MJ Opportunity Corp. Announces Letter of Intent to Complete a Qualifying Transaction with Lift Co. Ltd.

Toronto, Ontario–(Newsfile Corp. – April 11, 2018) – MJ Opportunity Corp. (TSXV: MJC.P) (the “Corporation” or “MJO”) is pleased to announce that it has entered into a non-binding letter of intent (the “LOI”) dated April 6, 2018 with Lift Co. Ltd. (“Lift”, and together with MJO, the “Parties”) wherein MJO will acquire all of the issued and outstanding securities of Lift (the “Acquisition”).

The Corporation is a Capital Pool Company as defined in the policies of the TSX Venture Exchange (the “Exchange”), and intends for the Acquisition to constitute its Qualifying Transaction (as such term is defined in the policies of the Exchange).

About Lift Co. Ltd.

Lift is a privately held company that was incorporated under the Business Corporations Act (British Columbia) and subsequently continued and currently existing pursuant to the Business Corporation Act (Ontario). Lift brings media and data together to empower cannabis businesses and consumers with unique knowledge and insights to make better-informed decisions. For consumers, Lift operates Canada’s largest cannabis product-comparison platform, an unrivalled loyalty program and North America’s largest consumer cannabis tradeshows. For businesses, Lift provides unique market, product and consumer insights while connecting businesses and consumers through Canada’s most-adopted consumer channels.

Based on the draft unaudited interim financial statements of Lift for the nine month period ended December 31, 2017, Lift had revenues of $1,233,088 and incurred a net loss of $2,047,095 as the company increased headcount to support future growth. In addition, as at December 31, 2017, Lift had total assets of $1,642,467, total liabilities of $1,253,577 and shareholders’ equity of $388,890.

The Qualifying Transaction

It is currently anticipated that the Acquisition will be completed by way of a three corner amalgamation or other similar form of acquisition transaction as agreed to by the Parties, which will result in each Lift share being exchanged for one post-consolidation Resulting Issuer (as such term is defined in the policies of the Exchange) share (the “Resulting Issuer Shares”). Each outstanding option, warrant and convertible security of Lift will remain outstanding and be adjusted in accordance with their terms or be exchanged for options, warrants or convertible securities of the Resulting Issuer, as applicable, on substantially the same economic terms and conditions as the existing options, warrants and convertible securities of Lift.

As at the date hereof, MJO has 4,521,000 common shares issued and outstanding, as well as 452,100 options and 352,100 broker options outstanding, each exercisable to acquire one MJO common share at an exercise price of $0.20 (on a pre-consolidation basis). As at the date hereof, Lift has 39,555,692 common shares and 14,336,616 preferred shares issued and outstanding, as well as 4,351,502 options, each exercisable to acquire one Lift common share at exercise prices ranging from $0.00007143 to $0.60, and 9,840,684 warrants, each exercisable to acquire one Lift common share at exercise prices ranging from $0.20 to $0.30. Further details regarding the post-consolidation Resulting Issuer Shares and other securities to be issued in connection with the Acquisition and the anticipated pro forma capital structure of the Resulting Issuer following completion of the Offering and the Acquisition will be provided in a subsequent press release once that information is determinable.

The Resulting Issuer is expected to continue Lift’s current operations.

The LOI contemplates the negotiation and execution of a binding definitive agreement (the “Definitive Agreement”), which will be subject to a number of conditions precedent, including:

Lift having completed the Offering (as defined below);

MJO having completed a consolidation of its outstanding common shares prior to completion of the Acquisition based on a ratio of the Issue Price of the Offering divided by a deemed price of the MJO common shares of $0.25, such consolidation ratio to be adjusted as necessary based on the final terms of the Offering and as agreed to between the Parties;

MJO having a cash balance of not less than $500,000 on the closing date of the Acquisition;

MJO having changed its name to “Lift Co. Ltd.”, or such other name as agreed between the Parties;

Completion of mutual satisfactory due diligence investigations of Lift and MJO, including receipt and satisfaction by MJO with the interim financial statements of Lift as at and for the nine month period ended December 31, 2017 and the audited annual financial statements of Lift as at and for the year ended March 31, 2017;

Approval of the Acquisition of Lift by the boards of directors of each of Lift and MJO; and

Receipt of all required consents, waivers and approvals from the Exchange, any securities regulatory authority and any other necessary third parties.

