As filed with the Securities and Exchange Commission on March 29, 2023
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Leafly Holdings, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware |
| 84-2266022 |
(State or other jurisdiction of incorporation or organization |
| (I.R.S. Employer Identification Number) |
113 Cherry Street PMB 88154
Seattle, WA 98104
Telephone: (206) 455-9504
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Yoko Miyashita
Chief Executive Officer
113 Cherry Street PMB 88154
Seattle, WA 98104
Telephone: (206) 455-9504
(Name, address, including zip code, and telephone number, including area code, of agent for service)
With copies to:
Allison C. Handy
Jonathan S. Schulman
Perkins Coie LLP
1201 Third Avenue
Suite 4900
Seattle, WA 98101
Tel: (206) 359-8000
Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
STATEMENT PURSUANT TO RULE 429
Pursuant to Rule 429 under the Securities Act of 1933, as amended (the “Securities Act”), the prospectus that is a part of this registration statement is a combined prospectus that relates to and will be used in connection with: (I) the offer and sale by Leafly Holdings, Inc. (formerly known as Merida Merger Corp. I), a Delaware corporation (the “Company”), of up to $75,000,000 in the aggregate of the securities identified herein from time to time in one or more offerings; (II) the issuance by the Company of an aggregate of up to 10,450,987 shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), that are issuable upon the exercise of Public Warrants (as defined below) originally issued in the initial public offering of units of Merida (as defined below) and Private Warrants (as defined below) originally issued in a private placement simultaneously with Merida’s initial public offering; and (III) the offer and resale from time to time by the selling securityholders named herein (the “Selling Securityholders”), or their permitted transferees, of up to (A) 17,338,901 shares of Common Stock, which includes (i) 11,943,212 shares of Common Stock (a) issued in connection with the Business Combination (as defined below) by certain Selling Securityholders named herein, which shares were originally issued to holders of Legacy Leafly’s (as defined below) common stock and preferred stock, and were automatically converted into the right to receive a number of shares of Merida’s common stock at the Exchange Ratio (as defined below), or (b) acquired after the Business Combination by certain Selling Securityholders named herein to the extent such shares of Common Stock are “restricted securities” (as defined in Rule 144 under the Securities Act) or are otherwise held by an “affiliate” (as defined in Rule 144 under the Securities Act) of the Company; (ii) 1,625,194 Sponsor Shares (as defined below) originally issued at a price of approximately $0.009 per share; (iii) 3,762,287 shares of Common Stock that may be issued upon exercise of Private Warrants (as defined below) referred to in clause (C); and (iv) 8,208 shares of Common Stock underlying certain outstanding options to purchase shares of Common Stock; (B) 2,495,997 shares of Common Stock reserved for issuance upon the conversion of $30,000,000 aggregate principal amount of Convertible Notes (as defined below) plus the amount of accrued and unpaid interest, if any, that is payable in shares of Common Stock in connection with the conversion thereof with an initial conversion price of $12.50 per share; and (C) 3,762,287 Private Warrants purchased at a price of $1.00 per warrant, from time to time, through any means described in the section entitled “Plan of Distribution” herein.
All of the securities listed in (II) and (III) above were previously registered on either the Company’s Registration Statement on Form S-1 (File No. 333-264232), which was originally declared effective on May 16, 2022 (as amended, the “May 2022 Prior Registration Statement”), or the Company’s Registration Statement on Form S-1 (File No. 333-266361), which was originally declared effective on August 2, 2022 (as amended, the “August 2022 Prior Registration Statement” and, together with the May 2022 Prior Registration Statement, the “Prior Registration Statements”). To the Company’s knowledge, all of the securities listed in (III) above have not been sold or otherwise disposed of by the Selling Securityholders. This Registration Statement is also being filed to convert the Prior Registration Statements into a Registration Statement on Form S-3 (the “S-3 Registration Statement”). Pursuant to Rule 429 under the Securities Act, this S-3 Registration Statement also constitutes a post-effective amendment to each of the Prior Registration Statements, and such post-effective amendments shall hereafter become effective concurrently with the effectiveness of this S-3 Registration Statement in accordance with Section 8(c) of the Securities Act.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. Neither we nor the selling securityholders may sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to completion dated March 29, 2023
Prospectus
LEAFLY HOLDINGS, INC.
$75,000,000
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
Offered by Leafly Holdings, Inc.
Up to 10,450,987 Shares of Common Stock Underlying IPO Warrants
Offered by Leafly Holdings, Inc.
and
17,338,901 Shares of Common Stock
2,495,997 Shares of Common Stock Underlying Convertible Notes
3,762,287 Private Warrants
Offered by the Selling Securityholders
Leafly Holdings, Inc. may from time to time offer and sell Common Stock (as defined below), preferred stock, debt securities, warrants or units in one or more offerings of up to $75,000,000 in aggregate offering price. In addition, this prospectus relates to the issuance by us of up to 10,450,987 shares of common stock, par value $0.0001 per share (the “Common Stock”), of Leafly Holdings, Inc. (formerly known as Merida Merger Corp. I), a Delaware corporation (the “Company”), that are issuable upon the exercise of Public Warrants (as defined below) originally issued in the initial public offering of units of Merida (as defined below) and Private Warrants (as defined below) originally issued in a private placement simultaneously with Merida’s initial public offering.
In addition, this prospectus also relates to the offer and resale from time to time by the selling securityholders named in this prospectus (the “Selling Securityholders”), or their permitted transferees, of up to (A) 17,338,901 shares of Common Stock (the “Total Resale Shares”), which includes (i) 11,943,212 shares of Common Stock (a) issued in connection with the Business Combination (as defined below) by certain Selling Securityholders named in this prospectus, which shares were originally issued to holders of common stock and preferred stock of Leafly Holdings, Inc., a Washington corporation (“Legacy Leafly”), and were automatically converted into the right to receive a number of shares of Merida’s common stock at the Exchange Ratio (as defined below), or (b) acquired after the Business Combination by certain Selling Securityholders named in this prospectus to the extent such shares of Common Stock are “restricted securities” (as defined in Rule 144 under the Securities Act (as defined below)) or are otherwise held by an “affiliate” (as defined in Rule 144 under the Securities Act) of the Company; (ii) 1,625,194 Sponsor Shares (as defined below) originally issued at a price of approximately $0.009 per share; (iii) 3,762,287 shares of Common Stock that may be issued upon exercise of Private Warrants (as defined below) referred to in clause (C); and (iv) 8,208 shares of Common Stock underlying certain outstanding options to purchase shares of Common Stock; (B) 2,495,997 shares of Common Stock reserved for issuance upon the conversion of $30,000,000 aggregate principal amount of Convertible Notes (as defined below) plus the amount of accrued and unpaid interest, if any, that is payable in shares of Common Stock in connection with the conversion thereof with an initial conversion price of $12.50 per share; and (C) 3,762,287 Private Warrants purchased at a price of $1.00 per warrant, from time to time, through any means described in the section entitled “Plan of Distribution.”
On February 4, 2022 (the “Closing Date”), we consummated the Business Combination in connection with that certain Agreement and Plan of Merger, dated as of August 9, 2021 and amended on September 8, 2021 (as may be amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among Merida, Merger Sub I (as defined below), Merger Sub II (as defined below)
and Legacy Leafly. Pursuant to the Merger Agreement and in connection therewith, at the Closing (as defined below), among other things, (i) Merger Sub I merged with and into Legacy Leafly (the “Initial Merger”), with Legacy Leafly being the surviving entity (the “Initial Surviving Company”) of the Initial Merger and Legacy Leafly’s shareholders receiving Common Stock, in exchange for their equity securities of Legacy Leafly, and (ii) immediately following the Initial Merger and as part of the same overall transaction as the Initial Merger, the Initial Surviving Company merged with and into Merger Sub II (the “Final Merger” and, together with the Initial Merger, the “Mergers”), with Merger Sub II surviving the Final Merger as a limited liability company named Leafly, LLC (the “Final Surviving Company”). In connection with the Closing, the registrant changed its name from “Merida Merger Corp. I” to “Leafly Holdings, Inc.” As a result of the Business Combination and such name change, Legacy Leafly became a wholly owned subsidiary of the Company, with the securityholders of Legacy Leafly becoming securityholders of the Company.
We are registering the resale of shares of Common Stock and IPO Warrants (as defined below) as required by (i) an amended and restated registration rights agreement, dated as of February 4, 2022 (the “Registration Rights Agreement”), entered into by and among the Company, Merida Holdings, LLC (the “Sponsor”) and certain other parties thereto and (ii) the note purchase agreement, dated as of January 11, 2022, entered into by and between the Company and certain investors relating to the purchase of the Company’s $30 million 8.00% Senior Convertible Notes due 2025 (the “Convertible Notes”) in private placements consummated in connection with the Business Combination. Please see “Selling Securityholders—Material Relationships with Selling Securityholders.”
We will receive proceeds from the issuance and sale of our Common Stock, preferred stock, debt securities, warrants or units.
Each IPO Warrant entitles the holder thereof to purchase one share of Common Stock at a price of $11.50 per share. We will not receive any proceeds from the sale of shares of our Common Stock or IPO Warrants by the Selling Securityholders pursuant to this prospectus, except with respect to amounts received by us upon exercise of the IPO Warrants to the extent such IPO Warrants are exercised for cash, which amount of aggregate proceeds, assuming the exercise of all IPO Warrants, could be up to approximately $120.2 million. We believe the likelihood that IPO Warrant holders will exercise their IPO Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the market price of our Common Stock. If the market price for our Common Stock is less than $11.50 per share, we believe the IPO Warrant holders will be less likely to exercise their IPO Warrants. However, we will pay the expenses, other than underwriting discounts and commissions and expenses incurred by the Selling Securityholders for brokerage, accounting, tax or legal services or any other expenses incurred by the Selling Securityholders in disposing of the securities, associated with the sale of securities pursuant to this prospectus.
Our registration of the securities covered by this prospectus does not mean that either we or the Selling Securityholders will issue, offer, sell or resell, as applicable, any of the securities. The Selling Securityholders may offer and sell the securities covered by this prospectus in a number of different ways and at varying prices. We provide more information in the section entitled “Plan of Distribution.” In addition, certain of the securities being registered hereby are subject to vesting and/or transfer restrictions that may prevent the Selling Securityholders from offering or selling of such securities upon the effectiveness of the registration statement of which this prospectus is a part. See “Description of Capital Stock” for more information.
You should read this prospectus and any prospectus supplement or amendment carefully before you invest in our securities. Our Common Stock and Public Warrants are traded on the Nasdaq Global Market of the Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “LFLY” and “LFLYW,” respectively. On March 28, 2023, the last reported sale price of our Common Stock on Nasdaq was $0.3987 per share and the last reported sale price of our Public Warrants on Nasdaq was $0.035.
The Total Resale Shares being offered for resale in this prospectus represent approximately 43.0% of our total outstanding Common Stock as of March 3, 2023. The Total Resale Shares represent a substantial percentage of our total outstanding Common Stock as of the date of this prospectus. Separately, if all of the Private Warrants registered hereunder are exercised, the Selling Securityholders would own an additional 3,762,287 shares of Common Stock, representing an additional approximately 8.5% of the total outstanding Common Stock following such exercises. The sale of all securities being offered in this prospectus could result in a significant decline in the public trading price of our Common Stock. The public securityholders may not experience a similar rate of return on the securities they purchase due to differences in the purchase prices and the current trading price.
We are an “emerging growth company” and a “smaller reporting company” under applicable federal securities laws and will be subject to reduced public company reporting requirements.
As of March 3, 2023, the aggregate market value of our outstanding Common Stock held by non-affiliates, or public float, was approximately $19.9 million, based on the closing price of our Common Stock as reported on Nasdaq on March 3, 2023, as calculated in accordance with General Instruction I.B.6 of Form S-3. We have not sold any securities pursuant to General Instruction I.B.6. of Form S-3 during the 12 calendar months prior to and including the date of this prospectus. Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell any securities in a public primary offering with a value exceeding one-third of our public float in any 12-month period unless our public float subsequently rises to $75.0 million or more.
Investing in our securities involves a high degree of risk. See the section entitled “Risk Factors” beginning on page 6.
Neither the Securities and Exchange Commission nor any other state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
Prospectus dated , 2023
TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-3 that we filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration process. Under this shelf registration process, we and the Selling Securityholders may, from time to time, issue, offer and sell, as applicable, any combination of the securities described in this prospectus in one or more offerings. This prospectus provides you with a general description of the securities that we and the Selling Securityholders may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. More specific terms of any securities that the Selling Securityholders offer and sell may be provided in a prospectus supplement that describes, among other things, specific information about the terms of that offering.
A prospectus supplement may also add, update or change information included in this prospectus. Any statement contained in this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in such prospectus supplement modifies or supersedes such statement. Any statement so modified will be deemed to constitute a part of this prospectus only as so modified, and any statement so superseded will be deemed not to constitute a part of this prospectus. You should rely only on the information contained in this prospectus, any applicable prospectus supplement or any related free writing prospectus. See “Where You Can Find More Information” and “Information Incorporated by Reference.”
Neither we nor the Selling Securityholders have authorized anyone to provide any information or to make any representations other than those contained in this prospectus, any accompanying prospectus supplement or any free writing prospectus we have prepared. We and the Selling Securityholders take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the securities offered hereby and only under circumstances and in jurisdictions where it is lawful to do so. No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus, any applicable prospectus supplement or any related free writing prospectus. This prospectus is not an offer to sell securities, and it is not soliciting an offer to buy securities, in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus or any prospectus supplement is accurate only as of the date on the front of those documents only, regardless of the time of delivery of this prospectus or any applicable prospectus supplement, or any sale of a security. Our business, financial condition, results of operations and prospects may have changed since those dates.
This prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below under “Where You Can Find More Information.”
The Nasdaq ticker symbols for the Company’s Common Stock and IPO Warrants are “LFLY” and “LFLYW,” respectively.
