UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
July 5, 2022
LFTD PARTNERS INC.
(Exact name of registrant as specified in its charter)
Nevada |
| 000-52520 |
| 87-0479286 |
(State or other jurisdiction of incorporation or organization) |
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14155 Pine Island Drive, |
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| 32224 |
(Address of principal executive offices) |
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847-915-2446
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01.Entry into a Material Definitive Agreement.
(a)Amendment of December 30, 2021 Agreement with Insiders
Merger Related Promissory Note
On February 24, 2020, we acquired Lifted Liquids, Inc. d/b/a Lifted Made (“Lifted”) as a wholly owned subsidiary for cash and stock paid to Lifted’s then owner Nicholas C. Warrender (“Warrender”). The $7,500,000 money component of the purchase consideration was paid to Warrender in the form of $3,750,000 in cash at closing and a $3,750,000 promissory note (“Note”). Over the past two years, we have paid down about half of the principal balance of the Note to a current balance of $1,833,334. As our business has developed, Warrender has been flexible and we have mutually agreed with Warrender from time to time to extend the maturity dates for payments toward the principal balance of the Note.
On July 5, 2022, we entered into a new agreement (“Acceleration Agreement”) with Warrender and others to accelerate the repayment of 75%, or $1,374,999, of the current $1,833,334 balance of the Note to on or before December 31, 2022 from the previously agreed upon installment dates in 2023 and 2024. Despite the acceleration of the foregoing payment dates, the final $458,335 Note principal installment payment will remain unchanged and due on or before December 31, 2024. The Acceleration Agreement contains a provision that if we raise $5,000,000 all unpaid principal balance due under the Note will be immediately paid to Warrender within two days.
Obligation to Purchase Headquarters Building
Toward the end of 2020, Warrender, through his assigned entity 95th Holdings, LLC, purchased a building located at 5511 95th Avenue in Kenosha, Wisconsin (“5511 Building”) that was immediately leased to us to conduct our expanded operations. The 5511 Building includes office, laboratory and warehouse space. As part of the lease agreement with 95th Holdings, LLC, the parties agreed that our wholly owned subsidiary Lifted would eventually purchase the 5511 Building. The purchase price for the 5511 Building was originally subject to variation based on a formula agreed upon by the parties. Pursuant to an agreement with Warrender on December 30, 2021, the parties agreed to set the purchase price for the 5511 Building at $1,375,000. Prior to the Acceleration Agreement, Lifted had an obligation to complete the purchase of the 5511 Building on or before December 31, 2022. Pursuant to the Acceleration Agreement, the deadline to purchase the 5511 Building has been extended by one year to December 31, 2023. In addition, the Acceleration Agreement contains a provision that if we raise $5,000,000, Lifted Liquids Inc. or our designee shall immediately purchase the Property from 95th Holdings, LLC at the agreed upon $1,375,000 purchase price.
The foregoing description of the terms of the Acceleration Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Acceleration Agreement, a copy of which is attached hereto as Exhibit 10.70.
(b)Sublease For Commuter Employees
On July 6, 2022, our wholly owned subsidiary Lifted entered into a sublease for office space in Chicago, Illinois located at 2701-09 West Fulton PH, Chicago, Illinois 60612. The sublease costs $3,000 per month, plus supplemental lease related charges such as real estate taxes and common expenses of the property that we anticipate will be commercially typical costs. The sublease is retroactively effective as of June 1, 2022 and for a five-month term that extends to through October 31, 2022. The purpose of the sublease is to make available office space for the members of Lifted Made's sales team who live in Chicago. These salespeople were spending significant time in their cars commuting from Chicago to Kenosha.
The sublessor is one of our affiliates, Bill McLaughlin, Lifted’s Chief Strategy Officer. The sublease is structured so that Mr. McLaughlin's lease payment obligations to the landlord are passed on to Lifted on a dollar-for-dollar basis, such that Mr. McLaughlin does not realize a cashflow profit or loss from the sublease.
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The foregoing description of the terms of the Commercial Sublease does not purport to be complete and is qualified in its entirety by reference to the full text of the Commercial Sublease, a copy of which is attached hereto as Exhibit 10.71.
Item 2.03.Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The discussion contained in “Item 1.01 Entry into a Material Definitive Agreement” of this Current Report on Form 8-K is incorporated into this Item 2.03 by reference.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
Exhibit 10.70 | |
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Exhibit 10.71 |
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.
| LFTD PARTNERS INC.. |
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| /s/ Gerard M. Jacobs |
| Gerard M. Jacobs |
| Chief Executive Officer |
Dated: July 7, 2022
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AGREEMENT
This Agreement (this “Agreement”) by and among LFTD Partners Inc. (“LIFD”), Lifted Liquids, Inc. d/b/a Lifted Made (“Lifted”), Nicholas S. Warrender (“NSW”), 95th Holdings, LLC (“Holdings”), Gerard M. Jacobs (“GMJ”) and William C. “Jake” Jacobs (“WCJ”), is dated and effective as of July 1, 2022. LIFD, Lifted, NSW, Holdings, GMJ and WCJ are hereafter sometimes referred to as a “Party” and collectively as the “Parties”.
