at the SEC suggested that Ethereum is not a security (in its then current form), the SEC’s views in this area have evolved over time, and it is difficult to predict the direction or timing of any continuing evolution. In fact, shortly after the Merge, Gary Gensler, Chairman of the SEC, stated that staking may be an indicia that, under applicable U.S. law, a digital asset is a security because it may demonstrate that investors expect to earn a return from the work of third parties. With respect to all other digital assets, including Filecoin, Pocket and Zilliqa Proof-of-Work, there is currently no regulatory certainty that such assets are not securities, notwithstanding the conclusions we may draw based on our risk-based assessment regarding the likelihood that a particular digital asset could be deemed a “security” under applicable laws. The SEC may also take the view that the “staking” service falls within the definition of a “security” under the U.S. federal securities laws. In May 2022, the SEC disclosed that it will focus on investigating securities laws violations relating to, among other things, staking products.

The legal test for determining whether any given digital asset is a security is a highly complex and fact-driven analysis, and the outcome is difficult to predict. Furthermore, it is also possible that a change in the governing administration or the appointment of new SEC commissioners could substantially impact the views of the SEC and its staff. Similarly, though the SEC’s Strategic Hub for Innovation and Financial Technology published a framework for analyzing whether any given digital asset is a security in April 2019, this framework is not a rule, regulation or statement of the SEC and is not binding on the SEC, nor is it clear how it would be applied by the SEC. In addition, more recent enforcement actions by the SEC and statements by the current SEC Chair have all pointed to the SEC being more assertive in regulating digital asset markets and participants, but the SEC has not provided additional guidance or clarification to help markets and participants determine if a particular digital asset is a security, creating greater uncertainty about the interplay between digital assets and U.S. securities regulations, as well as compliance with such regulations.

Several foreign jurisdictions have taken a broad-based approach to classifying digital assets as “securities” or regulated instruments while other foreign jurisdictions, such as Switzerland, Malta, and Singapore, have adopted a narrower approach. As a result, certain digital assets may be deemed to be a “security” under the laws of some jurisdictions but not others. Various foreign jurisdictions may, in the future, adopt additional laws, regulations, or directives that affect the characterization of digital assets as “securities.” If Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work or any other digital asset for which we provide infrastructure services, is deemed to be a security under the laws or regulations of any U.S. federal, state, or foreign jurisdiction, or in a proceeding in a court of law or otherwise, it may have adverse consequences for such digital asset. For instance, the digital asset would have to be registered with the SEC or other foreign authority, or sold in accordance with an exemption from registration, which could severely limit its liquidity, usability and transactability. Moreover, the networks on which such digital assets are utilized may be required to be regulated as broker-dealers or national securities exchanges, and subject to applicable rules, which could effectively render the network impracticable for its existing purposes. Further, a regulatory finding that a digital asset is a security could draw negative publicity and a decline in the general acceptance of the digital asset. Also, it may make it difficult for the digital asset to be traded, cleared, and custodied as compared to other digital assets that are not considered to be securities.

There can be no assurances that we will properly characterize any given digital asset as a security or non-security for purposes of determining the digital assets to which we provide storage or compute infrastructure services or which we, hold and trade, or that the SEC, foreign regulatory authority, or a court, if the question was presented to it, would agree with our assessment. There may be additional state and federal regulatory authorities

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that regulate digital assets and they may take positions or impose requirements that may result in material costs and expenses.

Companies in which we make a minority investment could become subject to judicial or administrative sanctions for failing to offer or sell digital assets in compliance with securities or other registration requirements or for acting as a broker or dealer without appropriate registration.

The classification of a digital asset as a security under the federal securities laws has wide-ranging implications for the regulatory obligations that flow from the offer, sale, trading, clearing and holding of such asset. If a digital asset is determined to be a security and a company in which we make a minority investment offered or sold that digital asset to its customers without a valid exemption from SEC registration requirements, it could incur liability to purchasers as well as SEC monetary fines and other penalties, including restrictions on its ability to conduct its business. In addition, a person in the business of effecting transactions in securities in the United States is generally subject to registration with the SEC as a “broker” or “dealer.” A platform that brings together purchasers and sellers to trade securities in the United States is generally subject to registration as a national securities exchange, or must qualify for an exemption, such as by being operated by a registered broker-dealer as an alternative trading system. Liability for acting as an unregistered broker-dealer, national securities exchange or clearing agency include civil monetary penalties and disgorgement, injunctive relief and cease and desist orders requiring such company to cease from engaging in certain activities, and/or undertakings requiring the retention of compliance consultants or monitors. Such regulatory actions could also damage the company’s reputation or otherwise result in a material adverse impact on its business, including restrictions on its ability to conduct business. The consequences for us of having invested in such a company could range from reputational harm to potential securities law liability. See “—If a digital asset is deemed to be a “security” or a “regulated financial instrument” in any relevant jurisdiction, that may have an adverse impact on the transferability of and market demand for the digital asset, may expose us to regulatory scrutiny, investigations, fines, and requirements, including registration and licensure, which may adversely affect our business, financial condition and results of operations” and “—Our status under the Investment Company Act of 1940 could be challenged.”

Our status under the Investment Company Act of 1940 could be challenged.

An investment company is a company that is engaged in the business of investing, reinvesting or trading in securities. Section 3(a)(1)(C) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), deems a company an investment company if the value of investment securities it owns is more than 40% of its total assets (exclusive of government securities and cash items) on an unconsolidated basis.

We are engaged in the business of providing customized enterprise-grade storage and compute infrastructure to power Web3. However, we cannot guarantee that the cryptocurrencies or digital assets we receive for providing infrastructure services will not be considered “securities” and thus “investment securities” for purposes of the Investment Company Act. See “—If a digital asset is deemed to be a “security” or a “regulated financial instrument” in any relevant jurisdiction, that may have an adverse impact on the transferability of and market demand for the digital asset, may expose us to regulatory scrutiny, investigations, fines, and requirements, including registration and licensure, which may adversely affect our business, financial condition and results of operations” and “—Companies in which we make a minority investment could become subject to judicial or administrative sanctions for failing to offer or sell digital assets in compliance with securities or other registration requirements or for acting as a broker or dealer without appropriate registration.” Additionally, we engage in financial transactions involving digital assets. For example, we invest digital assets into decentralized finance liquidity pools to generate a return on investment and, in exchange for the contribution of digital assets to a liquidity pool, we receive liquidity pool tokens that represent a share of the total liquidity pool value. These transactions, among others in which we may engage involving digital assets (such as digital asset lending), could involve us receiving or disposing of securities. In the event that digital or other assets held by us are considered “investment securities” under the Investment Company Act and exceed 40% of our total assets (exclusive of government securities and cash items) on an unconsolidated basis, we would inadvertently become an investment company.

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We intend to manage this risk by either not holding cryptocurrencies or digital and other assets that we believe are securities, limiting the value of the cryptocurrencies or digital and other assets we hold that we believe are securities to less than 40% of our total assets (exclusive of government securities and cash items) on an unconsolidated basis, or a combination of the foregoing. Therefore, we do not believe that we will be an investment company under the Investment Company Act; however, we cannot guarantee that the SEC will agree with this position in the future. Classification as an investment company under the Investment Company Act would require registration with the SEC. If an investment company fails to register, it would have to stop doing almost all business, and its contracts would become voidable. Registration is time-consuming and restrictive and would require a restructuring of our operations, and we would be very constrained in the kind of business we could do as a registered investment company. Further, we would become subject to substantial regulation concerning management, operations, transactions with affiliated persons, and portfolio composition, and would need to file reports under the Investment Company Act regime. The cost of such compliance would result in our incurring substantial additional expenses, and the failure to register if required would have a materially adverse impact on our operations.

Our failure to comply with U.S. and foreign economic and financial sanctions, export controls, and other trade laws and regulations could adversely affect our reputation and have a material adverse effect on our business.

We are subject to, and must comply with, rules and regulations maintained by the United States and other relevant authorities relating to economic and financial sanctions, trade embargoes and export controls, including sanctions administered by OFAC and export controls administered by the Department of Commerce. Our global operations expose us to the risk of violating, or being accused of violating, these laws and regulations, which limit our ability to transact or deal with certain countries, territories, governments, and persons. Our failure to comply with these laws and regulations may expose us to significant penalties—including criminal fines, imprisonment, civil fines, disgorgement of profits, injunctions and debarment from government contracts, and other remedial measures—as well as reputational harm, adverse media coverage, and other collateral consequences. Investigations of alleged violations can be expensive and disruptive. Despite our compliance efforts, we cannot assure compliance with applicable rules, and any such violation could materially adversely affect our reputation, business, financial condition and results of operations.

A new 1% U.S. federal excise tax may be imposed upon SLAC in connection with the redemptions by SLAC of SLAC Class A common stock.

On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (the “IRA”), which, among other things, imposes a new U.S. federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic corporations and certain domestic subsidiaries of publicly traded foreign corporations. This excise tax is imposed on the repurchasing corporation itself, not its stockholders from which shares are repurchased. Generally, the amount of the excise tax is 1% of the fair market value of the shares repurchased at the time of the repurchase. For the purposes of calculating the excise tax, the repurchasing corporation is permitted to net the fair market value of certain new stock issuances against the fair market value of the stock repurchases that occur in the same taxable year. The U.S. Treasury Department, the IRS, and other standard-setting bodies are expected to issue guidance on how the excise tax provisions of the IRA will be applied, however the timing and form of such guidance are uncertain. The IRA excise tax applies to repurchases that occur after December 31, 2022.

