\nShawn \u201cJAY-Z\u201d Carter, who will become The Parent Company\u2019s Chief Visionary Officer following closing of the Transaction, said: \u201cAlthough we know we can\u2019t fully redeem the injustices created by the \u2018war on drugs\u2019, we can help shape a brighter and inclusive future. The brands we build will pave a new path forward for a legacy rooted in equity, access, and justice. We\u2019re creating something people can trust and we\u2019re investing in our future, our people, and our communities.\u201d\n<\/p>\n
\nSCAC\u2019s Chairman, Michael Auerbach, said: \u201cCalifornia is the most powerful cannabis economy in the world, and we have a unique opportunity to consolidate the market with The Parent Company. With its advanced infrastructure, industry leading operational efficiencies, proven strategy of brands, and cultural influence, The Parent Company is expected to be best positioned for the inevitable end of cannabis prohibition in the United States.\u201d\n<\/p>\n
\nSteve Allan, who will become The Parent Company\u2019s CEO following closing of the Transaction, said: \u201cIn addition to building the most influential portfolio of cannabis and hemp brands in the world, The Parent Company\u2019s vertical operational platform has been designed for growth and future mergers and acquisitions, forging a path to redefine the cannabis industry in California.\u201d\n<\/p>\n
\nSCAC has received private placement commitments of $36.5 million at a price of $10.00 per share issuable immediately prior to, and conditional on, completion of the Transaction (the \u201cPrivate Placement\u201d). Investors inthe private placement commitments received to date include Fireman Capital Partners, Tuatara Capital, and Subversive Capital, the largest investors in Caliva and Left Coast Ventures, as well as Roc Nation artists Rihanna, Yo Gotti, and Meek Mill. <\/b>The proceeds of the Private Placement are intended to be used in connection with the Transaction and to fund the growth of The Parent Company following closing. The Private Placement remains subject to the approval of the Neo Exchange Inc. (the \u201cExchange\u201d). Based on sources and uses of capital, SCAC will have sufficient cash to satisfy the Transaction’s closing conditions.<\/p>\n
\nChris Akelman, Partner at Fireman Capital Partners (\u201cFCP\u201d), said: \u201cCaliva and Left Coast Ventures are two proven cannabis operators, and California is an incredible market with a huge opportunity for consolidation. I\u2019m proud of FCP’s role and confident that The Parent Company will go on to build industry-leading brands in the cannabis space.\u201d\n<\/p>\n
\nSCAC has filed today an investor presentation which describes in more detail the proposed business of The Parent Company. The presentation is available under SCAC\u2019s profile on www.sedar.com<\/a> as well as their website www.subversivecapital.com<\/a>.\n<\/p>\n The Parent Company Investment Highlights<\/b><\/p>\n \n– Steve Allan as CEO \nThe Parent Company\u2019s Board of Directors is expected to include:\n<\/p>\n \n– Carol Bartz, former CEO of Yahoo and Autodesk \nPursuant to the applicable rules, SCAC will file with the Canadian securities regulatory authorities of each of the provinces and territories of Canada, except Quebec, a non-offering prospectus containing disclosure regarding the Transaction and The Parent Company assuming completion of the Transaction. The preliminary prospectus is expected to be filed shortly. Investors and security holders may obtain a copy of the definitive agreements for the Transaction and the prospectus, when filed, under SCAC\u2019s profile on the SEDAR website at www.sedar.com<\/a>.\n<\/p>\n Transaction Terms and Conditions<\/b><\/p>\n Caliva Transaction<\/span><\/b><\/p>\n \nPursuant to the terms of the definitive transaction agreement with respect to Caliva (the \u201cCaliva Agreement\u201d), SCAC will directly purchase each share of capital stock of Caliva owned by Canadian shareholders and, immediately thereafter, Caliva will merge with a newly-formed wholly-owned Delaware subsidiary of SCAC, with Caliva continuing as the surviving entity and becoming a wholly-owned subsidiary of SCAC (collectively, the \u201cCaliva Transaction\u201d). Under the terms of the Caliva Agreement, upon closing of the Caliva Transaction the Caliva shareholders will receive aggregate consideration of approximately $282.9 million (subject to certain adjustments and holdbacks). Caliva shareholders will receive consideration in the form of newly issued common shares in the capital of SCAC (\u201cSCAC Common Shares\u201d), subject to exceptions for certain U.S. persons that will receive consideration in cash.