In consideration of the mutual covenants and agreements hereafter set forth, and for other valuable consideration the receipt and adequacy of which is agreed upon and acknowledged by each of the Parties, the Parties have executed this Agreement, intending to be legally bound hereby:
1.Reference is hereby made to that certain Agreement among the Parties dated as of December 30, 2021 (the “December 30, 2021 Agreement”). Words and terms defined in the December 30, 2021 Agreement are used herein with the same meaning. Reference is also made to the lease between Holdings and Lifted executed in or about December 2020 (the “Lease”) and the term “Property” as defined in the Lease is used herein with the same meaning. The “Note” refers to that certain Promissory Note dated January 3, 2022.
2.The Parties agree and acknowledge that the remaining principal balance of the Note currently is $1,833,334, which is currently due and payable in four remaining installments of: (a) $458,333 due and payable on June 30, 2023 (the “June 30, 2023 Installment”); (b) $458,333 due and payable on December 31, 2023 (the “December 31, 2023 Installment”; (c) $458,333 due and payable on June 30, 2024; and (d) $458,335 due and payable on December 31, 2024 (the “December 31, 2024 Installment”).
3.Notwithstanding anything to the contrary set forth in the December 30, 2021 Agreement or the Lease:
(a)The Parties hereby agree that Lifted shall purchase the Property from Holdings on or before December 31, 2023 (rather than on or before December 31, 2022), for a fixed purchase price equal to $1,375,000;
(b)The Parties hereby agree that LIFD shall prepay the Installments due under the Note as follows: the June 30, 2023 Installment, the December 31, 2023 Installment, and the June 30, 2024 Installment (a total of $1,374,999) paid on or before December 31, 2022, with the December 31, 2024 Installment of $458,335.00 being due and payable on December 31, 2024; and
(c)The Parties hereby agree that, notwithstanding Sections 3(a) and 3(b) above, if and in the event that LIFD and/or Lifted closes any equity or debt capital raise following the date of this Agreement in the amount of
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$5,000,000 or more, then within two days following the closing of such equity or debt capital raise (i) LIFD shall prepay all remaining principal and all accrued interest on the Note; and (ii) Lifted or its designee shall purchase the Property from Holdings for a fixed purchase price equal to $1,375,000.
4. Excepting only as expressly modified or amended pursuant to this Agreement, all other terms and conditions of the Merger Agreement, the Amended Compensation Agreement, the Executive Employment Agreements, the Lease, and all other agreements among any of the Parties shall remain in full force and effect following the execution and delivery of this Agreement.
In Witness Whereof, the Parties have executed and delivered this Agreement as of the date first set forth above.
LFTD PARTNERS INC., a Nevada corporation
By | /s/ Gerard M. Jacobs |
| /s/ Gerard M. Jacobs |
| Gerard M. Jacobs, CEO |
| Gerard M. Jacobs, in his individual |
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LIFTED LIQUIDS, INC., an Illinois corporation |
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By | /s/ Nicholas S. Warrender |
| /s/ William C. Jacobs |
| Nicholas S. Warrender, CEO |
| William C. Jacobs, in his individual |
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95th HOLDINGS, LLC, |
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a Wisconsin limited liability company |
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By | /s/ Nicholas S. Warrender |
| /s/ Nicholas S. Warrender |
| Nicholas S. Warrender |
| Nicholas S. Warrender, in his individual |
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COMMERCIAL SUBLEASE
This Commercial Sublease (“Sublease”) dated as of June 23, 2022 is by and between Bill McLaughlin (“Sublessor”) and Lifted Liquids, Inc. d/b/a Lifted Made (“Sublessee”). Sublessor and Sublessee are sometimes referred to as a “Party” and collectively as the “Parties”.
In consideration of the mutual agreements and covenants hereafter set forth, Sublessor and Sublessee hereby agree as follows, intending to be legally bound hereby:
1. Reference is hereby made to that certain Industrial/Commercial Lease (“Lease”) dated April 27, 2022, by and between Property Management (“Lessor”) and Sublessor, pursuant to which Lessor has leased to Sublessor the premises described as 2701-09 West Fulton PH, Chicago, Illinois 60612 (the “Premises”) for the period of April 20, 2022 through October 25, 2022.
2. Sublessor hereby subleases the Premises to Sublessee upon the following terms and conditions:
(a)Term. Sublessor subleases the Premises to Sublessee for a term of 5 months commencing June 1, 2022 and terminating on October 31, 2022, or sooner as provided herein.
(b)Rent. Sublessee shall pay Sublessor a monthly rental calculated as follows:
(1)Base monthly rent equal to the base monthly rent payable by Sublessor to Lessor pursuant to Section 1 of the Lease, which initially is $3,000, which base monthly rent for each calendar month during the term of this Sublease shall be due and payable (i) immediately following the execution of this Sublease, for the month of June 2022, (ii) in advance at 3:30pm on the last business day prior to the first day of such calendar month, for the month of July 2022 and subsequent calendar months; plus
(2)Supplemental monthly rent for each calendar month during the term of this Sublease, equal to the aggregate additional rent (on a dollar-for-dollar basis) that is due and payable by Sublessor to Lessor under the Lease during such calendar month, including in regard to real estate taxes and any other common expenses of the property of which the Premises are a part.