Any repurchase or redemption of SLAC Class A common stock that occurs after December 31, 2022, in connection with the Business Combination or otherwise, may be subject to the excise tax. Whether and to what extent SLAC would be subject to the excise tax in connection with the Business Combination would depend on a number of factors, including (i) the fair market value of the redemptions and repurchase in connection with the Business Combination, (ii) the structure of the Business Combination, (iii) the nature and amount of any PIPE or other equity issuances in connection with the Business Combination (or otherwise issued not in connection with

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the Business Combination but issued within the same taxable year of the Business Combination) and (iv) the regulations and other guidance issued by the U.S. Treasury Department, the IRS or any other applicable standard-setting body.

Changes in tax law and differences in interpretation of tax laws and regulations may adversely impact our financial statements.

United States federal, state and local and non-U.S. tax laws and regulations are complex and subject to varying interpretations. Tax authorities may interpret tax laws and regulations differently than we do and challenge tax positions that we have taken. This may result in differences in the treatment of revenues, deductions, credits and/or differences in the timing of these items. The differences in treatment may result in payment of additional taxes, interest or penalties that could have an adverse effect on our financial condition and results of operations. Further, future changes to applicable tax laws and regulations could increase our tax obligations in jurisdictions where we do business or require us to change the manner in which we conduct some aspects of our business.

Risks Related to Intellectual Property

Our intellectual property rights are valuable, and any inability to protect them could adversely impact our business, financial condition and results of operations.

Our business depends in large part on our proprietary technology and our brand. We rely on, and expect to continue to rely on, a combination of trademark, copyright, and trade secret laws, as well as confidentiality and license agreements with our employees, contractors, consultants, and third parties with whom we have relationships, to establish and protect our brand and other intellectual property rights. As of August 2022, we held two registered trademarks in the United States, including W3BCLOUD and the logo and also held four registered trademarks in foreign jurisdictions. We also had three pending trademark applications in the United States, as well as six pending trademark applications in foreign jurisdictions.

Our efforts to protect our intellectual property rights may not be sufficient or effective. Our proprietary technology and trade secrets could be lost through independent development by another party, misappropriation or breach of our confidentiality and license agreements, and any of our intellectual property rights may be challenged, which could result in them being narrowed in scope or declared invalid or unenforceable. There can be no assurance that our intellectual property rights will be sufficient to protect against others offering products, services, or technologies that are substantially similar to ours and that compete with our business. Intellectual property protection may not be available to us in every country in which our services are available.

In the future we may be sued by third parties for alleged infringement of their proprietary rights.

Individuals and groups can purchase patents and other intellectual property assets for the purpose of making claims of infringement to extract settlements from companies like ours. We cannot guarantee that our internally developed or acquired technologies and content do not or will not infringe the intellectual property rights of others. From time to time, our competitors or other third parties may claim that we are infringing upon or misappropriating their intellectual property rights, and we may be found to be infringing upon such rights. Any claims or litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial damages or ongoing royalty payments, prevent us from providing our services or using certain technologies, force us to implement expensive work-arounds, or impose other unfavorable terms.

We expect that the occurrence of infringement claims is likely to grow as the digital asset market grows and matures. Accordingly, our exposure to damages resulting from infringement claims could increase and this could further exhaust our financial and management resources. Further, during the course of any litigation, we may make announcements regarding the results of hearings and motions, and other interim developments. If securities

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analysts and investors regard these announcements as negative, the market price of our securities may decline. Even if intellectual property claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and require significant expenditures. Any of the foregoing could prevent us from competing effectively and could have an adverse effect on our business, financial condition and results of operations.

Our services, including the blockchain where the Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and other protocols for which we provide storage and compute services are built, contain third-party open source software components, and failure to comply with the terms of the underlying open source software licenses could harm our business.

Our services contain software modules licensed by third-party authors under “open source” licenses. Also, the blockchains on which the Ethereum Classic, Filecoin, Pocket, Zilliqa Proof-of-Work and certain other digital asset protocols are built and our other ecosystem partners materially rely on open source licenses to operate.

Some open source licenses contain requirements that we make source code available for modifications or derivative works, or grant other licenses to our intellectual property. If we combine our proprietary software with open source software in a certain manner, we could, under certain open source licenses, be required to release the source code of our proprietary software to the public. This would allow our competitors to create similar offerings with lower development effort and time and ultimately could result in a loss of our competitive advantages. Alternatively, to avoid the public release of the affected portions of our source code, we could be required to expend substantial time and resources to re-engineer some or all of our software.

Although we monitor our use of open source software to avoid subjecting our services to conditions we do not intend, we have not recently conducted an extensive audit of our use of open source software and, as a result, we cannot assure you that our processes for controlling our use of open source software in our services are, or will be, effective. If we are held to have breached or failed to fully comply with all the terms and conditions of an open source software license, we could face litigation, infringement or other liability, or be required to seek costly licenses from third parties to continue providing our offerings on terms that are not economically feasible, to re-engineer our services, to discontinue or delay the provision of our offerings if re-engineering could not be accomplished on a timely basis or to make generally available, in source code form, our proprietary code, any of which could adversely affect our business, financial condition and results of operations.

Moreover, the terms of many open source licenses have not been interpreted by U.S. or foreign courts. As a result, there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to provide or distribute our services. From time to time, there have been claims challenging the ownership of open source software against companies that incorporate open source software into their solutions. As a result, we could be subject to lawsuits by parties claiming ownership of what we believe to be open source software.

Risks Related to Operating as a Public Company

The requirements of being a public company, including maintaining adequate internal control over our financial and management systems, may strain our resources, divert management’s attention, make us incur increased costs, and affect our ability to attract and retain executive management and qualified board members.

As a public company we will incur significant legal, accounting, and other expenses that we did not incur as a private company. We will be subject to reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the rules subsequently implemented by the SEC, the rules and regulations of the listing standards of the NYSE and other applicable securities rules and regulations. Stockholder activism, the current political and social environment, and the current high level of government intervention and regulatory reform, may lead to substantial new regulations and disclosure obligations, which will likely result in additional compliance costs and could impact the manner in which we operate our business in ways we cannot currently anticipate.

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Our management team has limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently manage our transition to being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, financial condition and results of operations. Although we have already hired additional employees to assist us in complying with these requirements, our finance team is small and we may need to hire more employees in the future, or engage outside consultants, which will increase our operating expenses. We also expect that being a public company and complying with applicable rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantially higher costs to obtain and maintain the same or similar coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors and qualified executive officers.

Compliance with these rules and regulations may strain our financial and management systems, internal controls, and employees. The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating results. Moreover, the Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures, and internal control, over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures, and internal control over, financial reporting to meet this standard, significant resources and management oversight may be required. If we encounter material weaknesses or deficiencies in our internal control over financial reporting, we may not detect errors on a timely basis and our consolidated financial statements may be materially misstated. Effective internal control is necessary for us to produce reliable financial reports and is important to prevent fraud.

As a public company listed in the United States, we will incur significant additional legal, accounting and other costs. These additional costs could negatively affect our financial results. In addition, changing laws, regulations and standards relating to corporate governance and public disclosure, including regulations implemented by the SEC and the NYSE, may increase legal and financial compliance costs and make some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If, notwithstanding our efforts to comply with new laws, regulations and standards, we fail to comply, regulatory authorities may initiate legal proceedings against us and our business may be harmed.

We expect our independent registered public accounting firm will be required to formally attest to the effectiveness of our internal control over financial reporting commencing with our second annual report on Form 10-K. We expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404. If we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. As a result, the market price of our common stock could be negatively affected, and we could become subject to investigations by the NYSE, the SEC or other regulatory authorities, which could require additional financial and management resources.

Failure to comply with these rules might also make it more difficult for us to obtain some types of insurance, including director and officer liability insurance, and we might be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of

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these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on committees of our board of directors or as members of senior management.

Pursuant to the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act for so long as we are an “emerging growth company.”

Section 404 of the Sarbanes-Oxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting, and generally requires in the same report a report by our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. However, under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until we are no longer an “emerging growth company.” We will be an “emerging growth company” until the earlier of (1) the last day of the fiscal year (a) following February 16, 2026, the fifth anniversary of SLAC’s IPO, (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. Accordingly, until we cease being an “emerging growth company” stockholders will not have the benefit of an independent assessment of the effectiveness of our internal control environment.

The trading price of our common stock may be volatile, and purchasers of our common stock could incur substantial losses.

The trading price of our common stock may be volatile. The stock market in general and the market for technology companies and digital asset technology companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, investors may not be able to sell their common stock at or above the price paid for the shares. The market price for our common stock may be influenced by many factors, including:

In addition, in the past, stockholders have initiated class action lawsuits against technology companies following periods of volatility in the market prices of these companies’ stock. Such litigation, if instituted against us, could cause us to incur substantial costs and divert management’s attention and resources from our business.

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The dual class structure of our common stock has the effect of concentrating voting control with the W3BCLOUD Founders (as defined below). This will limit or preclude your ability to influence corporate matters, including the outcome of important transactions, including a change in control.