\n<\/p>\n \nIn addition, the Caliva shareholders may receive the following additional consideration post-closing:\n<\/p>\n Left Coast Ventures Transaction<\/span><\/b><\/p>\n \nPursuant to the terms of the definitive transaction agreement with respect to Left Coast Ventures (the \u201cLCV Agreement\u201d), SCAC will acquire Left Coast Ventures by merging such entity with and into a newly-formed wholly-owned subsidiary of SCAC, with Left Coast Ventures continuing as the surviving entity and becoming a wholly-owned subsidiary of SCAC (the \u201cLCV Transaction\u201d). Under the terms of the LCV Agreement, upon closing of the LCV Transaction the Left Coast Ventures shareholders will receive aggregate consideration of approximately $142.2 million (subject to certain adjustments and holdbacks) less the Sisu Consideration (as defined below). Left Coast Venture shareholders will receive consideration in the form of newly issued SCAC Common Shares, subject to exceptions for certain U.S. persons that will receive consideration in cash. In connection with the consummation of the LCV Transaction, SCAC has also agreed to repay in full certain promissory notes of LCV for an aggregate amount equal to $15.0 million (the \u201cLCV Note Repayment\u201d) which LCV Note Repayment will adjust the consideration paid to Left Coast Ventures shareholders on closing.\n<\/p>\n \nIn addition, the Left Coast Venture shareholders may receive up to approximately 3.9 million additional SCAC Common Shares in the event the VWAP of SCAC Common Shares reaches $13.00, $17.00 and $21.00 within three years of closing (with one-third of such shares delivered at each such price threshold).\n<\/p>\n \nConcurrently with the completion of the LCV Transaction, Left Coast Ventures will acquire Sisu Extraction, LLC (\u201cSisu\u201d) pursuant to an agreement and plan of merger dated November 23, 2020 (the \u201cSisu Agreement\u201d). Pursuant to the terms of the Sisu Agreement, the transaction will be structured as a merger of a newly-formed wholly-owned subsidiary of Left Coast Ventures with and into Sisu, with Sisu continuing as the surviving entity. Under the terms of the Sisu Agreement, upon closing of the Sisu Transaction the Sisu members will receive aggregate consideration of approximately $76.3 million of consideration (subject to certain adjustments and holdback, the \u201cSisu Consideration\u201d). Sisu members will receive consideration in the form of $15.0 million in cash and the remainder in newly issued SCAC Common Shares, subject to exceptions for certain U.S. persons that will receive consideration in cash.\n<\/p>\n \nThe LCV Note Repayment and cash portion of the Sisu Consideration may, in certain circumstances, be partially satisfied by convertible notes issued by SCAC (the \u201cSCAC Notes\u201d). All or any portion of each SCAC Note will be convertible, at the option of the holder, into SCAC Common Shares at a conversion price equal to $10.00 per SCAC Common Share. The SCAC Notes will contain customary events of default and covenants restricting SCAC from incurring additional indebtedness or granting security without the prior approval of the holders of the majority of the principal amount of the SCAC Notes.\n<\/p>\n \nSubversive Capital Sponsor LLC (the \u201cSponsor\u201d) has agreed to potentially forfeiting up to approximately 5.7 million SCAC Common Shares (subject to certain reductions), whereby one-third of such SCAC Common Shares will cease to be subject to forfeiture if the VWAP of SCAC Common Shares reaches $13.00, $17.00 and $21.00, respectively, within three years of closing of the Transaction. The Sponsor has also agreed to forfeit to SCAC (i) approximately 0.6 million SCAC Common Shares on closing of the Transaction, and (ii) a number of SCAC Common Shares equal to any Caliva Earnout Shares issued to the Caliva shareholders.\n<\/p>\n \nConcurrently with entering into the Caliva Agreement and the LCV Agreement, certain shareholders of Caliva and LCV entered into support and lock-up agreements pursuant to which such holders agreed to support the Caliva Transaction and the LCV Transaction, respectively, and agreed not to sell any SCAC Common Shares received under the Caliva Agreement or LCV Agreement, as applicable, for six months after the closing of the Transaction. The Sponsor and certain shareholders of SCAC will enter into a lock-up and forfeiture agreement upon closing of the Transaction restricting sales of SCAC Common Shares for six months after the closing of the Transaction. The Sponsor and certain shareholders of Caliva and Left Coast Ventures will also receive certain customary registration rights after the expiration of such lock-up periods.\n<\/p>\n \nCompletion of the Transaction, which is expected in January 2021, remains subject to the satisfaction or waiver of certain customary conditions including, among other things, the requisite approval of the shareholders of Caliva and Left Coast Ventures, (b) the approval of the Exchange recognizing the Caliva Transaction and the LCV Transaction as SCAC\u2019s qualifying acquisition and the listing of the SCAC Common Shares on the Exchange, (c) a final receipt for the prospectus having been issued by or on behalf of the securities authorities, (d) no law or order (other than U.S. federal cannabis laws) having been enacted, issued, promulgated, enforced or entered that prohibits or restrains the consummation of the Caliva Transaction or the LCV Transaction, (e) the conversion of SCAC\u2019s Class A restricted voting shares and Class B shares into SCAC Common Shares, (f) contemporaneous closing of the Caliva Transaction and the LCV Transaction, and (f) the waiting period under the HSR Act having expired or being terminated (which waiting period expired on November 16, 2020).