LIFD 8-K
Lftd Partners Inc. (LIFD)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Section 8 - Other Events
Item 8.01 Other Events.
On February 19, 2024, LFTD Partners Inc., a Nevada corporation (“LIFD”), Lifted Liquids, Inc., an Illinois corporation (“Lifted”), and several of their affiliates as set out below, entered several letters of intent (each an “LOI”) outlining several proposed mergers or acquisitions with various target companies in different industries. Below is a breakdown of the key terms and provisions of the LOIs.
(1) Letter of Intent to Acquire Sustainable Innovations Inc. and its Marijuana Subsidiaries
LIFD, Lifted, Gerard M. Jacobs (“GMJ”), Nicholas S. Warrender (“NSW”), William C. Jacobs (“WCJ”), Sustainable Innovations Inc., an Illinois corporation (“SI”), Sustainable Craft Grow #1, LLC, an Illinois limited liability company (“SCG1”), Sustainable Transporter #1, LLC, an Illinois limited liability company (“ST1”), Sustainable Transporter #2, LLC, an Illinois limited liability company (“ST2”), Illinois Kindness Four, LLC, an Illinois limited liability company (“IK4”), L. John Murray (“JM”) and Erik Carlson (“EC”) entered into a Letter of Intent - SI and Marijuana Subsidiaries dated as of February 19, 2025 (the “LOI - SI and Marijuana Subsidiaries”), pursuant to which, at a closing (the “Marijuana Subsidiaries Closing”):
(a) a wholly-owned subsidiary of LIFD will acquire, in a merger, all of the ownership interests in SCG1, which at the Marijuana Subsidiaries Closing is to own Illinois Cannabis Craft Grow License number 2206010102-CG (the “Craft Grow License”), for merger consideration consisting of 1,985,811 unregistered shares of common stock of LIFD (“LIFD Shares”), pursuant to a mutually acceptable merger agreement which shall include a certified list of SCG1’s licenses, assets, liabilities and contracts acceptable to LIFD;
(b) a wholly-owned subsidiary of LIFD will acquire, in a merger, all of the ownership interests in ST1, which at the Marijuana Subsidiaries Closing is to own Illinois Cannabis Transport License number 2107150140-TR (“Transport License #1”), for merger consideration consisting of 66,194 unregistered LIFD Shares, pursuant to a mutually acceptable merger agreement which shall include a certified list of ST1’s licenses, assets, liabilities and contracts acceptable to LIFD;
(c) a wholly-owned subsidiary of LIFD will acquire, in a merger, all of the ownership interests in ST2, which at the Marijuana Subsidiaries Closing is to own Illinois Cannabis Transport License number 2107150187-TR (“Transport License #2”), for merger consideration consisting of 66,194 unregistered LIFD Shares, pursuant to a mutually acceptable merger agreement which shall include a certified list of ST2’s licenses, assets, liabilities and contracts acceptable to LIFD; and
(d) a wholly-owned subsidiary of LIFD will acquire, in a merger, all of the ownership interests in IK4, which at the Marijuana Subsidiaries Closing is to own Illinois Cannabis Infuser License number 2108011034-IN (the “IK Infuser License”) and certain inventory, for merger consideration consisting of 463,356 unregistered LIFD Shares, pursuant to a mutually acceptable merger agreement which shall include a certified list of IK4’s licenses, assets, liabilities and contracts acceptable to LIFD.
The Marijuana Subsidiaries Closing shall be subject to a number of conditions precedent being fulfilled on or prior to the date of the Marijuana Subsidiaries Closing (the “Marijuana Subsidiaries Closing Date”):
(e) SI shall transfer ownership of the Craft Grow License to SCG1, SI shall transfer ownership of Transport License #1 to ST1, SI shall transfer ownership of Transport License #2 to ST2, and Illinois Kindness Three, LLC (“IK3”) shall transfer ownership of the IK Infuser License and certain inventory to IK4; and IK3 shall transfer certain equipment to TMD Ventures, LLC, a Pennsylvania limited liability company (“TMD”);
(f) IK3 shall receive full payment of both certain license debt and certain equipment debt totaling slightly more than $730,000 (collectively the “License and Equipment Debt”);
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(g) The merger agreements and all of the other transactions contemplated by the LOI - SI and Marijuana Subsidiaries shall have obtained all necessary approvals, including: approval by a majority of the LIFD Board; unanimous approval by each of the owners, board of directors and managers of the entities being acquired; and approval by LIFD’s lender, Surety Bank of DeLand, Florida;
(h) all necessary securities filings shall have been filed with, and any necessary approvals shall have been obtained from, the U.S. Securities and Exchange Commission (“SEC”);
(i) LIFD’s outside firm of certified public accountants (“Fruci”) shall have agreed with LIFD that the financial statements of the entities being acquired for fiscal years 2023 and 2024 are not required to be audited, or, alternatively, any needed audits and audit opinion letters associated with the mergers shall have been delivered by Fruci to LIFD, and such audits and opinion letters shall have been acceptable to LIFD in form and substance in its discretion;
(j) all necessary approvals of or consents to the Illinois Cannabis License transfers contemplated by the LOI - SI and Marijuana Subsidiaries, to the mergers, or to the executives, directors or stockholders of LIFD or its subsidiaries, shall have been obtained from the State of Illinois and its departments and agencies, and from any other governmental bodies having any approval rights thereof;
(k) LIFD shall have received a written plan, accompanied by an approving legal opinion, regarding the lawful maintenance of the social equity status of SI, SCG1, ST1, ST2 and IK4 during the periods before and after the Marijuana Subsidiaries Closing Date, and such plan and legal opinion shall be acceptable to LIFD in its discretion; and
(l) SI and IK3 shall have entered into a Pre-Closing Agreement, and such Pre-Closing Agreement shall be acceptable to LIFD in its discretion. Pursuant to such Pre-Closing Agreement: IK3 shall transfer ownership of the IK Infuser License and certain inventory to IK4; IK3 shall transfer ownership of certain equipment to TMD; and all contractual and financial obligations owed by SI to IK3 pursuant to certain agreements shall terminate, excepting only IK3’s right to receive full payment of the License and Equipment Debt on or prior to the Marijuana Subsidiaries Closing Date.
SCG1, ST1, ST2 and IK4 have not yet engaged in any business, and as of the Marijuana Subsidiaries Closing Date they shall not yet have engaged in any business.
Both prior to and after the Marijuana Subsidiaries Closing Date, SI shall own Illinois Cannabis Infuser License number 2108011014-IN (the “SI Infuser License”). SI received a social equity forgivable loan from the Illinois DCEO in the amount of $625,000 in relation to the SI Infuser License (the $625,000 Loan”), and under the terms of the $625,000 Loan, the $625,000 Loan must be repaid by SI in full if SI or the SI Infuser License is transferred to a third party prior to or during the one year period after the $625,000 Loan is forgiven (the “Standstill Period”). Immediately following the end of the Standstill Period (the “SI Purchase Date”), the owners of SI shall sell to LIFD all of the capital stock of SI for an aggregate purchase consideration of $10.00.
SI has not yet engaged in any business, and, as of the SI Purchase Date, SI shall not yet have engaged in any business.
SI has already entered into discussions and negotiations with certain third parties related to certain potential marijuana product agreements and arrangements. Prior to the Marijuana Subsidiaries Closing, SI shall use good faith efforts to collaborate with LIFD regarding these discussions and negotiations, SI shall not shop SI or its subsidiaries to potential acquirors other than LIFD, and each of the parties agrees and covenants to use good faith efforts to cause the mergers to close as soon as practicable, subject to the fulfillment of all of the terms, conditions and requirements set forth in the LOI - SI and Merger Subsidiaries and in the related merger agreements.
Either party shall have the unilateral right to terminate the LOI - SI and Merger Subsidiaries, without any payment by or penalty due from any party, if such party in good faith believes that the terms, conditions and requirements that must be met in order for the Merger Subsidiaries Closing to occur cannot reasonably
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be met on or before March 15, 2025, provided, however, that if one or more of the conditions precedent cannot reasonably be met on or before March 15, 2025, then the parties shall meet and use good faith efforts in an attempt to fashion a mutually acceptable interim arrangement that would accommodate a delay in the Merger Subsidiaries Closing Date to a date after March 15, 2025.
(2) Letter of Intent to Acquire TMD Ventures, LLC
LIFD, Lifted, GMJ, NSW, WCJ, SI, TMD, JM, Karim “Joe” Murray (“KM”), and EC entered into a Letter of Intent - TMD dated as of February 19, 2025 (the “LOI - TMD”), pursuant to which, at a closing (the “TMD Closing”), a wholly-owned subsidiary of LIFD will acquire, in a merger, all of the ownership interests in TMD, for merger consideration consisting of 2,000,000 unregistered LIFD Shares, pursuant to a mutually acceptable merger agreement which shall include a certified list of TMD’s licenses, assets, liabilities and contracts acceptable to LIFD.
TMD shall own the following asset as of the date of the TMD Closing (the “TMD Closing Date”): A leasehold interest in approximately 18,558 rentable square feet located at 7537 Central Ave., Skokie, IL 60077, pursuant to that certain Lease Agreement dated December 6, 2022 by and between Amy and Connor, LLC, as landlord, and TMD, as tenant (the “Skokie Lease”). As of the TMD Closing Date, the Skokie Lease shall be in full force and effect and legally binding, without any outstanding defaults by TMD (as tenant) thereunder.
The TMD Closing shall be subject to a number of conditions precedent being fulfilled on or prior to the TMD Closing Date:
(a) The merger agreement and all of the other transactions contemplated by the LOI - TMD shall have obtained all necessary approvals, including: approval by a majority of the LIFD Board; unanimous approval by each of the owners and managers of TMD; and approval by LIFD’s lender, Surety Bank of DeLand, Florida;
(b) all necessary securities filings shall have been filed with, and any necessary approvals shall have been obtained from, the SEC;
(c) Fruci shall have agreed with LIFD that the financial statements of TMD for fiscal years 2023 and 2024 are not required to be audited, or, alternatively, any needed audit and audit opinion letter associated with the merger shall have been delivered by Fruci to LIFD, and such audit and opinion letter shall have been acceptable to LIFD in form and substance in its discretion; and
(d) Any necessary approvals of or consents to the merger, or to the executives, directors or stockholders of LIFD or its subsidiaries, shall have been obtained from the State of Illinois and its departments and agencies, and from any other governmental bodies having any approval rights thereof.
TMD has not yet engaged in any business, and, as of the TMD Closing Date, TMD shall not yet have engaged in any business.
TMD has already entered into discussions and negotiations with certain third parties related to certain potential agreements and arrangements. Prior to the TMD Closing, TMD shall use good faith efforts to collaborate with LIFD regarding these discussions and negotiations, TMD shall not shop TMD to potential acquirors other than LIFD, and each of the parties agrees and covenants to use good faith efforts to cause the merger to close as soon as practicable, subject to the fulfillment of all of the terms, conditions and requirements set forth in the LOI - TMD and in the related merger agreement.
Either party shall have the unilateral right to terminate the LOI - TMD, without any payment by or penalty due from any party, if such party in good faith believes that the terms, conditions and requirements that must be met in order for the TMD Closing to occur cannot reasonably be met on or before March 15, 2025, provided, however, that if one or more of the conditions precedent cannot reasonably be met on or before March 15, 2025, then the parties shall meet and use good faith efforts in an attempt to fashion a mutually
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acceptable interim arrangement that would accommodate a delay in the TMD Closing Date to a date after March 15, 2025.
(3) Letter of Intent to Acquire Real Estate Companies
LIFD, Lifted, GMJ, NSW, WCJ, Sustainable Properties, LLC, an Illinois limited liability company (“SP”), 1221 Research Parkway, LLC, an Illinois limited liability company (“1221”), 2422 N. Main, LLC, an Illinois limited liability company (“2422”), JM, Joshua Gillan (“JG”), and EC entered into a Letter of Intent - Real Estate Companies dated as of February 19, 2025 (the “LOI - Real Estate Companies”), pursuant to which, at a closing (the “SP Closing”), a wholly-owned subsidiary of LIFD will acquire, in a merger, all of the ownership interests in SP, for merger consideration consisting of 763,593 unregistered LIFD Shares, pursuant to a mutually acceptable merger agreement which shall include a certified list of SP’s assets, liabilities and contracts acceptable to LIFD.
SP owns 100% of the ownership interests in 1221 and 2422. 1221 owns all of the real estate, building, equipment, fixtures and other improvements located at 1221 Research Parkway, Rockford, IL 61109 (collectively the “1221 Property”). 2422 owns all of the real estate, building, equipment, fixtures and other improvements located at 2422 N. Main Street, Rockford, IL 61103 (the “2422 Property”).
SP, 1221 and 2422 have not engaged in any business, and as of the Closing Date they shall not have engaged in any business.
The SP Closing shall be subject to a number of conditions precedent being fulfilled on or prior to the date of the SP Closing (the “SP Closing Date”):
(a) LIFD shall have received clean updated title insurance policies on the 1221 Property and the 2422 Property.
(b) The merger agreement and all of the other transactions contemplated by the LOI - SP shall have obtained all necessary approvals, including: approval by a majority of the LIFD Board; unanimous approval by each of the owners and managers of SP; and approval by LIFD’s lender, Surety Bank of DeLand, Florida. The parties agree that, in order to try to obtain approval of the merger Agreement by Surety Bank, it is likely that LIFD will be required to commit to Surety Bank in a written agreement that if Surety Bank has not approved LIFD’s and SP’s plan for the development and leasing or joint venturing of the 1221 Property as a marijuana grow facility, as a data center, as a crypto-mining facility, or otherwise, by a particular date, then LIFD and SP will likely be obligated to publicly list the 1221 Property with a nationally recognized broker of industrial buildings for sale, and to complete such sale, as promptly as is commercially feasible.
(c) all necessary securities filings shall have been filed with, and any necessary approvals shall have been obtained from, the SEC; and
(d) Fruci shall have agreed with LIFD that the financial statements of SP for fiscal years 2023 and 2024 are not required to be audited, or, alternatively, any needed audits and audit opinion letters associated with the mergers shall have been delivered by Fruci to LIFD, and such audits and opinion letters shall have been acceptable to LIFD in form and substance in its discretion.