Each share of our Class B common stock entitles the holder to 10 votes per share, and our Class A common stock, has one vote per share. Upon the Closing, the W3BCLOUD Founders will together own and/or have voting control with respect to all of the issued and outstanding shares of our Class B common stock, representing     % of the voting control of our Company (assuming no redemptions by SLAC’s shareholders). Therefore, the W3BCLOUD Founders, individually or together, will be able to significantly influence matters submitted to our shareholders for approval, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions. The W3BCLOUD Founders, individually or together, may have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. This concentrated control may have the effect of delaying, preventing or deterring a change in control of our company, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of our company and might ultimately affect the market price of our Class A common stock.

Future transfers by the holders of our Class B common stock will generally result in those shares converting into our Class A common stock, subject to limited exceptions, such as certain transfers effected for estate planning or charitable purposes. In addition, each share of our Class B common stock will convert automatically into one share of our Class A common stock on the date on which the record holders of a share or shares of New W3BCLOUD Class B common stock as of the Effective Time and their permitted transferees under the Proposed Charter (collectively, the “W3BCLOUD Founders”) collectively hold forty five percent (45%) or less of the shares of our Class B common stock issued to the W3BCLOUD Founders as of the Effective Time (as adjusted to reflect appropriately the effect of any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares or other like change), subject to a ten (10)-day cure period, as provided in the Proposed Charter. For information about our dual class structure, see “Description of Securities.”

We cannot predict the impact our dual class structure may have on our share price.

We cannot predict whether our dual class structure will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indexes. In July 2017, FTSE Russell and S&P Dow Jones announced that they would cease to allow most newly public companies utilizing dual or multi-class capital structures to be included in their indices. Affected indices include the Russell 2000 and the S&P 500, S&P MidCap 400 and S&P SmallCap 600, which together make up the S&P Composite 1500. Beginning in 2017, MSCI, a leading stock index provider, opened public consultations on their treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from certain of its indices; however, in October 2018, MSCI announced its decision to include equity securities “with unequal voting structures” in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria. Under the announced policies, our dual class capital structure would make us ineligible for inclusion in certain indices, and as a result, mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track those indices will not be investing in our shares. These policies are still fairly new and it is as of yet unclear what effect, if any, they will have on the valuations of publicly traded companies excluded from the indices, but it is possible that they may depress these valuations compared to those of other similar companies that are included. Because of our dual class structure, we will likely be excluded from certain of these indexes and we cannot assure you that other stock indexes will not take similar actions. Given the sustained flow of investment funds into passive strategies that seek to track certain indexes, exclusion from stock indexes would likely preclude investment by many of these funds and could make our Class A common stock less attractive to other investors. As a result, the market price of our Class A common stock could be adversely affected.

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Because we will be a “controlled company” within the meaning of the NYSE rules, our shareholders may not have certain corporate governance protections that are available to shareholders of companies that are not controlled companies.

So long as more than 50% of the voting power for the election of our directors is held by an individual, a group, or another company, we will qualify as a “controlled company” within the meaning of the NYSE corporate governance standards. Following the completion of the Business Combination, the W3BCLOUD Founders will control approximately     % of the voting power of our common stock assuming no redemption of SLAC’s public shares (or     % of the voting power of our common stock assuming 100% redemptions of SLAC’s public shares). As a result, we will be a “controlled company” within the meaning of the NYSE corporate governance standards and will not be subject to the requirements that would otherwise require us to have: (i) a majority of independent directors; (ii) a nominating committee comprised solely of independent directors; (iii) a compensation committee comprised solely of independent directors; and (iv) director nominees selected, or recommended for our board selection, by the nominating committee. To the extent we rely on any of these exemptions, holders of our Class A common stock will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE. The W3BCLOUD Founders may have their interests in us diluted due to future equity issuances or their own actions in selling shares of our common stock, in each case, which could result in a loss of the “controlled company” exemption under the NYSE listing rules. We would then be required to comply with those provisions of the NYSE listing requirements, as applicable.

The price of our common stock could decline if securities analysts do not publish research or if securities analysts or other third parties publish inaccurate or unfavorable research about us.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. We do not currently have and may never obtain research coverage by securities and industry analysts. If no or few securities or industry analysts commence coverage of us, the trading price for our common stock could be negatively impacted. In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us issue an adverse or misleading opinion regarding us, our business model or the performance of our common stock, or if our results of operations fail to meet the expectations of analysts, the price of our common stock would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline.

Future sales of our common stock, or the perception that such sales may occur, could depress our share price.

Following completion of the Business Combination, there will be approximately                shares of our common stock outstanding (assuming no redemptions). Sales by us or our shareholders, particularly our executives, of a substantial number of our common stock in the public market, or the perception that these sales might occur, could cause the market price of our common stock to decline or could impair our ability to raise capital through a future sale of, or pay for acquisitions using, our equity securities. Following the expiration of the lock-up periods set forth in the Amended and Restated Registration Rights Agreement, Sponsor Letter Agreement and Transaction Support Agreement, as described in the section titled “Description of Securities—Capital Stock Upon Completion of the Business Combination—Registration Rights,” all of SLAC’s common stock issued in connection with this transaction will be freely transferable, except for any shares held by our “affiliates,” without restriction or further registration under the Securities Act.

We are an “emerging growth company” and, as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, our common stock may be less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are

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not “emerging growth companies.” In particular, while we are an “emerging growth company,” we will not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act; we will be exempt from any rules that could be adopted by the PCAOB requiring mandatory audit firm rotations or a supplement to the auditor’s report on financial statements; we will be subject to reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and we will not be required to hold non-binding advisory votes on executive compensation or shareholder approval of any golden parachute payments not previously approved.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company.

We will be an “emerging growth company” until the earlier of (1) the last day of the fiscal year (a) following February 16, 2026, the fifth anniversary of SLAC’s IPO, (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

The exact implications of the JOBS Act are subject to interpretation and guidance by the SEC and other regulatory agencies, and we cannot assure that we will be able to take advantage of all of the benefits of the JOBS Act. In addition, investors may find our common stock less attractive to the extent we rely on the exemptions and relief granted by the JOBS Act. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and the price of our common stock may decline or become more volatile.

Anti-takeover provisions in our organizational documents could delay or prevent a change of control.

Certain provisions of the Proposed Charter and Amended and Restated Bylaws to become effective upon the consummation of the Business Combination may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by our stockholders. These provisions provide for, among other things:

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These anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many of our stockholders. As a result, our stockholders may be limited in their ability to obtain a premium for their shares. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause us to take other corporate actions you desire. See “Description of Securities—Capital Stock Upon Completion of the Business Combination—Certain Anti-Takeover Provisions of Delaware Law, the Proposed Charter and Amended and Restated Bylaws.”

The Proposed Charter will designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.

The Proposed Charter will provide that, subject to limited exceptions, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for any (i) derivative action or proceeding brought on behalf of us, (ii) action asserting a claim of breach of a duty (including any fiduciary duty) owed by any current or former director, officer, stockholder, employee or agent of the Company to us or our stockholders, (iii) action asserting out of or relating to any provision of the DGCL, the Proposed Charter or the Amended and Restated Bylaws or (iv) action asserting a claim governed by the internal affairs doctrine of the State of Delaware shall, to the fullest extent permitted by law. The Proposed Charter will also provide that, to the fullest extent permitted by law, the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. Any person or entity purchasing, otherwise acquiring or holding any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of the provisions of the Proposed Charter described above. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees. This exclusive forum provision will not apply to claims under the Exchange Act, but will apply to actions arising under the Securities Act. Section 22 of the Securities Act, however, creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act, and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. If a court were to find these provisions of the Proposed Charter inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.

Risks Related to SLAC and the Business Combination

SLAC’s Sponsor, Initial Stockholders, directors and officers may have a conflict of interest in determining to pursue the Business Combination, since certain of their interests are different from or in addition to (and may conflict with) the interests of SLAC’s public stockholders, and such interests may have influenced their decisions to approve the Business Combination and recommend that SLAC’s stockholders approve the Business Combination Proposal.

SLAC’s Sponsor, Initial Stockholders, officers and directors have interests in and arising from the Business Combination that are different from or in addition to, and which may conflict with, the interests of SLAC’s public stockholders, which may result in a conflict of interest, including the following:

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These interests may have influenced SLAC’s directors in making their recommendation that you vote in favor of the Business Combination Proposal and the other Proposals in this proxy statement. In addition, the Sponsor and it affiliates will benefit from the completion of a business combination as described above and may be incentivized to complete an acquisition of a less favorable target or on terms less favorable to public stockholders rather than liquidate.

In light of the foregoing, the Sponsor, SLAC’s Initial Stockholders, directors and officers, and their respective affiliates will receive material benefits from the completion of the Business Combination in a manner that may not be aligned with SLAC’s public stockholders.

The Sponsor and SLAC’s Initial Stockholders, directors and officers who hold Founder Shares, Private Placement Warrants and/or SLAC’s pre-transaction Class B common stock may receive a positive return on their investment even if SLAC’s public stockholders experience a negative return on their investment after consummation of the Business Combination.

If SLAC is able to complete a business combination within the required time period, the Sponsor and SLAC’s Initial Stockholders, directors and officers who hold Founder Shares, Private Placement Warrants and/or SLAC’s pre-transaction Class B common stock, which were acquired prior to the SLAC IPO, or concurrently with the completion of the SLAC IPO, may receive a positive return on their investment even if SLAC’s public stockholders experience a negative return on their investment after consummation of the Business Combination.