It is expected that the Acquisition will be completed on a date to be agreed upon by the Parties, but which shall be no later than 10 business days following receipt of all required consents, waivers and approvals from the Exchange and any other securities regulatory authority having jurisdiction over the Parties.

Private Placement

In conjunction with, or prior to the closing of the Acquisition, pursuant to the terms of an engagement letter dated March 16, 2018 between Lift and GMP Securities L.P. (the “Lead Agent”), Lift will undertake a brokered private placement of subscription receipts (the “Subscription Receipts”) to raise aggregate gross proceeds of up to $15,000,000 (the “Offering”). There is no minimum amount required to be raised pursuant to the Offering. The issue price per Subscription Receipt shall be determined in the context of the market at the time of the Offering, based on a pre-Offering valuation attributable to the outstanding common shares and preferred shares of Lift of not less than $60,000,000 (the “Issue Price”).

The Offering will be led by the Lead Agent, on its own behalf and on behalf of a syndicate of agents to be formed by the Lead Agent (collectively, the “Agents”). The Company has granted the Agents an option, exercisable in whole or in part at any time up until 48 hours prior to the closing of the Offering, to purchase at the Issue Price up to such number of additional subscription receipts of Lift as is equal to 15% of the initial Subscription Receipts sold under the Offering (together with the Subscription Receipts, the “Offered Receipts”).

Upon closing of the Offering, the aggregate subscription proceeds of the Offering less: (i) fifty percent (50%) of the Cash Commission (as defined below); and (ii) the costs and expenses of or incurred by the Agents which have not been paid to the Agents as of the closing date of the Offering (the “Escrowed Funds”), shall be placed in escrow with a Canadian trust company (the “Subscription Receipt Agent”) mutually acceptable to the Lead Agent and Lift.

Upon satisfaction of the Escrow Release Conditions (as defined below) and prior to the Release Deadline (as defined below), the Subscription Receipt Agent will release the Escrowed Funds to Lift, less the escrowed portion of the Cash Commission, which will be released to the Lead Agent (on behalf of the Agents).

Each Offered Receipt issued in connection with the Offering shall be deemed to be automatically exercised, without further action on the part of the holder thereof, for one common share of Lift upon the satisfaction of certain conditions (the “Escrow Release Conditions”), including but not limited to:

Written confirmation from each of MJO and Lift that all conditions to the completion of the Acquisition have been satisfied or waived, other than the release of the Escrowed Funds and the closing of the Acquisition;

The receipt of all shareholder and regulatory approvals required for the Acquisition;

The Resulting Issuer Shares being conditionally approved for listing on the Exchange and the completion, satisfaction or waiver of all conditions precedent to such listing, other than the release of the Escrowed Funds; and

Lift and the Lead Agent, on behalf of the Agents, delivering a release notice to the Subscription Receipt Agent confirming that the Escrow Release Conditions have been satisfied (the “Release Notice”).

Following conversion of the Offered Receipts into common shares of Lift, such common shares shall be immediately exchanged for Resulting Issuer Shares in connection with completion of the Acquisition.

In the event that the Subscription Receipt Agent does not receive the Release Notice prior to 5:00 p.m. (Toronto time) on the date that is 120 days after the closing date of the Offering (the “Release Deadline”), or if prior to such time, Lift advises the Agents or announces to the public that it does not intend to or will be unable to satisfy the Escrow Release Conditions or that the Acquisition has been terminated or abandoned, the Subscription Receipt Agent will return to holders of the Offered Receipts, within two business days of the Release Deadline or such earlier date, an amount equal to the aggregate Issue Price of the Offered Receipts held by them and their pro rata portion of any interest earned thereon (including any interest that would have been earned on 50% of the Cash Commission and the costs and expenses of the Agents paid on the Closing Date were such amounts included in the Escrowed Funds), net of any applicable withholding tax. Lift will be responsible and liable to the holders of Offered Receipts for any shortfall between the aggregate gross proceeds of the Offering (including any applicable interest payable) and the Escrowed Funds.