\n<\/p>\n OG Enterprises Transaction<\/span><\/b><\/p>\n \nPursuant to the terms of the definitive transaction agreement (the \u201cOG Enterprises Agreement\u201d) with respect to OG Enterprises Branding, Inc. (\u201cOG Enterprises\u201d), Caliva will acquire the remaining 50% interest in OG Enterprises, which is currently 50% owned by Caliva and 50% owned by an affiliate of Shawn \u201cJAY-Z\u201d Carter, by merging such entity with and into Caliva (the \u201cOG Enterprises Transaction\u201d), with Caliva continuing as the surviving entity. Under the terms of the OG Enterprises Agreement, upon closing of the OG Enterprises Transaction the affiliate of Mr. Carter will receive 5.0 million SCAC Common Shares and will have the contingent right to receive up to an additional 1.0 million SCAC Common Shares post-closing in the event the VWAP of SCAC Common Shares reaches $13.00, $17.00 and $21.00 within three years of closing (with one-third of such shares delivered at each such price threshold). The affiliate of Mr. Carter will enter into a lock-up agreement upon closing of the Transaction restricting sales of SCAC Common Shares for six months after the closing of the Transaction.\n<\/p>\n Roc Nation Transaction<\/span><\/b><\/p>\n \nPursuant to the terms of the binding heads of terms agreement (the \u201cRoc Agreement\u201d) with respect to Roc Nation, LLC (\u201cRoc Nation\u201d), The Parent Company will become Roc Nation\u2019s \u201cOfficial Cannabis Partner\u201d, Roc Nation will provide The Parent Company with special access and rights with respect to Roc Nation\u2019s roster of artists and athletes and Roc Nation will promote The Parent Company\u2019s brand portfolio and provide various services specifically described therein.\n<\/p>\n \nThe Roc Agreement will be effective as of the consummation of SCAC\u2019s qualifying transaction and will remain in effect for an initial period of three years, provided that The Parent Company and Roc Nation may elect to extend the term for an additional three years upon terms to be mutually agreed. Over the initial three year term, of the Roc Nation agreement, The Parent Company will pay to SC Branding, LLC the following consideration in SCAC Common Shares: (i) $25 million payable following commencement of the term; (ii) $7.5 million payable in respect of the second year of the term; and (iii) $7.5 million payable in respect of the third year of the term.\n<\/p>\n \nThis press release is not an offer of securities for sale in the United States, and the securities referred to herein may not be offered or sold in the United States absent registration or an exemption from registration. The securities have not been and will not be registered under the United States Securities Act of 1933.\n<\/p>\n \nCanaccord Genuity Corp. is serving as financial advisor to SCAC. Blake, Cassels & Graydon LLP and Paul Hastings LLP are acting as legal counsel to SCAC. Benesch Friedlander Coplan & Aronoff LLP is serving as U.S. legal advisor and lead transaction counsel and Bennett Jones LLP as Canadian counsel to Caliva. Cooley LLP and Cassels Brock & Blackwell LLP are acting as legal counsel to Left Coast Ventures. Cummings & Lockwood LLC, Reed Smith LLP and Aird & Berlis LLP are acting as legal counsel to Shawn (\u201cJAY-Z\u201d) Carter and his affiliate entities. Stikeman Elliot LLP is acting as legal counsel to Canaccord Genuity Corp.\n<\/p>\n Conference Call<\/b><\/p>\n \nThe Parent Company recorded a conference call with members of the executive management team to discuss this announcement. Investors interested in listening can do so via webcast at http:\/\/public.viavid.com\/index.php?id=142580<\/a> or by dialing 844-512-2921 from the U.S., or 412-317-6671 from international locations, and entering confirmation code 13713699.\n<\/p>\n About Subversive Capital Acquisition Corp.<\/b><\/p>\n \nSubversive Capital Acquisition Corp. (SCAC) is a special purpose acquisition corporation incorporated under the laws of the Province of British Columbia for the purpose of effecting, directly or indirectly, a qualifying transaction within a specified period of time. Founded by Michael Auerbach and led by Chief Executive Officer, Leland Hensch, SCAC is dedicated to investing in radical companies whose core missions subvert the status quo. For more information, visit www.subversivecapital.com<\/a>.