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FREQUENTLY USED TERMS
Unless otherwise stated or the context otherwise requires, as used in this prospectus:
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FORWARD-LOOKING STATEMENTS
This prospectus, any prospectus supplement and the documents incorporated by reference herein each contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Words and variations of words such as “may,” “expect,” “anticipate,” “contemplate,” “believe,” “estimate,” “intend,” “project,” “budget,” “forecast,” “anticipate,” “plan,” “may,” “will,” “could,” “should,” “predict,” “potential,” and “continue” and similar expressions are intended to identify our forward-looking statements. You should read statements that contain these words carefully because they:
You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made.
All forward-looking statements included or incorporated by reference herein attributable to the Company or any person acting on the Company’s behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable laws and regulations, the Company undertakes no obligations to update these forward-looking statements to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events.
There may be events in the future that the Company is not able to predict accurately or over which it has no control. The sections in the documents incorporated by reference herein entitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the other cautionary language discussed in this prospectus, any prospectus supplement and the documents incorporated herein and therein provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described by the Company in such forward-looking statements.
vii
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in, or incorporated by reference into, this prospectus. Because it is only a summary, it does not contain all of the information that you should consider before investing in our securities, and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this prospectus, any applicable prospectus supplement, any free writing prospectus that we have authorized for use in connection with this offering and the documents incorporated by reference in this prospectus and any applicable prospectus supplement. You should read all such documents carefully, and you should pay special attention to the information contained under the caption entitled "Risk Factors" in this prospectus, any applicable prospectus supplement, in our Annual Reports on Form 10-K, in any subsequent Quarterly Reports on Form 10-Q and in our other reports filed from time to time with the SEC, which are incorporated by reference into this prospectus, before making an investment decision.
Our Business
Leafly’s mission is to help people discover cannabis. We endeavor to serve as the world’s most trusted destination to discover and shop for legal cannabis. The company was founded in 2010 with the objective to demystify cannabis, a product that lived in the shadows through decades of prohibition. Tens of millions of unique visitors access Leafly each year to learn more about legal cannabis, discover what products are right for them, and to shop with regulation-compliant local businesses. Through helping people navigate their cannabis journey, Leafly helps millions of consumers discover the benefits of cannabis.
Leafly began as a platform to provide consumers with trusted cannabis information. Since then, Leafly has evolved into a content-first, community-driven, multi-sided marketplace that connects consumers to cannabis brands and licensed retailers. We offer cannabis retailers and brands subscription-based marketplace listings that provide our broad-based cannabis audience with information, reviews, menus, and ordering and delivery options through legal retailers. Our audience — which averaged 8 million MAUs in 2022 — chooses Leafly for our unique, original content and data.
Implications of Being an Emerging Growth Company and Smaller Reporting Company
As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the JOBS Act. An emerging growth company may take advantage of reduced reporting requirements that are not otherwise applicable to public companies. These provisions include, but are not limited to:
We may use these provisions until the last day of our fiscal year following the fifth anniversary of our initial public offering. However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenues exceed $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.
We have elected to take advantage of certain of the reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests.
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The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards, until those standards apply to private companies. We have elected to take advantage of the benefits of this extended transition period and, therefore, we are not subject to the same new or revised accounting standards as other public companies that are not emerging growth companies; however, we may adopt certain new or revised accounting standards early. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards during the period in which we remain an emerging growth company. It is possible that some investors will find our Common Stock less attractive as a result, which may result in a less active trading market for our Common Stock and higher volatility in our stock price.
We are also a “smaller reporting company,” and we will continue to be a “smaller reporting company” if either (i) the market value of our stock held by non-affiliates is less than $250.0 million as of the last business day of our second fiscal quarter or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million as of the last business day of our second fiscal quarter. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements and only two years of management’s discussion and analysis of financial condition and results of operations disclosures and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
Corporate Information
We were incorporated as a Delaware corporation on June 20, 2019 as a special purpose acquisition company under the name Merida Merger Corp. I. On November 7, 2019, Merida completed its initial public offering. On February 4, 2022, Merida consummated the Business Combination. In connection with the mergers, Merida changed its name to Leafly Holdings, Inc. Our Common Stock and IPO Warrants are listed on Nasdaq under the symbols “LFLY” and “LFLYW”, respectively. Our address is 113 Cherry Street PMB 88154, Seattle, Washington 98104. Our telephone number is (206) 455-9504. Our website is www.leafly.com. Our website and the information contained on, or accessed through, our website are not part of this prospectus, and you should rely only on the information contained in this prospectus when making an investment decision.
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The Offering
We are registering up to $75,000,000 in aggregate offering price of Common Stock, preferred stock, debt securities, warrants or units that we may from time to time offer and sell in one or more offerings.
In addition, we are registering the issuance of 10,450,987 shares of Common Stock issuable by us upon the exercise of Public Warrants originally issued in the initial public offering of units of Merida and Private Warrants originally issued in a private placement simultaneously with Merida’s initial public offering.
We are also registering the offer and resale from time to time by the Selling Securityholders or their permitted transferees, of up to (A) 17,338,901 shares of Common Stock, which includes (i) 11,943,212 shares of Common Stock (a) issued in connection with the Business Combination by certain Selling Securityholders named in this prospectus, which shares were originally issued to holders of Legacy Leafly’s common stock and preferred stock, and were automatically converted into the right to receive a number of shares of Merida’s common stock at the Exchange Ratio, or (b) acquired after the Business Combination by certain Selling Securityholders named in this prospectus to the extent such shares of Common Stock are “restricted securities” (as defined in Rule 144 under the Securities Act) or are otherwise held by an “affiliate” (as defined in Rule 144 under the Securities Act) of the Company; (ii) 1,625,194 Sponsor Shares originally issued at a price of approximately $0.009 per share; (iii) 3,762,287 shares of Common Stock that may be issued upon exercise of Private Warrants referred to in clause (C); and (iv) 8,208 shares of Common Stock underlying certain outstanding options to purchase shares of Common Stock; (B) 2,495,997 shares of Common Stock reserved for issuance upon the conversion of $30,000,000 aggregate principal amount of Convertible Notes plus the amount of accrued and unpaid interest, if any, that is payable in shares of Common Stock in connection with the conversion thereof with an initial conversion price of $12.50 per share; and (C) 3,762,287 Private Warrants originally purchased at a price of $1.00 per warrant, from time to time, through any means described in the section entitled “Plan of Distribution.” The securities being offered by this prospectus represent a substantial percentage of our outstanding Common Stock, and the sales of such securities could cause the market price of our Common Stock to decline.
Any investment in the securities offered hereby is speculative and involves a high degree of risk. You should carefully consider the information set forth under “Risk Factors” on page 6 of this prospectus.
Issuance of Common Stock
The following information is as of March 3, 2023 and does not give effect to (i) issuances of shares of our Common Stock, IPO Warrants or options to purchase shares of our Common Stock after such date, (ii) the exercise of IPO Warrants or options or the vesting of other equity grants after such date or (iii) any issuances, exercises or conversions, as applicable, of the $75,000,000 in aggregate offering price of Common Stock, preferred stock, debt securities, warrants or units registered hereunder that we may from time to time offer and sell in one or more offerings.
Common Stock to be issued upon exercise of the Public Warrants and Private Warrants | 10,450,987 shares. |
Common Stock outstanding prior to exercise of Public Warrants and Private Warrants | 40,307,773 shares. |
Common stock outstanding assuming exercise of all Public Warrants and Private Warrants | 50,758,760 shares. |
Exercise price of Public Warrants and Private Warrants | $11.50 per share, subject to adjustment as described herein. |
Use of proceeds | We will receive up to an aggregate of approximately $120.2 million from the exercise of all the Public Warrants and Private Warrants, assuming the exercise in full of all such IPO Warrants for cash. Unless we inform you otherwise in a prospectus supplement or free writing prospectus, we intend to use the net proceeds from the exercise of such IPO Warrants for general corporate purposes which may include acquisitions or other strategic investments or |
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| repayment of outstanding indebtedness. See “Use of Proceeds.” |
Resale of Common Stock and IPO Warrants
Shares of Common Stock offered by the Selling Securityholders | 16,072,611 shares. |
IPO Warrants to purchase Common Stock offered by the Selling Securityholders | 3,762,287 IPO Warrants (representing the Private Warrants). |
Terms of the offering | The Selling Securityholders will determine when and how they will dispose of the shares of Common Stock and IPO Warrants registered under this prospectus for resale. |
Use of proceeds | We will not receive any proceeds from the resale of the Common Stock or IPO Warrants to be offered by the Selling Securityholders. With respect to shares of Common Stock underlying the IPO Warrants, we will not receive any proceeds from such shares except with respect to amounts received by us upon exercise of such IPO Warrants to the extent such IPO Warrants are exercised for cash. In such case, we will receive up to an aggregate of approximately $120.2 million from the exercise of all such IPO Warrants. Unless we inform you otherwise in a prospectus supplement or free writing prospectus, we intend to use the net proceeds from the exercise of such IPO Warrants for general corporate purposes which may include acquisitions or other strategic investments or repayment of outstanding indebtedness. We believe the likelihood that IPO Warrant holders will exercise their IPO Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the market price of our Common Stock. If the market price of our Common Stock is less than $11.50 per share, we believe the IPO Warrant holders will be less likely to exercise their IPO Warrants. As of March 28, 2023, the closing price of our Common Stock was $0.3987 per share. See “Use of Proceeds.” |
Nasdaq ticker symbols | “LFLY” and “LFLYW” for the Common Stock and the IPO Warrants, respectively. |
Unless we specifically state otherwise or the context otherwise requires, the number of shares of our Common Stock that will be outstanding after this offering is based on 40,307,773 shares of our Common Stock outstanding as of March 3, 2023 and excludes (a) 3,077,879 shares of Common Stock issuable upon exercise of outstanding options at a weighted-average exercise price of $1.65 per share (which calculations exclude the 8,208 shares of Common Stock underlying certain outstanding options to purchase shares of Common Stock registered hereunder); (b) 1,471,794 shares of Common Stock issuable upon the settlement of RSUs outstanding; (c) 5,319,722 shares of Common Stock available for future issuance under our 2021 Plan to purchase Common Stock, (d) 1,125,624 shares of Common Stock available for future issuance under the ESPP, (e) 570,927 shares of Common Stock available for future issuance under the Earn Out Plan, (f) 10,450,987 shares of Common Stock that may be issued upon exercise of the IPO Warrants, (g) 2,495,997 shares of Common Stock reserved for issuance upon the conversion of $30,000,000 aggregate principal amount of Convertible Notes plus the amount of accrued and unpaid interest, if any, that is payable in shares of Common Stock in connection with the conversion thereof and (h) any issuances, exercises or conversions, as applicable, of the $75,000,000 in aggregate offering price of the Common
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Stock, preferred stock, debt securities, warrants or units registered hereunder that we may from time to time offer and sell in one or more offerings.
Unless we specifically state otherwise or the context otherwise requires, this prospectus reflects and assumes no exercise or issuance of our Common Stock pursuant to the plans described above.
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RISK FACTORS
An investment in our securities involves a high degree of risk. You should carefully consider the risk factors and all of the other information included in or incorporated by reference into this prospectus, including those in our most recent Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and other documents we file with the SEC, before making an investment decision. Our business, prospects, financial condition, or operating results could be harmed by any of these risks, as well as other risks not currently known to us or that we currently consider immaterial. The trading price of our securities could decline due to any of these risks, and, as a result, you may lose all or part of your investment.
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USE OF PROCEEDS
All shares of our Common Stock offered by the Selling Securityholders pursuant to this prospectus will be sold by the Selling Securityholders for their respective accounts. We will not receive any of the proceeds from these sales.
We will receive up to an aggregate of approximately $120.2 million from the issuance of Common Stock offered hereby upon the exercise of all outstanding IPO Warrants, assuming the exercise in full of such IPO Warrants for cash. Unless we inform you otherwise in a prospectus supplement or free writing prospectus, we intend to use the net proceeds from the exercise of such IPO Warrants and the issuance and sale by us of any Common Stock, preferred stock, debt securities, warrants or units for general corporate purposes which may include acquisitions or other strategic investments or repayment of outstanding indebtedness. Our management will have broad discretion over the use of proceeds from the exercise of the IPO Warrants and the issuance and sale by us of any Common Stock, preferred stock, debt securities, warrants or units.
There is no assurance that the holders of the IPO Warrants will elect to exercise any or all of the IPO Warrants. To the extent that the IPO Warrants are exercised on a “cashless basis,” the amount of cash we would receive from the exercise of the IPO Warrants will decrease. We believe the likelihood that IPO Warrant holders will exercise their IPO Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the market price of our Common Stock. If the market price for our Common Stock is less than $11.50 per share, we believe the IPO Warrant holders will be less likely to exercise their IPO Warrants. As of March 28, 2023, the closing price of our Common Stock was $0.3987 per share.
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DESCRIPTION OF CAPITAL STOCK
The following description summarizes, among other things, the material terms of the Company’s securities registered under Section 12 of the Exchange Act: (1) Common Stock and (2) IPO Warrants to purchase Common Stock. This summary does not purport to be complete and is qualified by reference to the provisions of the Charter, the Bylaws, the Registration Rights Agreement and the IPO Warrant Agreement, which are included as exhibits to the registration statement of which this prospectus is a part, or incorporated by reference herein, as applicable, and to the applicable provisions of Delaware law.
On the Closing Date, we consummated the Business Combination in connection with the Merger Agreement. Pursuant to the Merger Agreement and in connection therewith, at the Closing, among other things, (i) the Initial Merger occurred, with Legacy Leafly being the Initial Surviving Company and Legacy Leafly’s shareholders receiving Common Stock in exchange for their equity securities of Legacy Leafly, and (ii) immediately following the Initial Merger and as part of the same overall transaction as the Initial Merger, the Final Merger occurred, with Merger Sub II (surviving the Final Merger as Leafly, LLC) being the Final Surviving Company. As a result of the Business Combination, Legacy Leafly became wholly owned subsidiary of the Company, with the securityholders of Legacy Leafly becoming securityholders of the Company.