In connection with the Offering, Lift will pay to the Agents a cash commission equal to 6.0% (the “Cash Commission”) of the gross proceeds of the Offering (provided that the Cash Commission shall be reduced to 3.0% of the gross proceeds from sales of Offered Receipts to subscribers on the President’s List). Fifty percent (50%) of the Cash Commission shall be paid to the Agents on the closing date of the Offering. The remaining fifty percent (50%) of the Cash Commission shall be deposited into escrow with the Subscription Receipt Agent on the closing date of the Offering and released upon satisfaction of the Escrow Release Conditions and the release of the Escrowed Funds pursuant to the Release Notice and the terms of the subscription receipt agreement to be entered into in connection with the Offering, together with any interest earned thereon.

As additional consideration, the Agents will be granted on the closing of the Offering compensation options (“Compensation Options”) equal to 4.0% of the number of Offered Receipts issued under the Offering (provided that the number of Compensation Options shall be reduced to 2.0% of the number of Offered Receipts sold to subscribers on the President’s List). Each Compensation Option will be exercisable for one common share of Lift or one Resulting Issuer Share (subject to any necessary adjustments), as applicable, at the Issue Price for a period of 24 months following the satisfaction of the Escrow Release Conditions.

The closing of the Offering is expected to occur in May, 2018, or as otherwise mutually agreed by Lift and the Lead Agent.

The net proceeds from the Offering are expected to be used for working capital and general corporate purposes.

Arm’s Length Transaction and Shareholder Approval

The proposed Qualifying Transaction will be an arm’s length transaction under the policies of the Exchange, as a result of which MJO will not be required to obtain shareholder approval for the Acquisition.

Control Persons

Tyler Sookochoff, founder and a director of Lift and a resident of the Province of Ontario, currently owns 20,793,333 common shares of Lift, representing approximately 38.6% of the combined issued and outstanding common shares and preferred shares of Lift (calculated on an undiluted basis) as at the date hereof.

Sponsorship

MJO intends to make an application to the Exchange for an exemption from the sponsorship requirements, but there is no assurance that such an exemption will be granted.

Filing Statement

In connection with the Acquisition and pursuant to the requirements of the Exchange, MJO will file a filing statement on its issuer profile on SEDAR (www.sedar.com), which will contain details regarding the Acquisition, the Offering, MJO, Lift and the Resulting Issuer.

Directors and Management of the Resulting Issuer

The board of directors of the Resulting Issuer will be nominated by Lift prior to the completion of the Qualifying Transaction, at least two of whom will be independent board members. The board of directors of the Resulting Issuer is anticipated to include Tyler Sookochoff (Chairman), Matei Olaru, Daniel Finkelstein, and two independent directors who will be announced prior to completion of the Qualifying Transaction.

Management of the Resulting Issuer will include Matei Olaru as Chief Executive Officer, Craig Hudson as Chief Financial Officer, Kerri-Lynn McAllister as Chief Marketing Officer, and Josh Kerbel as Chief Technology Officer.

Matei Olaru, Chief Executive Officer and Director

Matei Olaru is the Chief Executive Officer (CEO) of Lift. A corporate lawyer and consultant by trade, Matei has been the CEO of Lift since 2016. Under his leadership, Lift has raised $4-million in private funding, tripled to more than forty employees and launched several key products, all in one year’s time. Previously, Matei helped advise international governments on business and investment policy as a consultant with the World Bank in Washington, D.C., and practiced law on Bay Street with a focus on cannabis and corporate work. Matei is a sought-after thought leader, speaking at numerous domestic and international cannabis conferences and appearing regularly on BNN, CBC, in Forbes, the Financial Post, the Toronto Star, and Maclean’s. Matei holds a law degree from the University of Western Ontario, and a commerce degree from the Smith School of Business at Queen’s University.