SP has already entered into discussions and negotiations with certain third parties related to certain potential real estate agreements and arrangements. Prior to the SP Closing, SP shall use good faith efforts to collaborate with LIFD regarding these discussions and negotiations, SP shall not shop SP or its subsidiaries to potential acquirors other than LIFD, and each of the parties agrees and covenants to use good faith efforts to cause the merger to close as soon as practicable, subject to the fulfillment of all of the terms, conditions and requirements set forth in the LOI - Real Estate Companies and in the merger agreement.
Either party shall have the unilateral right to terminate the LOI - SP, without any payment by or penalty due from any party, if such party in good faith believes that the terms, conditions and requirements that must be met in order for the SP Closing to occur cannot reasonably be met on or before March 15, 2025,
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provided, however, that if one or more of the conditions precedent cannot reasonably be met on or before March 15, 2025, then the parties shall meet and use good faith efforts in an attempt to fashion a mutually acceptable interim arrangement that would accommodate a delay in the SP Closing Date to a date after March 15, 2025.
(4) Letter of Intent to Acquire Hemp and Retail Companies
LIFD, Lifted, GMJ, NSW, WCJ, Sustainable Growers, LLC, an Illinois limited liability company (“SG”), Sustainable Innovations Development Company, LLC, an Illinois limited liability company (“SIDC”), Buckbee Seed Co., LLC, an Illinois limited liability company (“BSC”), Buckbee Seed Company, LLC, SEED II, an Illinois limited liability company (“Mrs. Buckbee’s”), Downtown Rockford Restaurant, LLC, an Illinois limited liability company (“District”), Northtown Restaurant, LLC, an Illinois limited liability company (“Half Baked”), JM, EC and Billy Ni (“Ni”), entered into a Letter of Intent - Hemp and Retail dated as of February 19, 2025 (the “LOI - Hemp and Retail”) pursuant to which, at a closing (the “SG Closing”), a wholly-owned subsidiary of LIFD will acquire, in a merger, all of the ownership interests in SG, for merger consideration consisting of 2,290,777 unregistered LIFD Shares, pursuant to a mutually acceptable merger agreement which shall include a certified list of SG’s assets, liabilities and contracts acceptable to LIFD.
As of the SG Closing:
(a) SG will own 100% of the ownership interests in SIDC and BSC;
(b) BSC will own 100% of the ownership interests in Mrs. Buckbee’s, and 50% of the ownership interests in each of District and Half Baked;
(c) Mrs. Buckbee’s will own all rights, titles and interests in the brand names Mrs. Buckbee’s and Wake N Bakery, and in the lease (the “Mrs. Buckbee’s Lease”) of 275 Deane Drive, Rockford, IL 61107, and the Mrs. Buckbee’s Lease shall be in full force and effect and legally binding, without any outstanding defaults by Mrs. Buckbee’s (as tenant) thereunder;
(d) District will own all rights, titles and interests in in the brand name District Bar & Grill, and in the lease (the “District Lease”) of 205 W. State St., Rockford, IL 61101, and the District Lease shall be in full force and effect and legally binding, without any outstanding defaults by District (as tenant) thereunder; and
(e) Half Baked will own all rights, titles and interests in the brand name Half Baked Bar, and in the lease (the “Half Baked Lease”) of 908 W. Riverside, Rockford, IL 61103, and the Half Baked Lease shall be in full force and effect and legally binding, without any outstanding defaults by Half Baked (as tenant) thereunder.
The SG Closing shall be subject to a number of conditions precedent being fulfilled on or prior to the date of the SG Closing (the “SG Closing Date”):
(f) The merger agreement and all of the other transactions contemplated by the LOI - SG shall have obtained all necessary approvals, including: approval by a majority of the LIFD Board; unanimous approval by each of the owners and managers of SG, SIDC, BSC, Mrs. Buckbee’s, District and Half Baked; and approval by LIFD’s lender, Surety Bank of DeLand, Florida;
(g) all necessary securities filings shall have been filed with, and any necessary approvals shall have been obtained from, the SEC; and
(h) Fruci shall have audited the financial statements of SG and its subsidiaries for fiscal years 2023 and 2024 in accordance with U.S. generally accepted accounting principles (and potentially, after Fruci has reviewed those companies’ financial statements for quarterly periods during 2025), and such audited financial statements and audit opinion letters associated with the merger (collectively the “Audit”) shall have been delivered by Fruci to LIFD, all as shall be necessary to allow SG to be acquired by LIFD
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pursuant to all applicable SEC and FASB rules and regulations, and to allow LIFD to timely file all necessary securities filings with the SEC, and the Audit shall have been acceptable to LIFD in its discretion. SG and its subsidiaries shall use good faith efforts to cause the Audit to be completed as promptly as possible.
From and after the date of the LOI - SG through the SG Closing Date:
(i) SG and each of its subsidiaries shall continue to operate in due course and consistently with their historical practices;
(j) Any and all after-tax free cash flow generated by SG, SIDC, BSC and Mrs. Buckbee’s, or generated by BSC’s 50% ownership interests in District and Half Baked, shall be deposited by SG, SIDC, BSC, Mrs. Buckbee’s, District and Half Baked into checking accounts at Surety Bank in the names of SG, SIDC, BSC (in the case of after-tax free cash flow generated by BSC or by BSC’s 50% ownership interests in District and Half Baked) and Mrs. Buckbee’s, and shall not be otherwise paid out, distributed or dissipated prior to the SG Closing Date; and
(k) all leases, contracts, agreements, books, records, profit and loss statements, balance sheets, cash flow statements, distribution records, bank statements, borrowings, other material documents, and tax returns, of each of SG, SIDC, BSC, Mrs. Buckbee’s, District and Half Baked shall be diligently, accurately and professionally prepared and maintained in accordance with all applicable laws, rules and regulations, and shall be made available for review and copying by LIFD upon reasonable advance notice; and
(l) SG’s executives shall use good faith efforts to facilitate discussions by and among LIFD, SG and Ni, regarding the potential terms and conditions pursuant to which LIFD or its designee might acquire Ni’s 50% ownership interests in District and Half Baked.
SG has already entered into discussions and negotiations with certain third parties related to certain potential agreements and arrangements regarding SG and its subsidiaries, such as the potential for franchising Mrs. Buckbee’s. Prior to the SG Closing, SG shall use good faith efforts to collaborate with LIFD regarding these discussions and negotiations, SG shall not shop SG or its subsidiaries to potential acquirors other than LIFD, SG and its subsidiaries shall be operated only in accordance with the ordinary, normal and customary course thereof consistent with past practices or as otherwise contemplated in the LOI - SG, and each of the parties agrees and covenants to use good faith efforts to cause the merger to close as soon as practicable, subject to the fulfillment of all of the terms, conditions and requirements set forth in the LOI - SG and in the merger agreement.
Either party shall have the unilateral right to terminate the LOI - SG, without any payment by or penalty due from any party, if such party in good faith believes that the terms, conditions and requirements that must be met in order for the SG Closing to occur cannot reasonably be met. Provided, that the parties expressly agree and acknowledge that the timing of completion of the Audit is uncertain, and none of the parties shall use any delay in the timing of completion of the Audit as an excuse to terminate either the LOI - SG or the merger agreement as long as SG and its subsidiaries are using good faith efforts to complete the Audit in a commercially reasonable fashion and time frame.
(5) Letter of Intent Regarding Boards of Directors and Executives
LIFD, Lifted, GMJ, NSW, WCJ, JM and EC entered into a Letter of Intent - Boards of Directors and Executives dated as of February 19, 2025 (the “LOI - Boards and Executives”).
As an express inducement to each of the parties to enter into the Letter of Intent - Boards and Executives and the LOI - SI and Marijuana Subsidiaries, the parties agree that:
(a) Effective on the Marijuana Subsidiaries Closing Date, the Bylaws of LIFD shall be changed to increase the size of the Board of Directors of LIFD (the “LIFD Board”) from nine (9) members to ten (10) members, and JM shall be added to the LIFD Board effective as of the completion of the Marijuana Subsidiaries Closing;
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(b) At the Marijuana Subsidiaries Closing, LIFD shall grant to each member of the LIFD Board who is not an employee of LIFD (a “Non-Employee LIFD Board Member”) assignable warrants to purchase 50,000 LIFD Shares at an exercise price of $3.25 per LIFD Share and assignable warrants to purchase 50,000 LIFD Shares at an exercise price of $5.00 per LIFD Share, provided that each such warrant: (1) shall contain a so-called “cashless exercise” provision; (2) shall expire if not exercised on or before the seventh anniversary of the Marijuana Subsidiaries Closing Date; and (3) shall not vest and shall not be exercisable unless and until LIFD’s audited earnings per share (“EPS”) during 2025 or any subsequent calendar year is at or above $0.20 on a fully diluted basis;
(c) At the Marijuana Subsidiaries Closing, each of the existing employment agreements of GMJ, NSW and WCJ (the “LIFD Executives”) with LIFD shall terminate, and each of JM, EC and the LIFD Executives (collectively the “Senior Executives”) shall sign a mutually acceptable new five year “rolling” employment agreement with LIFD (individually an “Employment Agreement” and collectively the “Employment Agreements”) generally in the same form as the existing employment agreements of the LIFD Executives with LIFD, excepting only as follows:
(1) The Senior Executives shall serve in the following capacities, respectively:
GMJ - | Chairman of the LIFD Board and of the board of directors or managers of each of LIFD’s wholly-owned subsidiaries, Chief Executive Officer and Secretary of LIFD, and Secretary of each of LIFD’s wholly-owned subsidiaries |
NSW - | Vice Chairman of the LIFD Board and of the board of directors or managers of each of LIFD’s wholly-owned subsidiaries, Chief Operating Officer of LIFD, and Founder and Chief Executive Officer of Lifted |
WCJ - | Director of the LIFD Board and of the board of directors or managers of each of LIFD’s wholly-owned subsidiaries, President, Chief Financial Officer and Treasurer of LIFD, and President and Treasurer of Lifted |
JM - | Director of the LIFD Board and of the board of directors or managers of each of LIFD’s wholly-owned subsidiaries, and Chief Business Officer and Chief Strategy Officer of LIFD |
EC - | General Counsel and Chief Compliance Officer of LIFD, who will be invited to attend all meetings of the LIFD Board and of the board of directors or managers of each of LIFD’s wholly-owned subsidiaries; |
(2) The annual base salary of NSW shall be $500,000. The annual base salaries of each of GMJ, WCJ, JM and EC shall initially be $250,000, provided that immediately following the first calendar quarter in which LIFD’s consolidated gross revenue exceeds $20,000,000, then the annual base salaries of each of GMJ, WCJ, JM and EC shall increase to $400,000, and provided further, that immediately following the first calendar quarter in which LIFD’s consolidated gross revenue exceeds $25,000,000, then the annual base salaries of each of GMJ, WCJ, JM and EC shall increase to $500,000, and provided further, that if the annual base salary of any of the Senior Executives is ever increased above $500,000, then the annual base salary of each of the other Senior Executives shall automatically also be increased so that none of the Senior Executives has an annual base salary which exceeds the annual base salary of any of the other Senior Executives by more than $100,000;
(3) The amount of the annual company-wide bonus pool for each of years 2025 and 2026 shall be capped, so that in no event shall the amount of the annual company-wide bonus pool for either 2025 or 2026 decrease LIFD’s audited EPS for such year below an EPS of $0.20 on a fully diluted basis, provided that certain previously disclosed overpayments of the annual company-wide bonus pool in regard to calendar year 2022 which were made to certain Lifted employees who are not Senior Executives shall not reduce the calculation of the annual company-wide bonus pool for calendar year 2025 or for any subsequent year, and provided further that nothing in this Section shall be deemed to cap the annual company-wide bonus pool for 2027 or any subsequent year; and
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(4) LIFD shall grant to each of the Senior Executives assignable warrants to purchase 500,000 LIFD Shares at an exercise price of $3.25 per LIFD Share and assignable warrants to purchase 500,000 LIFD Shares at an exercise price of $5.00 per LIFD Share (collectively such Senior Executive’s “Warrants”), provided that each of such Senior Executive’s Warrants: (i) shall contain a so-called “cashless exercise” provision; (ii) shall expire if not exercised on or before the seventh anniversary of the Marijuana Subsidiaries Closing Date; and (iii) shall not vest and shall not be exercisable unless and until LIFD’s audited EPS during 2025 or any subsequent calendar year is at or above $0.20 on a fully diluted basis;
provided, that:
(iv) each of the Senior Executives, at his election, may elect to sign his Employment Agreement with a newly formed Illinois corporation (“Senior Executive Corporation”) the capital stock of which is owned by such Senior Executive;
(v) on the Closing Date such Senior Executive Corporation shall merge with and into LIFD (a “Senior Executive Corporation Merger”), with LIFD being the survivor of such Senior Executive Corporation Merger;
(vi) the merger consideration that shall be paid by LIFD in such Senior Executive Corporation Merger pursuant to which LIFD shall acquire 100% of the capital stock of such Senior Executive Corporation shall consist of one LIFD Share plus such Senior Executive’s Warrants described above; and
(vii) upon the closing of such Senior Executive Corporation Merger, such Employment Agreement shall be legally binding upon LIFD (as employer) and such Senior Executive (as employee), and LIFD shall assume all rights and obligations of such Senior Executive Corporation (as employer) under such Employment Agreement;
(d) Promptly following the Marijuana Subsidiaries Closing, LIFD shall hire a full-time internal CPA who is a resident of Illinois, who shall be acceptable to and report to LIFD’s President and CFO, and who shall be responsible for maintaining the financial books and records and for handling all needed internal accounting functions for the operations of the subsidiaries of LIFD operating in Illinois; and
(e) At the Marijuana Subsidiaries Closing, the existing Shareholder Agreement among the LIFD Executives shall terminate, and each of the five Senior Executives shall sign a mutually acceptable new Shareholder Agreement in which they shall agree, among other things, following the Closing:
(1) to nominate, support, agree upon, and vote in favor only of slates of nominees for the LIFD Board, and for the boards of directors and managers of all subsidiaries and affiliates of LIFD (collectively “LIFD Subsidiaries and Affiliates”), who are mutually acceptable to all five of the Senior Executives;
(2) to propose, request, support, agree upon, accept, assist, facilitate and vote in favor only of base salaries, bonuses and bonus pools, commission agreements, consulting agreements, employment agreements, stock options and warrants, and any other direct or indirect forms of equity or profit participation or compensation, paid or entered into by LIFD and/or by LIFD Subsidiaries and Affiliates, to or for the benefit of any of the Senior Executives, key employees, contractors or consultants of LIFD and/or LIFD Subsidiaries and Affiliates, that are mutually acceptable to all five of the Senior Executives;
(3) to propose, request, support, agree upon, accept, assist, facilitate and vote in favor only of material corporate agreements and contracts, mergers, purchases, acquisitions and divestitures, plan or arrangement, capital raises, and other lawful corporate transactions or series of transactions of any nature (individually a “Transaction” and collectively “Transactions”) involving LIFD and/or LIFD Subsidiaries and Affiliates that are mutually acceptable to all five of the Senior Executives; and
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(4) not to directly or indirectly sell or transfer any right, title or interest in or to some or all of their LIFD stock, stock options or warrants in any Transaction that could or might result in a change of control of LIFD, unless such Transaction is mutually acceptable to all five of the Senior Executives and is approved by a majority of the LIFD Board.