Authorized and Outstanding Stock
The Company’s authorized capital stock consists of:
As of March 3, 2023, there were (i) 40,307,773 shares of our Common Stock outstanding, (ii) no shares of preferred stock outstanding, (iii) 10,450,987 shares of Common Stock issuable upon the exercise of the IPO Warrants and (iv) 2,495,997 shares of Common Stock reserved for issuance upon the conversion of $30,000,000 aggregate principal amount of Convertible Notes plus the amount of accrued and unpaid interest, if any, that is payable in shares of Common Stock in connection with the conversion thereof.
Voting Rights
Except as otherwise required by law or the Charter, the holders of Common Stock exclusively possess all stockholder voting power with respect to the Company. Holders of Common Stock are entitled to one vote per share on each matter properly submitted to a vote of stockholders. The holders of Common Stock at all times vote together as one class on all matters submitted to a vote of stockholders, unless otherwise required by Delaware law or the Charter. If the Company has multiple classes of common stock in the future, then Delaware law could require holders of shares of a class of capital stock to vote separately as a single class in the following circumstances:
Election of Directors
The Charter provides for a classified board of directors that is divided into three classes with staggered three-year terms. Only the directors in one class are subject to election by a plurality of the votes cast at each annual meeting of stockholders, with the directors in the other classes continuing for the remainder of their respective three-year terms. The Charter does not provide for cumulative voting for the election of directors.
Dividend Rights
Subject to the rights, if any, of the holders of any outstanding series of the preferred stock, the holders of Common Stock are entitled to receive dividends and other distributions (payable in cash, property or capital stock of the Company) when, as and if declared by the Company’s board of directors out of any assets or funds legally available and will share equally on a per share basis in such dividends and distributions.
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No Preemptive or Similar Rights
Common Stock is not entitled to preemptive rights, and is not subject to conversion, redemption or sinking fund provisions.
Liquidation, Dissolution and Winding Up
Subject to the rights, if any, of the holders of any outstanding shares of the preferred stock, in the event of any voluntary or involuntary liquidation, dissolution or winding-up, after payment or provision for payment of the debts and other liabilities of the Company, the holders of Common Stock will be entitled to receive all the remaining assets of the Company available for distribution to its stockholders, ratably in proportion to the number of shares of the Common Stock held by them.
Earn-Out Shares
Under the Merger Agreement, the holders of Common Stock and preferred stock and Participants will have the contingent right to receive up to an aggregate of 6,000,000 Earn Out Shares, subject to the achievement of certain vesting triggers prior to the third anniversary of the Closing Date.
Preferred Stock
The Company’s board of directors is authorized, subject to limitations prescribed by the law of the State of Delaware, to issue preferred stock from time to time in one or more series. The Company’s board of directors is authorized to establish the number of shares to be included in each such series and to fix the voting rights, if any, designations, powers, preferences and relative, participating, optional, special and other rights, if any, and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The Company’s board of directors is able, without stockholder approval, to issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the Common Stock and could have anti-takeover effects. The ability of the Company’s board of directors to issue preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of the Company or the removal of existing management. There are no current plans to issue any shares of preferred stock.
IPO Warrants
Each whole IPO Warrant entitles the registered holder to purchase one share of Common Stock at a price of $11.50 per share, subject to adjustment as discussed below. The IPO Warrants will expire at 5:00 p.m., New York City time on the date that is five years after the Closing Date, or earlier upon redemption or liquidation. In addition to the IPO Warrants, Merida sold private warrants to Merida Holdings, LLC and EBC in connection with Merida’s initial public offering. The Private Warrants are identical to the Public Warrants except that the Private Warrants are exercisable for cash on a cashless basis, at the holder’s option, and will not be redeemable by the Company, in each case so long as they are still held by Merida Holdings, LLC, EBC or their permitted transferees.
The Company may call the IPO Warrants for redemption (excluding the Private Warrants), in whole and not in part, at a price of $0.01 per IPO Warrant in the following circumstances:
If the foregoing conditions are satisfied and the Company issues a notice of redemption, each IPO Warrant holder can exercise his, her or its IPO Warrant prior to the scheduled redemption date. On and after the redemption date, a record holder of an IPO Warrant will have no further rights except to receive the redemption price for such holder’s IPO Warrant upon surrender of such IPO Warrant.
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The redemption criteria for the IPO Warrants have been established at a price which is intended to provide IPO Warrant holders a reasonable premium to the initial exercise price and provide a sufficient differential between the then-prevailing share price and the IPO Warrant exercise price so that if the share price declines as a result of our redemption call, the redemption will not cause the share price to drop below the exercise price of the IPO Warrants. However, the price of the shares of Common Stock may fall below the $18.00 trigger price as well as the $11.50 IPO Warrant exercise price after the redemption notice is issued.
If we call the IPO Warrants for redemption as described above, our management will have the option to require all holders that wish to exercise IPO Warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the IPO Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (a) the product of the number of shares of Common Stock underlying the IPO Warrants, multiplied by the difference between the exercise price of the IPO Warrants and the “fair market value” (defined below) by (b) the fair market value. The “fair market value” for this purpose will mean the average reported last sale price of the shares of Common Stock for the five trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of IPO Warrants.
The IPO Warrants are issued in registered form under a Warrant Agreement between Continental Stock Transfer & Trust Company (the “IPO Warrant Agent”) and us. The IPO Warrant Agreement provides that the terms of the IPO Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, or to add or change any other provisions with respect to matters or questions arising under the IPO Warrant Agreement as the Company and the IPO Warrant Agent may deem necessary or desirable and that they, relying on the advice of counsel, deem shall not adversely affect the interest of the registered holders. The IPO Warrant Agreement requires the approval, by written consent or vote, of the holders of at least 50% of the then outstanding IPO Warrants (including the Private Warrants) in order to make any change that adversely affects the interests of the registered holders. Notwithstanding the foregoing, the Company may lower the exercise price of the IPO Warrants or extend the duration of the exercise period without the consent of the registered holders.
The exercise price and number of shares of Common Stock issuable on exercise of the IPO Warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However, except as described below, the IPO Warrants will not be adjusted for issuances of shares of Common Stock at a price below their respective exercise prices.
The IPO Warrants may be exercised upon surrender of the IPO Warrant certificate on or prior to the expiration date at the offices of the IPO Warrant Agent, with the exercise form on the reverse side of the IPO Warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified or official bank check payable to us, for the number of IPO Warrants being exercised. The IPO Warrant holders do not have the rights or privileges of holders of shares of Common Stock and any voting rights until they exercise their IPO Warrants and receive shares of Common Stock. After the issuance of shares of Common Stock upon exercise of the IPO Warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.
No IPO Warrants will be exercisable for cash unless we have an effective and current registration statement covering the shares of Common Stock issuable upon exercise of the IPO Warrants and a current prospectus relating to such shares of Common Stock. Under the terms of the IPO Warrant Agreement, we have agreed to use our best efforts to meet these conditions and to file and maintain a current and effective prospectus relating to the Common Stock issuable upon exercise of the IPO Warrants until the expiration of the IPO Warrants. However, we cannot assure you that we will be able to do so. If a registration statement covering the shares of Common Stock issuable upon exercise of the IPO Warrants is not effective within 90 days of the Closing Date, IPO Warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise IPO Warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their IPO Warrants on a cashless basis.
IPO Warrant holders may elect to be subject to a restriction on the exercise of their IPO Warrants such that an electing IPO Warrant holder would not be able to exercise their IPO Warrants to the extent that, after giving effect to such exercise, such holder would beneficially own in excess of 9.8% of the shares of Common Stock outstanding.
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No fractional shares will be issued upon exercise of the IPO Warrants. If, upon exercise of the IPO Warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round up to the nearest whole number the number of shares of Common Stock to be issued to the IPO Warrant holder.
Anti-Takeover Provisions
Some provisions of Delaware law, the Charter, and the Bylaws contain provisions that could make the following transactions more difficult: an acquisition of the Company by means of a tender offer; an acquisition of the Company by means of a proxy contest or otherwise; or the removal of incumbent officers and directors. It is possible that these provisions could make it more difficult to accomplish or could deter transactions that stockholders may otherwise consider to be in their best interest or in the Company’s best interests, including transactions that provide for payment of a premium over the market price for the Company’s shares.
These provisions, summarized below, are intended to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of the Company to first negotiate with the Company’s board of directors. We believe that the benefits of the increased protection of the Company’s potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure the Company outweigh the disadvantages of discouraging these proposals because negotiation of these proposals could result in an improvement of their terms.
Delaware Law
The Company is subject to the provisions of Section 203 of the DGCL regulating corporate takeovers. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder for a period of three years following the date on which the person became an interested stockholder unless:
Generally, a business combination includes a merger, asset or stock sale, or other transaction or series of transactions together resulting in a financial benefit to the interested stockholder. An interested stockholder is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own 15% or more of a corporation’s outstanding voting stock. We expect the existence of this provision to have an anti-takeover effect with respect to transactions the Company’s board of directors does not approve in advance. We also anticipate that Section 203 may discourage attempts that might result in a premium over the market price for the shares of Common Stock held by stockholders.
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Charter and Bylaws Provisions
The Charter and Bylaws include a number of provisions that could deter hostile takeovers or delay or prevent changes in control of the Company’s management team, including the following:
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Registration Rights
At the closing of the Business Combination, the Company entered into the Registration Rights Agreement with the registration rights holders. Pursuant to the terms of the Registration Rights Agreement, (a) any (i) outstanding share of Common Stock or any Private Warrants, and (ii) shares of Common Stock issued as Earn Out Shares to shareholders of Legacy Leafly that received shares of Common Stock in the Business Combination or issuable as Earn Out Shares pursuant to the Earn Out Plan and (b) any other equity security of the Company issued or issuable with respect to any such share of Common Stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise, will be entitled to registration rights.
Pursuant to the terms of the Registration Rights Agreement, we previously filed registration statements and have filed a shelf registration statement, of which this prospectus is a part, in each case, registering the resale of the registration rights holders shares and we are obligated to use our best efforts to cause it to become effective as soon as practicable after the filing thereof, but in no event later than 60 days following the filing deadline. The Sponsor, EBC, and their transferees may demand not more than three demand registrations or shelf underwritten offerings in the aggregate and not more than two demand registrations in any twelve-month period, and the Leafly holders may demand not more than six demand registrations or shelf underwritten offerings in the aggregate and not more than two demand registrations in any twelve-month period, and the Company will not be obligated to participate in more than four demand registrations or shelf underwritten offerings, in any twelve-month period. The Company will bear the expenses incurred in connection with the filing of any registration statements filed pursuant to the terms of the Registration Rights Agreement.
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Pursuant to the Convertible Notes, the Company has also agreed to register the resale of the Common Stock issuable upon conversion of the Convertible Notes on similar terms as the Registration Rights Agreement described above, of which this prospectus so registers.
Limitation of Liability and Indemnification
The Charter and the Bylaws provide that the Company will indemnify its directors and officers, and may indemnify its employees and other agents, to the fullest extent permitted by Delaware law.
Delaware law prohibits the Charter from limiting the liability of the Company’s directors for the following:
If Delaware law is amended to authorize corporate action further eliminating or limiting the personal liability of a director, then the liability of the Company’s directors will be eliminated or limited to the fullest extent permitted by Delaware law, as so amended. Under the Bylaws, the Company can purchase insurance, at its expense, to protect itself and/or any director, officer, employee or agent against any expense, liability or loss, whether or not the Company would have the power to indemnify such person against expense, liability or loss under Delaware law. We believe that these charter and bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers. The limitation of liability and indemnification provisions in the Charter and Bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit the Company and its stockholders. Moreover, a stockholder’s investment may be harmed to the extent the Company pays the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.
Exchange Listing
The Common Stock and IPO Warrants are listed on Nasdaq under the symbols “LFLY” and “LFLYW,” respectively.
Transfer Agent and Registrar; IPO Warrant Agent
The transfer agent and registrar for the Company’s Common Stock, and the warrant agent for the IPO Warrants, is Continental Stock Transfer & Trust Company.
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DESCRIPTION OF DEBT SECURITIES
We may issue debt securities, in one or more series, as either senior or subordinated debt or as senior or subordinated convertible debt. While the terms we have summarized below will apply generally to any debt securities that we may offer under this prospectus, we will describe the particular terms of any debt securities that we may offer in more detail in the applicable prospectus supplement. The terms of any debt securities offered under a prospectus supplement may differ from the terms described below. Unless the context requires otherwise, whenever we refer to the indentures, we also are referring to any supplemental indentures that specify the terms of a particular series of debt securities.
We will issue the senior debt securities under the senior indenture that we will enter into with the trustee named in the senior indenture. We will issue the subordinated debt securities under the subordinated indenture that we will enter into with the trustee named in the subordinated indenture. The indentures will be qualified under the Trust Indenture Act of 1939, as amended (the “TIA”). We use the term “debenture trustee” to refer to either the trustee under the senior indenture or the trustee under the subordinated indenture, as applicable. We have filed forms of indentures as exhibits to the registration statement of which this prospectus is a part, and supplemental indentures and forms of debt securities containing the terms of the debt securities being offered will be filed as exhibits to the registration statement of which this prospectus is a part or will be incorporated by reference from reports that we file with the SEC.
The following summaries of material provisions of the senior debt securities, the subordinated debt securities and the indentures are subject to, and qualified in their entirety by reference to, all of the provisions of the indenture applicable to a particular series of debt securities. We urge you to read the applicable prospectus supplements and any related free writing prospectuses related to the debt securities that we may offer under this prospectus, as well as the complete indentures that contain the terms of the debt securities. Except as we may otherwise indicate, the terms of the senior indenture and the subordinated indenture are identical.
General
We will describe in the applicable prospectus supplement the terms of the series of debt securities being offered, including:
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The notes may be issued as original issue discount securities. An original issue discount security is a note, including any zero coupon note, which:
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U.S. federal income tax consequences applicable to notes sold at an original issue discount will be described in the applicable prospectus supplement. In addition, U.S. federal income tax or other consequences applicable to any notes which are denominated in a currency or currency unit other than U.S. dollars may be described in the applicable prospectus supplement.