You may not have the same benefits as an investor in an underwritten public offering and may be subject to material risks present when a company is taken public through a merger including, but not limited to, the absence of due diligence conducted by an underwriter that would be subject to liability for any material misstatements or omissions in a registration statement.

We will become a publicly listed company upon the completion of the Business Combination. The Business Combination and the transactions described in this proxy statement are not an underwritten initial public offering of New W3BCLOUD’s securities and differ from an underwritten initial public offering in several significant ways, which include, but are not limited to, the following.

Like other business combinations, in connection with the Business Combination, you will not receive the benefits of the diligence performed by the underwriters in an underwritten public offering. Investors in an underwritten public offering may benefit from the role of the underwriters in such an offering. In an underwritten public offering, an issuer initially sells its securities to the public market via one or more underwriters, who distribute or resell such securities to the public. Underwriters have liability under the U.S. securities laws for material misstatements or omissions in a registration statement pursuant to which an issuer sells securities. Because the underwriters have a “due diligence” defense to any such liability by, among other things, conducting a reasonable investigation, the underwriters and their counsel conduct a due diligence investigation of the issuer. Due diligence entails engaging legal, financial and/or other experts to perform an investigation as to the accuracy of an issuer’s disclosure regarding, among other things, its business and financial results. Auditors of the issuer will also deliver a “comfort” letter with respect to the financial information contained in the registration statement. In making their investment decision, investors have the benefit of such diligence in underwritten public offerings. In contrast, SLAC and the Company have each engaged financial advisors (rather than underwriters) in connection with the Business Combination. While such financial advisors or their respective affiliates may act as underwriters in underwritten public offerings, the role of a financial advisor differs from that of an underwriter. For example, financial advisors do not act as intermediaries in the sale of securities and therefore are not subject to the same potential liability under the U.S. securities laws as underwriters. As a result, financial advisors typically do not undertake the same level of due diligence investigation of the issuer as is typically undertaken by underwriters.

In addition, because there are no underwriters engaged in connection with the Business Combination, prior to the opening of trading on the trading day immediately following the closing, there will be no book building

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process and no price at which underwriters initially sold shares to the public to help inform efficient and sufficient price discovery with respect to the initial post-closing trades of New W3BCLOUD Class A common stock. Therefore, buy and sell orders submitted prior to and at the opening of initial post-closing trading of the New W3BCLOUD Class A common stock on the stock exchange will not have the benefit of being informed by a published price range or a price at which the underwriters initially sold shares to the public, as would be the case in an underwritten initial public offering. There will be no underwriters assuming risk in connection with an initial resale of shares of the New W3BCLOUD Class A common stock or helping to stabilize, maintain or affect the public price of the New W3BCLOUD Class A common stock following the closing. Moreover, we will not engage in, and have not and will not, directly or indirectly, request the financial advisors to engage in, any special selling efforts or stabilization or price support activities in connection with the New W3BCLOUD Class A common stock that will be outstanding immediately following the closing. All of these differences from an underwritten public offering of the Company’s securities could result in a more volatile price for the New W3BCLOUD Class A common stock.

Further, we will not conduct a traditional “roadshow” with underwriters prior to the opening of initial post-closing trading of the New W3BCLOUD Class A common stock on the stock exchange. There can be no guarantee that any information made available in this proxy statement and/or otherwise disclosed or filed with the SEC will have the same impact on investor education as a traditional “roadshow” conducted in connection with an underwritten initial public offering. As a result, there may not be efficient or sufficient price discovery with respect to the New W3BCLOUD Class A common stock or sufficient demand among potential investors immediately after the closing, which could result in a more volatile price for the New W3BCLOUD Class A common stock.

In addition, SLAC’s Initial Stockholders, including the Sponsor, as well as their respective affiliates and permitted transferees, have interests in the Business Combination that are different from or are in addition to SLAC’s public stockholders and that would not be present in an underwritten public offering of the Company’s securities. Such interests may have influenced the SLAC Board in making their recommendation that you vote in favor of the approval of the Business Combination Proposal and the other Proposals in this proxy statement.

Such differences from an underwritten public offering may present material risks to unaffiliated investors that would not exist if New W3BCLOUD became a publicly listed company through an underwritten initial public offering instead of upon completion of the Business Combination.

SLAC’s directors and officers have discretion in agreeing to changes or waivers to the terms of the Business Combination Agreement and related transactions, which may result in a conflict of interest when determining whether such changes or waivers are appropriate and in SLAC’s public stockholders’ best interest.

In the period leading up to the Closing, events may occur that, pursuant to the Business Combination Agreement, would require SLAC to agree to amend the Business Combination Agreement, to consent to certain actions taken by the Company or to waive rights to which SLAC is entitled to under the Business Combination Agreement. These events could arise because of changes in the Company’s business, a request by the Company to undertake actions that would otherwise be prohibited by the terms of the Business Combination Agreement or the occurrence of other events that would have a material adverse effect on the Company’s business and would entitle SLAC to terminate the Business Combination Agreement. In any of such circumstances, it would be at SLAC’s discretion, acting through SLAC’s board of directors, to consent to such a request or action or waive such rights. The existence of the financial and personal interests of the directors described elsewhere in these risk factors may result in a conflict of interest on the part of one or more of the directors between what he or she may believe is best for the public stockholders and what he or she may believe is best for himself or herself in determining whether or not to take the requested action or waive SLAC’s rights. As of the date of this proxy statement, SLAC does not believe there will be any requests, actions or waivers that SLAC’s directors and officers would be likely to make after stockholder approval of the Business Combination Proposal has been obtained. While certain changes could be made without further stockholder approval, SLAC will circulate a new

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or amended proxy statement and resolicit SLAC’s stockholders if changes to the terms of the Business Combination and related transactions that would have a material impact on SLAC’s stockholders are required prior to the vote on the Business Combination Proposal.

SLAC’s Initial Stockholders have agreed to vote in favor of the Business Combination, regardless of how SLAC’s public stockholders vote.

Unlike other blank check companies in which the founders agree to vote their founder shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, SLAC’s Initial Stockholders have agreed to vote any shares of SLAC’s common stock owned by them in favor of SLAC’s proposed initial business combination. As of the date hereof, SLAC’s Initial Stockholders own approximately 20% of SLAC’s issued and outstanding shares of common stock. Accordingly, it is more likely that the requisite stockholder approval will be received for the Business Combination than would be the case if SLAC’s Initial Stockholders agreed to vote any shares of SLAC’s common stock owned by them in accordance with the majority of the votes cast by SLAC’s public stockholders.

Neither the SLAC Board nor any committee thereof obtained a third-party valuation in determining whether or not to pursue the Business Combination.

Neither the SLAC Board nor any committee thereof is required to obtain an opinion from an independent investment banking or accounting firm that the price that SLAC is paying for the Company is fair to SLAC from a financial point of view. Neither the SLAC Board nor any committee thereof obtained a third-party valuation in connection with the Business Combination. In analyzing the Business Combination, the SLAC Board conducted due diligence on the Company and reviewed comparisons of selected financial data of the Company with certain of its peers in the industry and the financial terms set forth in the Business Combination Agreement. The SLAC Board also consulted with the Company’s management and its legal counsel, financial advisor and other advisors and considered a number of factors, uncertainty and risks, including, but not limited to, those discussed under “The Business Combination and The Business Combination Agreement—Recommendation of the SLAC Board and Reasons for the Business Combination,” and concluded that the Business Combination was in the best interest of SLAC stockholders. Accordingly, investors will be relying solely on the judgment of the SLAC Board in valuing the Company, and the SLAC Board may not have properly valued such businesses. The lack of a third-party valuation may also lead an increased number of stockholders to vote against the Business Combination or demand redemption of their shares, which could potentially impact SLAC’s ability to consummate the Business Combination.

A market for our securities may not continue, which would adversely affect the liquidity and price of our securities.

Following the Business Combination, the price of our securities may fluctuate significantly due to the market’s reaction to the Business Combination and general market and economic conditions. An active trading market for our securities following the Business Combination may never develop or, if it develops, it may not be sustained.

The NYSE may not list our securities on its exchange, and if they are listed we may be unable to satisfy listing requirements in the future, which could limit investors’ ability to effect transactions in our securities and subject us to additional trading restrictions.

As a result of the Business Combination, the NYSE rules require that we apply to continue the listing of our Class A common stock and warrants. While we will apply to have our common stock and warrants listed on the NYSE upon consummation of the Business Combination, we will be required to meet the NYSE’s initial listing requirements. We may be unable to meet those requirements. Even if our securities continue to be listed on the NYSE immediately following the Business Combination, we may be unable to maintain the listing of our securities in the future.

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If we fail to meet the initial listing requirements and the NYSE does not list our securities on its exchange, or if we are delisted, there could be significant material adverse consequences, including:

If we do not develop and implement all required accounting practices and policies, we may be unable to provide the financial information required of a United States publicly traded company in a timely and reliable manner.

As the Company is a privately held company, it has not been required to adopt all of the financial reporting and disclosure procedures and controls required of a United States publicly traded company. We expect that the implementation of all required accounting practices and policies and the hiring of additional financial staff will increase the operating costs of New W3BCLOUD and could require the management of New W3BCLOUD to devote significant time and resources to such implementation. If we fail to develop and maintain effective internal controls and procedures and disclosure procedures and controls, we may be unable to provide financial information and required SEC reports that are timely and reliable. Any such delays or deficiencies could harm us, including by limiting our ability to obtain financing, either in the public capital markets or from private sources and damaging our reputation, which in either case could impede our ability to implement our growth strategy. In addition, any such delays or deficiencies could result in our failure to meet the requirements for continued listing of our common stock and warrants on the NYSE.