(c)Key Deposit. Sublessee shall make a key deposit to Sublessor of $4,500, immediately following the execution of this Sublease.
(d)Utilities. Sublessee shall pay directly, or shall reimburse Sublessor on a dollar-for-dollar basis, for all utilities used on the Premises.
(e)Use. Sublessee shall use and occupy the Premises for business known as LIFTED MADE. The Premises shall be used for no other purpose.
(f)Care and Maintenance of Premises. Sublessee acknowledges that the Premises are in good order and repair, unless otherwise indicated herein. Sublessee shall, at its own expense and at all times, maintain the Premises in good and safe condition, including plate glass, electrical wiring, plumbing, heating, installation, doors, locks, alarms, overhead doors/openers and exterior lights, as well as any
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other system or equipment upon the Premises and surrender the same at termination hereof in as good conditions as received, normal wear and tear expected. Sublessee shall be responsible for the entire repair required, excepting the roof, exterior walls and structural foundations. Sublessee shall also maintain in good condition such portions adjacent to the Premises, such as sidewalks, driveways lawn and shrubbery, which would otherwise be required to be maintained by the Sublessor.
(g)Alterations. Sublessee shall not without first obtaining the written consent of the Sublessor, make any alterations, additions or improvements in, to or about the Premises. If written consent is not obtained and the work for the improvements has commenced, Sublessor may issue a Stop Work Order. If Sublessee is served with the Stop Work Order, there will be a charge of $495.00 as well as all attorney’s fees, court costs, and other liability costs.
(h)Ordinances and Statutes. Lessee shall comply with all the statutes, ordinances and requirements of all municipal, state and federal authorities now in force or which may hereafter be in force pertaining to the Premises by or affecting the use thereof by Sublessee.
(i)Utilities. All applications and connections for necessary utility services on the Premises shall be made in the name of the Sublessee only, and Sublessee shall be solely liable for utility charges as they become due, including water, gas, electricity, cable and telephone services. Sublessor to bring to unit only: gas supply ¾ inch and water supply ¾ inch and 100 AMP electrical only.
(j)Entry and Inspection. Sublessee shall permit Sublessor or Sublessor’s agent to enter upon the Premises with reasonable notice for the purpose of inspecting the same and will permit Sublessor at any time within sixty (60) days prior to the expiration of this Sublease to place upon the Premises any usual “To Let” or “For Lease” signs and permit persons desiring to sublease the same to inspect the Premises thereafter.
(k)Possession. If Sublessor is unable to deliver possession of the Premises at the commencement hereof, Sublessor shall not be liable for any damage caused thereby, nor shall this Sublease be void or voidable but Sublessee my terminate this Sublease if possession is not delivered within 30 days of the commencement of the term hereof.
(l)Insurance. A Business License must be obtained and maintained by Sublessee for the duration of the Sublease. Sublessee, at its expense, will maintain plate glass and public liability insurance including bodily injury and property damage insuring the Premises, Sublessee and Sublessor with and minimum coverage as follows: One Million Dollars liability.
(m)Indemnification of Sublessor. Sublessor shall not be liable for any damages or injury to Sublessee, or any other persons or to any property occurring on the Premises or any part thereof, and Sublessee agrees to hold Sublessor harmless from any claims for damages, no matter how caused.
(n)Eminent Domain. If the Premises or any part of thereof or any part of the building materially affecting Sublessee’s use of the Premises shall be taken by eminent domain, this Sublease shall terminate on the date when the title vests pursuant to such taking. The base monthly rent, and any supplemental monthly rent, shall be apportioned as of the termination date and any rent paid for any period beyond that date shall be paid to Sublessee. Sublessee shall not be entitled to any part of the
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award for such taking or any payment in lieu thereof, but Sublessee may file a claim for any taking of fixtures and improvements owned by the Sublessee, and for moving expenses.
(o)Destruction and Premises. In the event of a partial destruction of the Premises during the term of this Sublease, from any cause, Sublessor shall forthwith repair the same.
(p)Entire Agreement. The forgoing constitutes the entire agreement between the Parties and can be modified only be a writing signed by both Parties.
(q)Miscellaneous. The foregoing constitutes the entire agreement between the Parties in regard to the Premises. This Sublease shall be legally binding upon Sublessor, Sublessee, and their respective heirs, representatives, successors and permitted assigns. No modification, waiver or assignment of this Sublease shall be legally binding unless it is signed by both of the Parties in their discretion. Any notices hereunder shall be emailed to Sublessor c/o Bill McLaughlin, or to Sublessee c/o Nick Warrender.
IN WITNESS WHEREOF, the Parties have executed this Sublease as of the date first written above.
Sublessor:Sublessee:
Lifted Liquids, Inc. d/b/a Lifted Made
/s/ Bill McLaughlin By /s/ Nicholas S. Warrender
Bill McLaughlinNicholas S. Warrender, CEO
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