Under the indentures, we will have the ability, in addition to the ability to issue notes with terms different from those of notes previously issued, without the consent of the holders, to reopen a previous issue of a series of notes and issue additional notes of that series, unless the reopening was restricted when the series was created, in an aggregate principal amount determined by us.
Conversion or Exchange Rights
We will set forth in the prospectus supplement the terms on which a series of debt securities may be convertible into or exchangeable for our Common Stock or our other securities. We will include provisions as to whether conversion or exchange is mandatory, at the option of the holder or at our option. We may include provisions pursuant to which the number of shares of our Common Stock or our other securities that the holders of the series of debt securities receive would be subject to adjustment.
Consolidation, Merger or Sale
Unless we provide otherwise in the prospectus supplement applicable to a particular series of debt securities, the indentures will not contain any covenant that restricts our ability to merge or consolidate, or sell, convey, transfer or otherwise dispose of all or substantially all of our assets. However, any successor to or acquiror of such assets must assume all of our obligations under the indentures or the debt securities, as appropriate. If the debt securities are convertible into or exchangeable for our other securities or securities of other entities, the person with whom we consolidate or merge or to whom we sell all of our property must make provisions for the conversion of the debt securities into securities that the holders of the debt securities would have received if they had converted the debt securities before the consolidation, merger or sale.
Events of Default Under the Indentures
Unless we provide otherwise in the prospectus supplement applicable to a particular series of debt securities, the following are events of default under the indentures with respect to any series of debt securities that we may issue:
If an event of default with respect to debt securities of any series occurs and is continuing, other than an event of default specified in the second to last bullet point above, the debenture trustee or the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series, by notice to us in writing, and to the debenture trustee if notice is given by such holders, may declare the unpaid principal of, premium, if any, and accrued interest, if any, due and payable immediately. If an event of default results from the occurrence of a specified event of bankruptcy, insolvency or reorganization with respect to us, the principal amount of and accrued interest, if any, of each issue of debt securities then outstanding shall be due and payable without any notice or other action on the part of the debenture trustee or any holder.
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The holders of a majority in principal amount of the outstanding debt securities of an affected series may waive any default or event of default with respect to the series and its consequences, except defaults or events of default regarding payment of principal, premium, if any, or interest, unless we have cured the default or event of default in accordance with the indenture. Any such waiver shall cure the default or event of default.
Subject to the terms of the applicable indenture, if an event of default under an indenture shall occur and be continuing, the debenture trustee will be under no obligation to exercise any of its rights or powers under such indenture at the request or direction of any of the holders of the applicable series of debt securities, unless such holders have offered the debenture trustee reasonable indemnity. The holders of a majority in principal amount of the outstanding debt securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the debenture trustee, or exercising any trust or power conferred on the debenture trustee, with respect to the debt securities of that series, provided that:
A holder of the debt securities of any series will have the right to institute a proceeding under an indenture or to appoint a receiver or trustee, or to seek other remedies only if:
These limitations do not apply to a suit instituted by a holder of debt securities if we default in the payment of the principal, premium, if any, or accrued interest on, the debt securities.
We will periodically file statements with the debenture trustee regarding our compliance with specified covenants in the indentures.
Modification of Indenture; Waiver
We and the debenture trustee may change an indenture without the consent of any holders with respect to specific matters:
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In addition, under the indentures, the rights of holders of a series of debt securities may be changed by us and the debenture trustee with the written consent of the holders of at least a majority in aggregate principal amount of the outstanding debt securities of each series that is affected. However, unless we provide otherwise in the prospectus supplement applicable to a particular series of debt securities, we and the debenture trustee may make the following changes only with the consent of each holder of any outstanding debt securities affected:
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Discharge
Each indenture provides that we can elect to be discharged from our obligations with respect to one or more series of debt securities, except for specified obligations, including obligations to:
In order to exercise our rights to be discharged, we must deposit with the debenture trustee money or government obligations sufficient to pay all the principal of, the premium, if any, and interest on, the debt securities of the series on the dates payments are due.
Form, Exchange and Transfer
We will issue the debt securities of each series only in fully registered form without coupons and, unless we provide otherwise in the applicable prospectus supplement, in denominations of $1,000 and any integral multiple thereof. The indentures provide that we may issue debt securities of a series in temporary or permanent global form and as book-entry securities that will be deposited with, or on behalf of, The Depository Trust Company (“DTC”) or another depositary named by us and identified in a prospectus supplement with respect to that series. See the section entitled “Legal Ownership of Securities” for a further description of the terms relating to any book-entry securities.
At the option of the holder, subject to the terms of the indentures and the limitations applicable to global securities described in the applicable prospectus supplement, the holder of the debt securities of any series can exchange the debt securities for other debt securities of the same series, in any authorized denomination and of like tenor and aggregate principal amount.
Subject to the terms of the indentures and the limitations applicable to global securities set forth in the applicable prospectus supplement, holders of the debt securities may present the debt securities for exchange or for registration of transfer, duly endorsed or with the form of transfer endorsed thereon duly executed if so required by us or the security registrar, at the office of the security registrar or at the office of any transfer agent designated by us for this purpose. Unless otherwise provided in the debt securities that the holder presents for transfer or exchange, we will impose no service charge for any registration of transfer or exchange, but we may require payment of any taxes or other governmental charges.
We will name in the applicable prospectus supplement the security registrar, and any transfer agent in addition to the security registrar, that we initially designate for any debt securities. We may at any time designate additional transfer agents or rescind the designation of any transfer agent or approve a change in the office through which any transfer agent acts, except that we will be required to maintain a transfer agent in each place of payment for the debt securities of each series.
If we elect to redeem the debt securities of any series, we will not be required to:
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Information Concerning the Debenture Trustee
The debenture trustee, other than during the occurrence and continuance of an event of default under an indenture, undertakes to perform only those duties as are specifically set forth in the applicable indenture. Upon an event of default under an indenture, the debenture trustee must use the same degree of care as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the debenture trustee is under no obligation to exercise any of the powers given to it by the indentures at the request of any holder of debt securities unless it is offered reasonable security and indemnity against the costs, expenses and liabilities that it might incur.
Payment and Paying Agents
Unless we otherwise indicate in the applicable prospectus supplement, we will make payment of the interest on any debt securities on any interest payment date to the person in whose name the debt securities, or one or more predecessor securities, are registered at the close of business on the regular record date for the interest.
We will pay principal of, and any premium and interest on, the debt securities of a particular series at the office of the paying agents designated by us, except that unless we otherwise indicate in the applicable prospectus supplement, we will make interest payments by check that we will mail to the holder or by wire transfer to certain holders. Unless we otherwise indicate in the applicable prospectus supplement, we will designate the corporate trust office of the debenture trustee in the City of New York as our sole paying agent for payments with respect to debt securities of each series. We will name in the applicable prospectus supplement any other paying agents that we initially designate for the debt securities of a particular series. We will maintain a paying agent in each place of payment for the debt securities of a particular series.
All money we pay to a paying agent or the debenture trustee for the payment of the principal of, or any premium or interest on, any debt securities that remains unclaimed at the end of two years after such principal, premium or interest has become due and payable will be repaid to us, and the holder of the debt security thereafter may look only to us for payment thereof.
Governing Law
The indentures and the debt securities will be governed by and construed in accordance with the laws of the State of New York, except to the extent that the TIA is applicable.
Subordination of Subordinated Debt Securities
The subordinated debt securities will be unsecured and will be subordinate and junior in priority of payment to certain of our other indebtedness to the extent described in a prospectus supplement. The subordinated indenture does not limit the amount of subordinated debt securities that we may issue, nor does it limit us from issuing any other secured or unsecured debt.
21
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of debt securities, Common Stock, preferred stock or other securities. Warrants may be issued independently or together with debt securities, Common Stock, preferred stock or other securities offered by any prospectus supplement and may be attached to or separate from any such offered securities. Each series of warrants will be issued under a separate warrant agreement to be entered into between us and a bank or trust company, as warrant agent, all as will be set forth in the prospectus supplement relating to the particular issue of warrants. The warrant agent will act solely as our agent in connection with the warrants and will not assume any obligation or relationship of agency or trust for or with any holders of warrants or beneficial owners of warrants. The summary of the terms of the warrants contained in this prospectus is not complete and is subject to, and is qualified in its entirety to, all provisions of the applicable warrant agreement.
Reference is made to the prospectus supplement relating to the particular issue of warrants offered pursuant to such prospectus supplement for the terms of and information relating to such warrants, including, where applicable:
22
DESCRIPTION OF UNITS
We may, from time to time, issue units comprised of one or more of the other securities that may be offered under this prospectus, in any combination. Each unit may also include debt obligations of third parties, such as U.S. Treasury securities. Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately at any time, or at any time before a specified date or other specific circumstances occur. The summary of the terms of the units contained in this prospectus is not complete and is subject to, and is qualified in its entirety by, all provisions of the applicable unit agreements.
Any prospectus supplement related to any particular units will describe, among other things:
The applicable provisions described in this section, as well as those described under “Description of Capital Stock,” “Description of Debt Securities” and “Description of Warrants,” will apply to each unit and to each security included in each unit, respectively.
23
SELLING SECURITYHOLDERS
This prospectus also relates to the resale by the Selling Securityholders from time to time of up to (A) 17,338,901 shares of Common Stock, which includes (i) 11,943,212 shares of Common Stock (a) issued in connection with the Business Combination by certain Selling Securityholders named in this prospectus, which shares were originally issued to holders of Legacy Leafly’s common stock and preferred stock, and were automatically converted into the right to receive a number of shares of Merida’s common stock at the Exchange Ratio, or (b) acquired after the Business Combination by certain Selling Securityholders named in this prospectus to the extent such shares of Common Stock are “restricted securities” (as defined in Rule 144 under the Securities Act) or are otherwise held by an “affiliate” (as defined in Rule 144 under the Securities Act) of the Company; (ii) 1,625,194 Sponsor Shares originally issued at a price of approximately $0.009 per share; (iii) 3,762,287 shares of Common Stock that may be issued upon exercise of Private Warrants referred to in clause (C); and (iv) 8,208 shares of Common Stock underlying certain outstanding options to purchase shares of Common Stock; (B) 2,495,997 shares of Common Stock reserved for issuance upon the conversion of $30,000,000 aggregate principal amount of Convertible Notes plus the amount of accrued and unpaid interest, if any, that is payable in shares of Common Stock in connection with the conversion thereof with an initial conversion price of $12.50 per share; and (C) 3,762,287 Private Warrants originally purchased at a price of $1.00 per warrant, from time to time, through any means described in the section entitled “Plan of Distribution.” The Selling Securityholders may from time to time offer and sell any or all of the Common Stock set forth below pursuant to this prospectus and any accompanying prospectus supplement. When we refer to the “Selling Securityholders” in this prospectus, we mean the persons listed in the table below, and their permitted transferees who later come to hold any of the Selling Securityholders’ interest in the Common Stock or IPO Warrants in accordance with the terms of the agreement(s) governing the registration rights applicable to such Selling Securityholder’s Common Stock or IPO Warrants.
For information regarding material relationships between the Company and certain of the Selling Securityholders, in addition to those disclosed in the footnotes to the table below, please see “—Material Relationships with Selling Securityholders.” In addition, certain of the Selling Securityholders originally acquired certain of the securities registered hereunder pursuant to previously issued awards under a compensatory plan or arrangement with us.
The following table sets forth, based on representations from the Selling Securityholders, as of the date of this prospectus, the names of the Selling Securityholders, the aggregate number of Common Stock and/or IPO Warrants beneficially owned prior to the sale of the securities offered hereby by the Selling Securityholders, the aggregate number of Common Stock and/or IPO Warrants that the Selling Securityholders may offer pursuant to this prospectus and the number of Common Stock and/or IPO Warrants beneficially owned by the Selling Securityholders after the sale of the securities offered hereby. The Selling Securityholders may have sold, transferred or otherwise disposed of some or all of their shares of Common Stock and/or IPO Warrants, or may have purchased additional freely-tradeable shares of Common Stock and/or IPO Warrants since providing us with this information.
We have determined beneficial ownership in accordance with the rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Unless otherwise indicated below, to our knowledge, the persons and entities named in the tables have sole voting and sole investment power with respect to all securities that they beneficially own, subject to community property laws where applicable.
We cannot advise you as to whether the Selling Securityholders will in fact sell any or all of such Common Stock and/or IPO Warrants. In addition, the Selling Securityholders may sell, transfer or otherwise dispose of, at any time and from time to time, the Common Stock and/or IPO Warrants in transactions exempt from the registration requirements of the Securities Act after the date of this prospectus. For purposes of this table, we have assumed that the Selling Securityholders will have sold all of the securities covered by this prospectus upon the completion of the resale offering and no other purchase or sales of our securities by the Selling Securityholders will have occurred.
Selling Securityholder information for each additional Selling Securityholder, if any, will be set forth by prospectus supplement to the extent required prior to the time of any offer or sale of such Selling Securityholder’s shares pursuant to this prospectus. Any prospectus supplement may add, update, substitute, or change the information contained in this prospectus, including the identity of each Selling Securityholder and the number of shares registered on its behalf. A Selling Securityholder may sell or otherwise transfer all, some or none of such shares in this resale offering. See “Plan of Distribution.”
24
The beneficial ownership of our Common Stock is based on 40,307,773 shares of Common Stock issued and outstanding as of March 3, 2023. The beneficial ownership of our IPO Warrants is based on 10,450,987 IPO Warrants outstanding as of March 3, 2023.
Unless otherwise noted, the business address of each of those listed in the table is c/o Leafly Holdings, Inc., 113 Cherry Street PMB 88154, Seattle, Washington 98104.