We may issue additional shares of common stock or other equity securities without your approval, which would dilute your ownership interest in us and may depress the market price of our common stock.

We may issue additional shares of common stock or other equity securities in the future in connection with, among other things, future acquisitions, repayment of outstanding indebtedness or grants under the Equity Incentive Plan without stockholder approval in a number of circumstances.

Our issuance of additional common stock or other equity securities could have one or more of the following effects:

If our performance following the Business Combination does not meet market expectations, the price of our securities may decline.

If our performance following the Business Combination does not meet market expectations, the price of our common stock may decline from the price of SLAC’s common stock prior to the Closing. The market value of our common stock at the time of the Business Combination may vary significantly from the price on the date the Business Combination Agreement was executed, the date of this proxy statement, or the date on which SLAC’s stockholders vote on the Business Combination. Because the number of shares of SLAC’s common stock issued as consideration in the Business Combination will not be adjusted to reflect any changes in the market price of SLAC’s common stock, the value of the shares of SLAC’s common stock issued in the Business Combination may be higher or lower than the value of the same number of shares of SLAC’s common stock on earlier dates.

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In addition, following the Business Combination, fluctuations in the price of our common stock could contribute to the loss of all or part of your investment. Prior to the Business Combination, there has not been a public market for our common stock, and trading in our common stock has not been active. Accordingly, the valuation ascribed to us and our common stock in the Business Combination may not be indicative of the price that will prevail in the trading market following the Business Combination. If an active market for our common stock develops and continues, the trading price of our common stock following the Business Combination could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in our common stock and our common stock may trade at prices significantly below the price you paid for them.

Factors affecting the trading price of our common stock following the Business Combination may include:

Broad market and industry factors may depress the market price of our common stock irrespective of our operating performance. The stock market in general and the NYSE has experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in our market or the stocks of other companies which investors perceive to be similar to us could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our common stock also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

The Company is a private company and as such little information is publicly available regarding the Company. This may result in the Business Combination not being as profitable as we expect, or at all.

While SLAC has conducted due diligence on the Company, very little public information exists about private companies. As a result, the Business Combination could be less profitable than SLAC expects, or at all. Furthermore, the relative lack of information about a private company may hinder SLAC’s ability to properly assess the value of the Company which could result in SLAC’s overpaying.

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Even if SLAC consummates the Business Combination, the public warrants may never be in the money, and they may expire worthless.

The exercise price for SLAC’s warrants is $11.50 per share. There can be no assurance that the public warrants will be in the money prior to their expiration and, as such, the warrants may expire worthless.

The terms of SLAC’s warrants may be amended in a manner that may be adverse to the holders. The warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and SLAC provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders. Accordingly, SLAC may amend the terms of the warrants in a manner adverse to a holder if holders of at least 65% of the then outstanding public warrants approve of such amendment. SLAC’s ability to amend the terms of the warrants with the consent of at least 65% of the then outstanding public warrants is unlimited. Examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares of SLAC’s common stock purchasable upon exercise of a warrant.

SLAC may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

SLAC has the ability to redeem outstanding warrants (excluding any Private Placement Warrants held by the Sponsor or their permitted transferees other than those two million (2,000,000) Private Placement Warrants which will be exchanged at Closing as a condition of the Business Combination) for cash at any time after they become exercisable and prior to their expiration, at $0.01, provided that the last reported sales price (or the closing bid price of SLAC common stock in the event the shares of SLAC common stock are not traded on any specific trading day) of the common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and the like) on each of 20 trading days within the 30 trading-day period ending on the third business day prior to the date on which SLAC send proper notice of such redemption; provided that on the date SLAC gives notice of redemption and during the entire period thereafter until the time SLAC redeems the warrants, SLAC has an effective registration statement under the Securities Act covering the shares of SLAC common stock issuable upon exercise of the warrants and a current prospectus relating to them is available. SLAC has the ability to redeem outstanding warrants (excluding any placement warrants held by the Sponsor or their permitted transferees other than those two million (2,000,000) Private Placement Warrants which will be exchanged at Closing as a condition of the Business Combination) for shares of SLAC common stock at any time after they become exercisable and prior to their expiration, at $0.10; provided that the last reported sales price (or the closing bid price of SLAC common stock in the event the shares of SLAC common stock are not traded on any specific trading day) of the SLAC common stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations and the like) on each of 20 trading days within the 30 trading-day period ending on the third business day prior to the date on which SLAC sends proper notice of such redemption; provided that on the date SLAC gives notice of redemption and during the entire period thereafter until the time SLAC redeems the warrants, SLAC has an effective registration statement under the Securities Act covering the shares of SLAC common stock issuable upon exercise of the warrants and a current prospectus relating to them is available. If and when the warrants become redeemable by SLAC, SLAC may exercise its redemption right even if SLAC is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force a warrant holder: (i) to exercise its warrants and pay the exercise price therefore at a time when it may be disadvantageous for it to do so, (ii) to sell its warrants at the then-current market price when it might otherwise wish to hold its warrants or (ill) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, will be substantially less than the market value of its warrants.

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Warrants to purchase SLAC common stock will become exercisable following the Business Combination, which could increase the number of shares eligible for future resale in the public market and result in dilution to SLAC stockholders.

Outstanding warrants to purchase an aggregate of 10,625,000 shares of SLAC common stock will become exercisable on the 30th day following the Closing in accordance with the terms of the warrant agreement governing those securities. These warrants consist of 8,625,000 warrants originally included in the units issued in SLAC’s IPO and 6,000,0000 warrants included in the placement units. Each warrant entitles its holder to purchase one share of SLAC common stock at an exercise price of $11.50 per share and will expire at 5:00 p.m., New York time, five years after the Closing or earlier upon redemption of SLAC common stock or SLAC’s liquidation. To the extent warrants are exercised, additional shares of SLAC common stock will be issued, which will result in dilution to SLAC’s then existing stockholders and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could depress the market price of SLAC common stock.

Additionally, effective as of and conditioned on the closing of the Business Combination, two million (2,000,000) of the Private Placement Warrants, each to purchase one share of SLAC Class A common stock, will be exchanged for two million (2,000,000) new Exchange Private Placement Warrants with substantially the same terms as the original Private Placement Warrants, except that such new Exchange Private Placement Warrants will be subject to redemption at a reference price of $18.00 per share, subject to conditions set forth in a new Exchange Warrant Agreement to be entered into in connection with the Closing of the Business Combination.

The Warrant Agreement provides that the courts of the State of New York or the United States District Court for the Southern District of New York are the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with SLAC.

The Warrant Agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the Warrant Agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that SLAC irrevocably submits to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. SLAC will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

Notwithstanding the foregoing, these provisions of the Warrant Agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Any person or entity purchasing or otherwise acquiring any interest in any of the warrants shall be deemed to have notice of and to have consented to the forum provisions in our Warrant Agreement. If any action, the subject matter of which is within the scope of the forum provisions of the Warrant Agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of the warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.

This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with SLAC, which may discourage such lawsuits. Alternatively, if a court were to find this provision of the Warrant Agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, SLAC may incur additional costs associated with resolving such

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matters in other jurisdictions, which could materially and adversely affect its business, financial condition and results of operations and result in a diversion of the time and resources of SLAC’s management and board of directors.

SLAC’s stockholders will experience immediate dilution due to the issuance of common stock to the Company stockholders as consideration in the Business Combination. Having a minority share position likely reduces the influence that SLAC’s current stockholders have on the management of New W3BCLOUD.

Based on SLAC’s current capitalization, SLAC anticipates issuing an aggregate of approximately                  shares of SLAC Class A common stock and                shares of SLAC Class B common stock to the Company’s stockholders as consideration in the Business Combination. It is anticipated that, upon completion of the Business Combination, based upon the As Exchanged Class A Share Ownership Assumptions: (1) the Company’s public stockholders would own approximately     % of New W3BCLOUD’s outstanding Class A common stock; (2) the PIPE Investors would own approximately     % of New W3BCLOUD’s outstanding Class A common stock; (3) the Sponsor and other SLAC Initial Stockholders would own     % of New W3BCLOUD’s outstanding Class A common stock; and (4) Company rollover holders will hold approximately     % of New W3BCLOUD’s outstanding Class A common stock.

If any shares of SLAC’s common stock are redeemed in connection with the Business Combination, the percentage of New W3BCLOUD’s outstanding common stock held by SLAC’s public stockholders will decrease and the percentages of New W3BCLOUD’s outstanding common stock held immediately following the Closing by each of SLAC’s Initial Stockholders and the Company stockholders will increase. See “Unaudited Pro Forma Condensed Combined Financial Information” for further information. To the extent that any of the outstanding warrants or options are exercised for shares of New W3BCLOUD’s common stock, or awards are issued under the proposed Equity Incentive Plan, SLAC’s existing stockholders may experience substantial dilution. Such dilution could, among other things, limit the ability of SLAC’s current stockholders to influence New W3BCLOUD’s management through the election of directors following the Business Combination.

Following the completion of the Business Combination, SLAC public stockholders will beneficially own                shares of New W3BCLOUD’s Class A common stock, representing approximately     % of our total voting power.

