New investment fully funds Leafly’s current
multi-year business plan upon closing of business combination
Special meeting of Merida stockholders will be
moved to a later date to vote on proposed business combination
Leafly Holdings Inc. (“Leafly”), a leading online cannabis
discovery marketplace and resource for cannabis consumers, and
Merida Merger Corp. I (NASDAQ: MCMJ) (“Merida”), a special purpose
acquisition company sponsored by Merida Capital Holdings, today
announced that it entered into a $30 million convertible note
purchase agreement with new investors led by Cohanzick Management
LLC and affiliates (“Cohanzick”), an investment management firm.
This supplemental financing, which will close immediately prior to
the closing of the proposed business combination between Leafly and
Merida, will help to ensure full funding of Leafly’s current
multi-year business plan.
In addition, Merida announced that Merida’s special meeting to
vote on the proposed business combination, originally scheduled for
January 14, 2022, will be adjourned to a later date to be
announced, to give Merida stockholders sufficient time to evaluate
the terms of the note financing and certain additional information.
As a result, the date for holders of Merida public shares to
request redemption will be extended to two business days prior to
the date that meeting is held to vote on the proposed business
combination.
“This agreement provides additional funding certainty as Leafly
enters the next phase of our journey as a public company,” said
Yoko Miyashita, Chief Executive Officer of Leafly. “Having
accelerated our growth trajectory in 2021, we look forward to using
this significant new capital to expand our leading cannabis
marketplace and further enhance our technology platform, delivering
more personalized consumer shopping experiences and driving more
value to our retail partners.”
“Leafly is a rapidly growing platform with tremendous brand
loyalty and market leadership,” said David Sherman, President and
Founder of Cohanzick. “This investment demonstrates our confidence
in the Leafly team and in the strategy they are implementing to
create significant long-term value for stakeholders across the
cannabis ecosystem.”
Details of the Transaction and Notes
The $30 million financing will be in the form of unsecured
convertible senior notes due 2025. The notes will bear interest at
a rate of 8.00% per annum, paid in cash semi-annually in arrears on
July 31 and January 31 of each year. The notes will be convertible
at the option of the holders at any time before maturity at an
initial conversion share price of $12.50 (80 shares of the company
common stock per $1,000 principal amount of notes or accrued and
unpaid interest, if any, thereon). In addition, the company has the
option after one year to redeem all or a portion of the notes for
cash equal to the principal or force the conversion of the notes
after two years based on pre-agreed share price thresholds.
Pursuant to the note purchase agreement, Merida has agreed to
pay Cohanzick (and/or its designees) a 1.25% commitment fee, which
fee will be paid through the transfer of shares of Merida common
stock held by Merida’s sponsor, and transfer an aggregate of
300,000 private warrants held by the sponsor to the investors.
In connection with the foregoing, Merida and Leafly entered into
a second amendment to the Merger Agreement (as defined below) so
that the proceeds to be received from the note purchase agreement
would be counted towards Merida meeting the minimum cash condition
required by the Merger Agreement.
Additional information about the note purchase agreement, the
terms of the notes and the second amendment to the Merger Agreement
will be provided in a Current Report on Form 8-K to be filed by
Merida with the Securities and Exchange Commission (“SEC”) and to
be available at www.sec.gov.
About Leafly
Cannabis discovery marketplace Leafly aims to help more than 125
million visitors discover cannabis this year. Our powerful
ecommerce tools help shoppers make informed purchase decisions and
empower cannabis businesses to attract and retain loyal customers
through advertising and technology services. Learn more at
Leafly.com or download the Leafly mobile app through Apple’s App
Store or Google Play.
About Merida Merger Corp. I
Merida Merger Corp. I is a blank check company formed for the
purpose of entering into a merger, share exchange, asset
acquisition, stock purchase, recapitalization, reorganization or
other similar business combination with one or more businesses or
entities.