These transactions described herein, are subject to numerous conditions and risks, including but not limited to the following:
There is No Assurance That Any of These Transactions Will Close
There can be no assurance that the proposed acquisitions described above will be completed as currently contemplated, or at all. Each transaction is subject to the satisfaction of various conditions precedent, including regulatory approvals, due diligence, execution of definitive agreements, financial audits, and third-party consents. If any of these conditions are not met, the transactions may be delayed, modified, or terminated, which could adversely impact LIFD’s business strategy and shareholder expectations.
The Acquisitions Are Subject to Extensive Regulatory Approvals and Compliance Risks
The acquisitions of Sustainable Innovations Inc. and its Marijuana Subsidiaries involve obtaining Illinois Cannabis Licenses, which are subject to strict regulatory oversight. There is no guarantee that the necessary governmental approvals from Illinois state agencies, the SEC, or LIFD’s lender will be obtained in a timely manner, or at all. Failure to secure these approvals could prevent the consummation of the transactions or result in additional regulatory burdens, fines, or penalties.
Stock-Based Consideration Will Result in Significant Dilution to Existing Shareholders
LIFD intends to issue unregistered shares of common stock as consideration for these acquisitions. The issuance of additional shares will dilute existing shareholders, and if LIFD’s stock price declines, the valuation of the acquisitions may become unfavorable to the Company. Furthermore, if recipients of these shares choose to sell their stock in large quantities when they are legally permitted to do so, it could create downward pressure on LIFD’s stock price.
Financial Audit and Due Diligence Risks May Delay or Prevent the Closings
Each target company must satisfy financial reporting and audit requirements as part of the closing process. If financial statements do not meet SEC standards, or if auditors identify material weaknesses, inconsistencies, or liabilities, it could result in additional delays or a decision not to proceed with the acquisitions. Additionally, any undisclosed financial obligations or liabilities uncovered during due diligence could materially impact LIFD’s financial condition.
Integration of the Acquired Companies May Be Challenging and Costly
Successfully integrating multiple acquisitions across cannabis, hemp, retail, and real estate will require significant resources and management focus. Risks associated with integration include:
·Aligning corporate cultures and business practices;
·Consolidating financial and operational systems;
·Managing regulatory compliance across multiple industries;
·Retaining key executives and employees from acquired entities.
If integration efforts are unsuccessful, LIFD may fail to realize anticipated synergies, resulting in lower-than-expected revenue, increased expenses, and potential impairments to acquired assets.
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LIFD’s Expansion into Regulated Cannabis Markets Involves Additional Risks
The cannabis industry is extremely competitive, with many companies being unprofitable or going bankrupt due to low prices, costly regulations and high taxes on marijuana, an unregulated “black market”, and inability to deduct their costs of selling a federally illegal product under section 280E of the Internal Revenue Code. The cannabis industry is also subject to changing federal and state laws. Future regulatory changes could:
·Increase the number of cannabis licenses
·Increase compliance costs
·Restrict business operations
·Impact the ability to obtain or renew cannabis licenses
Additionally, if federal cannabis laws change, LIFD could face increased scrutiny from financial institutions, lenders, and regulatory agencies, which may affect its ability to conduct business
The Acquisitions of Real Estate Assets Are Subject to Market and Financing Risks
LIFD’s acquisition of Sustainable Properties, LLC and its associated real estate holdings in Rockford, Illinois involves risks related to property valuation, development, and tenant acquisition. The success of these properties depends on:
·Securing and/or maintaining proper zoning and permits;
·Attracting qualified tenants or buyers;
·Managing maintenance and operational costs.
Additionally, if LIFD’s lender does not approve the transaction, the Company may be required to sell the real estate assets, potentially at a loss.
Failure to Maintain Social Equity Status Could Trigger a $625,000 Loan Repayment Obligation
Sustainable Innovations Inc. received a $625,000 social equity forgivable loan from the Illinois Department of Commerce and Economic Opportunity relating to an Illinois cannabis infuser license. Under the loan’s terms, if SI or that infuser license is transferred before the end of the required “Standstill Period,” the loan must be repaid in full. If LIFD proceeds with the acquisition and is required to repay the loan, it could result in an unexpected financial obligation or liability.
The Company May Be Required to Commit to Selling Certain Acquired Assets
To obtain lender approval for the acquisition of Sustainable Properties, LLC, LIFD may be required to commit to selling the 1221 Property or other assets if financing terms are not favorable. This could impact LIFD’s ability to execute its long-term real estate strategy.
Macroeconomic and Industry-Specific Risks Could Impact Business Operations
The success of the acquired companies depends on broader economic conditions, industry competition, and consumer trends. Risks include:
·Volatility in cannabis and hemp markets;
·Potential oversupply in cannabis cultivation;
·Fluctuations in commercial real estate values;
·Changes in consumer preferences in the retail and food & beverage sectors.
If market conditions deteriorate, LIFD’s growth strategy and financial performance could be adversely affected.
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Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
Exhibit 10.65 | |
Exhibit 10.66 | Letter of Intent – Sustainable Growers, LLC, Buckbee Seed Co |
Exhibit 10.67 | Letter of Intent – Sustainable Properties, LLC – Real Property Purchase |
Exhibit 10.68 | Letter of Intent – Sustainable Innovations Inc. (SI) and certain subsidiaries |
Exhibit 10.69 | |
Exhibit 99.1 |
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.
| LFTD PARTNERS INC.. |
|
|
| /s/ Gerard M. Jacobs |
| Gerard M. Jacobs |
| Chief Executive Officer |
Dated: February 24, 2025
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Letter of Intent - TMD
This Letter of Intent - TMD (this “LOI”) dated as of February 19, 2025, is made and entered into by and among
LFTD Partners Inc., a Nevada corporation ("LIFD") and Lifted Liquids, Inc., an Illinois corporation ("Lifted"),
and
Gerard M. Jacobs, a Florida resident ("GMJ"), Nicholas S. Warrender, a Florida resident ("NSW") and William C. Jacobs, a Florida resident ("WCJ"),
and
Sustainable Innovations Inc., an Illinois corporation (“SI”), and TMD Ventures, LLC, a Pennsylvania limited liability company (“TMD”),
and
L. John Murray, an Illinois resident ("JM"), Karim "Joe" Murray, an Alabama resident ("KM"), and Erik Carlson, an Illinois resident ("EC").
LIFD, Lifted, GMJ, NSW, WCJ, SI, TMD, JM and EC are hereafter sometimes referred to individually as a "Party" and collectively as the "Parties".
GMJ, NSW and WCJ are hereafter sometimes referred to collectively as the "LIFD Executives". LIFD, Lifted, and the LIFD Executives are hereafter sometimes referred to collectively as the "LIFD Group".
JM, KM and EC are hereafter sometimes referred to collectively as the "Sustainable Executives". SI, TMD, and the Sustainable Executives are hereafter sometimes referred to collectively as the "TMD Group".
The LIFD Executives and the Sustainable Executives are hereafter sometimes referred to individually as a "Senior Executive" and collectively as the "Senior Executive Group".
RECITALS
Whereas, TMD holds a long-term lease of space located in Skokie, Illinois; and
Whereas, LIFD believes that acquiring TMD is in the best interests of LIFD and LIFD's stockholders;
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Now, Therefore, in consideration of the mutual agreements and covenants hereafter set forth, the Parties hereby agree as follows, intending to be legally bound hereby:
1. Agreements, Representations and Warranties of LIFD Group
As an inducement to the TMD Group to enter into this LOI, the LIFD Group hereby agrees, represents, warrants and covenants as follows:
(A) Ownership. LIFD is owned by the holders of its common stock (collectively the "LIFD Stockholders") and by the holders of its Series A and Series B convertible preferred stock.
(B) Governance. LIFD is governed by a Board of Directors, consisting of GMJ (Chairman), NSW (Vice Chairman), Joshua Bloom, Sharial Howard, James Jacobs, WCJ, Vincent Mesolella, Richard Morrissy, and Kevin Rocio (collectively the "LIFD Board"). GMJ is the CEO of LIFD, NSW is the COO of LIFD, and WCJ is the President and CFO of LIFD.
(C) Wholly Owned Subsidiary. LIFD owns 100% of the common stock of Lifted, which sometimes does business as "Lifted Made" or as "Urb". NSW is the founder and CEO of Lifted, and WCJ is the President of Lifted.
2. Agreements, Representations and Warranties of the Marijuana Group
As an inducement to the LIFD Group to enter into this LOI, the TMD Group hereby agrees, represents, warrants and covenants as follows:
(A) Ownership. The persons and entities who own SI and TMD (individually an "Owner" and collectively the "Owners"), and their respective ownership percentages thereof, are specified in that certain TMD Ownership Letter dated the date hereof from the Sustainable Executives to the LIFD Executives (the "Ownership Letter"), and during the period from the date hereof through the date of the Closing (as defined below) or the date of the termination of this LOI, there shall be no changes to such ownership and respective ownership percentages.
(B) Governance.
(1) SI. SI is governed by a Board of Directors, consisting of JM, EC, Emily Newbury, David Nissman and Imran Mirza (collectively the “SI Board”). JM is the President of SI.
(2) TMD. TMD is governed by its Managers, consisting of JM and EC (collectively the "Managers").
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(C) Assets to be Owned by TMD as of the date of the Closing ("Closing Date"). TMD shall own the following asset as of the Closing Date: A leasehold interest in approximately 18,558 rentable square feet located at 7537 Central Ave., Skokie, IL 60077, pursuant to that certain Lease Agreement dated December 6, 2022 by and between Amy and Connor, LLC, as landlord ("Landlord") and TMD, as tenant (the "Skokie Lease"). As of the Closing Date, the Skokie Lease shall be in full force and effect and legally binding, without any outstanding defaults by TMD (as tenant) thereunder.
TMD has not yet engaged in any business, and as of the Closing Date TMD shall not yet have engaged in any business.
(D) Visco Parties and Entities. The Estate of Christine Visco (the "Visco Estate") is the primary owner of Illinois Kindness Three LLC, an Illinois limited liability company ("IK3"). The Executor of the Visco Estate is Candace Centeno (the “Visco Executor”). IK3 is managed by its Managers, Molly Dunne and Candace Centeno. (collectively the “IK3 Managers”). IK3 is owned by its members (collectively the “IK3 Members”).
(E) TMD Purchase Agreement. SI, the Visco Estate, and TMD entered into that certain Membership Interest Purchase Agreement dated as of November 8, 2024 (the "TMD Purchase Agreement"), pursuant to which SI acquired 100% of the ownership interests in TMD from the Visco Estate.
3. Conditions Precedent to the Closing
The following shall be conditions precedent to the Closing (the "Conditions Precedent"):
(A) The TMD Group's agreements, representations, warranties and covenants set forth in Section 2 above shall be fulfilled and accurate on or before the Closing Date. Without limiting the generality of the foregoing, on or prior to the Closing Date:
(B) The Merger Agreement (as defined below) and all of the other transactions contemplated by this LOI shall have been approved in writing by LIFD, by a majority of the LIFD Board, by a majority of the LIFD Stockholders if such approval is required under Nevada law, and by the Merger Subsidiary (as defined below);
(C) The Merger Agreement and all of the other transactions contemplated by this LOI shall have been unanimously approved in writing: by each of the Owners; by the SI Board; and by the Managers of TMD;
(D) The Merger Agreement shall have been approved by LIFD's lender, Surety Bank of DeLand, Florida;
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(E) All necessary securities filings in regard to the Merger (as defined below) shall have been filed, and any necessary approvals shall have been obtained from the U.S. Securities and Exchange Commission (the "SEC"), all in the opinion of LIFD's securities attorney David Hunt of Salt Lake City, Utah;
(F) LIFD's outside firm of certified public accountants, Fruci & Associates II, PLLC of Spokane, Washington ("Fruci") shall have agreed with LIFD that the financial statements of SI and TMD for fiscal years 2023 and 2024 are not required to be audited, or, alternatively, any needed audits and audit opinion letters associated with the Merger shall have been delivered by Fruci to LIFD, and such audits and opinion letters shall have been acceptable to LIFD in form and substance in its discretion; and
(G) Any necessary approvals of or consents to the Merger, or to the executives, directors or stockholders of LIFD or its subsidiaries, shall have been obtained from the State of Illinois and its departments and agencies, and from any other governmental bodies having any approval rights thereof (collectively the "Governmental Approvals").
4. The Closing
Following the successful fulfillment all of the Conditions Precedent, the Parties shall proceed to a closing (the "Closing") to be held on the Closing Date at the offices of law firm Fox Rothschild LLP in Chicago, at which the following shall occur:
(A) TMD shall merge with and into a newly formed, wholly owned subsidiary of LIFD (the "Merger Subsidiary") pursuant to a mutually acceptable merger agreement (the "Merger Agreement"), under which Merger Agreement LIFD shall acquire, via merger (the "Merger"), 100% of the ownership interests in TMD, and TMD shall be the surviving entity in such Merger. The Merger Agreement shall, among other things, contain representations, warranties, covenants, conditions, and indemnification provisions customary to transactions like the Merger (for example but without limitation, representations, warranties, covenants, conditions, and indemnification provisions similar to those contained in the agreements used by LIFD in its acquisition of Lifted on February 24, 2020.) Without limiting the generality of the foregoing, the Merger Agreement shall include an accurate list of TMD's licenses, assets, liabilities and contracts as of the Closing Date, certified to LIFD in writing by the Sustainable Executives, and such list must be acceptable to LIFD in its discretion; and
(B) The merger consideration to be paid by LIFD in the Merger pursuant to which LIFD shall acquire 100% of the ownership interests in TMD shall consist of Two Million (2,000,000) shares of unregistered common stock of LIFD ("LIFD Shares"). Such LIFD Shares shall be allocated and distributed among the Owners of TMD in the Merger as specified in the Merger Agreement.