Our stockholders may be diluted by the future issuance of common stock, preferred stock or securities convertible or exchangeable into common or preferred stock, in connection with our incentive plans, acquisitions, capital raises or otherwise.

After the Closing, we would have approximately                million shares of Class A common stock authorized but unissued in the No Redemptions Scenario or approximately                million shares of Class A common stock authorized but unissued assuming 100% redemptions; and approximately                 million shares of Class B common stock authorized but unissued in the No Redemptions Scenario or approximately                 million shares of Class B common stock authorized but unissued assuming 100% redemptions. Our Proposed Charter to become effective upon the Closing authorizes us to issue these shares of common stock and options, rights, warrants, and appreciation rights relating to common stock for the consideration and on the terms and conditions established by our board of directors in its sole discretion, whether in connection with acquisitions or otherwise.

In the future, we expect to obtain financing or to further increase our capital resources by issuing additional shares of our capital stock or offering debt or other equity securities, including senior or subordinated notes, debt securities convertible into equity, or shares of preferred stock. Issuing additional shares of our capital stock, other equity securities, or securities convertible into equity may dilute the economic and voting rights of our existing stockholders, reduce the market price of our Class A common stock, or both. Debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the

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number of equity securities issuable upon conversion. Preferred stock, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our Class A common stock. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing, or nature of our future offerings. As a result, holders of our Class A common stock bear the risk that our future offerings may reduce the market price of our Class A common stock and dilute their percentage ownership.

SLAC expects to incur significant, non-recurring costs in connection with consummating the Business Combination and related transactions.

SLAC expects to incur significant, non-recurring costs in connection with consummating the Business Combination and related transactions. SLAC will pay all fees, expenses and costs SLAC incurs or incurred on SLAC’s behalf in connection with the Business Combination Agreement and the transactions contemplated thereby (including the Business Combination). Additionally, the Business Combination Agreement provides that if the Business Combination is consummated, SLAC will pay all fees, expenses and costs incurred by the Company’s or on the Company’s behalf, subject to certain limited exceptions, in connection with the Business Combination Agreement and the transactions contemplated thereby (including the Business Combination). SLAC currently estimates that transaction expenses will be approximately $51.7 million (excluding transaction-related bonuses), including post-closing expenses that will be paid by New W3BCLOUD.

If SLAC is unable to complete the Business Combination or another initial business combination by SLAC’s Outside Date, SLAC will cease all operations except for the purpose of winding up SLAC’s affairs, redeem SLAC’s outstanding public shares and dissolve and liquidate. In such event, third parties may bring claims against SLAC and, as a result, the proceeds held in the Trust Account could be reduced and the per share liquidation price received by SLAC’s stockholders could be less than $10.00 per share.

SLAC’s current charter provides that it must complete the Business Combination or another initial business combination by SLAC’s Business Combination Outside Date, or SLAC must cease all operations except for the purposes of winding up, redeem SLAC’s outstanding public shares and, subject to approval by SLAC’s remaining stockholders and SLAC’s board, dissolve and liquidate. In such event, third parties may bring claims against SLAC for monies SLAC owes for products or services provided to SLAC. Although SLAC has obtained waiver agreements from the Company and from certain vendors and service providers that SLAC has engaged and to which SLAC owes money pursuant to which such parties have waived any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account, there is no guarantee that they or other vendors who did not execute such waivers will not seek recourse against the Trust Account notwithstanding such agreements. Furthermore, there is no guarantee that a court will uphold the validity of such agreements. Accordingly, the proceeds held in the Trust Account could be subject to claims, which could take priority over those of SLAC’s public stockholders. If SLAC is unable to complete the Business Combination or another business combination within the required time period, the Sponsor has agreed it will be liable to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities to which SLAC owes money for services rendered or contracted for or products sold to SLAC, but only if such a vendor or prospective target business does not execute such a waiver. However, he may not be able to meet such obligation. Therefore, the per share distribution from the Trust Account in such a situation may be less than $10.00 due to such claims.

Additionally, if SLAC is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against SLAC which is not dismissed, or if SLAC otherwise enters compulsory or court supervised liquidation, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in its bankruptcy estate and subject to the claims of third parties with priority over the claims of its stockholders. To the extent any bankruptcy claims deplete the Trust Account, the per share distribution from the Trust Account may be less than $10.00.

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SLAC’s directors may decide not to enforce the indemnification obligations of the Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to SLAC’s public stockholders.

If proceeds in the Trust Account are reduced below $10.00 per public share and the Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, SLAC’s independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations. While SLAC currently expects that its independent directors would take legal action on SLAC’s behalf against the Sponsor to enforce its indemnification obligations to SLAC, it is possible that SLAC’s independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance. If SLAC’s independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to SLAC’s public stockholders may be reduced below $10.00 per share.

SLAC may not have sufficient funds to satisfy indemnification claims of SLAC’s directors and executive officers.

SLAC has agreed to indemnify SLAC’s officers and directors to the fullest extent permitted by law. However, SLAC’s officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account and to not seek recourse against the Trust Account for any reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied by SLAC only if (i) SLAC has sufficient funds outside of the Trust Account or (ii) SLAC consummates the Business Combination. SLAC’s obligation to indemnify its officers and directors may discourage stockholders from bringing a lawsuit against SLAC’s officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against SLAC’s officers and directors, even though such an action, if successful, might otherwise benefit SLAC and SLAC’s stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against SLAC’s officers and directors pursuant to these indemnification provisions.

SLAC’s stockholders may be held liable for claims by third parties against SLAC to the extent of distributions received by them.

If SLAC is unable to complete the Business Combination or another initial business combination within the required time period, SLAC must dissolve and liquidate, subject in each case to SLAC’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. SLAC cannot assure you that SLAC will properly assess all claims that may be potentially brought against SLAC, nor can SLAC assure you that third parties will not seek to recover from SLAC’s stockholders amounts owed to them by SLAC. As such, SLAC’s stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of SLAC’s stockholders may extend well beyond the third anniversary of the date of distribution.

If SLAC is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against SLAC which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by SLAC’s stockholders. Furthermore, because SLAC intends to distribute the proceeds held in the Trust Account to SLAC’s public stockholders promptly after SLAC’s Outside Date, if SLAC does not consummate the Business Combination, this may be viewed or interpreted as giving preference to SLAC’s public stockholders over any potential creditors with respect to access to or distributions from SLAC’s assets. Moreover, SLAC’s board may be viewed as having breached its fiduciary duties to SLAC’s creditors and/or having acted in bad faith, and thereby exposing the board and SLAC to claims for punitive damages, by paying public stockholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against SLAC or you for those reasons.

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Actions taken by SLAC’s Initial Stockholders, SLAC’s officers and directors to increase the likelihood of approval of the Business Combination Proposal and the other Proposals presented in this proxy statement could have a depressive effect on the price of SLAC’s common stock.

At any time prior to the Special Meeting, during a period when they are not then aware of any material nonpublic information regarding SLAC or SLAC’s securities, SLAC’s Initial Stockholders, SLAC’s directors, officers and their respective affiliates may enter into agreements to purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the Business Combination Proposal, or enter into transactions with such investors and others to provide them with incentives to acquire shares of SLAC’s common stock or vote their shares in favor of the Business Combination Proposal. While the exact nature of any other incentive arrangements that may be entered into in the future has not been determined as of the date of this proxy statement, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and the transfer to such investors or holders of shares owned by the Initial Stockholders for nominal value. See, for example, “Certain Relationships and Related Party Transactions—SLAC Related Party Transactions—Founder Shares” and “Certain Relationships and Related Party Transactions—SLAC Related Party Transactions—Sponsor Letter Agreement.” The purpose of such purchases and other transactions would be to increase the likelihood that the Business Combination Proposal is approved and to decrease the likelihood that holders request redemption of public shares. Entering into any such arrangements may have a depressive effect on the price of SLAC’s common stock. For example, if as a result of these arrangements an investor or holder purchases shares for nominal value, the investor or holder may be more likely to sell such shares immediately following the Closing for a price below market value.

Our ability to successfully effect the Business Combination and the successful operation of the business thereafter will depend largely upon the efforts of certain key personnel, including the key personnel of the Company, all of whom we expect to stay with New W3BCLOUD following the Business Combination. The loss of such key personnel could adversely affect the operations and profitability of the post-combination business.

Our ability to recognize certain benefits of the Business Combination and the successful operation of New W3BCLOUD’s business following the Business Combination will depend upon the efforts of certain key personnel of New W3BCLOUD. Although we expect all of such key personnel to remain with New W3BCLOUD following the Business Combination, the unexpected loss of key personnel may adversely affect the operations and profitability of New W3BCLOUD. In addition, our future success depends in part on our ability to identify and retain key personnel to succeed senior management. Furthermore, while we have closely scrutinized the skills, abilities and qualifications of the key New W3BCLOUD personnel that will be employed by New W3BCLOUD, our assessment may not prove to be correct. If such personnel do not possess the skills, qualifications or abilities we expect or those necessary to manage a public company, the operations and profitability of New W3BCLOUD’s business may be negatively impacted.

Future sales of SLAC’s common stock issued to Company stockholders or to the Initial Stockholders may reduce the market price of SLAC’s common stock that you might otherwise obtain.

In accordance with the terms and subject to the conditions of the Business Combination Agreement:

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In connection with the execution of the Business Combination Agreement, SLAC and the Company entered into a Transaction Support Agreement providing for certain restrictions on transfer applicable to the shares issued to the Company in connection with the Business Combination. For additional information regarding the Transaction Support Agreement, see “The Business Combination and The Business Combination Agreement—Related Agreements—Transaction Support Agreement.”