Craig Hudson, Chief Financial Officer

Craig Hudson is the Chief Financial Officer (CFO) of Lift. A Chartered Accountant (CA) and Chartered Financial Analyst (CFA), Craig joined Lift in August 2017, bringing over 17 years of finance and operations experience, most recently as Vice President of Digital Operations at Indigo (TSX: IDG), Canada’s largest book, gift, and specialty retailer. At Indigo, Craig led multiple initiatives to increase efficiencies, support growth, and drive profitability, including as Head of Indigo’s Business Intelligence teams. Previously, Craig worked for 10 years with global accounting firm KPMG, leading audits in Vancouver and London (UK), and managing over 40 financial due diligence engagements for a range of clients and industries. Craig has a Bachelor of Commerce degree from the University of British Columbia. He is also a strategic advisor for an eCommerce start-up, and has been a Board Chair and Treasurer for not-for-profits in the Toronto Arts scene.

Kerri-Lynn McAllister, Chief Marketing Officer

Kerri-Lynn McAllister is the Chief Marketing Officer (CMO) of Lift. Previously, Kerri-Lynn was a member of the founding team at Ratehub.ca, Canada’s leading financial product comparison platform, serving more than five million users annually. During her tenure, Ratehub.ca secured $12-million in series A financing. Kerri-Lynn is also an early-stage investor in Zoocasa, and remains an advisor to this and other and other notable real estate tech companies. A graduate of the Smith School of Business at Queen’s University, Kerri-Lynn regularly shares her insights into digital marketing and technology at conferences and meetups including the Richard Ivey School of Business, OneEleven, and Elevate Toronto.

Josh Kerbel, Chief Technology Officer

Josh Kerbel is the Chief Technology Officer (CTO) of Lift. Josh brings over 15 years of entrepreneurial experience in technology and product management. Josh has worked across a range of sectors and technology domains with previous roles at Extreme Innovations, r/ally, Waygoz, and other companies with focus on machine learning, mobile applications, and Internet-of-things. Josh has managed multiple multinational teams, raised capital for early-stage start-ups, and implemented numerous ROI-driven development processes. Josh has an MBA from the Schulich School of Business at York University, and a Bachelor of Arts from the University of Western Ontario. Josh was recently a Mentor at The Entrepreneurship Hatchery at the University of Toronto’s Faculty of Applied Science and Technology.

Mariana Fonar, Corporate Secretary

Mariana Fonar is the Legal Counsel and Corporate Secretary of Lift. Prior to joining Lift, Mariana worked as Senior Legal Counsel at SkyPower Global, one of the world’s largest solar-energy companies, where she was involved in international M&A deals and provided legal expertise to manage corporate, commercial, employment, and governance matters. Mariana was also an Associate at Dale & Lessmann LLP in the Corporate/Commercial and Employment Law Groups, and has previously worked at the Bank of Montreal and in Product Planning at Mercedes-Benz Canada. Mariana is currently the President of Young Women in Law, a not-for-profit corporation aimed at encouraging and promoting the welfare, interests and retention of young female lawyers. Mariana was called to the Ontario Bar after obtaining her Juris Doctor from the University of Western Ontario. She has an MBA from the Richard Ivey School of Business and an Honors Bachelor of Administrative Studies (Marketing) at York University.

Tyler Sookochoff, Director (Chairman)

Tyler Sookochoff is an advisor and Chair of the Board of Directors of Lift. Tyler has worked in cannabis start-up environments for over a decade. In 2008, Tyler joined Keirton, the world’s leading manufacturer of commercial-cannabis harvesting equipment. Tyler was employee number one with Keirton, and helped grow the company to over $10-million in revenue as its Director of Marketing. In January 2014, Tyler founded Lift Co. Ltd. and served as its CEO until November, 2016.

Daniel Finkelstein, Director

Daniel Finkelstein is on the Board of Directors of Lift. Daniel is the Principal and Chief Product Officer at Gotham Green Partners (“GGP”), a New York-based private equity firm focused on deploying capital into cannabis and cannabis-related enterprises. Prior to launching GGP, Daniel was the Founder and CEO of Timber Ridge Capital, Founder and CEO of Henry Scott Ventures, and a Consultant for Finkelstein Timberger East Real Estate. An early investor in the cannabis space, Daniel has a Bachelor of Science in Management from the A.B. Freeman School of Business as Tulane University.

Original press release

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