Forward-Looking Statements
This document contains certain forward-looking statements within
the meaning of the federal securities laws with respect to the
proposed business combination between Merida and Leafly, including
statements regarding the benefits of the proposed business
combination, the anticipated timing of the proposed business
combination, the anticipated funding of the notes, debt levels,
potential growth opportunities, and Merida's or Leafly's projected
future results. These forward-looking statements generally are
identified by the words "believe," "project," "expect,"
"anticipate," "estimate," "intend," "strategy," "future,"
"forecast," "opportunity," "plan," "may," "should," "will,"
"would," "will be," "will continue," "will likely result," and
similar expressions (including the negative versions of such words
or expressions). Forward-looking statements are predictions,
projections and other statements about future events that are based
on current expectations and assumptions and, as a result, are
subject to risks and uncertainties. Many factors could cause actual
future events to differ materially from the forward-looking
statements in this document, including but not limited to: (i) the
risk that the proposed business combination may not be completed in
a timely manner or at all, which may adversely affect the price of
Merida's securities; (ii) the risk that the proposed business
combination may not be completed by Merida's business combination
deadline and the potential failure to obtain an extension of the
business combination deadline if sought by Merida; (iii) the
failure to satisfy the conditions to the consummation of the
proposed business combination, including the approval of the
proposed business combination by Merida's stockholders, the
satisfaction of the minimum trust account amount following
redemptions by Merida's public stockholders and the receipt of
certain governmental and regulatory approvals; (iv) the effect of
the announcement or pendency of the proposed business combination
on Merida's or Leafly's business relationships, performance, and
business generally; (v) risks that the proposed business
combination disrupts current plans of Leafly and potential
difficulties in Leafly employee retention as a result of the
proposed business combination; (vi) the outcome of any legal
proceedings that may be instituted against Merida or Leafly related
to the Merger Agreement or the proposed business combination; (vii)
the ability to maintain the listing of Merida's securities on the
NASDAQ; (viii) the price of Merida's securities, including
volatility resulting from changes in the competitive and highly
regulated industry in which Leafly plans to operate, variations in
performance across competitors, changes in laws and regulations
affecting Leafly's business and changes in the combined capital
structure; (ix) the risk that the anticipated funding of the notes
may not be completed at closing of the proposed business
combination and that the amount may not be sufficient to fund
Leafly’s current multi-year business plan; and (x) the ability to
implement business plans, forecasts, and other expectations after
the completion of the proposed business combination, and identify
and realize additional opportunities. The foregoing list of factors
is not exhaustive. You should carefully consider the foregoing
factors and the other risks and uncertainties that are described in
Merida's final proxy statement/prospectus/consent solicitation
statement contained in the Registration Statement, including those
under "Risk Factors" therein, and other documents filed by Merida
from time to time with the SEC. These filings identify and address
other important risks and uncertainties that could cause actual
events and results to differ materially from those contained in the
forward-looking statements. Forward-looking statements speak only
as of the date they are made. Readers are cautioned not to put
undue reliance on forward-looking statements, and Merida and Leafly
assume no obligation and, except as required by law, do not intend
to update or revise these forward-looking statements, whether as a
result of new information, future events, or otherwise. Neither
Merida nor Leafly gives any assurance that either Merida or Leafly
will achieve its expectations.
Additional Information and Where to Find It
In connection with the proposed business combination
contemplated by the Agreement and Plan of Merger by and among
Merida, Merida Merger Sub, Inc., Merida Merger Sub II, LLC, and
Leafly (the "Merger Agreement"),
Merida has filed a registration statement on Form S-4 (the
"Registration Statement") that
includes a proxy statement of Merida, a prospectus of Merida and a
consent solicitation statement of Leafly. The Registration
Statement was declared effective by the SEC on December 20, 2021.
The proxy statement/prospectus/consent solicitation statement was
mailed to all Merida stockholders as of December 28, 2021 and
Leafly shareholders as of December 20, 2021 for voting on the
proposed business combination and the other matters to be voted
upon at a meeting of Merida's stockholders to be held to approve
the proposed business combination (the "Special Meeting"). Merida will also file a
prospectus supplement reflecting new information discussed in this
press release, and may also file other documents regarding the
proposed business combination with the SEC. The definitive proxy
statement/prospectus/consent solicitation statement (along with the
prospectus supplement) contains important information about the
proposed business combination and the other matters to be voted
upon at the Special Meeting and is not intended to provide the
basis for any investment decision or any other decision in respect
of such matters. Before making any voting decision, investors and
security holders of the Merida and Leafly are urged to read the
Registration Statement, the proxy statement/prospectus/consent
solicitation statement and all other relevant documents filed or
that will be filed with the SEC in connection with the proposed
business combination (including the prospectus supplement) as they
become available because they do and will contain important
information about the proposed business combination and related
matters.
Investors and security holders can obtain free copies of the
proxy statement/prospectus/consent solicitation statement and all
other relevant documents filed or that will be filed with the SEC
by Merida through the website maintained by the SEC at
www.sec.gov.
Participants in Solicitation
Merida and Leafly and their respective directors and officers
may be deemed to be participants in the solicitation of proxies
from Merida's stockholders in connection with the proposed business
combination. Information about Merida's directors and executive
officers and their ownership of Merida's securities is set forth in
Merida's filings with the SEC. Additional information regarding the
interests of those persons and other persons who may be deemed
participants in the proposed business combination may be obtained
by reading the proxy statement/prospectus/consent solicitation
statement regarding the proposed business combination. You may
obtain free copies of these documents as described in the preceding
paragraph.
No Offer or Solicitation
This document relates to a proposed business combination between
Merida and Leafly. This document does not constitute an offer to
sell or exchange, or the solicitation of an offer to buy or
exchange, any securities, nor shall there be any sale of securities
in any jurisdiction in which such offer, sale or exchange would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220111006153/en/
Media Laura Morarity laura.morarity@leafly.com
206-489-8427
Molly Morse / Nick Capuano Molly.Morse@kekstcnc.com /
Nicholas.Capuano@kekstcnc.com 917-603-4142 / 917-842-7859
Investors Chris Hollenbeck IR@leafly.com
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