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5. Pending Discussions and Negotiations
SI and TMD have already entered into discussions and negotiations with certain third parties related to certain potential agreements and arrangements. The Sustainable Executives agree and covenant that prior to the Closing they shall use good faith efforts to collaborate with LIFD Group regarding these discussions and negotiations.
6. No Shop Clause
During the period between the signing of this LOI and either the termination of this LOI or the execution of the Merger Agreement, SI, TMD and the Sustainable Executives and their lawyers, agents and representatives shall not directly or indirectly enter into any discussion(s), negotiation(s), letter(s) of intent, merger(s), reorganization(s), stock sale(s), asset sale(s) (other than asset sales in the ordinary, normal, and customary course of business), other transaction(s), loan agreement(s), financing agreement(s) or arrangement(s) of any type, other capital raise(s), or other contract(s) or arrangement(s) with any third party, or any other agreement(s), contract(s) or arrangement(s) outside the ordinary course of business that would or might delay or make more costly or difficult the closing of the Merger. The Merger Agreement shall include similar covenants regarding the period (if any) between the signing of the Merger Agreement and the Closing or the termination of the Merger Agreement.
During the period between the signing of this LOI and the execution and delivery of the Merger Agreement or the termination of this LOI, the Sustainable Executives shall operate SI, TMD and their affiliates only in accordance with the ordinary, normal and customary course thereof consistent with past practices, or as otherwise contemplated in this LOI.
7. Good Faith Efforts to Close
Each of the Parties agrees and covenants to use good faith efforts to cause the Merger to close as soon as practicable, subject to the fulfillment of all of the terms, conditions and requirements set forth in this LOI and in the Merger Agreement.
8. Termination of this LOI and the Merger Agreement
The Parties agree and acknowledge that there is considerable time pressure to proceed forward to a closing of the Merger as soon as possible. Either Party shall have the unilateral right to terminate this LOI, without any payment by or penalty due from any party, if such Party in good faith believes that the terms, conditions and requirements that must be met in order for the Closing to occur cannot reasonably be met on or before March 15, 2025, or if any material provisions of this LOI shall be adjudged by a court or the SEC to be invalid or unenforceable, and thereafter the parties to this LOI are unable to mutually agree upon how to proceed forward with the Mergers as impacted by such court or SEC action, provided, however, that if one or more of the Conditions Precedent, such as Governmental Approvals referred to in Section 3(G)
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above, cannot reasonably be met on or before March 15, 2025, then the Parties shall meet and use good faith efforts in an attempt to fashion a mutually acceptable interim arrangement that would accommodate a delay in the Closing Date to a date after March 15, 2025.
9. Miscellaneous
(A) Each of the Parties shall bear its or his own fees and expenses in connection with the proposed transactions. Without limiting the generality of the foregoing, each of the Parties shall be solely responsible for the fees and expenses owed by it or him to any lawyers, accountants, financial advisors, investment bankers, brokers or finders employed by such Party.
(B) LIFD shall be permitted to publicly disclose the terms and conditions of this LOI and the Merger Agreement in its SEC filings, press releases, conference calls, and investor relations efforts, and the Parties shall use good faith efforts to cooperate therewith.
(C) The Parties acknowledge that LIFD is a publicly traded company and that unauthorized disclosure of any material non-public information regarding LIFD or the transactions contemplated by this LOI could subject the disclosing party to scrutiny and potential liability under applicable securities laws and regulations.
In Witness Whereof, the Parties have executed and delivered this LOI as of the date first written above.
LFTD Partners Inc., a Nevada corporation
By /s/ Gerard M. Jacobs
Gerard M. Jacobs, CEO
Lifted Liquids, Inc., an Illinois corporation
By /s/ Nicholas S. Warrender
Nicholas S. Warrender, CEO
/s/ Gerard M. Jacobs
Gerard M. Jacobs, a Florida resident
/s/ Nicholas S. Warrender
Nicholas S. Warrender, a Florida resident
/s/ William C. Jacobs
William C. Jacobs, a Florida resident
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Sustainable Innovations Inc., an Illinois corporation
By /s/ L. John Murray
L. John Murray, its authorized representative
TMD Ventures, LLC, a Pennsylvania limited liability company
By /s/ Karim J. Murray
Karim "Joe" Murray, its authorized representative
/s/ L. John Murray
L. John Murray, an Illinois resident
/s/ Erik Carlson
Erik Carlson, an Illinois resident
/s/ Karim J. Murray
Karim "Joe" Murray, an Alabama resident
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Letter of Intent - Hemp and Retail
This Letter of Intent - Hemp and Retail (this “LOI”) dated as of February 19, 2025, is made and entered into by and among
LFTD Partners Inc., a Nevada corporation ("LIFD") and Lifted Liquids, Inc., an Illinois corporation ("Lifted"),
and
Gerard M. Jacobs, a Florida resident ("GMJ"), Nicholas S. Warrender, a Florida resident ("NSW") and William C. Jacobs, a Florida resident ("WCJ"),
and
Sustainable Growers, LLC, an Illinois limited liability company (“SG”), Sustainable Innovations Development Company, LLC, an Illinois limited liability company (“SIDC”), Buckbee Seed Co., LLC, an Illinois limited liability company (“BSC”), Buckbee Seed Company, LLC, SEED II, an Illinois limited liability company (“Mrs. Buckbee’s”), Downtown Rockford Restaurant, LLC, an Illinois limited liability company (“District”), and Northtown Restaurant, LLC, an Illinois limited liability company (“Half Baked”),
and
L. John Murray, an Illinois resident ("JM") and Erik Carlson, an Illinois resident ("EC").
and
Billy Ni, an Illinois resident ("Ni").
LIFD, Lifted, GMJ, NSW, WCJ, SG, SIDC, BSC, Mrs. Buckbee's, District, Half Baked, JM, EC and Ni are hereafter sometimes referred to individually as a "Party" and collectively as the "Parties".
GMJ, NSW and WCJ are hereafter sometimes referred to collectively as the "LIFD Executives". LIFD, Lifted, and the LIFD Executives are hereafter sometimes referred to collectively as the "LIFD Group".
JM and EC are hereafter sometimes referred to collectively as the "Sustainable Executives". SG, SIDC, BSC, Mrs. Buckbee's, District and Half Baked are hereafter sometimes referred to collectively as the "Hemp and Retail Companies". The Hemp and Retail Companies, the Sustainable Executives, and Ni are hereafter sometimes referred to collectively as the "Hemp and Retail Group".
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The LIFD Executives and the Sustainable Executives are hereafter sometimes referred to individually as a "Senior Executive" and collectively as the "Senior Executive Group".
RECITALS
Whereas, LIFD wishes to expand its hemp business and to enter the retail food and beverage industry in the United States;
Whereas, the Hemp and Retail Companies own all or 50% of certain valuable hemp and retail food and beverage businesses; and
Whereas, LIFD believes that acquiring the Hemp and Retail Companies is in the best interests of LIFD and LIFD's stockholders;
Now, Therefore, in consideration of the mutual agreements and covenants hereafter set forth, the Parties hereby agree as follows, intending to be legally bound hereby:
1. Agreements, Representations and Warranties of LIFD Group
As an inducement to the Hemp and Retail Companies to enter into this LOI, the LIFD Group hereby agrees, represents, warrants and covenants as follows:
(A) Ownership. LIFD is owned by the holders of its common stock (collectively the "LIFD Stockholders") and by the holders of its Series A and Series B convertible preferred stock.
(B) Governance. LIFD is governed by a Board of Directors, consisting of GMJ (Chairman), NSW (Vice Chairman), Joshua Bloom, Sharial Howard, James Jacobs, WCJ, Vincent Mesolella, Richard Morrissy, and Kevin Rocio (collectively the "LIFD Board"). GMJ is the CEO of LIFD, NSW is the COO of LIFD, and WCJ is the President and CFO of LIFD.
(C) Wholly Owned Subsidiary. LIFD owns 100% of the common stock of Lifted, which sometimes does business as "Lifted Made" or as "Urb". NSW is the founder and CEO of Lifted, and WCJ is the President of Lifted.
2. Agreements, Representations and Warranties of the Hemp and Retail Group
As an inducement to the LIFD Group to enter into this LOI, the Hemp and Retail Group hereby agrees, represents, warrants and covenants as follows:
(A) Ownership. The persons and entities who own the Hemp and Retail Companies (individually an "Owner" and collectively the "Owners") and their respective ownership percentages thereof, are specified in that certain Hemp and Retail Ownership Letter dated the
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date hereof from the Sustainable Executives to the LIFD Executives (the "Ownership Letter"), and during the period from the date hereof through the date of the Closing (as defined below) or the date of the termination of this LOI, there shall be no changes to such ownership and respective ownership percentages.
(B) Governance. Each of the SG, SIDC, BSC and Mrs. Buckbee's is governed by its Managers, consisting of JM and EC (collectively the "Managers"), and each of District and Half Baked is governed by its Managers, consisting of JM, EC and Ni (collectively the "Bar Managers").
(C) Assets to be Owned by the Hemp and Retail Companies as of the date of the Closing ("Closing Date"). Each of the following entities shall own the following assets as of the Closing Date, respectively:
(1) SG: 100% of the ownership interests in SIDC and BSC;
(2) BSC: 100% of the ownership interests in Mrs. Buckbee's, and 50% of the ownership interests in each of District and Half Baked;
(3) Mrs. Buckbee's: All rights, titles and interests in the brand names Mrs. Buckbee's and Wake N Bakery, and in the lease (the "Mrs. Buckbee's Lease") of 275 Deane Drive, Rockford, IL 61107, free and clear of all debts, liabilities, mortgages, liens, income taxes, other taxes, assessments, claims, or other encumbrances of any type or nature whatsoever excepting only debts, liabilities, mortgages, liens, income taxes, other taxes, assessments, claims, or other encumbrances of any type or nature whatsoever incurred by Mrs. Buckbee's in the ordinary course of Mrs. Buckbee's Wake N Bakery's business;
(4) District: All rights, titles and interests in in the brand name District Bar & Grill, and in the lease (the "District Lease") of 205 W. State St., Rockford, IL 61101, free and clear of all debts, liabilities, mortgages, liens, income taxes, other taxes, assessments, claims, or other encumbrances of any type or nature whatsoever excepting only debts, liabilities, mortgages, liens, income taxes, other taxes, assessments, claims, or other encumbrances of any type or nature whatsoever incurred by District in the ordinary course of District Bar & Grill's business; and
(5) Half Baked: All rights, titles and interests in the brand name Half Baked Bar, and in the lease (the "Half Baked Lease") of 908 W. Riverside, Rockford, IL 61103, free and clear of all debts, liabilities, mortgages, liens, income taxes, other taxes, assessments, claims, or other encumbrances of any type or nature whatsoever excepting only debts, liabilities, mortgages, liens, income taxes, other taxes, assessments, claims, or other encumbrances of any type or nature whatsoever incurred by Half Baked in the ordinary course of Half Baked's business.
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(E) Leases.
(1) Mrs. Buckbee's Lease. As of the Closing Date, the Mrs. Buckbee's Lease shall be in full force and effect and legally binding, without any outstanding defaults by Mrs. Buckbee's (as tenant) thereunder;
(2) District Lease. As of the Closing Date, the District Lease shall be in full force and effect and legally binding, without any outstanding defaults by District (as tenant) thereunder; and
(3) Half Baked Lease. As of the Closing Date, the Half Baked Lease shall be in full force and effect and legally binding, without any outstanding defaults by Half Baked (as tenant) thereunder;
(F) Operations Prior to the Closing Date.
(1) From and after the date of this LOI through the Closing Date, each of the Hemp and Retail Companies shall continue to operate in due course and consistently with their historical practices;
(2) From and after the date of this LOI through the Closing Date, any and all after-tax free cash flow generated by SG, SIDC, BSC and Mrs. Buckbee's, or generated by BSC's 50% ownership interests in District and Half Baked, shall be deposited by SG, SIDC, BSC, Mrs. Buckbee's, District and Half Baked into checking accounts at Surety Bank in the names of SG, SIDC, BSC (in the case of after-tax free cash flow generated by BSC or by BSC's 50% ownership interests in District and Half Baked) and Mrs. Buckbee's, and shall not be otherwise paid out, distributed or dissipated prior to the Closing Date; and
(3) From and after the date of this LOI through the Closing Date, all leases, contracts, agreements, books, records, profit and loss statements, balance sheets, cash flow statements, distribution records, bank statements, borrowings, other material documents, and tax returns, of each of SG, SIDC, BSC, Mrs. Buckbee's, District and Half Baked shall be diligently, accurately and professionally prepared and maintained in accordance with all applicable laws, rules and regulations, and shall be made available for review and copying by LIFD upon reasonable advance notice; and
(G) The Sustainable Executives shall use good faith efforts to facilitate discussions by and among the Senior Executive Group and Ni, regarding the potential terms and conditions pursuant to which LIFD or its designee might acquire Ni's 50% ownership interests in District and Half Baked.
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3. Conditions Precedent to the Closing
The following shall be conditions precedent to the Closing (the "Conditions Precedent"):
(A) The Hemp and Retail Group's agreements, representations, warranties and covenants set forth in Section 2 above shall be fulfilled and accurate on or before the Closing Date;
(B) The Merger Agreement (as defined below) and all of the other transactions contemplated by this LOI shall have been approved in writing by LIFD, by a majority of the LIFD Board, by a majority of the LIFD Stockholders if such approval is required under Nevada law, and by the Merger Subsidiary (as defined below);
(C) The Merger Agreement and all of the other transactions contemplated by this LOI shall have been unanimously approved in writing: by each of the Owners; by the Managers of SG, SIDC, BSC and Mrs. Buckbee's; and by the Bar Managers of District and Half-Baked;
(D) The Merger Agreement shall have been approved by LIFD's lender, Surety Bank of DeLand, Florida;
(E) All necessary securities filings in regard to the Merger (as defined below) shall have been filed, and any necessary approvals shall have been obtained from the U.S. Securities and Exchange Commission (the "SEC"), all in the opinion of LIFD's securities attorney David Hunt of Salt Lake City, Utah; and
(F) LIFD's outside firm of certified public accountants, Fruci & Associates II, PLLC of Spokane, Washington ("Fruci") shall have audited the financial statements of the Hemp and Retail Companies for fiscal years 2023 and 2024 in accordance with U.S. generally accepted accounting principles (and potentially, after Fruci has reviewed the Hemp and Retail Companies' financial statements for quarterly periods during 2025), and such audited financial statements and audit opinion letters associated with the Merger (collectively the "Audit") shall have been delivered by Fruci to LIFD, all as shall be necessary to allow SG to be acquired by LIFD pursuant to all applicable SEC and FASB rules and regulations, and to allow LIFD to timely file all necessary securities filings with the SEC, and the Audit shall have been acceptable to LIFD in its discretion. The Hemp and Retail Group shall use good faith efforts to cause the Audit to be completed as promptly as possible.