The Sponsor is a party to the Sponsor Letter Agreement, pursuant to which the Sponsor is prohibited from, except in limited circumstances, from transferring or selling the shares except to permitted transferees, as defined in the Sponsor Letter Agreement. See “the Business Combination and The Business Combination Agreement—Related Agreements—Sponsor Letter Agreement.”

New W3BCLOUD will, in connection with the Closing, amend and restate the existing registration rights agreement with the Sponsor by entering into the Amended and Restated Registration Rights Agreement with the A&R RRA Parties with respect to the shares of New W3BCLOUD’s Class A common stock and certain other equity securities of New W3BCLOUD held by the A&R RRA Parties. The Amended and Restated Registration Rights Agreement will require New W3BCLOUD to, among other things, file with the SEC a resale shelf registration statement pursuant to Rule 415 under the Securities Act on behalf of the A&R RRA Parties within 30 calendar days after the Closing (the “Shelf Registration Statement”). If the shelf registration statement becomes unavailable once it is declared effective, the A&R RRA Parties will have certain demand registration rights.

Upon expiration of the lock-up periods set forth in the Amended and Restated Registration Rights Agreement and Sponsor Letter Agreement, applicable to shares of New W3BCLOUD’s common stock and certain other equity securities held by the A&R RRA Parties and the effectiveness of the Shelf Registration Statement, these parties may sell large amounts of our stock in the open market or in privately negotiated transactions. The registration and availability of such a significant number of shares of common stock for trading in the public market may increase the volatility in the price of our common stock or put significant downward pressure on the price of our common stock. In addition, the combined company may use shares of our common stock as consideration for future acquisitions, which could further dilute our stockholders.

Subsequent to the consummation of the Business Combination, New W3BCLOUD may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and stock price, which could cause you to lose some or all of your investment.

Although SLAC has conducted a due diligence examination of the Company, SLAC cannot assure you that this examination revealed all material issues that may be present in the Company’s business, or that factors

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outside of SLAC’s and the Company’s control will not later arise. As a result, we may be forced to later write down or write off assets, restructure New W3BCLOUD’s operations, or incur impairment or other charges that could result in losses. Even if SLAC’s due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with SLAC’s preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about New W3BCLOUD or its securities. In addition, charges of this nature may cause us to be unable to obtain future financing on favorable terms or at all.

New W3BCLOUD may be subject to securities litigation, which is expensive and could divert management attention.

Following the Business Combination, our share price may be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. New W3BCLOUD may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could have a material adverse effect on business, financial condition, results of operations and prospects. Any adverse determination in litigation could also subject New W3BCLOUD to significant liabilities.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.

We are subject to laws and regulations enacted by national, regional and local governments, including in particular, reporting and other requirements under the Exchange Act. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could result in fines, injunctive relief or similar remedies which could be costly to us or limit our ability to operate post-Business Combination.

The historical consolidated and unaudited pro forma financial information in this proxy statement is not representative of the results New W3BCLOUD would have achieved as a stand-alone public company and may not permit you to predict its future results.

The historical consolidated and unaudited pro forma financial information in this proxy statement does not reflect the financial condition, results of operations or cash flows that New W3BCLOUD would have achieved as a stand-alone public company during the periods presented or those it will achieve in the future as a result of added costs New W3BCLOUD expects to incur as a public company, including costs related to public company reporting, investor relations and compliance with the Sarbanes-Oxley Act of 2002. As a result of these matters, among others, it may be difficult for investors to compare New W3BCLOUD’s future results to historical results or to evaluate its relative performance or trends in its business.

Risks Related to the Redemption

SLAC public stockholders, together with any affiliates of theirs or any other person with whom they are acting in concert or as a “group,” will be restricted from exercising redemption rights with respect to more than 15% of the public shares.

A public stockholder, together with any of its affiliates or any other person with whom it is acting in concert or as a “group,” will be restricted from exercising redemption rights with respect to more than 15% of the public shares. Accordingly, if you hold more than 15% of the public shares and the Business Combination Proposal is approved, you will not be able to exercise redemption rights with respect to the full amount of your shares and

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may be forced to hold the shares in excess of 15% or sell them in the open market. If the Business Combination is consummated, the value of such excess shares may not appreciate over time and the market price of SLAC’s common stock may not exceed the per share redemption price paid in connection with the Business Combination.

A SLAC stockholder’s decision as to whether to redeem his, her or its shares for a pro rata portion of the Trust Account may not put the stockholder in a better future economic position.

SLAC can give no assurance as to the price at which a stockholder may be able to sell his, her or its public shares in the future following the completion of the Business Combination. Certain events following the consummation of any business combination, such as the Business Combination, may cause an increase in SLAC’s share price, and may result in a lower value realized upon redemption than a stockholder might realize in the future had the stockholder not redeemed his, her or its shares. Similarly, if a stockholder does not redeem his, her or its shares, the stockholder will bear the risk of ownership of the public shares after the consummation of the Business Combination, and the risk that the stockholder may not be able, in the future to sell his, her or its shares, for a greater amount than the redemption price described in this proxy statement. A stockholder should consult his, her or its tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.

If SLAC’s stockholders fail to comply with the redemption requirements specified in this proxy statement, they will not be entitled to redeem their shares of SLAC common stock for a pro rata portion of the funds held in the Trust Account.

In order to exercise redemption rights, holders of SLAC public shares are required to, among other requirements, submit a request in writing and deliver their stock (either physically or electronically) to SLAC’s transfer agent at least two business days prior to the Special Meeting. Stockholders electing to redeem their public shares will receive their pro rata portion of the amount on deposit in the Trust Account as of two business days prior to the anticipated consummation of the Business Combination. See “Special Meeting of SLAC Stockholders—Redemption Rights and Procedures” for additional information on how to exercise your redemption rights. If you do not timely submit your redemption request and deliver your common stock and comply with the other redemption requirements, you will not be entitled to redeem your common stock.

SLAC stockholders who redeem their shares of SLAC Class A common stock may continue to hold any public warrants they own, which will result in additional dilution to non-redeeming holders upon exercise of the public warrants.

SLAC stockholders who redeem their shares of SLAC Class A common stock may continue to hold any public warrants they owned prior to redemption, which will result in additional dilution to non-redeeming holders upon exercise of such public warrants. Assuming (i) all redeeming SLAC stockholders acquired SLAC Units in SLAC’s IPO and continue to hold the public warrants that were included in the SLAC Units, and (ii) maximum redemption of shares of SLAC Class A common stock held by the redeeming SLAC stockholders,              public warrants would be retained by redeeming SLAC stockholders with a value of approximately $             based on the market price of $             per warrant based on the closing price of the public warrants on the NYSE on                 , 2022. As a result of the redemption, the redeeming SLAC stockholders would recoup their entire investment and continue to hold public warrants with an aggregate market value of approximately $            , while non-redeeming SLAC stockholders would suffer additional dilution in their percentage ownership and voting interest of New W3BCLOUD to the extent such warrants are exercised and additional shares of New W3BCLOUD Class A common stock are issued.

General Risk Factors

Adverse economic conditions may adversely affect our business.

Our performance is subject to general economic conditions, and their impact on the digital assets, payments and capital raise markets. The United States and other key international economies have experienced cyclical

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downturns from time to time in which economic activity declined resulting in lower consumption rates, restricted credit, reduced profitability, weaknesses in financial markets, bankruptcies, and overall uncertainty with respect to the economy. The impact of general economic conditions, including a recession or economic slowdown, on the cryptoeconomy is highly uncertain and dependent on a variety of factors, including market adoption of digital assets and other digital assets, global trends in the crypto and blockchain economy, central bank monetary policies, and other events beyond our control. Geopolitical developments, such as international hostilities, trade wars and foreign exchange limitations can also increase the severity and levels of unpredictability globally and increase the volatility of global financial and digital asset markets. To the extent that conditions in the general economic and digital asset markets materially deteriorate, our ability to attract and retain customers may suffer.

We may be adversely affected by natural disasters, pandemics, and other catastrophic events, and by man-made problems such as terrorism and international hostilities, that could disrupt our business operations, and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.

Natural disasters or other catastrophic events may also cause damage or disruption to our operations, international commerce, and the global economy, and could have an adverse effect on our business, operating results, and financial condition. Our business operations are subject to interruption by natural disasters, fire, power shortages, and other events beyond our control.

In addition, our global operations expose us to risks associated with public health crises, such as pandemics and epidemics, which could harm our business and cause our operating results to suffer. For example, the ongoing effects of the COVID-19 pandemic and/or the precautionary measures that we have adopted have resulted, and could continue to result, in difficulties or changes to our customer support, or create operational or other challenges, any of which could adversely impact our business and operating results.

Further, acts of terrorism, labor activism or unrest, and other geo-political unrest or international hostilities could cause disruptions in our business or the businesses of our partners or the economy as a whole. In the event of a natural disaster, including a major earthquake, blizzard, or hurricane, or a catastrophic event such as a fire, power loss, or telecommunications failure, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in development of our services, lengthy interruptions in service, breaches of data security, and loss of critical data, all of which could have an adverse effect on our future operating results.