\n<\/p>\n About Roc Nation<\/b><\/p>\n \nRoc Nation, founded in 2008 by JAY-Z, has grown into the world\u2019s preeminent entertainment company. Roc Nation works in every aspect of modern entertainment, with recording artists, producers, songwriters, and more. Roc Nation\u2019s client list includes some of the world\u2019s most recognizable names in entertainment, from Rihanna and Rapsody to Buju Banton and Snoh Aalegra. Roc Nation is a full-service organization, supporting a diverse roster of talent via artist management, music publishing, touring, production, strategic brand development, and beyond. Roc Nation Sports was founded in 2013, bringing the organization\u2019s full-service touch to athletes across the NFL, NBA, MLB, and global soccer. For further information, visit rocnation.com.\n<\/p>\n About Caliva<\/b><\/p>\n \nCaliva is a leading single-state cannabis operator in California. Founded in 2015, Caliva\u2019s industry advantage comes from its vertical integration and direct-to-consumer platform. This direct-to-consumer experience enables customers to purchase cannabis at Caliva\u2019s retail stores and place orders online for in-store pickup or same-day delivery straight to their door. Caliva\u2019s plant-based solutions serve over 1 million customers and are designed to fit any lifestyle. Caliva\u2019s commitment to compliance and quality reinforce its position as THE MOST TRUSTED NAME IN CANNABIS\u2122. For more information visit caliva.com or follow along on Instagram, @GoCaliva.\n<\/p>\n About Left Coast Ventures<\/b><\/p>\n \nHeadquartered in Santa Rosa, CA, Left Coast Ventures is a diversified cannabis and hemp company specializing in cultivation, extraction, manufacturing, brand development, and distribution. Left Coast Ventures and its subsidiaries are working to shape the future of the legal cannabis industry in the United States through acquisitions, investments, and incubation while building a respected portfolio of top shelf brands. Wholly owned, licensed, and\/or distributed brands within the Left Coast Ventures portfolio include Marley Natural, Mind Your Head by Mickey Hart, Mirayo by Carlos Santana, JEF, SoulSpring, Provault, Chill, Headlight, Get Zen, New Frontier Brewing, and Yummi Karma\/High Gorgeous.\n<\/p>\n Forward Looking Statements<\/b><\/p>\n \nThis press release may contain forward-looking information within the meaning of applicable securities legislation which reflects SCAC\u2019s current expectations regarding future events. The words \u201cwill\u201d, \u201cexpects\u201d, \u201cintends\u201d and similar expressions are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words. Specific forward-looking information contained in this press release includes, but is not limited to: statements concerning the completion and proposed terms of, and matters relating to, the Transaction and the Private Placement and the expected timing thereof, statements concerning the listing of the common shares of SCAC following closing of the Transaction, the anticipated effects of the Transaction and the expected operations, financial results and condition of The Parent Company following closing of the Transaction, including The Parent Company\u2019s expected management team, business strategy, competitive strengths, goals and expansion and growth plans. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond SCAC\u2019s control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to: failure to complete the Transaction or the Private Placement, inability to obtain requisite regulatory or shareholder approvals, changes in general economic, business and political conditions, changes in applicable laws, the U.S. and Canadian regulatory landscapes and enforcement related to cannabis, changes in public opinion and perception of the cannabis industry, reliance on the expertise and judgment of senior management, as well as the factors discussed under the heading \u201cRisk Factors\u201d in the Investor Presentation dated November 24, 2020 which is available on SEDAR at www.sedar.com<\/a>. SCAC undertakes no obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.\n<\/p>\n View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20201124005792\/en\/<\/a><\/span><\/p>\n \nSubversive Capital Acquisition Corp. \nInvestor Relations\n
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– Brett Cummings as CFO, President of Left Coast Ventures
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– Dennis O\u2019Malley as COO, President of Caliva
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– Shawn \u201cJAY-Z\u201d Carter as Chief Visionary Officer
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– Desiree Perez, CEO of ROC NATION
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– Al Foreman, Partner of Tuatara Capital
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– Daniel Neukomm, CEO of La Jolla Group
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– Jeffry Allen, Director of NetApp and Barracuda
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– Leland Hensch, CEO of SCAC
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– Michael Auerbach, Founder and Chairman of SCAC\n<\/p>\n\n
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Berrin Noorata
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media@subversivecapital.com
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investor@subversivecapital.com
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