4. The Closing
Following the successful fulfillment all of the Conditions Precedent, the Parties shall proceed to a closing (the "Closing") to be held on the Closing Date at the offices of law firm Fox Rothschild LLP in Chicago, at which the following shall occur:
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(A) SG shall merge with and into a newly formed, wholly owned subsidiary of LIFD (the "Merger Subsidiary") pursuant to a mutually acceptable merger agreement (the "Merger Agreement"), pursuant to which Merger Agreement LIFD shall acquire, via merger (the "Merger"), 100% of the ownership interests in SG, and SG shall be the surviving entity in the Merger. The Merger Agreement shall, among other things, contain representations, warranties, covenants, conditions, and indemnification provisions customary to transactions like the Merger (for example but without limitation, representations, warranties, covenants, conditions, and indemnification provisions similar to those contained in the agreements used by LIFD in its acquisition of Lifted on February 24, 2020.) Without limiting the generality of the foregoing, the Merger Agreement shall include an accurate list of each of the Hemp and Retail Companies' assets, liabilities and contracts as of the Closing Date, certified to LIFD in writing by the Sustainable Executives, and such list must be acceptable to LIFD in its discretion; and
(B) The merger consideration to be paid by LIFD in the Merger pursuant to which LIFD shall acquire 100% of the ownership interests in SG shall consist of Two Million Two Hundred Ninety Thousand Seven Hundred Seventy-Seven (2,290,777) shares of unregistered common stock of LIFD ("LIFD Shares"). Such LIFD Shares shall be allocated and distributed among the Owners of SG in the Merger as specified in the Merger Agreement.
5. Pending Discussions/Negotiations
The Sustainable Executives have already entered into discussions and negotiations related to certain potential agreements and arrangements regarding the Hemp and Retail Companies, such as the potential for franchising Mrs. Buckbee's. The Sustainable Executives agree and covenant that prior to the Closing they shall use good faith efforts to collaborate with LIFD Group regarding these discussions and negotiations.
6. No Shop Clause
During the period between the signing of this LOI and either the termination of this LOI or the execution of the Merger Agreements, SG and the Sustainable Executives and their lawyers, agents and representatives shall not directly or indirectly enter into any discussion(s), negotiation(s), letter(s) of intent, merger(s), reorganization(s), stock sale(s), asset sale(s) (other than asset sales in the ordinary, normal, and customary course of business), other transaction(s), loan agreement(s), financing agreement(s) or arrangement(s) of any type, other capital raise(s), or other contract(s) or arrangement(s) with any third party, or any other agreement(s), contract(s) or arrangement(s) outside the ordinary course of business that would or might delay or make more costly or difficult the closing of the Merger. The Merger Agreement shall include similar covenants regarding the period (if any) between the signing of the Merger Agreement and the Closing or the termination of the Merger Agreement.
During the period between the signing of this LOI and the execution and delivery of the Merger Agreement or the termination of this LOI, the Sustainable Executives shall operate the Hemp and
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Retail Companies and their affiliates only in accordance with the ordinary, normal and customary course thereof consistent with past practices, or as otherwise contemplated in this LOI.
7. Good Faith Efforts to Close
Each of the Parties agrees and covenants to use good faith efforts to cause the Merger to close as soon as practicable, subject to the fulfillment of all of the terms, conditions and requirements set forth in this LOI and in the Merger Agreement.
8. Termination of this LOI and the Merger Agreement
The Parties agree and acknowledge that there is considerable time pressure to proceed forward to a closing of the Merger as soon as possible. Either Party shall have the unilateral right to terminate this LOI, without any payment by or penalty due from any party, if such Party in good faith believes that the terms, conditions and requirements that must be met in order for the Closing to occur cannot reasonably be met, or if any material provisions of this LOI shall be adjudged by a court or the SEC to be invalid or unenforceable, and thereafter the parties to this LOI are unable to mutually agree upon how to proceed forward with the Merger as impacted by such court or SEC action. Provided, that the Parties expressly agree and acknowledge that the timing of completion of the Audit is uncertain, and none of the Parties shall use any delay in the timing of completion of the Audit as an excuse to terminate either this LOI or the Merger Agreement as long as the Hemp and Retail Group is using good faith efforts to complete the Audit in a commercially reasonable fashion and time frame.
9. Miscellaneous
(A) Each of the Parties shall bear its or his own fees and expenses in connection with the proposed transactions. Without limiting the generality of the foregoing, each of the Parties shall be solely responsible for the fees and expenses owed by it or him to any lawyers, accountants, financial advisors, investment bankers, brokers or finders employed by such Party.
(B) LIFD shall be permitted to publicly disclose the terms and conditions of this LOI and the Merger Agreement in its SEC filings, press releases, conference calls, and investor relations efforts, and the Parties shall use good faith efforts to cooperate therewith.
(C) The Parties acknowledge that LIFD is a publicly traded company and that unauthorized disclosure of any material non-public information regarding LIFD or the transactions contemplated by this LOI could subject the disclosing party to scrutiny and potential
liability under applicable securities laws and regulations.
In Witness Whereof, the Parties have executed and delivered this LOI as of the date first written above.
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LFTD Partners Inc., a Nevada corporation
By /s/ Gerard M. Jacobs
Gerard M. Jacobs, CEO
Lifted Liquids, Inc., an Illinois corporation
By /s/ Nicholas S. Warrender
Nicholas S. Warrender, CEO
/s/ Gerard M. Jacobs
Gerard M. Jacobs, a Florida resident
/s/ Nicholas S. Warrender
Nicholas S. Warrender, a Florida resident
/s/ William C. Jacobs
William C. Jacobs, a Florida resident
Sustainable Growers, LLC, an Illinois limited liability company
By /s/ Erik Carlson
Erik Carlson, its authorized representative
Sustainable Innovations Development Company, LLC, an Illinois limited liability company
By /s/ Erik Carlson
Erik Carlson, its authorized representative
Buckbee Seed Co., LLC, an Illinois limited liability company
By /s/ Erik Carlson
Erik Carlson, its authorized representative
Buckbee Seed Company, LLC, SEED II, an Illinois limited liability company
By /s/ Erik Carlson
Erik Carlson, its authorized representative
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Downtown Rockford Restaurant, LLC, an Illinois limited liability company
By /s/ Erik Carlson
Erik Carlson, its authorized representative
Northtown Restaurant, LLC, an Illinois limited liability company
By /s/ Erik Carlson
Erik Carlson, its authorized representative
/s/ L. John Murray
L. John Murray, an Illinois resident
/s/ Erik Carlson
Erik Carlson, an Illinois resident
/s/ Billy Ni
Billy Ni, an Illinois resident
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Letter of Intent - Real Estate Companies
This Letter of Intent - Real Estate Companies (this “LOI”) dated as of February 19, 2025, is made and entered into by and among
LFTD Partners Inc., a Nevada corporation ("LIFD") and Lifted Liquids, Inc., an Illinois corporation ("Lifted"),
and
Gerard M. Jacobs, a Florida resident ("GMJ"), Nicholas S. Warrender, a Florida resident ("NSW") and William C. Jacobs, a Florida resident ("WCJ"),
and
Sustainable Properties, LLC, an Illinois limited liability company (“SP”), 1221 Research Parkway, LLC, an Illinois limited liability company ("1221"), and 2422 N. Main, LLC, an Illinois limited liability company ("2422"),
and
L. John Murray, an Illinois resident ("JM"), Joshua Gillan, an Illinois resident ("JG"), and Erik Carlson, an Illinois resident ("EC").
LIFD, Lifted, GMJ, NSW, WCJ, SP, 1221, 2422, JM and EC are hereafter sometimes referred to individually as a "Party" and collectively as the "Parties".
GMJ, NSW and WCJ are hereafter sometimes referred to individually as a "LIFD Executive" and collectively as the "LIFD Executives". LIFD, Lifted, and the LIFD Executives are hereafter sometimes referred to collectively as the "LIFD Group".
JM, JG and EC are hereafter sometimes referred to collectively as the "Sustainable Executives". SP, 1221 and 2422 are hereafter sometimes referred to collectively as the "Real Estate Companies". The Real Estate Companies and the Sustainable Executives are hereafter sometimes referred to collectively as the "Real Estate Group".
The LIFD Executives and the Sustainable Executives are hereafter sometimes referred to individually as a "Senior Executive" and collectively as the "Senior Executive Group".
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RECITALS
Whereas, LIFD wishes to enter the real estate industry in the United States, by acquiring, developing, owning, leasing and/or selling properties and buildings for various purposes;
Whereas, the Real Estate Companies own valuable real estate and buildings located in Rockford, Illinois, that are appropriate for acquisition, development, ownership, leasing and/or sale; and
Whereas, LIFD believes that acquiring the Real Estate Companies is in the best interests of LIFD and LIFD's stockholders;
Now, Therefore, in consideration of the mutual agreements and covenants hereafter set forth, the Parties hereby agree as follows, intending to be legally bound hereby:
1. Agreements, Representations and Warranties of LIFD Group
As an inducement to the Real Estate Group to enter into this LOI, the LIFD Group hereby agrees, represents, warrants and covenants as follows:
(A) Ownership. LIFD is owned by the holders of its common stock (collectively the "LIFD Stockholders") and by the holders of its Series A and Series B convertible preferred stock.
(B) Governance. LIFD is governed by a Board of Directors, consisting of GMJ (Chairman), NSW (Vice Chairman), Joshua Bloom, Sharial Howard, James Jacobs, WCJ, Vincent Mesolella, Richard Morrissy, and Kevin Rocio (collectively the "LIFD Board"). GMJ is the CEO of LIFD, NSW is the COO of LIFD, and WCJ is the President and CFO of LIFD.
(C) Wholly Owned Subsidiary. LIFD owns 100% of the common stock of Lifted, which sometimes does business as "Lifted Made" or as "Urb". NSW is the founder and CEO of Lifted, and WCJ is the President of Lifted.
2. Agreements, Representations and Warranties of the Real Estate Group
As an inducement to the LIFD Group to enter into this LOI, the Real Estate Group hereby agrees, represents, warrants and covenants as follows:
(A) Ownership. The persons and entities who own SP (individually an "Owner" and collectively the "Owners"), and their respective ownership percentages thereof, are specified in that certain Real Estate Ownership Letter dated the date hereof from the Sustainable Executives to the LIFD Executives (the "Ownership Letter"), and during the period from the date hereof through the date of the Closing (as defined below) or the date of the termination of this LOI, there shall be no changes to such ownership and respective ownership percentages.
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(B) Governance. Each of the Real Estate Companies is governed by its Managers, consisting of JM and EC (collectively the "Managers").
(C) Wholly Owned Subsidiaries. SP owns 100% of the ownership interests in 1221 and 2422.
(D) Assets to be Owned by 1221 and 2422 as of the date of the Closing ("Closing Date"). Each of the following entities shall own the following assets as of the Closing Date, respectively:
(1) SP: 100% of the ownership interests in 1221 and 2422;
(2) 1221: The real estate, building, equipment, fixtures and other improvements located at 1221 Research Parkway, Rockford, IL 61109 (collectively the "Data Center"); and
(3) 2422: The real estate, building, equipment, fixtures and other improvements located at 2422 N. Main Street, Rockford, IL 61103(the "Beverage Building").
SP, 1221 and 2422 have not engaged in any business, and as of the Closing Date they shall not have engaged in any business.
3. Conditions Precedent to the Closing
The following shall be conditions precedent to the Closing (the "Conditions Precedent"):
(A) The Real Estate Group's agreements, representations, warranties and covenants set forth in Section 2 above shall be fulfilled and accurate on or before the Closing Date;
(B) The Real Estate Group shall have delivered to LIFD clean updated title insurance policies on the Data Center and the Beverage Building;
(C) The Merger Agreement (as defined below) and all of the other transactions contemplated by this LOI shall have been approved in writing by LIFD, by a majority of the LIFD Board, by a majority of the LIFD Stockholders if such approval is required under Nevada law, and by the Merger Subsidiary (as defined below);
(D) The Merger Agreement and all of the other transactions contemplated by this LOI shall have been unanimously approved in writing: by each of the Owners and by the Managers of SP;
(E) The Merger Agreement shall have been approved by LIFD's lender, Surety Bank of DeLand, Florida;
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(F) All necessary securities filings in regard to the Merger (as defined below) shall have been filed, and any necessary approvals shall have been obtained from the U.S. Securities and Exchange Commission (the "SEC"), all in the opinion of LIFD's securities attorney David Hunt of Salt Lake City, Utah; and
(G) LIFD's outside firm of certified public accountants, Fruci & Associates II, PLLC of Spokane, Washington ("Fruci") shall have agreed with LIFD that the financial statements of the Real Estate Companies for fiscal years 2023 and 2024 are not required to be audited, or, alternatively, any needed audits and audit opinion letters associated with the Merger shall have been delivered by Fruci to LIFD, and such audits and opinion letters shall have been acceptable to LIFD in form and substance in its discretion.