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| Securities Beneficially Owned |
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| Securities to be Registered in this |
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| Securities to be Beneficially Owned After this Resale Offering |
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Name of Selling Securityholder |
| Common Stock(2) |
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| IPO Warrants(3) |
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| Common Stock(2) |
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| IPO Warrants (3) |
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| Common Stock(2) |
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| % |
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| IPO Warrants (3) |
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| % |
| ||||||||
Brendan Kennedy(4) |
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| 3,434,776 |
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|
| — |
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| 3,434,776 |
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|
| — |
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|
| — |
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|
| — | % |
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| — |
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|
| % |
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Merida Capital(5) |
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| 3,382,273 |
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| 779,510 |
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| 3,382,273 |
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| 779,510 |
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|
| — |
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| — | % |
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| — |
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| % |
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Michael Blue(6) |
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| 2,948,415 |
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| — |
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| 2,927,772 |
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| — |
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| 20,643 |
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| * | % |
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| — |
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|
| % |
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Entities affiliated with Cohanzick(7) |
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| 2,639,297 |
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| 143,300 |
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| 2,639,297 |
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| 143,300 |
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|
| — |
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| — | % |
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| — |
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| % |
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Christian Groh(8) |
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| 1,746,227 |
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|
| — |
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| 1,746,227 |
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|
| — |
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| — |
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|
| — | % |
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| — |
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|
| % |
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Merida Holdings, LLC (9) |
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| 1,625,194 |
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|
| — |
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| 1,625,194 |
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|
| — |
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| — |
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| — | % |
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| — |
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| % |
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Yoko Miyashita(10) |
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| 917,484 | (11) |
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| — |
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| 23,402 |
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| — |
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| 894,082 |
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| 2.2 | % |
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| — |
|
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| % |
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Entities affiliated with EarlyBirdCapital, Inc. (12) |
|
| 632,049 |
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| 632,049 |
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| 632,049 |
|
|
| 632,049 |
|
|
| — |
|
|
| — | % |
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| — |
|
|
| % |
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Peter Lee(13) |
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| 593,060 |
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| 327,410 |
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| 578,983 |
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| 327,410 |
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|
| 14,077 |
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|
| * | % |
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| — |
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| % |
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Linden Capital L.P.(14) |
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| 399,123 |
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| 339,123 |
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| 399,123 |
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| 339,123 |
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| — |
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| — | % |
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| — |
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| % |
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Newtyn Partners, LP (15) |
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| 374,075 |
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| 374,075 |
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| 374,075 |
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| 374,075 |
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| — |
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| — | % |
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| — |
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| % |
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Samuel Martin(16) |
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| 307,037 | (17) |
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| — |
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| 307,037 |
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| — |
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| — |
|
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| — | % |
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| — |
|
|
| % |
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Newtyn TE Partners, LP (15) |
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| 260,565 |
|
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| 260,565 |
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| 260,565 |
|
|
| 260,565 |
|
|
| — |
|
|
| — | % |
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| — |
|
|
| % |
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Jeffrey Monat(18) |
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| 243,931 |
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|
| 144,209 |
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| 243,931 |
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| 144,209 |
|
|
| — |
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| — | % |
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| — |
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| % |
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Nuwa Group LLC(19) |
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| 238,694 |
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| 140,312 |
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| 238,694 |
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| 140,312 |
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|
| — |
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| — | % |
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| — |
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| % |
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Cole Investments III LLC(20) |
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| 211,326 |
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| 181,326 |
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| 211,326 |
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| 181,326 |
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| — |
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| — | % |
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| — |
|
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| % |
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Andres Nannetti(21) |
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| 187,983 |
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|
| 116,927 |
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| 187,983 |
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| 116,927 |
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|
| — |
|
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| — | % |
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| — |
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| % |
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Brian Beattie(22) |
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| 132,608 |
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| 77,951 |
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| 132,608 |
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| 77,951 |
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| — |
|
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| — | % |
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| — |
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| % |
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Richard Sellers(23) |
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| 132,608 |
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| 77,951 |
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| 132,608 |
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| 77,951 |
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|
| — |
|
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| — | % |
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| — |
|
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| % |
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Greg Wilson(22) |
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| 99,454 |
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| 58,463 |
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| 99,454 |
|
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| 58,463 |
|
|
| — |
|
|
| — | % |
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| — |
|
|
| % |
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Groh Family Irrevocable Trust(24) |
|
| 78,988 |
|
|
| — |
|
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| 78,988 |
|
|
| — |
|
|
| — |
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| * | % |
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| — |
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| % |
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Mario Maruzzo(22)(25) |
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| 66,277 |
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| 38,960 |
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| 66,277 |
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| 38,960 |
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|
| — |
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| — | % |
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| — |
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| % |
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Robert Romero(25) |
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| 54,566 |
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| 54,566 |
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| 54,566 |
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| 54,566 |
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|
| — |
|
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| — | % |
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| — |
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| % |
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Echelon Wealth Partners Inc.(26) |
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| 24,000 |
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|
| — |
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| 24,000 |
|
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| — |
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| — |
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| — | % |
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| — |
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| % |
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Edward Kovary(27) |
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| 12,500 |
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|
| — |
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| 12,500 |
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| — |
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| — |
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| — | % |
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| — |
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| % |
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Tao Long(22) |
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| 7,795 |
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| 7,795 |
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| 7,795 |
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| 7,795 |
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| — |
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| — | % |
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| — |
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| % |
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King Yung Hor(22) |
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| 7,795 |
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| 7,795 |
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| 7,795 |
|
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| 7,795 |
|
|
| — |
|
|
| — | % |
|
| — |
|
|
| % |
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Therese Mellet(22) |
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| 1,500 |
|
|
| — |
|
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| 1,500 |
|
|
| — |
|
|
| — |
|
|
| — | % |
|
| — |
|
|
| % |
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Florinda Koka(22) |
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| 1,500 |
|
|
| — |
|
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| 1,500 |
|
|
| — |
|
|
| — |
|
|
| — | % |
|
| — |
|
|
| % |
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Maxwell Gerard(22) |
|
| 1,000 |
|
|
| — |
|
|
| 1,000 |
|
|
| — |
|
|
| — |
|
|
| — | % |
|
| — |
|
|
| % |
|
Tracy Fezza(27) |
|
| 500 |
|
|
| — |
|
|
| 500 |
|
|
| — |
|
|
| — |
|
|
| — | % |
|
| — |
|
|
| % |
|
Coleen McGlynn(27) |
|
| 500 |
|
|
| — |
|
|
| 500 |
|
|
| — |
|
|
| — |
|
|
| — | % |
|
| — |
|
|
| % |
|
Jacqueline Chang(27) |
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| 500 |
|
|
| — |
|
|
| 500 |
|
|
| — |
|
|
| — |
|
|
| — | % |
|
| — |
|
|
| % |
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Joseph Mongiello(27) |
|
| 100 |
|
|
| — |
|
|
| 100 |
|
|
| — |
|
|
| — |
|
|
| — | % |
|
| — |
|
|
| % |
|
* Indicates less than 1%
25
Cohanzick Management, LLC is the Investment Adviser to RiverPark Strategic Income Fund, Leaffilter North Holdings, Inc. and OlsonUbben LLC. CrossingBridge Advisors, LLC (a wholly owned subsidiary of Cohanzick Management, LLC) is the Investment Adviser to CrossingBridge Low Duration High Yield Fund, CrossingBridge Ultra Short Duration Fund, Destinations Low Duration Fixed Income Fund and Destinations Global Fixed Income Opportunities Fund. David K. Sherman is the Managing Member of Cohanzick Management, LLC. The business address for Cohanzick Management, LLC and CrossingBridge Advisors, LLC is 427 Bedford Road Suite 230, Pleasantville, New York 10570.
26
Each individual has one vote, and the approval of three of the four managing members is required for approval of an action of the entity. Under the so-called “rule of three,” if voting and dispositive decisions regarding an entity’s securities are made by three or more individuals, and a voting or dispositive decision requires the approval of a majority of those individuals, then none of the individuals is deemed a beneficial owner of the entity’s securities. Based on the foregoing, no individual of the committee exercises voting or dispositive control over any of the securities held by such entity, even those in which he directly owns a pecuniary interest. Accordingly, none of them will be deemed to have or share beneficial ownership of such shares. The business address of Merida Holdings, LLC is 670 Milton Road, Rye, NY 10580.
27
Other Material Relationships with the Selling Securityholders
Sponsor Shares
Concurrently with the execution of the Merger Agreement, Leafly, Merida, and the Sponsor entered into an agreement (the “Sponsor Agreement”), which provides that (a) at the Closing, a number of Sponsor Shares equal to the quotient of (i) the amount by which certain unpaid expenses incurred by or on behalf of Merida (the “Outstanding Merida Expenses”) exceed $6.5 million, divided by (ii) $10.00 (such shares, the “Forfeited Shares”), will be forfeited by the Sponsor and cancelled by Merida, (b) the parties will enter into an amendment to the existing Stock Escrow Agreement (“Stock Escrow Amendment”) providing for the forfeiture and cancellation of the Forfeited Shares and the escrow of all remaining Sponsor Shares until certain earnout conditions are met, and (c) the Sponsor Shares will be subject to transfer restrictions for a period of 180 days following the completion of the Business Combination.
Concurrently with the execution of the Merger Agreement, Leafly, Merida, and the Sponsor entered into the Stock Escrow Amendment which provides that, following the Closing, after giving effect to the forfeiture of the Forfeited Shares, fifty percent of the remaining Sponsor Shares (the “Net Sponsor Shares”) were or will be released from escrow as follows: (a) fifty percent of the Net Sponsor Shares were released from escrow on the Closing Date due to the satisfaction of the Minimum Cash Condition, (b) twenty-five percent of the Net Sponsor Shares will be released from escrow upon the occurrence of the First Price Triggering Event, (c) all of the Sponsor Shares then held in escrow will be released from escrow upon the occurrence of the Second Price Triggering Event, and (d) if a Change of Control that will result in the holders of Common Stock receiving a per share price equal to or in excess of the applicable per share price required in connection with the First Price Triggering Event or the Second Price Triggering Event occurs at a time when Sponsor Shares are held in escrow, then immediately prior to the consummation of such Change of Control (i) the applicable triggering event that has not previously occurred shall be deemed to have occurred and (ii) the applicable Net Sponsor Shares will be released from escrow. On the business day following the end of the Second Earn Out Period, all Sponsor Shares not released from escrow will be forfeited and cancelled.
Administrative Support Agreement
Merida entered into an Administrative Services Agreement with Merida Manager III, LLC for $5,000 per month for office space, utilities and secretarial and administrative support from November 2019 (the “Administrative Agreement”). In October 2021, Merida ended the $5,000 Administrative Agreement and as a condition of closing the Business Combination, forfeited accrued administrative fees as of September 30, 2021 in the amount of $55,000. As the result of ending the Administrative Agreement, the outstanding balance for the years ended December 31, 2022, 2021 and 2020 was $0, $0 and $50,000, respectively.
28
The Administrative Agreement was solely for Merida’s benefit and was not intended to provide Merida’s officers or directors compensation in lieu of a salary or other compensation. Other than the $5,000 per month administrative fee, the payment of consulting, success or finder fees to the Sponsor and Merida’s officers, directors, the Merida initial stockholders or their affiliates in connection with the consummation of an initial business combination and the repayment of loans that may be made by the Sponsor to Merida, no compensation or fees of any kind, including finder’s, consulting fees and other similar fees, were paid to the Sponsor, the Merida initial stockholders, special advisors, members of Merida’s management team or their respective affiliates, for services rendered prior to or in connection with the consummation of Merida’s initial business combination.
After the Business Combination, members of Merida’s management team who remained with the combined company may be paid consulting, management, or other fees from the combined company. Such compensation will be publicly disclosed at the time of its determination in a filing with the SEC, to the extent required.
Advances — Related Party
In anticipation of the underwriters’ election to fully exercise their over-allotment option, the Sponsor advanced Merida an additional $41,458 to cover the purchase of the additional IPO Warrants. At December 31, 2021 and 2020, advances of $16,458 were outstanding and due on demand. This amount was repaid in connection with the closing of the Business Combination and was no longer outstanding as of December 31, 2022.
Promissory Note — Related Party
On August 6, 2019, Merida issued an unsecured promissory note to the Sponsor (the “Sponsor Promissory Note”), pursuant to which Merida borrowed an aggregate principal amount of $100,569 under the Sponsor Promissory Note, which was also the largest aggregate amount of principal outstanding under the Sponsor Promissory Note. The Sponsor Promissory Note was non-interest bearing and payable on the earlier of (a) September 30, 2020, (b) the consummation of Merida’s initial public offering or (c) the date on which Merida determined not to proceed with the initial public offering. The $339 that remained outstanding under the Sponsor Promissory Note prior to the closing of the Business Combination was repaid in connection with the closing of the Business Combination and was no longer outstanding as of December 31, 2022.
On June 25, 2021, Merida issued an unsecured promissory note in the amount of $400,000 to the Sponsor (the “Promissory Note”), pursuant to which Merida borrowed an aggregate principal amount of $400,000 under the Promissory Note, which was also the largest aggregate amount of principal outstanding under the Promissory Note. The Promissory Note was non-interest bearing and payable prior to the consummation of a Business Combination. The $400,000 that remained outstanding under the Promissory Note prior to the closing of the Business Combination was repaid in connection with the closing of the Business Combination and was no longer outstanding as of December 31, 2022.
On October 13, 2021, Merida issued an unsecured promissory note in the amount of $400,000 to the Sponsor (the “Second Promissory Note”), pursuant to which Merida borrowed an aggregate principal amount of $400,000 under the Second Promissory Note, which was also the largest aggregate amount of principal outstanding under the Second Promissory Note. The Second Promissory Note was non-interest bearing and payable prior to the consummation of a Business Combination. The $400,000 that remained outstanding under the Second Promissory Note prior to the closing of the Business Combination was repaid in connection with the closing of the Business Combination and was no longer outstanding as of December 31, 2022.
