Lift & Co Corp (TSX-V: LIFT), a Toronto-based cannabis media and technology platform, has closed a $3.5 million private placement offering.
The financing, consisting of senior secured convertible debentures and common share purchase warrants, was backed by U.S. cannabis private equity firm Gotham Green Partners and others.
Founded in 2014 by Chairman Tyler Sookochoff, Lift provides cannabis-related trade shows, online data and product reviews, and educational resources. It will use the deal’s proceeds for working capital, repaying debt and other priorities.
Lift, which went public last year, secured $3 million in a Series A financing in 2017.
Lift & Co. Corp Announces Closing of $3.5 Million Private Placement from Legacy Investor Gotham Green Partners
TORONTO, Sept. 11, 2019 (GLOBE NEWSWIRE) — Lift & Co. Corp. (the “Company”) (TSXV: LIFT) (OTCQB: LFCOF) is pleased to announce that it has completed a non-brokered private placement offering (the “Private Placement”) of 10.6% senior secured convertible debentures of the Company due September 10, 2020 in the aggregate principal amount of $3,500,000 (the “Debentures”) and 2,713,178 common share purchase warrants of the Company (each, a “Warrant” and collectively the “Warrants”) for aggregate gross proceeds of $3,500,000. The subscribers pursuant to the Private Placement were affiliates of Gotham Green Partners, LLC, an insider of the Company (such funds, the “Subscribers”).
The Debentures will be comprised of: (a) $2,000,000 principal amount, which will be immediately used to repay the Company’s existing indebtedness to the Subscribers pursuant to the Company’s unsecured convertible debentures due September 13, 2020; and (b) $1,500,000 principal amount which will remain outstanding. The Debentures will bear interest at a rate of 10.6% per annum and will mature on September 10, 2020, subject to prepayment upon meeting certain conditions (the “Maturity Date”). The Debentures are secured by a first ranking security interest that is in priority to all of the other obligations of the Company. The Debentures will be convertible at any time at the holder’s option into common shares of the Company (“Common Shares”) at a conversion price of $0.215, which is equal to the closing price of the Common Shares on the last trading day prior to the closing of the Private Placement (the “Closing Date”).
While the Debentures are outstanding, and subject to approval of the TSX Venture Exchange (“TSXV”), interest may be paid-in-kind (“PIK”) at the Company’s option on the outstanding principal amount of such Debentures such that any amount of PIK interest is added to the outstanding principal amount of such Debentures at a price per Common Share that is based on a price no less than the market price of the Common Shares at the time of the PIK interest being added to the Debentures.
Each Warrant is exercisable into one Common Share until September 10, 2020 at an exercise price of $0.3225 per Common Share.
All securities issued in connection with the Private Placement will be subject to a hold period of four months and one day from the Closing Date. The Company intends to use the net proceeds of the Private Placement for: (i) general working capital purposes; (ii) fees and expenses related to the Private Placement; and (iii) repayment of certain indebtedness of the Company, including the Company’s existing debentures held by the Subscribers, as described above.
The issuance of the Debentures and Warrants to an insider pursuant to the Private Placement is considered a related party transaction within the meaning of TSXV Policy 5.9 and Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company intends to rely on exemptions from the formal valuation and minority shareholder approval requirements in sections 5.5(e) and 5.7(c) of MI 61-101 in respect of such insider participation on the basis that the transaction is supported by an arm’s length control person.
The Private Placement remains subject to the final acceptance of the TSXV. The Company intends to file a material change report with respect to the Private Placement within 10 days of the Closing Date.
The Company did not file a material change report more than 21 days before the expected closing of the Private Placement, which it considers reasonable in the circumstances, as the participation in the transaction by related parties of the Company were not settled until shortly prior to closing of the Private Placement.
The securities issued in connection with the Private Placement have not been and will not be registered under 1933 Act, or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or an applicable exemption from the registration requirements of the 1933 Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About Lift & Co.
Lift & Co. is a publicly traded technology company modernizing the cannabis industry.
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Lift & Co. Corp.
Sara McMillen, Director Communications and Government Relations
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