4. The Closing
Following the successful fulfillment all of the Conditions Precedent, the Parties shall proceed to a closing (the "Closing") to be held on the Closing Date at the offices of law firm Fox Rothschild LLP in Chicago, at which the following shall occur:
(A) SP shall merge with and into a newly formed, wholly owned subsidiary of LIFD (the "Merger Subsidiary") pursuant to a mutually acceptable merger agreement (the "Merger Agreement"), under which Merger Agreement LIFD shall acquire, via merger (the "Merger"), 100% of the ownership interests in SP, and SP shall be the surviving entity in the Merger. The Merger Agreement shall, among other things, contain representations, warranties, covenants, conditions, and indemnification provisions customary to transactions like the Merger (for example but without limitation, representations, warranties, covenants, conditions, and indemnification provisions similar to those contained in the agreements used by LIFD in its acquisition of Lifted on February 24, 2020.) Without limiting the generality of the foregoing, the Merger Agreement shall include an accurate list of each of the Real Estate Companies' assets, liabilities and contracts as of the Closing Date, certified to LIFD in writing by the Sustainable Executives, and such list must be acceptable to LIFD in its discretion; and
(B) The merger consideration to be paid by LIFD in the Merger pursuant to which LIFD shall acquire 100% of the ownership interests in SP shall consist of Seven Hundred Sixty-Three Thousand Five Hundred Ninety-Three (763,593) shares of unregistered common stock of LIFD ("LIFD Shares"). Such LIFD Shares shall be allocated and distributed among the Owners of SP in the Merger as specified in the Merger Agreement.
5. Data Center
The Parties agree, understand and acknowledge that, in order to try to obtain approval of the Merger Agreement by LIFD's lender, Surety Bank of DeLand, Florida, it is likely that LIFD will be required to commit to Surety Bank in a written agreement that if Surety Bank has not approved LIFD's and SP's plan for the development and leasing or joint venturing of the Data
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Center as a marijuana grow facility, as a data center, as a crypto-mining facility, or otherwise, by a particular date, then LIFD and SP will likely be obligated to publicly list the Data Center with a nationally recognized broker of industrial buildings for sale, and to complete such sale, as promptly as is commercially feasible.
6. Pending Discussions and Negotiations
The Real Estate Companies have already entered into discussions and negotiations with certain third parties related to certain potential real estate agreements and arrangements. The Sustainable Executives agree and covenant that prior to the Closing they shall use good faith efforts to collaborate with LIFD Group regarding these discussions and negotiations.
7. No Shop Clause
During the period between the signing of this LOI and either the termination of this LOI or the execution of the Merger Agreement, the Real Estate Companies and the Sustainable Executives and their lawyers, agents and representatives shall not directly or indirectly enter into any discussion(s), negotiation(s), letter(s) of intent, merger(s), reorganization(s), stock sale(s), asset sale(s) (other than asset sales in the ordinary, normal, and customary course of business), other transaction(s), loan agreement(s), financing agreement(s) or arrangement(s) of any type, other capital raise(s), or other contract(s) or arrangement(s) with any third party, or any other agreement(s), contract(s) or arrangement(s) outside the ordinary course of business that would or might delay or make more costly or difficult the closing of the Merger. The Merger Agreement shall include similar covenants regarding the period (if any) between the signing of the Merger Agreement and the Closing or the termination of the Merger Agreement.
During the period between the signing of this LOI and the execution and delivery of the Merger Agreement or the termination of this LOI, the Sustainable Executives shall operate the Real Estate Companies and their affiliates only in accordance with the ordinary, normal and customary course thereof consistent with past practices, or as otherwise contemplated in this LOI.
8. Good Faith Efforts to Close
Each of the Parties agrees and covenants to use good faith efforts to cause the Merger to close as soon as practicable, subject to the fulfillment of all of the terms, conditions and requirements set forth in this LOI and in the Merger Agreement.
9. Termination of this LOI and the Merger Agreement
The Parties agree and acknowledge that there is considerable time pressure to proceed forward to a closing of the Merger as soon as possible. Either Party shall have the unilateral right to terminate this LOI, without any payment by or penalty due from any party, if such Party in good
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faith believes that the terms, conditions and requirements that must be met in order for the Closing to occur cannot reasonably be met on or before March 15, 2025, or if any material provisions of this LOI shall be adjudged by a court or the SEC to be invalid or unenforceable, and thereafter the parties to this LOI are unable to mutually agree upon how to proceed forward with the Merger as impacted by such court or SEC action, provided, however, that if one or more of the Conditions Precedent cannot reasonably be met on or before March 15, 2025, then the Parties shall meet and use good faith efforts in an attempt to fashion a mutually acceptable interim arrangement that would accommodate a delay in the Closing Date to a date after March 15, 2025.
10. Miscellaneous
(A) Each of the Parties shall bear its or his own fees and expenses in connection with the proposed transactions. Without limiting the generality of the foregoing, each of the Parties shall be solely responsible for the fees and expenses owed by it or him to any lawyers, accountants, financial advisors, investment bankers, brokers or finders employed by such Party.
(B) LIFD shall be permitted to publicly disclose the terms and conditions of this LOI and the Merger Agreement in its SEC filings, press releases, conference calls, and investor relations efforts, and the Parties shall use good faith efforts to cooperate therewith.
(C) The Parties acknowledge that LIFD is a publicly traded company and that unauthorized disclosure of any material non-public information regarding LIFD or the transactions contemplated by this LOI could subject the disclosing party to scrutiny and potential liability under applicable securities laws and regulations.
In Witness Whereof, the Parties have executed and delivered this LOI as of the date first written above.
LFTD Partners Inc., a Nevada corporation
By /s/ Gerard M. Jacobs
Gerard M. Jacobs, CEO
Lifted Liquids, Inc., an Illinois corporation
By /s/ Nicholas S. Warrender
Nicholas S. Warrender, CEO
/s/ Gerard M. Jacobs
Gerard M. Jacobs, a Florida resident
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/s/ Nicholas S. Warrender
Nicholas S. Warrender, a Florida resident
/s/ William C. Jacobs
William C. Jacobs, a Florida resident
Sustainable Properties, LLC, an Illinois limited liability company
By /s/ Joshua Gillan
Joshua Gillan, its authorized representative
1221 Research Parkway, LLC, an Illinois limited liability company
By /s/ Joshua Gillan
Joshua Gillan, its authorized representative
2422 N. Main, LLC, an Illinois limited liability company
By /s/ Joshua Gillan
Joshua Gillan, its authorized representative
/s/ L. John Murray
L. John Murray, an Illinois resident
/s/ Erik Carlson
Erik Carlson, an Illinois resident
/s/ Joshua Gillan
Joshua Gillan, an Illinois resident
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Letter of Intent - SI and Marijuana Subsidiaries
This Letter of Intent - SI and Marijuana Subsidiaries (this “LOI”) dated as of February 19, 2025, is made and entered into by and among
LFTD Partners Inc., a Nevada corporation ("LIFD") and Lifted Liquids, Inc., an Illinois corporation ("Lifted"),
and
Gerard M. Jacobs, a Florida resident ("GMJ"), Nicholas S. Warrender, a Florida resident ("NSW") and William C. Jacobs, a Florida resident ("WCJ"),
and
Sustainable Innovations Inc., an Illinois corporation (“SI”), Sustainable Craft Grow #1, LLC, an Illinois limited liability company (“SCG1”), Sustainable Transporter #1, LLC, an Illinois limited liability company (“ST1”), Sustainable Transporter #2, LLC, an Illinois limited liability company (“ST2”), and Illinois Kindness Four, LLC, an Illinois limited liability company (“IK4”),
and
L. John Murray, an Illinois resident ("JM") and Erik Carlson, an Illinois resident ("EC").
LIFD, Lifted, GMJ, NSW, WCJ, SI, SCG1, ST1, ST2, IK4, JM and EC are hereafter sometimes referred to individually as a "Party" and collectively as the "Parties".
GMJ, NSW and WCJ are hereafter sometimes referred to collectively as the "LIFD Executives". LIFD, Lifted, and the LIFD Executives are hereafter sometimes referred to collectively as the "LIFD Group".
JM and EC are hereafter sometimes referred to collectively as the "Sustainable Executives". SCG1, ST1, ST2 and IK4 are hereafter sometimes referred to collectively as the "Marijuana Subsidiaries". SI, the Marijuana Subsidiaries, and the Sustainable Executives are hereafter sometimes referred to collectively as the "Marijuana Group".
The LIFD Executives and the Sustainable Executives are hereafter sometimes referred to individually as a "Senior Executive" and collectively as the "Senior Executive Group".
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RECITALS
Whereas, LIFD wishes to enter the licensed marijuana industry in the United States;
Whereas, SI and the Marijuana Subsidiaries own certain valuable Illinois Cannabis Licenses; and
Whereas, LIFD believes that acquiring SI and the Marijuana Subsidiaries is in the best interests of LIFD and LIFD's stockholders;
Now, Therefore, in consideration of the mutual agreements and covenants hereafter set forth, the Parties hereby agree as follows, intending to be legally bound hereby:
1. Agreements, Representations and Warranties of LIFD Group
As an inducement to the Marijuana Group to enter into this LOI, the LIFD Group hereby agrees, represents, warrants and covenants as follows:
(A) Ownership. LIFD is owned by the holders of its common stock (collectively the "LIFD Stockholders") and by the holders of its Series A and Series B convertible preferred stock.
(B) Governance. LIFD is governed by a Board of Directors, consisting of GMJ (Chairman), NSW (Vice Chairman), Joshua Bloom, Sharial Howard, James Jacobs, WCJ, Vincent Mesolella, Richard Morrissy, and Kevin Rocio (collectively the "LIFD Board"). GMJ is the CEO of LIFD, NSW is the COO of LIFD, and WCJ is the President and CFO of LIFD.
(C) Wholly Owned Subsidiary. LIFD owns 100% of the common stock of Lifted, which sometimes does business as "Lifted Made" or as "Urb". NSW is the founder and CEO of Lifted, and WCJ is the President of Lifted.
2. Agreements, Representations and Warranties of the Marijuana Group
As an inducement to the LIFD Group to enter into this LOI, the Marijuana Group hereby agrees, represents, warrants and covenants as follows:
(A) Ownership. The persons and entities who own SI and the Marijuana Subsidiaries (individually an "Owner" and collectively the "Owners"), and their respective ownership percentages thereof, are specified in that certain Marijuana Ownership Letter dated the date hereof from the Sustainable Executives to the LIFD Executives (the "Ownership Letter"), and during the period from the date hereof through the date of the Closing (as defined below) or the date of the termination of this LOI, there shall be no changes to such ownership and respective ownership percentages.
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(B) Governance.
(1) SI. SI is governed by a Board of Directors, consisting of JM, EC, Emily Newbury, David Nissman and Imran Mirza (collectively the “SI Board”). JM is the President of SI.
(2) The Marijuana Subsidiaries. Each of the Marijuana Subsidiaries is governed by its Managers, consisting of JM and EC (collectively the "Managers").
(C) Assets to be Owned by the Marijuana Subsidiaries as of the date of the Closing ("Closing Date"). The Marijuana Subsidiaries shall own the following assets as of the Closing Date, respectively:
(1) SCG1: Illinois Cannabis Craft Grow License number 2206010102-CG (the "Craft Grow License");
(2) ST1: Illinois Cannabis Transport License number 2107150140-TR ("Transport License #1");
(3) ST2: Illinois Cannabis Transport License number 2107150187-TR ("Transport License #2"); and
(4) IK4: Illinois Cannabis Infuser License number 2108011034-IN (the "IK Infuser License") and the IK Inventory (as defined below).
The Marijuana Subsidiaries have not yet engaged in any business, and as of the Closing Date they shall not yet have engaged in any business.
(D) Asset to be Owned by SI as of the Post-Closing Date When SI is Acquired by LIFD (its "Acquisition Date"). SI shall own the following asset as of its Acquisition Date: Illinois Cannabis Infuser License number 2108011014-IN (the "SI Infuser License").
(E) Visco Parties and Entities. The Estate of Christine Visco (the "Visco Estate") is the primary owner of Illinois Kindness Three LLC, an Illinois limited liability company ("IK3"). The Executor of the Visco Estate is Candace Centeno (the “Visco Executor”). IK3 is managed by its Managers, Molly Dunne and Candace Centeno. (collectively the “IK3 Managers”). IK3 is owned by its members (collectively the “IK3 Members”).
(F) Certain Visco Agreements.
(1) IK4 Purchase Agreement. SI, IK3, and IK4 entered into that certain Membership Interest Purchase Agreement dated as of November 8, 2024 (the "IK4 Purchase Agreement"), pursuant to which, among other things, SI agreed to acquire 100% of the
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ownership interests in IK4 from IK3. In order to complete the transactions contemplated by the IK4 Purchase Agreement:
(a) IK3 is obligated to transfer ownership of the IK Infuser License and of certain inventory (the "IK Inventory") to IK4, and the successful completion of such transfers shall be a condition precedent to the Closing pursuant to Section 3(A)(2) below; and
(b) SI is obligated to pay IK3 a total of $250,000 plus certain accrued interest (collectively the "License Debt"), and the full payment of the License Debt shall be made from refinancing funds prior to Closing, or shall be paid out at Closing;
(2) Equipment Lease Agreement. SI and IK3 entered into that certain Equipment Lease Agreement dated as of November 8, 2024 (the "Equipment Lease Agreement"), pursuant to which, among other things, SI is obligated to "rent to own" various pieces of equipment (collectively the "Equipment") for payments over time totaling $480,000 (the "Equipment Debt"), and the full payment of the Equipment Debt shall be made from refinancing funds prior to Closing or shall be paid out at Closing; and
(3) Licensing Agreement. SI and IK3 entered into that certain Licensing, Manufacturing and Distribution Agreement dated as of November 8, 2024 (the "Licensing Agreement") which, among other things, obligates SI to pay to IK3 licensing fees (the "Licensing Fees").
