2018-10-07 Will Lift & Co. (LIFT) succeed or fail?
Matei Olaru’s shell graduate and marijuana promotion, Lift & Co. Corp. (LIFT: $0.45), began trading on September 17, 2018. Lift organizes the Lift Cannabis Expo. It has held this three-day event five times in the last two years: thrice in Toronto and twice in Vancouver. It boasts of having attracted 20,000 participants to the most recent expo, which was held in Toronto in May, 2018. Expo tickets cost at least $20.
Lift also operates a website where users can review marijuana products. When users submit reviews, they earn points that they can use to buy products in the company’s on-line store. Lift offers products from licensed marijuana producers such as Aphria Inc. (APH: $16.31) and Organigram Holdings Inc. (OGI: $7.45). Website users can also participate, for a fee, in Lift’s loyalty rewards program. Despite all the marijuana buzz, Lift lost $6-million on revenue of $2.3-million in its fiscal year ended March 31, 2018. Last month, the company sold a $6.85-million private placement at 60 cents. It also sold $2-million worth of debentures. It expects to spend the proceeds in this way: $3.35-million on salaries, $1.36-million on a new office (still in Toronto), $1.29-million on marketing, $1-million on potential acquisitions and $350,000 on information technology expenses for its website.
Now that his marijuana-adjacent business is public, Mr. Olaru, 28, gets a salary bump to $110,800 from $40,900. He is a lawyer and the company’s CEO. He was an articling student at Stikeman Elliott LLP from August, 2015, to June, 2016. He then became Lift’s CEO in November, 2016. He holds 4.58 million shares or 6.5 per cent of Lift. He also holds options to buy one million shares at 60 cents and 347,595 shares at 0.007143 cent.
Lift’s largest shareholder is Tyler Sookochoff with 20.79 million shares or 29.7 per cent. He used to be a director, but he resigned at the end of July for “personal reasons,” according to the company. Mr. Sookochoff belongs to the family of Larry and George Sookochoff, who have been involved with resource penny stocks since the late 1960s.
Mr. Olaru’s fellow directors are Daniel Finkelstein, Stuart Miller and Deborah Rosati. Mr. Finkelstein, 33, is the principal of Gotham Green Partners LLC, a New York private equity firm that focuses on marijuana. Two Gotham Green funds hold a combined 10.47 million shares or 15 per cent of Lift. Mr. Miller, 48, a Toronto lawyer, is general counsel to SkyPower Ltd., an international solar energy producer. Previously, he was general counsel to Capstone Infrastructure Corp. (CSE: $14.37) and Macquarie Power & Infrastructure Income Fund. Ms. Rosati, 56, is the founder and CEO of Women Get On Board, which advocates getting women (such as herself) seats on corporate boards (such as Lift’s). She also sits on the board of NexJ Systems Inc. (NXJ: $1.50), a financial software developer.
Lift went public through David Mitchell’s sixth capital pool shell, MJ Opportunity Corp. He listed it in November, 2017, with a $704,200 IPO at 20 cents. In connection with its QT, the shell rolled back 1 for 2.4, so its IPO shareholders need 48 cents to break even. Mr. Mitchell’s seventh capital pool shell, Commerce Acquisition Corp. (CAQ: halted), listed in May with a $1-million IPO at 20 cents. It is working on a QT with the maker of the Dr. Tobias brand of vitamins and supplements. For Mr. Mitchell’s first five capital pool shells, he has a record of three successes and two failures.
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