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TORONTO, July 23, 2020 /CNW/ - Good2Go Corp. ("G2G"
or the "Company") (TSXV: GOTO.P) is
pleased to provide an update on its previously announced proposed
qualifying transaction (the
"Transaction") involving Magical Brands Inc.
("Magical Brands"). Pursuant to the Transaction,
it is intended that the Company will, directly or indirectly,
acquire all of the issued and outstanding securities of Magical
Brands (the "Transaction") and it will constitute G2G's
qualifying transaction in accordance with the policies of the TSX
Venture Exchange (the "Exchange").
The Transaction is to be structured as a three-cornered
amalgamation, share exchange, plan of arrangement or other
similarly structured transaction as may be agreed upon by the
parties. For the purposes of the Transaction, it is intended that
the shareholders of Magical Brands will receive to be established
subordinate voting shares of G2G (the "Subordinate Voting
Shares"), or a combination of Subordinate Voting Shares and to
be established multiple voting shares of G2G (the "Multiple
Voting Shares") in exchange for their common stock of Magical
Brands (the "Magical Brands Shares"). In connection with the
Transaction, the Company intends to seek a listing of the
Subordinate Voting Shares on the Exchange. The Multiple Voting
Shares will not be listed for trading on any exchange. Upon
completion of the Transaction, it is intended that G2G will change
its name to "Magical Brands Corp.", or such other name as may be
determined by the board of directors of Magical Brands. For
convenience, the Company, after the completion of the Transaction,
is referred to herein as the "Resulting Issuer". Unless
otherwise indicated, all dollar amounts referred to herein are
expressed in Canadian Dollars.
Upon successful completion of the Transaction, it is anticipated
that the Resulting Issuer will be listed on the Exchange as a Tier
2 Technology Issuer, operating as a product innovation and consumer
branding company. The Transaction is subject to the receipt of all
necessary regulatory and shareholder approvals as well as the
satisfaction of conditions to closing which will be set out in a
definitive agreement between the parties (the "Definitive
Agreement").
A comprehensive news release with further particulars relating
to the Transaction, financial particulars, details on the
Subordinate Voting Shares and Multiple Voting Shares, descriptions
of the proposed management and directors of the Resulting Issuer
will follow in accordance with the policies of the Exchange.
About Magical Brands
Magical Brands was incorporated under the laws of Florida on May 13,
2015. Magical Brands is a herbal and plant-derived health
and wellness company. Magical Brands focuses on product innovation,
consumer branding, research and development, and global sales and
distribution. Magical Brands creates consumer-focused hardware and
consumable products, including the Magical Butter Machine, a
"do-it-yourself" botanical extraction machine, a line of
cannabidiol ("CBD") based products, and a line of functional
mushroom based products.
The Magical Butter Machine and its related products developed by
Magical Brands are focused on removing inconsistencies from the
botanical extraction process and increasing production capabilities
for consumers to develop nutrient-rich extracts from roots, fruits,
mushrooms, and herbs, infusing the lipid extracted nutrients into
butter, oils, tinctures, salves and lotions.
Magical Brands' CBD-based products are available under the
"Magical" brand name and comprise various formats, including (i)
edibles: soft gels, fruit chews, and hard candies; (ii) tinctures:
liquid form available in multiple flavours; and (iii) topicals:
presently available as a cream. Magical Brands' sales and
distribution footprint spans North
America, the European Union, the United Kingdom, Australia and New
Zealand using both e-commerce, direct-to-consumer and
traditional retail distribution channels, including its own
direct-to-consumer websites, as well as Amazon, Walmart, Bed Bath
& Beyond, Greenlane and Hawthorne.