3. Conditions Precedent to the Closing
The following shall be conditions precedent to the Closing (the "Conditions Precedent"):
(A) The Marijuana Group's agreements, representations, warranties and covenants set forth in Section 2 above shall be fulfilled and accurate on or before the Closing Date. Without limiting the generality of the foregoing, on or prior to the Closing Date:
(1) SI shall transfer ownership of the Craft Grow License to SCG1 as contemplated by Section 2(C)(1) above, SI shall transfer ownership of Transport License #1 to ST1 as contemplated by Section 2(C)(2) above, and SI shall transfer ownership of Transport License #2 to ST2 as contemplated by Section 2(C)(3) above;
(2) IK3 shall transfer ownership of the IK Infuser License and the IK Inventory to IK4, and shall transfer the Equipment to TMD Ventures, LLC; and
(3) IK3 shall receive full payment of both the License Debt and the Equipment Debt;
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(B) The Merger Agreements (as defined below) and all of the other transactions contemplated by this LOI shall have been approved in writing by LIFD, by a majority of the LIFD Board, by a majority of the LIFD Stockholders if such approval is required under Nevada law, and by the Merger Subsidiaries (as defined below);
(C) The Merger Agreements and all of the other transactions contemplated by this LOI shall have been unanimously approved in writing: by each of the Owners; by the SI Board; and by the Managers of the Marijuana Subsidiaries;
(D) The Merger Agreements shall have been approved by LIFD's lender, Surety Bank of DeLand, Florida;
(E) All necessary securities filings in regard to the Mergers (as defined below) shall have been filed, and any necessary approvals shall have been obtained from the U.S. Securities and Exchange Commission (the "SEC"), all in the opinion of LIFD's securities attorney David Hunt of Salt Lake City, Utah;
(F) LIFD's outside firm of certified public accountants, Fruci & Associates II, PLLC of Spokane, Washington ("Fruci") shall have agreed with LIFD that the financial statements of SI and the Marijuana Subsidiaries for fiscal years 2023 and 2024 are not required to be audited, or, alternatively, any needed audits and audit opinion letters associated with the Mergers shall have been delivered by Fruci to LIFD, and such audits and opinion letters shall have been acceptable to LIFD in form and substance in its discretion;
(G) All necessary approvals of or consents to the Illinois Cannabis License transfers contemplated by this LOI, to the Mergers, or to the executives, directors or stockholders of LIFD or its subsidiaries, shall have been obtained from the State of Illinois and its departments and agencies, and from any other governmental bodies having any approval rights thereof (collectively the "Governmental Approvals");
(H) The Sustainable Executives shall have delivered to LIFD a written plan, accompanied by an approving legal opinion, regarding the lawful maintenance of the social equity status of SI and the Marijuana Subsidiaries during the pre- and post-Closing periods, and such plan and legal opinion shall be acceptable to LIFD in its discretion; and
(I) SI and IK3 shall have entered into an Agreement (the "Pre-Closing Agreement"), and the Pre-Closing Agreement shall be acceptable to LIFD in its discretion.
4. The Closing
Following the successful fulfillment of all of the Conditions Precedent, the Parties shall proceed to a closing (the "Closing") to be held on the Closing Date at the offices of law firm Fox Rothschild LLP in Chicago, at which the following shall occur:
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(A) The Marijuana Subsidiaries each shall merge with and into a newly formed, wholly owned subsidiary of LIFD (each a "Merger Subsidiary" and collectively the "Merger Subsidiaries") pursuant to a mutually acceptable merger agreement (individually a "Merger Agreement" and collectively the "Merger Agreements"), under which Merger Agreements LIFD shall acquire, via mergers (individually a "Merger" and collectively the "Mergers"), 100% of the ownership interests in each of the Marijuana Subsidiaries, and each of the Marijuana Subsidiaries shall be the surviving entities in such Mergers. Each of the Merger Agreements shall, among other things, contain representations, warranties, covenants, conditions, and indemnification provisions customary to transactions like the Mergers (for example but without limitation, representations, warranties, covenants, conditions, and indemnification provisions similar to those contained in the agreements used by LIFD in its acquisition of Lifted on February 24, 2020.) Without limiting the generality of the foregoing, each of the Merger Agreements shall include, in regard to the Marijuana Subsidiary being acquired pursuant to such Merger Agreement, an accurate list of such entity's licenses, assets, liabilities and contracts as of the Closing Date, certified to LIFD in writing by the Sustainable Executives, and such list must be acceptable to LIFD in its discretion; and
(B) The merger consideration to be paid by LIFD in the Mergers pursuant to which LIFD shall acquire 100% of the ownership interests in the Marijuana Subsidiaries shall consist of an aggregate of Two Million Five Hundred Eighty-One Thousand Five Hundred Fifty-Five (2,581,555) shares of unregistered common stock of LIFD ("LIFD Shares"), respectively:
SCG1 - |
| 1,985,811 | LIFD Shares |
ST1 - |
| 66,194 | LIFD Shares |
ST2 - |
| 66,194 | LIFD Shares |
IK4 - |
| 463,356 | LIFD Shares |
Total | 2,581,555 | LIFD Shares | |
Such LIFD Shares shall be allocated and distributed among the Owners of the Marijuana Subsidiaries in the Mergers as specified in their respective Merger Agreements.
5. Purchase of SI
SI, the Owners and the Sustainable Executives agree, represent warrant and covenant to LIFD as follows:
(A) SI received a social equity forgivable loan from the Illinois DCEO in the amount of $625,000 in relation to the SI Infuser License (the $625,000 Loan"), and under the terms of the $625,000 Loan, the $625,000 Loan must be repaid by SI in full if SI or the SI Infuser License is transferred to a third party prior to or during the one year period after the $625,000 Loan is forgiven (the "Standstill Period");
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(B) The Sustainable Executives shall immediately notify LIFD in writing of the end of the Standstill Period;
(C) Following the execution of this LOI through the end of the Standstill Period:
(1) Neither SI nor any Owner shall directly or indirectly issue, transfer, sell or encumber in any way any shares of capital stock of SI;
(2) SI shall not directly or indirectly enter into any manufacturing, purchases, sales, contracts, other agreements or arrangements, mergers, other transactions, commitments, borrowings, or other business activity except as may be approved in advance in writing by LIFD, which approval may be granted or withheld in LIFD's discretion; and
(3) SI shall continue to own the SI Infuser License and shall not directly or indirectly transfer, sell or encumber any right, title or interest in the SI Infuser License in any fashion whatsoever;
it being expressly agreed, acknowledged and understood by SI, the Owners and the Sustainable Executives that this Section is intended to and shall prevent SI, any Owner or the Sustainable Executives from taking or failing to take any action that would or might trigger an obligation of SI to repay the $625,000 Loan, or that would or might delay, frustrate, or make more costly the purchase by LIFD of all of the capital stock of SI pursuant to Section 5(D) below; and
(D) Immediately following end of the Standstill Period, the Owners shall sell to LIFD, and LIFD shall purchase from the Owners, all of the capital stock of SI for an aggregate purchase consideration of Ten Dollars ($10.00), without LIFD being under any obligation whatsoever to repay the $625,000 Loan.
6. Pending Discussions and Negotiations
SI and the Marijuana Subsidiaries have already entered into discussions and negotiations with certain third parties related to certain potential marijuana product agreements and arrangements. The Sustainable Executives agree and covenant that prior to the Closing they shall use good faith efforts to collaborate with LIFD Group regarding these discussions and negotiations.
7. No Shop Clause
During the period between the signing of this LOI and either the termination of this LOI or the execution of the Merger Agreements, SI, the Marijuana Subsidiaries and the Sustainable Executives and their lawyers, agents and representatives shall not directly or indirectly enter into any discussion(s), negotiation(s), letter(s) of intent, merger(s), reorganization(s), stock sale(s), asset sale(s) (other than asset sales in the ordinary, normal, and customary course of business), other transaction(s), loan agreement(s), financing agreement(s) or arrangement(s) of any type,
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other capital raise(s), or other contract(s) or arrangement(s) with any third party, or any other agreement(s), contract(s) or arrangement(s) outside the ordinary course of business that would or might delay or make more costly or difficult the closing of the Mergers. The Merger Agreements shall include similar covenants regarding the period (if any) between the signing of the Merger Agreements and the Closing or the termination of the Merger Agreements.
During the period between the signing of this LOI and the execution and delivery of the Merger Agreements or the termination of this LOI, the Sustainable Executives shall operate SI and the Marijuana Subsidiaries and their affiliates only in accordance with the ordinary, normal and customary course thereof consistent with past practices, or as otherwise contemplated in this LOI.
8. Good Faith Efforts to Close
Each of the Parties agrees and covenants to use good faith efforts to cause the Mergers to close as soon as practicable, subject to the fulfillment of all of the terms, conditions and requirements set forth in this LOI and in the Merger Agreements.
9. Termination of this LOI and the Merger Agreements
The Parties agree and acknowledge that there is considerable time pressure to proceed forward to a closing of the Mergers as soon as possible. Either Party shall have the unilateral right to terminate this LOI, without any payment by or penalty due from any party, if such Party in good faith believes that the terms, conditions and requirements that must be met in order for the Closing to occur cannot reasonably be met on or before March 15, 2025, or if any material provisions of this LOI shall be adjudged by a court or the SEC to be invalid or unenforceable, and thereafter the parties to this LOI are unable to mutually agree upon how to proceed forward with the Mergers as impacted by such court or SEC action, provided, however, that if one or more of the Conditions Precedent, such as the Governmental Approvals referred to in Section 3(G), cannot reasonably be met on or before March 15, 2025, then the Parties shall meet and use good faith efforts in an attempt to fashion a mutually acceptable interim arrangement that would accommodate a delay in the Closing Date to a date after March 15, 2025.
10. Miscellaneous
(A) Each of the Parties shall bear its or his own fees and expenses in connection with the proposed transactions. Without limiting the generality of the foregoing, each of the Parties shall be solely responsible for the fees and expenses owed by it or him to any lawyers, accountants, financial advisors, investment bankers, brokers or finders employed by such Party.
(B) LIFD shall be permitted to publicly disclose the terms and conditions of this LOI and the Merger Agreements in its SEC filings, press releases, conference calls, and investor relations efforts, and the Parties shall use good faith efforts to cooperate therewith.
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(C) The Parties acknowledge that LIFD is a publicly traded company and that unauthorized disclosure of any material non-public information regarding LIFD or the transactions contemplated by this LOI could subject the disclosing party to scrutiny and potential liability under applicable securities laws and regulations.
In Witness Whereof, the Parties have executed and delivered this LOI as of the date first written above.
LFTD Partners Inc., a Nevada corporation
By /s/ Gerard M. Jacobs
Gerard M. Jacobs, CEO
Lifted Liquids, Inc., an Illinois corporation
By /s/ Nicholas S. Warrender
Nicholas S. Warrender, CEO
/s/ Gerard M. Jacobs
Gerard M. Jacobs, a Florida resident
/s/ Nicholas S. Warrender
Nicholas S. Warrender, a Florida resident
/s/ William C. Jacobs
William C. Jacobs, a Florida resident
Sustainable Innovations Inc., an Illinois corporation
By /s/ L. John Murray
L. John Murray, its authorized representative
Sustainable Craft Grow #1, LLC, an Illinois limited liability company
By /s/ L. John Murray
L. John Murray, its authorized representative
Sustainable Transporter #1, LLC, an Illinois limited liability company
By /s/ L. John Murray
L. John Murray, its authorized representative
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Sustainable Transporter #2, LLC, an Illinois limited liability company
By /s/ L. John Murray
L. John Murray, its authorized representative
Illinois Kindness Four, LLC, an Illinois limited liability company
By /s/ L. John Murray
L. John Murray, its authorized representative
/s/ L. John Murray
L. John Murray, an Illinois resident
/s/ Erik Carlson
Erik Carlson, an Illinois resident
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Letter of Intent - Boards of Directors and Executives
This Letter of Intent - Boards of Directors and Executives (this “LOI”) dated as of February 19, 2025, is made and entered into by and among LFTD Partners Inc., a Nevada corporation ("LIFD"), Lifted Liquids, Inc., an Illinois corporation ("Lifted"), Gerard M. Jacobs, a Florida resident ("GMJ"), Nicholas S. Warrender, a Florida resident ("NSW"), William C. Jacobs, a Florida resident ("WCJ"), L. John Murray, an Illinois resident ("JM") and Erik Carlson, an Illinois resident ("EC").
LIFD, Lifted, GMJ, NSW, WCJ, JM and EC are hereafter sometimes referred to individually as a "Party" and collectively as the "Parties". GMJ, NSW and WCJ are hereafter sometimes referred to collectively as the "LIFD Executives". JM and EC are hereafter sometimes referred to collectively as the "Sustainable Executives". The LIFD Executives and the Sustainable Executives are hereafter sometimes referred to individually as a "Senior Executive" and collectively as the "Senior Executive Group".
In consideration of the mutual agreements and covenants hereafter set forth, the Parties hereby agree as follows, intending to be legally bound hereby:
1. Reference to the Marijuana LOI
Reference is hereby made to that certain Letter of Intent - SI and Marijuana Companies dated as of February 19, 2025, by and among the Parties, Sustainable Innovations Inc., Sustainable Craft Grow #1, LLC, Sustainable Transporter #1, LLC, Sustainable Transporter #2, LLC, TMD Ventures, LLC, and Illinois Kindness Four, LLC (the "Marijuana LOI"). Words and terms defined in the Marijuana LOI are used herein with the same meaning.