Registration Rights
At the closing of the Business Combination, the Company entered into the Registration Rights Agreement with the registration rights holders. Pursuant to the terms of the Registration Rights Agreement, (a) any (i) outstanding share of Common Stock or any Private Warrants, and (ii) shares of Common Stock issued as Earn Out Shares to shareholders of Legacy Leafly that received shares of Common Stock in the Business Combination or issuable as Earn Out Shares pursuant to the Earn Out Plan and (b) any other equity security of the Company issued or issuable with respect to any such share of Common Stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise, will be entitled to registration rights.
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Pursuant to the terms of the Registration Rights Agreement, we previously filed registration statements and have filed a shelf registration statement, of which this prospectus is a part, in each case, registering the resale of the registration rights holders shares and we are obligated to use our best efforts to cause it to become effective as soon as practicable after the filing thereof, but in no event later than 60 days following the filing deadline. The Sponsor, EBC, and their transferees may demand not more than three demand registrations or shelf underwritten offerings in the aggregate and not more than two demand registrations in any twelve-month period, and the Leafly holders may demand not more than six demand registrations or shelf underwritten offerings in the aggregate and not more than two demand registrations in any twelve-month period, and the Company will not be obligated to participate in more than four demand registrations or shelf underwritten offerings, in any twelve-month period. The Company will bear the expenses incurred in connection with the filing of any registration statements filed pursuant to the terms of the Registration Rights Agreement.
Pursuant to the Convertible Notes, the Company has also agreed to register the resale of the Common Stock issuable upon conversion of the Convertible Notes on similar terms as the Registration Rights Agreement described above, of which this prospectus so registers. The Convertible Notes bear interest at a rate of 8.00% per annum, paid in cash semi-annually in arrears on July 31 and January 31 of each year, and mature on January 31, 2025. The largest aggregate amount of principal outstanding under the Convertible Notes was $30.0 million during the three years ended December 31, 2022, which is also the aggregate amount of principal outstanding as of the date of this prospectus. During the year ended December 31, 2022 we made an interest payment of $1.16 million on the Convertible Notes. Subsequently, on January 31, 2023, we made an interest payment of $1.20 million on the Convertible Notes.
Other
One of Leafly’s significant investors, Brendan Kennedy, is a member of the board of directors of Tilray Brands, Inc., which is the parent company of High Park Holdings Ltd., a customer of Leafly, and therefore has been identified as a related party. During the years ended December 31, 2022, 2021 and 2020, Leafly recorded approximately $0, $142,000 and $239,000, respectively, of revenue earned from contracts with this customer.
In June 2021, Mr. Kennedy purchased a Pre-Closing Convertible Promissory Note totaling $1,000,000, which bore interest at 8% annually. These notes, including all principal and accrued interest, were converted to Common Stock according to their terms, which was then exchanged for merger consideration in the Business Combination. The largest aggregate amount of principal outstanding under Mr. Kennedy’s Pre-Closing Convertible Promissory Note was $1,000,000.
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UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of certain material U.S. federal income tax consequences of the acquisition, ownership and disposition of our Common Stock and Private Warrants, which we refer to collectively as our securities. This discussion applies only to securities that are held as capital assets for U.S. federal income tax purposes and is applicable only to holders who are receiving our securities from us or the Selling Securityholders in this offering.
This discussion is a summary only and does not describe all of the tax consequences that may be relevant to you in light of your particular circumstances, including but not limited to the alternative minimum tax, the Medicare tax on certain investment income and the different consequences that may apply if you are subject to special rules that apply to certain types of investors, including but not limited to:
This discussion is based on the Code, and administrative pronouncements, judicial decisions and final, temporary and proposed U.S. Treasury regulations as of the date hereof, which are subject to change, possibly on a retroactive basis, and changes to any of which subsequent to the date of this prospectus may affect the tax consequences described herein. This discussion does not address any aspect of state, local or non-U.S. taxation, or any U.S. federal taxes other than income taxes (such as gift and estate taxes).
We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree with the discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adversely affect the accuracy of the statements in this discussion. You are urged to consult your tax advisor with respect to the application of U.S. federal tax laws to your particular situation, as well as any tax consequences arising under the laws of any state, local or foreign jurisdiction.
This discussion does not consider the tax treatment of partnerships or other pass-through entities or persons who hold our securities through such entities. If a partnership (or other entity or arrangement classified as a partnership or other pass-through entity for U.S. federal income tax purposes) is the beneficial owner of our securities, the U.S. federal income tax treatment of a partner or member in the partnership or other pass-through entity generally will depend on the status of the partner or member and the activities of the partnership or other pass-through entity. If you are a partner or member of a partnership or other pass-through entity holding our securities, we urge you to consult your own tax advisor.
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THIS DISCUSSION IS ONLY A SUMMARY OF CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS ASSOCIATED WITH THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES. EACH PROSPECTIVE INVESTOR IN OUR SECURITIES IS URGED TO CONSULT THE INVESTOR’S OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY UNITED STATES FEDERAL NON-INCOME, STATE, LOCAL, AND NON-U.S. TAX LAWS.
U.S. Holders
This section applies to you if you are a “U.S. holder.” A U.S. holder is a beneficial owner of our shares of Common Stock or Private Warrants who or that is, for U.S. federal income tax purposes:
Taxation of Distributions. If we pay distributions in cash or other property (other than certain distributions of our stock or rights to acquire our stock) to U.S. holders of shares of our Common Stock, such distributions generally will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. holder’s adjusted tax basis in our Common Stock. Any remaining excess will be treated as gain realized on the sale or other disposition of the Common Stock and will be treated as described under “U.S. Holders—Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock and Private Warrants” below.
Dividends we pay to a U.S. holder that is a taxable corporation generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), and provided certain holding period requirements are met, dividends we pay to a non-corporate U.S. holder may constitute “qualified dividends” that will be subject to tax at the maximum tax rate accorded to long-term capital gains. If the holding period requirements are not satisfied, then a corporation may not be able to qualify for the dividends received deduction and would recognize taxable income equal to the entire dividend amount, and non-corporate holders may be subject to tax on such dividend at regular ordinary income tax rates instead of the preferential rate that applies to qualified dividend income.
Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock and Private Warrants. A U.S. holder will generally recognize gain or loss on the sale, taxable exchange or other taxable disposition of our Common Stock or Private Warrants which, in general, would include a redemption of Private Warrants that is treated as a sale as described below. Any such gain or loss will be capital gain or loss in an amount equal to the difference between the amount realized and the U.S. holder’s adjusted tax basis in the Common Stock or Private Warrants. Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. holder’s holding period for the Common Stock or Private Warrants so disposed of exceeds one year. If the holding period requirements are not satisfied, any gain on a sale or taxable disposition of the shares or warrants would be subject to short-term capital gain treatment and would be taxed at regular ordinary income tax rates. Long-term capital gains recognized by non-corporate U.S. holders may be eligible to be taxed at reduced rates. The deductibility of capital losses is subject to limitations.
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Generally, the amount of gain or loss recognized by a U.S. holder is an amount equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such disposition and (ii) the U.S. holder’s adjusted tax basis in its Common Stock or Private Warrants so disposed of. A U.S. holder’s adjusted tax basis in the U.S. holder’s Common Stock or Private Warrants generally will equal the U.S. holder’s acquisition cost for the Common Stock or Private Warrants less, in the case of a share of Common Stock, any prior distributions treated as a return of capital. In the case of any shares of Common Stock or Private Warrants originally acquired as part of an investment unit, the acquisition cost for the share of Common Stock and Private Warrants that were part of such unit would equal an allocable portion of the acquisition cost of the unit based on the relative fair market values of the components of the unit at the time of acquisition.
Exercise, Lapse or Redemption of a Private Warrant. Except as discussed below with respect to the cashless exercise of a warrant, a U.S. holder generally will not recognize taxable gain or loss on the acquisition of our Common Stock upon exercise of a Private Warrant for cash. The U.S. holder’s tax basis in the share of our Common Stock received upon exercise of the Private Warrants generally will be an amount equal to the sum of the U.S. holder’s initial investment in the Private Warrants and the exercise price. It is unclear whether the U.S. holder’s holding period for the Common Stock received upon exercise of the Private Warrants will begin on the date following the date of exercise or on the date of exercise of the Private Warrants; in either case, the holding period will not include the period during which the U.S. holder held the Private Warrants. If a Private Warrant is allowed to lapse unexercised, a U.S. holder generally will recognize a capital loss equal to such holder’s tax basis in the Private Warrants.
The tax consequences of a cashless exercise of a Private Warrant are not clear under current tax law. A cashless exercise may be tax-free, either because the exercise is not a gain realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either tax-free situation, a U.S. holder’s basis in the Common Stock received would equal the holder’s basis in the Private Warrant. If the cashless exercise were treated as not being a gain realization event, a U.S. holder’s holding period in the Common Stock would either include the period during which the U.S. holder held the Private Warrant or be treated as commencing on the date following the date of exercise (or possibly the date of exercise) of the Private Warrant. If the cashless exercise were treated as a recapitalization, the holding period of the Common Stock would include the holding period of the Private Warrant.
It is also possible that a cashless exercise could be treated in part as a taxable exchange in which gain or loss would be recognized. In such event, a U.S. holder would recognize gain or loss with respect to the portion of the exercised Private Warrants treated as surrendered to pay the exercise price of the Private Warrants (the “surrendered warrants”). The U.S. holder would recognize capital gain or loss in an amount equal to the difference between the fair market value of the surrendered warrants and the U.S. holder’s tax basis in such Private Warrants. Such gain or loss would be long-term or short-term depending on the U.S. holder’s holding period in the surrendered warrants. In this case, a U.S. holder’s tax basis in the Common Stock received would equal the sum of the U.S. holder’s initial tax basis in the Private Warrants exercised (except for any such tax basis allocable to the surrendered warrants) and the exercise price of the exercised Private Warrants. A U.S. holder’s holding period for the Common Stock would commence on the date following the date of exercise (or possibly the date of exercise) of the Private Warrant.
Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, including when a U.S. holder’s holding period would commence with respect to the Common Stock received, there can be no assurance which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. holders should consult their tax advisors regarding the tax consequences of a cashless exercise.
If we redeem Private Warrants for cash pursuant to the redemption provisions described in the section of this prospectus entitled “Description of Capital Stock—IPO Warrants” or if we purchase Private Warrants in an open market transaction, such redemption or purchase generally will be treated as a taxable disposition to the U.S. holder, taxed as described above under “—Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock and Private Warrants.”
Possible Constructive Distributions. The terms of each Private Warrant provide for an adjustment to the number of shares of Common Stock for which the Private Warrant may be exercised or to the exercise price of the Private Warrant in certain events, as discussed in the section of this prospectus entitled “Description of Capital Stock—IPO Warrants.” An adjustment which has the effect of preventing dilution generally is not taxable. The U.S. holders of the Private Warrants would, however, be treated as receiving a constructive distribution from us if, for
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example, the adjustment to the number of such shares or to such exercise price increases the warrantholders’ proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of shares of Common Stock that would be obtained upon exercise or through a decrease in the exercise price of the Private Warrant) as a result of a distribution of cash or other property, such as other securities, to the holders of shares of our Common Stock, or as a result of the issuance of a stock dividend to holders of shares of our Common Stock, in each case which is taxable to the holders of such shares as a distribution. Such constructive distribution would be subject to tax as described under “—Taxation of Distributions” in the same manner as if the U.S. holders of the Private Warrants received a cash distribution from us equal to the fair market value of such increased interest.
Information Reporting and Backup Withholding. In general, information reporting requirements may apply to dividends paid to a U.S. holder and to the proceeds of the sale or other disposition of our shares of Common Stock and Private Warrants, unless the U.S. holder is an exempt recipient. Backup withholding may apply to such payments if the U.S. holder fails to provide a taxpayer identification number, a certification of exempt status or has been notified by the IRS that the U.S. holder is subject to backup withholding (and such notification has not been withdrawn).
Any amounts withheld under the backup withholding rules generally should be allowed as a refund or a credit against a U.S. holder’s U.S. federal income tax liability provided the required information is timely furnished to the IRS.
Non-U.S. Holders
This section applies to you if you are a “Non-U.S. holder.” As used herein, the term “Non-U.S. holder” means a beneficial owner of our Common Stock or Private Warrants who or that is for U.S. federal income tax purposes:
but generally does not include an individual who is present in the U.S. for 183 days or more in the taxable year of disposition. If you are such an individual, you should consult your tax advisor regarding the U.S. federal income tax consequences of the acquisition, ownership or sale or other disposition of our securities.
Taxation of Distributions. In general, any distributions (including constructive distributions) we make to a Non-U.S. holder of shares of our Common Stock, to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles), will constitute dividends for U.S. federal income tax purposes and, provided such dividends are not effectively connected with the Non-U.S. holder’s conduct of a trade or business within the United States (and are not attributable to a U.S. permanent establishment under an applicable treaty), we will be required to withhold tax from the gross amount of the dividend at a rate of 30%, unless such Non-U.S. holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of the Non-U.S. holder’s eligibility for such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E as applicable). In the case of any constructive dividend, it is possible that this tax would be withheld from any amount owed to a Non-U.S. holder by the applicable withholding agent, including cash distributions on other property or sale proceeds from Private Warrants or other property subsequently paid or credited to such holder. Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the Non-U.S. holder’s adjusted tax basis in the Non-U.S. holder’s shares of our Common Stock and, to the extent such distribution exceeds the Non-U.S. holder’s adjusted tax basis, as gain realized from the sale or other disposition of the Common Stock, which will be treated as described under “Non-U.S. Holders—Gain on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock and Private Warrants” below.
The withholding tax does not apply to dividends paid to a Non-U.S. holder who provides a Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. holder’s conduct of a trade or business within the United States (or if a tax treaty applies, are attributable to a U.S. permanent establishment or fixed base maintained by the Non-U.S. holder). Instead, the effectively connected dividends will be subject to regular U.S. income tax as if the Non-U.S. holder were a U.S. holder, subject to an applicable income tax treaty providing otherwise. A non-U.S. corporation receiving effectively connected dividends may also be subject to an additional “branch profits tax” imposed at a rate of 30% (or a lower treaty rate).