We do not maintain insurance sufficient to compensate us for the potentially significant losses that could result from disruptions to our services. Additionally, all the aforementioned risks may be further increased if we do not implement a disaster recovery plan or our business partners’ disaster recovery plans prove to be inadequate.

Acquisitions, joint ventures or other strategic transactions create certain risks and may adversely affect our business, financial condition or results of operations.

Acquisitions, partnerships and joint ventures are part of our growth strategy. We evaluate and expect in the future to evaluate potential strategic acquisitions of, and partnerships or joint ventures with, complementary businesses, services or technologies. We may not be successful in identifying acquisition, partnership and joint venture targets. In addition, we may not be able to successfully finance or integrate any businesses, services or technologies that we acquire or with which we form a partnership or joint venture.

We may not be able to identify suitable acquisition candidates or complete acquisitions in the future, which could adversely affect our future growth; or businesses that we acquire may not perform as well as expected or may be more difficult or expensive to integrate and manage than expected, which could adversely affect our business and results of operations. In addition, the process of integrating these acquisitions may disrupt our business and divert our resources.

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In addition, acquisitions outside of the United States often involve additional or increased risks including, for example:

These risks may arise for a number of reasons: we may not be able to find suitable businesses to acquire at affordable valuations or on other acceptable terms; we may face competition for acquisitions from other potential acquirers; we may need to borrow money or sell equity or debt securities to the public to finance acquisitions and the terms of these financings may be adverse to us; changes in accounting, tax, securities or other regulations could increase the difficulty or cost for us to complete acquisitions; we may incur unforeseen obligations or liabilities in connection with acquisitions; we may need to devote unanticipated financial and management resources to an acquired business; we may not realize expected operating efficiencies or product integration benefits from an acquisition; we could enter markets where we have minimal prior experience; and we may experience decreases in earnings as a result of non-cash impairment charges.

We cannot ensure that any acquisition, partnership or joint venture we make will not have a material adverse effect on our business, financial condition and results of operations.

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Introduction

SLAC and the Company are providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the Business Combination. The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X and should be read in conjunction with the accompanying notes.

The unaudited pro forma condensed combined balance sheet as of June 30, 2022 combines the unaudited condensed balance sheet of SLAC as of June 30, 2022 with the unaudited condensed consolidated balance sheet of the Company as of June 30, 2022, giving effect to the Business Combination as if it had been consummated on June 30, 2022.

The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2022 combines the unaudited condensed statement of operations of SLAC for the six months ended June 30, 2022 with the unaudited condensed consolidated statement of operations of the Company for the six months ended June 30, 2022. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2021 combines the audited statement of operations of SLAC for the year ended December 31, 2021 with the audited consolidated statement of operations of the Company for the year ended December 31, 2021, giving effect to the Business Combination as if it had been consummated on January 1, 2021, the beginning of the earliest period presented.

The unaudited pro forma condensed combined financial information was derived from, and should be read in conjunction with, the following historical financial statements and the accompanying notes, which are included elsewhere in this proxy statement:

The foregoing historical financial statements have been prepared in accordance with GAAP. The unaudited pro forma condensed combined financial information has been prepared based on the aforementioned historical financial statements and the assumptions and adjustments as described in the notes to the unaudited pro forma condensed combined financial information. The pro forma adjustments reflect transaction accounting adjustments related to the Business Combination, which is discussed in further detail below. The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only and do not purport to represent SLAC’s consolidated results of operations or consolidated financial position that would actually have occurred had the Business Combination been consummated on the dates assumed or to project SLAC’s consolidated results of operations or consolidated financial position for any future date or period.

The unaudited pro forma condensed combined financial information should also be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of SLAC” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Company,” and other financial information included elsewhere in this proxy statement.

Description of the Business Combination

On July 31, 2022, SLAC, the Company, and Merger Sub entered into the Business Combination Agreement. Pursuant to the Business Combination Agreement, and assuming a favorable vote of SLAC shareholders, Merger

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Sub will be merged with and into the Company, with the Company being the surviving corporation. Upon Closing, the Company will become a direct, wholly-owned subsidiary of SLAC.

Accounting for the Business Combination

The Business Combination will be accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, SLAC has been treated as the “acquired” company for financial reporting purposes. This determination was primarily based on the Company’s shareholders having a relative majority of the voting power of the post-combination entity; senior management of the Company comprising the majority of the senior management of the post-combination entity; and the Company having three of the four initial directors listed in the Business Combination Agreement on the Board of Directors, having agreed to the other initial director listed in the Business Combination Agreement, and having the right to dually elect another three directors along with the SPAC. Accordingly, for accounting purposes, the financial statements of the post-combination entity will represent a continuation of the financial statements of the Company with the acquisition being treated as the equivalent of the Company issuing stock for the net assets of SLAC, accompanied by a recapitalization. The net assets of SLAC will be stated at historical cost, with no goodwill or other intangible assets recorded.

Accounting for the Earn Out Shares

The post-combination entity is reserving 25.0 million Earn Out Shares for issuance to the Company’s existing shareholders during the Earn Out Period pursuant to the terms and conditions set forth in the Business Combination Agreement. One third of the Earn Out Shares will be issued when the VWAP of the post-combination entity’s common stock price equals or exceeds $12.50 per share for at least 20 trading days during any 30 trading-day period, one third of the Earn Out Shares will be issued when the VWAP of the post-combination entity’s common stock price equals or exceeds $15.00 for at least 20 trading days during any 30 trading-day period, and the remaining one third will be issued when the VWAP equals or exceeds $17.50 for at least 20 trading days during any 30 trading-day period. As the Business Combination will be accounted for as a reverse recapitalization, the issuance of the Earn Out Shares to the Company’s existing shareholders is anticipated to be accounted for as an equity transaction.

The accounting for the Earn Out Shares was evaluated under ASC Topic 480, Distinguishing Liabilities from Equity, and ASC Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, to determine if the Earn Out Shares should be classified as a liability or within equity. As part of that preliminary analysis, it was determined that the Earn Out Shares are freestanding from the related shares of common stock, do not meet the criteria within ASC 480 to be classified as a liability, and meet the criteria in ASC 815-40 to be considered indexed to the post-combination entity’s common stock and classified within equity. Therefore, an adjustment to recognize the Earn Out Shares would have no net impact on any financial statement line item as it would simultaneously increase and decrease additional paid-in capital. Thus, no adjustment has been applied to the unaudited pro forma combined financial information related to the Earn Out Shares.

Accounting for the Sponsor Shares

The post-combination entity shall restructure 8.6 million shares of SLAC Class B common stock currently outstanding and held by the Sponsor (the “Sponsor Shares”), with such Sponsor Shares convertible into shares of the post-combination entity’s Class A common stock, par value $0.0001 per share. Fifty percent, or 4.3 million shares, of the Sponsor Shares shall be delivered to the Sponsor upon Closing of the Business Combination; an additional up to 30%, or 2.6 million shares, shall be transferred to non-redeeming shareholders of the post-combination entity and certain investors in a potential PIPE financing upon Closing of the Business Combination or, to the extent not transferred, forfeited by the Sponsor; and the remaining 20%, or 1.7 million shares, are convertible beginning after the Closing of the Business Combination and ending five years after the Closing of the Business Combination, subject to the occurrence of certain triggering events (the “Restricted Sponsor Shares”). One half of the Restricted Sponsor Shares will be converted when the VWAP of the post-combination entity’s common stock price equals or exceeds $12.50 per share for at least 20 trading days during any 30

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trading-day period, and the remaining one half will be converted when the VWAP of the post-combination entity’s common stock price equals or exceeds $15.00 for at least 20 trading days during any 30 trading-day period. As the Business Combination will be accounted for as a reverse recapitalization, the issuance of the shares subject to the Restricted Sponsor Shares to the Sponsor’s existing shareholders is anticipated to be accounted for as an equity transaction.

The accounting for the Restricted Sponsor Shares was evaluated under ASC Topic 480, Distinguishing Liabilities from Equity, and ASC Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, to determine if the Restricted Sponsor Shares should be classified as a liability or within equity. As part of that preliminary analysis, it was determined that the Restricted Sponsor Shares subject to vesting are freestanding from other shares of common stock held by the Sponsor, do not meet the criteria within ASC 480 to be classified as a liability, and meet the criteria in ASC 815-40 to be considered indexed to the post-combination entity’s common stock and classified within equity. Therefore, an adjustment to recognize the Restricted Sponsor Shares would have no net impact on any financial statement line item as it would simultaneously increase and decrease additional paid-in capital. Thus, no adjustment has been applied to the unaudited pro forma combined financial information related to the Restricted Sponsor Shares.

Basis of Pro Forma Presentation

The historical financial information has been adjusted to give pro forma effect to the transaction accounting required for the Business Combination. The adjustments in the unaudited pro forma condensed combined financial information have been identified and presented to provide relevant information necessary for an accurate understanding of the post-combination entity upon the Closing.

The unaudited pro forma condensed combined financial information is for illustrative purposes only. The financial results may have been different had the companies always been combined. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the post-combination entity will experience. SLAC and the Company have not had any historical relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

The unaudited pro forma condensed combined financial information has been prepared assuming various alternative levels of redemptions of Class A common stock into cash:

If the actual facts are different than these assumptions, then the amounts and shares outstanding in the unaudited pro forma condensed combined financial information will be different. The Business Combination Agreement includes a condition to closing that, at the Closing, SLAC will have a minimum of $150.0 million in cash.

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Unaudited Pro Forma Condensed Combined Balance Sheet