2. Boards and Executives
As an express inducement to each of the Parties to enter into this LOI and the Marijuana LOI, each of the Parties hereby agrees, represents, warrants and covenants as follows:
(A) Effective on the Closing Date, the Bylaws of LIFD shall be changed to increase the size of the Board of Directors of LIFD (the "LIFD Board") from nine (9) members to ten (10) members, and JM shall be added to the LIFD Board effective as of the completion of the Closing;
(B) At the Closing, LIFD shall grant to each member of the LIFD Board who is not an employee of LIFD (a "Non-Employee LIFD Board Member") assignable warrants to purchase 50,000 LIFD Shares at an exercise price of $3.25 per LIFD Share and assignable warrants to purchase 50,000 LIFD Shares at an exercise price of $5.00 per LIFD Share, provided that each such warrant: (a) shall contain a so-called "cashless exercise" provision; (b) shall expire if not exercised on or before the seventh anniversary of the Closing Date; and (c) shall not vest and
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shall not be exercisable unless and until LIFD's audited EPS during 2025 or any subsequent calendar year is at or above $0.20 on a fully diluted basis;
(C) At the Closing, each of the existing employment agreements of the LIFD Executives with LIFD shall terminate, and each of the Senior Executives shall sign a mutually acceptable new five year "rolling" employment agreement with LIFD (individually an "Employment Agreement" and collectively the "Employment Agreements") generally in the same form as the existing employment agreements of the LIFD Executives with LIFD, excepting only as follows:
(1) The Senior Executives shall serve in the following capacities, respectively:
GMJ - | Chairman of the LIFD Board and of the board of directors or managers of each of LIFD's wholly-owned subsidiaries, Chief Executive Officer and Secretary of LIFD, and Secretary of each of LIFD's wholly-owned subsidiaries |
NSW - | Vice Chairman of the LIFD Board and of the board of directors or managers of each of LIFD's wholly-owned subsidiaries, Chief Operating Officer of LIFD, and Founder and Chief Executive Officer of Lifted |
WCJ - | Director of the LIFD Board and of the board of directors or managers of each of LIFD's wholly-owned subsidiaries, President, Chief Financial Officer and Treasurer of LIFD, and President and Treasurer of Lifted |
JM - | Director of the LIFD Board and of the board of directors or managers of each of LIFD's wholly-owned subsidiaries, and Chief Business Officer and Chief Strategy Officer of LIFD |
EC - | General Counsel and Chief Compliance Officer of LIFD, who will be invited to attend all meetings of the LIFD Board and of the board of directors or managers of each of LIFD's wholly-owned subsidiaries; |
(2) The annual base salary of NSW shall be $500,000. The annual base salaries of each of GMJ, WCJ, JM and EC shall initially be $250,000, provided that immediately following the first calendar quarter in which LIFD's consolidated gross revenue exceeds $20,000,000, then the annual base salaries of each of GMJ, WCJ, JM and EC shall increase to $400,000, and provided further, that immediately following the first calendar quarter in which LIFD's consolidated gross revenue exceeds $25,000,000, then the annual base salaries of each of GMJ, WCJ, JM and EC shall increase to $500,000, and provided further, that if the annual base salary of any of the Senior Executives is ever increased above $500,000, then the annual base salary of each of the other Senior Executives shall automatically also be increased so that none of the Senior Executives has an annual base salary which exceeds the annual base salary of any of the other Senior Executives by more than $100,000;
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(3) The amount of the annual company-wide bonus pool for each of years 2025 and 2026 shall be capped, so that in no event shall the amount of the annual company-wide bonus pool for either 2025 or 2026 decrease LIFD's audited earnings per share ("EPS") for such year below an EPS of $0.20 on a fully diluted basis, provided that certain previously disclosed overpayments of the annual company-wide bonus pool in regard to calendar year 2022 which were made to certain Lifted employees who are not Senior Executives shall not reduce the calculation of the annual company-wide bonus pool for calendar year 2025 or for any subsequent year, and provided further that nothing in this Section shall be deemed to cap the annual company-wide bonus pool for 2027 or any subsequent year; and
(4) LIFD shall grant to each of the Senior Executives assignable warrants to purchase 500,000 LIFD Shares at an exercise price of $3.25 per LIFD Share and assignable warrants to purchase 500,000 LIFD Shares at an exercise price of $5.00 per LIFD Share (collectively such Senior Executive's "Warrants"), provided that each of such Senior Executive's Warrants: (a) shall contain a so-called "cashless exercise" provision; (b) shall expire if not exercised on or before the seventh anniversary of the Closing Date; and (c) shall not vest and shall not be exercisable unless and until LIFD's audited EPS during 2025 or any subsequent calendar year is at or above $0.20 on a fully diluted basis;
provided, that:
(a) each of the Senior Executives, at his election, may elect to sign his Employment Agreement with a newly formed Illinois corporation ("Senior Executive Corporation") the capital stock of which is owned by such Senior Executive;
(b) on the Closing Date such Senior Executive Corporation shall merge with and into LIFD (a "Senior Executive Corporation Merger"), with LIFD being the survivor of such Senior Executive Corporation Merger;
(c) the merger consideration that shall be paid by LIFD in such Senior Executive Corporation Merger pursuant to which LIFD shall acquire 100% of the capital stock of such Senior Executive Corporation shall consist of one LIFD Share plus such Senior Executive's Warrants set forth in Section 2(C)(4) above; and
(d) upon the closing of such Senior Executive Corporation Merger, such Employment Agreement shall be legally binding upon LIFD (as employer) and such Senior Executive (as employee), and LIFD shall assume all rights and obligations of such Senior Executive Corporation (as employer) under such Employment Agreement;
(D) Promptly following the Closing, LIFD shall hire a full-time internal CPA who is a resident of Illinois, who shall be acceptable to and report to LIFD's President and CFO, and who shall be responsible for maintaining the financial books and records and for handling all needed
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internal accounting functions for the operations of the Marijuana Subsidiaries and any other subsidiaries of LIFD operating in Illinois; and
(E) At the Closing, the existing Shareholder Agreement among the LIFD Executives shall terminate, and each of the five Senior Executives shall sign a mutually acceptable new Shareholder Agreement in which they shall agree, among other things, following the Closing:
(1) to nominate, support, agree upon, and vote in favor only of slates of nominees for the LIFD Board, and for the boards of directors and managers of all subsidiaries and affiliates of LIFD (collectively "LIFD Subsidiaries and Affiliates"), who are mutually acceptable to all five of the Senior Executives;
(2) to propose, request, support, agree upon, accept, assist, facilitate and vote in favor only of base salaries, bonuses and bonus pools, commission agreements, consulting agreements, employment agreements, stock options and warrants, and any other direct or indirect forms of equity or profit participation or compensation, paid or entered into by LIFD and/or by LIFD Subsidiaries and Affiliates, to or for the benefit of any of the Senior Executives, key employees, contractors or consultants of LIFD and/or LIFD Subsidiaries and Affiliates, that are mutually acceptable to all five of the Senior Executives;
(3) to propose, request, support, agree upon, accept, assist, facilitate and vote in favor only of material corporate agreements and contracts, mergers, purchases, acquisitions and divestitures, plan or arrangement, capital raises, and other lawful corporate transactions or series of transactions of any nature (individually a "Transaction" and collectively "Transactions") involving LIFD and/or LIFD Subsidiaries and Affiliates that are mutually acceptable to all five of the Senior Executives; and
(4) not to directly or indirectly sell or transfer any right, title or interest in or to some or all of their LIFD stock, stock options or warrants in any Transaction that could or might result in a change of control of LIFD, unless such Transaction is mutually acceptable to all five of the Senior Executives and is approved by a majority of the LIFD Board.
3. Miscellaneous
(A) Each of the Parties shall bear its or his own fees and expenses in connection with this LOI. Without limiting the generality of the foregoing, each of the Parties shall be solely responsible for the fees and expenses owed by it or him to any lawyers, accountants, financial advisors, investment bankers, brokers or finders employed by such Party.
(B) LIFD shall be permitted to publicly disclose the terms and conditions of this LOI and in its SEC filings, press releases, conference calls, and investor relations efforts, and the Parties shall use good faith efforts to cooperate therewith.
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(C) The Parties acknowledge that LIFD is a publicly traded company and that unauthorized disclosure of any material non-public information regarding LIFD or the transactions contemplated by this LOI could subject the disclosing party to scrutiny and potential liability under applicable securities laws and regulations.
In Witness Whereof, the Parties have executed and delivered this LOI as of the date first written above.
LFTD Partners Inc., a Nevada corporation
By /s/ Gerard M. Jacobs
Gerard M. Jacobs, CEO
Lifted Liquids, Inc., an Illinois corporation
By /s/ Nicholas S. Warrender
Nicholas S. Warrender, CEO
/s/ Gerard M. Jacobs
Gerard M. Jacobs, a Florida resident
/s/ Nicholas S. Warrender
Nicholas S. Warrender, a Florida resident
/s/ William C. Jacobs
William C. Jacobs, a Florida resident
/s/ L. John Murray
L. John Murray, an Illinois resident
/s/ Erik Carlson
Erik Carlson, an Illinois resident
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LFTD PARTNERS ENTERING MARIJUANA INDUSTRY IN ILLINOIS
Plans to acquire multiple Illinois Cannabis Licenses, a lease for marijuana product manufacturing in Skokie, IL, and industrial buildings and retail businesses in Rockford, IL
JACKSONVILLE, FL / ACCESSWIRE / February 25, 2025 / LFTD Partners Inc. ("LIFD") (OTCQB:LIFD) and its wholly-owned subsidiary Lifted Made ("Lifted"), Kenosha, WI, which manufactures the award-winning Urb brand of hemp-derived cannabinoid products (www.urb.shop), today announced that they have entered into letters of intent (each an "LOI") for four separate transactions: (1) to acquire Illinois Cannabis Licenses (craft grow, infuser and transport), equipment and inventory; (2) to acquire a long-term lease of an 18,558 sq. ft. industrial space in Skokie, IL, which has already been built out for the manufacturing of marijuana products; (3) to acquire two industrial buildings in Rockford, IL, one with 33,792 sq. ft. and the other with 13,536 sq. ft., that may be used for cannabis cultivation, for manufacturing of THC-infused beverages, or for other purposes, or sold; and (4) to acquire a hemp-derived products manufacturer, Mrs. Buckbee's Wake N Bakery (www.mrsbuckbee.com), and at least half of each of District Bar & Grill (www.districtdowntown.com) and Half Baked Bar (www.halfbaked.bar) in Rockford, IL. If all of the transactions close, the aggregate acquisition consideration payable by LIFD will consist of 7,635,925 shares of unregistered common stock of LIFD ("LIFD Shares").
The closing of these transactions will be subject to a number of conditions precedent, including among other things: completion of transfer of the Illinois Cannabis Licenses, equipment and inventory to the companies being acquired (the "Targets"); payment by one of the Targets to an unrelated party of certain license and equipment related liabilities; receipt of all necessary approvals, including approvals by the State of Illinois, LIFD’s lender, and the owners and managers of the Targets; completion of all necessary audits and securities filings; and execution of mutually acceptable definitive closing documentation. The parties intend to use good faith efforts to close the first three of these transactions by March 15, 2025, or as soon thereafter as the conditions precedent can be fulfilled, while the acquisitions of the hemp-derived products manufacturer, Mrs. Buckbee's Wake N Bakery, and at least half of each of District Bar & Grill and Half Baked Bar are expected to occur subsequently after audit completion.
No assurance or guarantee can be given that all of these conditions precedent will be fulfilled or that the transactions will close by any particular date, if at all; these acquisitions are subject to extensive regulatory approvals and compliance risks; the LIFD Shares to be issued as merger consideration will result in significant dilution to existing shareholders; integration of the Targets may be challenging and costly; LIFD's expansion into regulated cannabis markets involves additional risks; a failure to maintain the social equity status of certain Targets could trigger loan repayment obligations, or could result in the loss of one or more of the Illinois Cannabis Licenses; real estate assets are subject to market and financing risks, LIFD's lender may require LIFD to commit to selling one of the industrial buildings being acquired or other assets under certain circumstances; and macroeconomic and industry-specific risks could materially adversely impact LIFD's business operations.
Upon the closing of the Illinois Cannabis Licenses transactions, John Murray will join the Board of Directors of LIFD and will serve as LIFD's Chief Business Officer and Chief Strategy Officer, and Erik Carlson, Esq., will serve as LIFD's General Counsel and Chief Compliance Officer, under multi-year employment agreements. Murray and Carlson will join LIFD's senior executive team and will join in a shareholder agreement with LIFD's CEO, COO, and President/CFO.
Gerard M. Jacobs, Chairman and CEO of LIFD, stated, "These acquisitions will significantly diversify our business into some exciting marijuana, real estate and retail businesses. Our executive team is very familiar with Illinois as we are from Chicago and Kenosha, and in John Murray and Erik Carlson we have met two highly intelligent entrepreneurs whom we are excited have as partners."
Nicholas S. Warrender, Vice Chairman and COO of LIFD, and the founder and CEO of Lifted, stated, "Our experience in New Mexico has convinced us that Lifted's Urb brand can be successfully extended into marijuana products. We have finally found the right opportunity to do so in Illinois, which is a large, "limited license" state, and there should be tremendous synergies between Lifted in Kenosha and our Illinois marijuana operations in Skokie."
William C. "Jake" Jacobs, President and CFO of LIFD, stated, "These all-stock acquisitions will add valuable Illinois Cannabis Licenses, two industrial buildings, and retail businesses to the asset side of our balance sheet. Based upon an appraisal, we expect but cannot guarantee that the 'as is' value of just one of the two industrial buildings will likely exceed the aggregate liabilities of the entities that we will be acquiring of roughly $4 million. We are very excited to be partnering with John and Erik as we diversify outside of hemp and into the regulated marijuana market of Illinois. There is a lot of cross-over, and we plan to explore other marijuana and non-cannabis opportunities in other states, as well."
John Murray, the President of Sustainable Innovations Inc., stated, "I am thrilled to join LIFD's Board of Directors and take on the roles of Chief Business Officer and Chief Strategy Officer. This is an incredible opportunity to leverage my experience in sustainable business practices and strategic growth to help LIFD expand into the burgeoning cannabis market in Illinois. The synergy between our teams and the potential for innovation in this space is immense. I look forward to working closely with Gerard, Nicholas, Jake, and Erik to drive LIFD's vision forward and capitalize on the exciting opportunities that lie ahead in the cannabis and hemp sectors.”
Erik Carlson, the Manager of Sustainable Growers, LLC stated, "We are incredibly impressed with the expertise that Lifted brings in manufacturing and marketing high quality hemp and cannabis products. The Illinois cannabis market is ready and waiting for a company that can supply underserved markets in innovative and unique ways. This merger will allow us to meet those market demands with highly respected and well-known brands.”
Cautionary Notes Regarding Forward-Looking Statements
Certain statements in this document are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such information includes the acquisitions, operations, financing, growth, performance, products, plans and expectations of LFTD Partners Inc. and Lifted Liquids, Inc. d/b/a Lifted Made and d/b/a Urb Finest Flowers. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors which may cause or contribute to these companies' actual acquisitions, operations, financing, growth, performance, products, plans or results of these companies differing materially from those expressed or implied by the forward-looking statements. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Actual results, performance or achievements could differ materially from those anticipated in such forward-looking statements as a result of certain other factors, including the risk factors set forth in LFTD Partners Inc.'s filings with the Securities and Exchange Commission. None of the statements contained herein have been approved by the Food and Drug Administration, and none of the products manufactured or sold by Lifted Made are intended to diagnose, treat, cure or prevent any disease. This press release does not constitute an offer to sell common stock or any other securities of LFTD Partners Inc.
Contact Information
Gerard M. Jacobs
Chairman and CEO of LFTD Partners Inc.
(847) 915-2446
Nicholas S. Warrender
Vice Chairman and COO of LFTD Partners Inc.
[email protected]
(224) 577-8148
William C. "Jake" Jacobs
President and CFO of LFTD Partners Inc.
(847) 400-7660
John Murray
President of Sustainable Innovations Inc.
(815) 988-2159
Erik Carlson, Esq.
Manager of Sustainable Growers, LLC
(815) 979-4196
SOURCE: LFTD Partners Inc.