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Exercise, Lapse or Redemption of a Private Warrant. The U.S. federal income tax treatment of a Non-U.S. holder’s exercise of a warrant, or the lapse of a warrant held by a Non-U.S. holder, generally will correspond to the U.S. federal income tax treatment of the exercise or lapse of a warrant by a U.S. holder, as described under “U.S. Holders—Exercise, Lapse or Redemption of a Private Warrant” above, although to the extent a cashless exercise results in a taxable exchange, the consequences would be similar to those described below in “Non-U.S. Holders—Gain on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock and Private Warrants.” The U.S. federal income tax treatment for a Non-U.S. holder of a redemption of Private Warrants for cash described in the section of this prospectus entitled “Description of Capital Stock—IPO Warrants” (or if we purchase Private Warrants in an open market transaction) would be similar to that described below in “Non-U.S. Holders—Gain on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock and Private Warrants.”
Gain on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock and Private Warrants. Subject to the discussions below of backup withholding and FATCA, a Non-U.S. holder generally will not be subject to U.S. federal income or withholding tax in respect of gain recognized on a sale, taxable exchange or other taxable disposition of our Common Stock or Private Warrants (including a redemption of our Private Warrants), unless:
We believe that we are not, and do not anticipate becoming, a U.S. real property holding corporation; however, there can be no assurance that we will not become a U.S. real property holding corporation in the future.
Unless an applicable treaty provides otherwise, gain described in the first bullet point above will be subject to tax at generally applicable U.S. federal income tax rates as if the Non-U.S. holder were a U.S. holder. Any gains described in the first bullet point above of a Non-U.S. holder that is a foreign corporation may also be subject to an additional “branch profits tax” at a 30% rate (or lower treaty rate).
If the second bullet point above applies to a Non-U.S. holder, gain recognized by such holder on the sale, exchange or other disposition of our Common Stock or Private Warrants will be subject to tax at generally applicable U.S. federal income tax rates. In addition, a buyer of our Common Stock or Private Warrants from such holder may be required to withhold U.S. federal income tax at a rate of 15% of the amount realized upon such distribution.
Possible Constructive Distributions. The terms of each Private Warrant provide for an adjustment to the number of shares of Common Stock for which the Private Warrant may be exercised or to the exercise price of the Private Warrant in certain events, as discussed in the section of this prospectus entitled “Description of Capital Stock—IPO Warrants.” An adjustment which has the effect of preventing dilution is generally not taxable. The Non-U.S. holders of Private Warrants would, however, be treated as receiving a constructive distribution from us if, for example, the adjustment increases the holder’s proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of shares of Common Stock that would be obtained upon exercise or through a decrease in the exercise price of the Private Warrant) as a result of a distribution of cash or other property, such as other securities, to the holders of shares of our Common Stock, or as a result of a stock dividend to the holders of our Common Stock, in each case which is taxable to such holders as a distribution. Any constructive distribution received by a Non-U.S. holder would be subject to U.S. federal income tax (including any applicable withholding) in the same manner as if such Non-U.S. holder received a cash distribution from us equal to the fair market value of such increased interest without any corresponding receipt of cash. Any resulting withholding tax may be withheld from future cash distributions as described above.
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Information Reporting and Backup Withholding. Information returns will be filed with the IRS in connection with payments of dividends and the proceeds from a sale or other disposition of our shares of Common Stock and Private Warrants. A Non-U.S. holder may have to comply with certification procedures to establish that the Non-U.S. holder is not a United States person (by providing certification of the Non-U.S. holder’s foreign status, under penalties of perjury, on a duly executed applicable IRS Form W-8 or by otherwise establishing an exemption) in order to avoid information reporting and backup withholding requirements. The certification procedures required to claim a reduced rate of withholding under a treaty will satisfy the certification requirements necessary to avoid the backup withholding as well. Backup withholding is not an additional tax and the amount of any backup withholding from a payment to a Non-U.S. holder will be allowed as a credit against such holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.
FATCA Withholding Taxes. Provisions commonly referred to as “FATCA” impose withholding of 30% on payments of dividends (including constructive dividends) and, subject to the discussion of certain proposed U.S. Treasury regulations below, on the gross proceeds from a sale or other disposition of our Common Stock paid to “foreign financial institutions” (which is broadly defined for this purpose and in general includes investment vehicles) and certain other Non-U.S. entities unless various U.S. information reporting and due diligence requirements (generally relating to ownership by U.S. persons of interests in or accounts with those entities) have been satisfied by, or an exemption applies to, the payee (typically certified as to by the delivery of a properly completed IRS Form W-8BEN-E). Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules. Under certain circumstances, a Non-U.S. holder might be eligible for refunds or credits of such withholding taxes, and a Non-U.S. holder might be required to file a U.S. federal income tax return to claim such refunds or credits. Prospective investors should consult their tax advisors regarding the effects of FATCA on their investment in our securities. The IRS released proposed U.S. Treasury regulations that, if finalized in their present form, would eliminate the U.S. federal withholding tax of 30% applicable to the gross proceeds of a sale or other disposition of our Common Stock. In its preamble to such proposed U.S. Treasury regulations, the IRS stated that taxpayers may generally rely on the proposed U.S. Treasury regulations until final U.S. Treasury regulations are issued.
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PLAN OF DISTRIBUTION
We are registering up to $75,000,000 in aggregate offering price of Common Stock, preferred stock, debt securities, warrants or units that we may from time to time offer and sell in one or more offerings.
In addition, we are registering the issuance of 10,450,987 shares of Common Stock issuable by us upon the exercise Public Warrants originally issued in the initial public offering of units of Merida and Private Warrants originally issued in a private placement simultaneously with Merida’s initial public offering.
We are also registering the offer and resale from time to time by the Selling Securityholders or their permitted transferees, of up to (A) 17,338,901 shares of Common Stock, which includes (i) 11,943,212 shares of Common Stock (a) issued in connection with the Business Combination by certain Selling Securityholders named in this prospectus, which shares were originally issued to holders of Legacy Leafly’s common stock and preferred stock, and were automatically converted into the right to receive a number of shares of Merida’s common stock at the Exchange Ratio, or (b) acquired after the Business Combination by certain Selling Securityholders named in this prospectus to the extent such shares of Common Stock are “restricted securities” (as defined in Rule 144 under the Securities Act) or are otherwise held by an “affiliate” (as defined in Rule 144 under the Securities Act) of the Company; (ii) 1,625,194 Sponsor Shares originally issued at a price of approximately $0.009 per share; (iii) 3,762,287 shares of Common Stock that may be issued upon exercise of Private Warrants referred to in clause (C); and (iv) 8,208 shares of Common Stock underlying certain outstanding options to purchase shares of Common Stock; (B) 2,495,997 shares of Common Stock reserved for issuance upon the conversion of $30,000,000 aggregate principal amount of Convertible Notes plus the amount of accrued and unpaid interest, if any, that is payable in shares of Common Stock in connection with the conversion thereof with an initial conversion price of $12.50 per share; and (C) 3,762,287 Private Warrants originally purchased at a price of $1.00 per warrant, from time to time, through any means described in this section.
We will receive proceeds from the issuance and sale of our Common Stock, preferred stock, debt securities, warrants or units. We will pay any underwriting discounts and commissions and expenses incurred by us in connection with the sale of securities by us.
We will not receive any of the proceeds from the sale of the securities by the Selling Securityholders. With respect to Common Stock underlying the IPO Warrants, we will not receive any proceeds from such shares except with respect to amounts received by us upon exercise of such IPO Warrants to the extent such IPO Warrants are exercised for cash. In such case, we will receive up to an aggregate of approximately $120.2 million from the exercise of all such IPO Warrants.
The Selling Securityholders will pay any underwriting discounts and commissions and expenses incurred by the Selling Securityholders for brokerage, accounting, tax or legal services or any other expenses incurred by the Selling Securityholders in disposing of the securities. We will bear all other costs, fees and expenses incurred in effecting the registration of the securities covered by this prospectus, including, without limitation, all registration and filing fees, Nasdaq listing fees and fees and expenses of our counsel and our independent registered public accountants.
The securities to be offered and sold by us covered by this prospectus may be offered and sold from time to time.
The securities beneficially owned by the Selling Securityholders covered by this prospectus may be offered and sold from time to time by the Selling Securityholders. The term “Selling Securityholders” includes their permitted transferees who later come to hold any of the Selling Securityholders’ interest in the shares of Common Stock or IPO Warrants in accordance with the terms of the agreement(s) governing the registration rights applicable to such Selling Securityholder’s shares of Common Stock or IPO Warrants. The Selling Securityholders will act independently of us in making decisions with respect to the timing, manner and size of each sale. Such sales may be made on one or more exchanges or in the over-the-counter market or otherwise, at prices and under terms then prevailing or at prices related to the then current market price or in negotiated transactions. We and each Selling Securityholder reserve the right to accept and, together with our and its respective agents, to reject, any proposed purchase of securities to be made directly or through agents. We, the Selling Securityholders and any of their permitted transferees may sell their securities offered by this prospectus on any stock exchange, market or trading facility on which the securities are traded or in private transactions. If underwriters are used in the sale, such underwriters will acquire the shares for their own account. These sales may be at a fixed price or varying prices, which may be changed, or at market prices prevailing at the time of sale, at prices relating to prevailing market
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prices or at negotiated prices. The securities may be offered to the public through underwriting syndicates represented by managing underwriters or by underwriters without a syndicate. The obligations of the underwriters to purchase the securities will be subject to certain conditions.
We or, subject to the limitations set forth in any applicable registration rights agreement, the Selling Securityholders may use any one or more of the following methods when selling the securities offered by this prospectus:
There can be no assurance that we or the Selling Securityholders will sell all or any of the securities offered by this prospectus. In addition, we and the Selling Securityholders may also sell securities under Rule 144 under the Securities Act, if available, or in other transactions exempt from registration, rather than under this prospectus. We and the Selling Securityholders, as applicable, have the sole and absolute discretion not to accept any purchase offer or make any sale of securities if we or they deem the purchase price to be unsatisfactory at any particular time.
Subject to the terms of the agreement(s) governing the registration rights applicable to a Selling Securityholder’s shares of Common Stock, such Selling Securityholder may transfer shares of Common Stock or IPO Warrants to one or more “permitted transferees” in accordance with such agreements and, if so transferred, such permitted transferee(s) will be the selling beneficial owner(s) for purposes of this prospectus. Upon being notified by a Selling Securityholder interest intends to sell our securities, we will, to the extent required, promptly file a supplement to this prospectus to name specifically such person as a Selling Securityholder.
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With respect to a particular offering of the securities by us or of securities held by the Selling Securityholders, to the extent required, an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement of which this prospectus is part, will be prepared and will set forth the following information:
In connection with distributions of the securities or otherwise, the Selling Securityholders may enter into hedging transactions with broker-dealers or other financial institutions. In connection with such transactions, broker-dealers or other financial institutions may engage in short sales of the securities in the course of hedging the positions they assume with Selling Securityholders. The Selling Securityholders may also sell the securities short and redeliver the securities to close out such short positions. The Selling Securityholders may also enter into option or other transactions with broker-dealers or other financial institutions which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). The Selling Securityholders may also pledge securities to a broker-dealer or other financial institution, and, upon a default, such broker-dealer or other financial institution, may effect sales of the pledged securities pursuant to this prospectus (as supplemented or amended to reflect such transaction).
In order to facilitate the offering of the securities, any underwriters or agents, as the case may be, involved in the offering of such securities may engage in transactions that stabilize, maintain or otherwise affect the price of our securities. Specifically, the underwriters or agents, as the case may be, may overallot in connection with the offering, creating a short position in our securities for their own account. In addition, to cover overallotments or to stabilize the price of our securities, the underwriters or agents, as the case may be, may bid for, and purchase, such securities in the open market. Finally, in any offering of securities through a syndicate of underwriters, the underwriting syndicate may reclaim selling concessions allotted to an underwriter or a broker-dealer for distributing such securities in the offering if the syndicate repurchases previously distributed securities in transactions to cover syndicate short positions, in stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of the securities above independent market levels. The underwriters or agents, as the case may be, are not required to engage in these activities, and may end any of these activities at any time.
We and the Selling Securityholders may solicit offers to purchase the securities directly from, and may sell such securities directly to, institutional investors or others. In this case, no underwriters or agents would be involved. The terms of any of those sales, including the terms of any bidding or auction process, if utilized, will be described in the applicable prospectus supplement.
It is possible that one or more underwriters may make a market in our securities, but such underwriters will not be obligated to do so and may discontinue any market making at any time without notice. We cannot give any assurance as to the liquidity of the trading market for our securities. Our shares of Common Stock and IPO Warrants are currently listed on Nasdaq under the symbols “LFLY” and “LFLYW,” respectively.
We and the Selling Securityholders may authorize underwriters, broker-dealers or agents to solicit offers by certain purchasers to purchase the securities at the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. The contracts will be subject only to those conditions set forth in the prospectus supplement, and the prospectus supplement will set forth any commissions we or the Selling Securityholders pay for solicitation of these contracts.
A Selling Securityholder may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus
39
supplement indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by any Selling Securityholder or borrowed from any Selling Securityholder or others to settle those sales or to close out any related open borrowings of stock and may use securities received from any Selling Securityholder in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and will be identified in the applicable prospectus supplement (or a post-effective amendment). In addition, any Selling Securityholder may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell the securities short using this prospectus. Such financial institution or other third party may transfer its economic short position to investors in our securities or in connection with a concurrent offering of other securities.
In effecting sales, broker-dealers or agents engaged by us or the Selling Securityholders may arrange for other broker-dealers to participate. Broker-dealers or agents may receive commissions, discounts or concessions from the Selling Securityholders in amounts to be negotiated immediately prior to the sale.