Magical Brands Financing
In connection with the Transaction, Magical Brands intends to
complete a concurrent brokered financing (the "Offering") of
subscription receipts (the "Subscription Receipts") of
Magical Brands, Inc. ("Finco"), a special
purpose British Columbia company
incorporated solely for the purpose of the Offering, at a price of
$0.50 per Subscription Receipt (the
"Issue Price") for minimum gross proceeds of $5,000,000 (or $5,750,000 if the Agents' Option (as defined
below) is exercised). Each Subscription Receipt is exchangeable for
one (1) unit of Finco (each, a "Finco Unit"). Each
Finco Unit is expected to be comprised of one common share of Finco
and one-half common share purchase warrant of Finco (each whole
common share purchase warrant, a "Warrant"). Upon the
satisfaction or waiver (to the extent such waiver is permitted) of
certain conditions, other than the release of the Escrowed Proceeds
(as defined below) (the "Escrow Release Conditions"), each
Finco Unit underlying the Subscription Receipts will, immediately
prior to the Transaction, automatically convert into and be
exchanged for one (1) unit of G2G (each, a "G2G Unit"). Each
G2G Unit shall consist of one Subordinate Voting Share and one-half
of one share purchase warrant of G2G (each whole share purchase
warrant a "G2G Warrant"). Each G2G Warrant shall entitle the
holder thereof to acquire one additional Subordinate Voting Share
at a price of $0.75 for a period of
twenty-four (24) months following closing of the Offering. Expiry
of the G2G Warrants will occur at the option of the Resulting
Issuer upon 30 days' notice to holders of G2G Warrants should the
volume weighted average trading price of the Subordinate Voting
Shares exceed $1.00 per Share for
ten (10) consecutive trading days.
Canaccord Genuity Corp. is acting as lead agent in connection
with the Offering (the "Lead Agent"), on behalf of a
syndicate of agents, including Haywood Securities Inc. and Eight
Capital (together with the Lead Agent, the "Agents") to
offer the Subscription Receipts for sale on a commercially
reasonable efforts agency basis. Magical Brands has granted the
Agents an option (the "Agents' Option"), exercisable in
whole or in part at any time prior to the closing of the Offering,
to increase the size of the offering by up to $750,000. In
connection with the Offering, Magical Brands has agreed to pay the
Agents a cash fee (the "Agents' Commission") equal to
7.0% of the gross proceeds of the Subscription Receipts sold in the
Offering (reduced to 3.5% in respect of sales to the president's
list) and to issue compensation warrants (the "Agents'
Warrants") to the Agents equal to 7.0% of the number of
Subscription Receipts sold in the Offering (reduced to 3.5% in
respect of sales to the president's list). Each Agents' Warrant
shall be exercisable for such number of Finco Units or G2G Units,
as the case may be, at an exercise price equal to the Issue Price
and having a term of twenty-four (24) months from the closing of
the Offering. Upon closing of the Offering, the Company shall pay
the Lead Agent a corporate finance fee equal to that number of
Subscription Receipts which is equal to 3.0% of the aggregate
number of Subscription Receipts issued pursuant to the
Offering.
The proceeds from the Offering (less an amount equal to 50% of
the Agents' Commission and less all of the reasonable expenses of
the Agents in connection with the Offering) (the "Escrowed
Proceeds") will be held in escrow until the satisfaction
of the Escrow Release Conditions.
The funds to be available to the Resulting Issuer upon the
closing of the Transaction are expected to be a minimum of
$5,000,000 (or $5,750,000 if the Agents' Option is exercised),
less costs of the Transaction and the Offering. These funds
are anticipated to be used, principally for corporate and general
working capital purposes.
About G2G
G2G was incorporated under the Business Corporations
Act (Ontario) on
February 28, 2018, and is a capital
pool company listed on the Exchange. G2G has no commercial
operations and has no assets other than cash. G2G's only business
has been to identify and evaluate assets or businesses with a view
to completing a qualifying transaction.
About the Transaction
G2G will duly call and hold a special meeting of its
shareholders (the "G2G Meeting"), to approve,
among other things and subject to the completion of the
Transaction, (i) the composition of the board of directors of the
Resulting Issuer following the completion of the Transaction; (ii)
the Resulting Issuer's stock option plan to take effect following
completion of the Transaction; (iii) the consolidation (the
"Consolidation") of the issued and outstanding common shares
of G2G (the "G2G Shares") prior to the Transaction on the
basis of one (1) post-Consolidation G2G Share for every 2.6844
pre-Consolidation G2G Shares (the "Consolidation
Ratio"); (iv) the change of the name of G2G to "Magical Brands
Corp.", or such other name as may be determined by the board of
directors of Magical Brands; (v) amend its articles of
incorporation to delete the common shares of G2G and amend the
authorized share capital to consist of Subordinate Voting Shares
and Multiple Voting Shares and to exchange each issued and
outstanding G2G Share for one (1) Subordinate Voting Share (the
"Share Amendments"); and (vi) the continuance of the
Resulting Issuer from the Business Corporations Act
(Ontario) to the Business
Corporations Act (British
Columbia). G2G will seek majority of the minority
shareholder approval for the creation of the Subordinate Voting
Shares and the Multiple Voting Shares.
