MCMJ - Merida Delays Vote Of Leafly SPAC
Leafly Holdings Inc. and cannabis SPAC Merida Merger Corp. I (NASDAQ: MCMJ) (a special purpose acquisition company sponsored by Merida Capital Holdings) announced that it has entered into a $30 million convertible note purchase agreement with new investors led by Cohanzick Management LLC and affiliates, 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. The stock was jumping almost 18% in pre-market reading to lately sell at $9.97.
In addition, Merida announced that Merida’s special meeting to vote on the proposed business combination, originally scheduled for January 14, 2022, will be postponed 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 the meeting is held to vote on the proposed business combination. Merida and Leafly entered into a second amendment to the Merger Agreement 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.
“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.