In compliance with the guidelines of the Financial Industry Regulatory Authority (“FINRA”), the aggregate maximum discount, commission, fees or other items constituting underwriting compensation to be received by any FINRA member or independent broker-dealer will not exceed 8% of the gross proceeds of any offering pursuant to this prospectus and any applicable prospectus supplement.
If at the time of any offering made under this prospectus a member of FINRA participating in the offering has a “conflict of interest” as defined in FINRA Rule 5121 (“Rule 5121”), that offering will be conducted in accordance with the relevant provisions of Rule 5121.
To our knowledge, there are currently no plans, arrangements or understandings between the Selling Securityholders and any broker-dealer or agent regarding the sale of the securities by the Selling Securityholders. Upon our notification by a Selling Securityholder that any material arrangement has been entered into with an underwriter or broker-dealer for the sale of securities through a block trade, special offering, exchange distribution, secondary distribution or a purchase by an underwriter or broker-dealer, we will file, if required by applicable law or regulation, a supplement to this prospectus pursuant to Rule 424(b) under the Securities Act disclosing certain material information relating to such underwriter or broker-dealer and such offering.
Underwriters, broker-dealers or agents may facilitate the marketing of an offering online directly or through one of their affiliates. In those cases, prospective investors may view offering terms and a prospectus online and, depending upon the particular underwriter, broker-dealer or agent, place orders online or through their financial advisors.
In offering the securities covered by this prospectus, we, the Selling Securityholders and any underwriters, broker-dealers or agents who execute sales for the Selling Securityholders may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. Any discounts, commissions, concessions or profit they earn on any resale of those securities may be underwriting discounts and commissions under the Securities Act.
The underwriters, broker-dealers and agents may engage in transactions with us or the Selling Securityholders, may have banking, lending or other relationships with us or perform services for us or the Selling Securityholders, in the ordinary course of business.
In order to comply with the securities laws of certain states, if applicable, the securities must be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain states the securities may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
The Selling Securityholders and any other persons participating in the sale or distribution of the securities will be subject to applicable provisions of the Securities Act and the Exchange Act, and the rules and regulations thereunder, including, without limitation, Regulation M. These provisions may restrict certain activities of and limit the timing of purchases and sales of any of the securities by, the Selling Securityholders or any other person which limitations may affect the marketability of the shares of the securities.
We will make copies of this prospectus available to the Selling Securityholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The Selling Securityholders may indemnify
40
any agent, broker-dealer or underwriter that participates in transactions involving the sale of the securities against certain liabilities, including liabilities arising under the Securities Act.
We have agreed to indemnify the Selling Securityholders against certain liabilities, including certain liabilities under the Securities Act, the Exchange Act or other federal or state law. Agents, broker-dealers and underwriters may be entitled to indemnification by us and the Selling Securityholders against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments which the agents, broker-dealers or underwriters may be required to make in respect thereof.
The Private Warrants (including Common Stock issuable upon exercise of such Private Warrants) are subject to restrictions on transfer, assignment and sale and, in certain circumstances, are subject to redemption. See “Description of Capital Stock — IPO Warrants.”
A holder of Private Warrants may exercise its Private Warrants in accordance with the IPO Warrant Agreement on or before the expiration date set forth therein by surrendering, at the office of the IPO Warrant Agent, the certificate evidencing such Private Warrant, with the form of election to purchase set forth thereon, properly completed and duly executed, accompanied by full payment of the exercise price and any and all applicable taxes due in connection with the exercise of the warrant, subject to any applicable provisions relating to cashless exercises in accordance with the IPO Warrant Agreement.
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LEGAL MATTERS
The validity of securities offered by this prospectus has been passed on by Perkins Coie LLP, Seattle Washington.
EXPERTS
The consolidated financial statements of Leafly Holdings, Inc. as of December 31, 2022 and 2021 incorporated by reference in this prospectus have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report thereon, incorporated by reference in this prospectus, and are incorporated by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-3 under the Securities Act with respect to the securities offered hereby. This prospectus, which constitutes part of the registration statement, does not contain all of the information set forth in the registration statement and the exhibits and schedules thereto. For further information with respect to the Company and its securities, reference is made to the registration statement and the exhibits and any schedules filed therewith. Statements contained in this prospectus as to the contents of any contract or other document referred to are not necessarily complete and in each instance, if such contract or document is filed as an exhibit, reference is made to the copy of such contract or other document filed as an exhibit to the registration statement, each statement being qualified in all respects by such reference. The SEC maintains a website at www.sec.gov, from which interested persons can electronically access the registration statement, including the exhibits and any schedules thereto and which contains the periodic reports, proxy and information statements and other information that we file electronically with the SEC.
The Company files reports, proxy statements and other information with the SEC as required by the Exchange Act. You may access information on the Company at the SEC website containing reports, proxy statements and other information free of charge at www.sec.gov.
Statements contained in this prospectus as to the contents of any contract or other document referred to are not necessarily complete and in each instance, if such contract or document is filed as an exhibit, reference is made to the copy of such contract or other document filed as an exhibit to the registration statement, each statement being qualified in all respects by such reference.
All information contained in this document related to Merida has been supplied by Merida, and all such information relating to the Leafly has been supplied by Leafly. Information provided by one entity does not constitute any representation, estimate or projection of the other entity.
We also maintain an Internet website at www.leafly.com. Through our website, we make available, free of charge, the following documents of the Company as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC: Annual Reports on Form 10-K; proxy statements for our annual and special shareholder meetings; Quarterly Reports on Form 10-Q; Current Reports on Form 8-K; Forms 3, 4 and 5 and Schedules 13D or 13G; and amendments to those documents. The information contained on, or that may be accessed through, our website is not part of, and is not incorporated into, this prospectus or the registration statement of which it forms a part.
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INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference information in this document. This means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be part of this document, except for any information that is superseded by information that is included directly in this document.
We are incorporating by reference the filings listed below and any additional documents that we may file with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date hereof and prior to the termination of any offering (other than documents or information deemed to have been furnished and not filed in accordance with SEC rules):
Any statement contained in this prospectus, or in a document incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded to the extent that a statement contained herein, or in any subsequently filed document that also is incorporated or deemed to be incorporated by reference herein, modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
Upon written or oral request, we will provide to you, without charge, a copy of any or all of the documents that are incorporated by reference into this prospectus but not delivered with the prospectus, including exhibits which are specifically incorporated by reference into such documents. Requests should be directed to: Leafly Holdings, Inc., Attention: Investor Relations, 113 Cherry Street PMB 88154, Seattle, Washington 98104, telephone (206) 455-9504.
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PART II — INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth all costs and expenses, other than underwriting discounts and commissions, payable by the registrant in connection with the offering of the securities being registered.
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| Amount | ||
SEC registration fee |
| $ | 34,925.14(1) | |
Stock exchange and other listing fees |
| $ | (2) | |
Printing and engraving expenses |
| $ | (2) | |
Legal fees and expenses |
| $ | (2) | |
Accounting fees and expenses |
| $ | (2) | |
Miscellaneous |
| $ | (2) | |
Total |
| $ | (2) | |
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware (the “DGCL”) permits a corporation, under specified circumstances, to indemnify its directors, officers, employees and agents against expenses (including attorneys’ fees) and other liabilities actually and reasonably incurred by them as a result of any suit (other than a suit brought by or in the right of the corporation) brought against them in their capacity as such, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, if they had no reasonable cause to believe their conduct was unlawful. Section 145 of the DGCL also provides that directors, officers, employees and agents may also be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by them in connection with a suit brought by or in the right of the corporation if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made, unless otherwise determined by the court, if such person was adjudged liable to the corporation. The DGCL provides that the indemnification described above shall not be deemed exclusive of other indemnification that may be granted by a corporation pursuant to its by-laws, disinterested directors’ vote, stockholders’ vote, agreement or otherwise.
The DGCL also provides corporations with the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation in a similar capacity for another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his or her status, whether or not the corporation would have the power to indemnify him or her against such liability as described above.
The registrant’s certificate of incorporation and bylaws provide for indemnification of its directors and officers to the maximum extent permitted by the DGCL. In addition, the registrant has entered into indemnification agreements with each of its current directors and executive officers. Each indemnification agreement provides that the registrant will indemnify the director or executive officer to the fullest extent permitted by law if the director or officer was, is made, or is threatened to be made a party to any proceeding (including any criminal proceeding, if the director or officer had no reason to believe his or her conduct was unlawful), other than a proceeding by or in the right of the registrant, for all expenses, judgments, liabilities, fines, penalties and amounts paid in settlement actually and reasonably incurred by the director or officer in connection with such proceeding, or, for all expenses actually and reasonably incurred by the director or officer in connection with any proceeding by or in the right of the
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registrant, in both cases, so long as the director or officer acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the registrant. The indemnification agreement also provides for, among other things, (i) partial indemnification of all expenses actually and reasonably incurred by the director or officer in the event that he or she was successful as to less than all of the claims in connection with any proceeding; (ii) that, in respect of any proceeding in which the registrant is jointly liable with the director or officer, to the fullest extent permitted by law, the registrant waives and relinquishes any right of contribution it may have against the director or officer; (iii) proportionate contribution by the registrant of all expenses actually incurred and paid or payable in the event the director or officer shall elect or be required to pay all or any portion of a judgment or settlement in any proceeding in which the registrant is jointly liable; and (iv) to the fullest extent permitted by law, that the registrant will advance the expenses incurred by or on behalf of the director or officer in connection with any eligible proceeding, provided that the director or officer undertakes to repay the amounts advanced to the extent it is ultimately determined that the director or officer is not entitled to indemnification by the registrant. The registrant also intends to enter into indemnification agreements with its future directors and executive officers.
The registrant has purchased directors’ and officers’ liability insurance. The registrant believes that this insurance is necessary to attract and retain qualified directors and officers.
Any underwriting agreement will provide for indemnification by the underwriters of the registrant and its officers and directors for certain liabilities arising under the Securities Act of 1933, as amended, or otherwise.
Item 16. Exhibits. and financial statement schedules.
The following exhibits are filed as part of this registration statement:
Exhibit No. |
| Description |
| Form |
| File No. |
| Exhibit |
| Filing Date |
| Herewith |
1.1* |
| Form of Underwriting Agreement |
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|
|
|
|
|
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2.1+ |
|
| S-4 |
| 333-259381 |
| 2.1 |
| December 9, 2021 |
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| |
2.2 |
|
| S-4 |
| 333-259381 |
| 2.2 |
| December 9, 2021 |
|
| |
2.3 |
|
| 8-K |
| 001-39119 |
| 2.1 |
| January 12, 2022 |
|
| |
3.1 |
|
| 10-K |
| 001-39119 |
| 3.1 |
| March 31, 2022 |
|
| |
3.2 |
| Amended and Restated By-Laws of Leafly Holdings, Inc., dated February 4, 2022. |
| 8-K |
| 001-39119
|
| 3.2 |
| February 10, 2022 |
|
|
4.1 |
|
| 8-K |
| 001-39119
|
| 4.1 |
| February 10, 2022 |
|
| |
4.2 |
|
| S-1 |
| 333-234134 |
| 4.3 |
| October 21, 2019 |
|
| |
4.3 |
|
| 8-K |
| 001-39119 |
| 4.1 |
| November 7, 2019 |
|
| |
4.4 |
|
| 8-K |
| 001-39119
|
| 4.4 |
| February 10, 2022 |
|
|
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4.5 |
| Notation of Guarantee, dated February 4, 2022, by Leafly Holdings, Inc. |
| 8-K |
| 001-39119
|
| 4.5 |
| February 10, 2022 |
|
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4.6* |
| Specimen Preferred Stock Certificate |
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4.7 |
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| X | |
4.8 |
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| X | |
4.9* |
| Form of Note |
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4.10* |
| Form of Warrant Agreement |
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4.11* |
| Form of Unit Agreement |
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5.1 |
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| X | |
23.1 |
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| X | |
23.2 |
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| X | |
24.1 |
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| X | |
25.1** |
| Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, with respect to the Indentures |
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107 |
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| X |
+ | Certain exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted exhibits or schedules upon request; provided that the registrant may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. |
* | To be filed by amendment, as an exhibit to a Current Report on Form 8-K or by other applicable filing with the SEC to be incorporated by reference herein. |
** | To be filed in accordance with the requirements of Section 305(b)(2) of the Trust Indenture Act of 1939, as amended. |
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement;
Provided however that paragraphs (i), (ii) and (iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post- effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i) each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement and
(ii) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or
(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(6) To file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the SEC under Section 305(b)(2) of the Trust Indenture Act.
(7) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(8) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in City of Seattle, State of Washington, on March 29, 2023.
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LEAFLY HOLDINGS, INC. | ||
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By: |
| /s/ Yoko Miyashita |
|
| Name: Yoko Miyashita |
|
| Title: Chief Executive Officer |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Yoko Miyashita and Suresh Krishnaswamy as the undersigned’s true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for the undersigned and in the undersigned’ s name, place and stead in any and all capacities, in connection with this registration statement, including to sign in the name and on behalf of the undersigned, this registration statement and any and all amendments thereto, including post-effective amendments and registrations filed pursuant to Rule 462 under the U.S. Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the U.S. Securities and Exchange Commission, granting unto such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute, may lawfully do or cause to be done by virtue hereof.
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Signature |
| Position |
| Date |
|
|
| ||
/s/ Yoko Miyashita Yoko Miyashita |
| Chief Executive Officer and Director |
| March 29, 2023 |
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| ||
/s/ Suresh Krishnaswamy Suresh Krishnaswamy |
| Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
| March 29, 2023 |
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| ||
/s/ Peter Lee Peter Lee |
| Director |
| March 29, 2023 |
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/s/ Michael Blue Michael Blue |
| Director |
| March 29, 2023 |
|
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| ||
/s/ Cassandra Chandler Cassandra Chandler |
| Director |
| March 29, 2023 |
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| ||
/s/ Blaise Judja-Sato Blaise Judja-Sato |
| Director |
| March 29, 2023 |
|
|
| ||
/s/ Alan Pickerill Alan Pickerill |
| Director |
| March 29, 2023 |
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