Upon completion of the Consolidation and the Share Amendments,
it is anticipated that the 5,411,670 currently issued and
outstanding G2G Shares will be consolidated into 2,015,970
post-Consolidation Subordinate Voting Shares.
Details regarding the G2G Meeting will be made available in a
management information circular that will be mailed to shareholders
of G2G.
For greater certainty, the shareholders of G2G will not be
required to approve completion of the Transaction. However, the
Transaction is subject to the approval of the shareholders of
Magical Brands.
Arm's Length Transaction
The Transaction is not a non-arm's length transaction in
accordance with the policies of the Exchange.
Filing Statement or Information Circular
In connection with the Transaction and pursuant to Exchange
requirements, G2G will file a filing statement on SEDAR
(www.sedar.com), which will contain details regarding the
Transaction, the Offering, G2G, Magical Brands and the Resulting
Issuer.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities in any
jurisdiction.
ANY SECURITIES REFERRED TO HEREIN WILL NOT BE REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933 (THE "1933 ACT") AND MAY NOT BE
OFFERED OR SOLD IN THE UNITED
STATES OR TO A U.S. PERSON IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE 1933 ACT.
Completion of the Transaction is subject to a number of
conditions, including but not limited to, negotiation and execution
of a definitive agreement between Magical Brands and the Company,
Exchange acceptance of the Transaction and listing of the
Subordinate Voting Shares. Where applicable, the Transaction cannot
close until the required shareholder approval is obtained. There
can be no assurance that the Transaction will be completed as
proposed or at all.
Investors are cautioned that, except as disclosed in the
management information circular or filing statement to be prepared
in connection with the Transaction, any information released or
received with respect to the Transaction may not be accurate or
complete and should not be relied upon. Trading in the securities
of a capital pool company should be considered highly
speculative.
The TSX Venture Exchange Inc. has in no way passed upon the
merits of the proposed Transaction and has neither approved nor
disapproved the contents of this press release.
The information contained or referred to in this press
release relating to Magical Brands has been furnished by Magical
Brands. Although G2G has no knowledge that would indicate that any
statement contained herein concerning Magical Brands is untrue or
incomplete, neither G2G nor any of its respective directors or
officers assumes any responsibility for the accuracy or
completeness of such information.
Notice regarding forward-looking statements:
This release includes forward-looking statements regarding
Magical Brands, G2G, and their respective businesses, which may
include, but is not limited to, statements with respect to the
completion of the Transaction, the terms on which the Transaction
are intended to be completed, the use of the net proceeds from the
Offering, the ability to obtain regulatory and shareholder
approvals, the proposed business plan of Magical Brands, the effect
of the novel Coronavirus (COVID-19) on the equity markets and
economy as a whole, and other factors. Often, but not always,
forward-looking statements can be identified by the use of words
such as "plans", "is expected", "expects", "scheduled", "intends",
"contemplates", "anticipates", "believes", "proposes" or variations
(including negative variations) of such words and phrases, or state
that certain actions, events or results "may", "could", "would",
"might" or "will" be taken, occur or be achieved. Such statements
are based on the current expectations of the management of each
entity. The forward-looking events and circumstances discussed in
this release, including the completion of the Transaction, may not
occur by certain specified dates or at all and could differ
materially as a result of known and unknown risk factors and
uncertainties affecting the companies, including risks regarding
Magical Brands' industry, failure to obtain regulatory or
shareholder approvals, changing regulatory landscape, economic
factors, the equity markets generally and risks associated with
regulations, growth and competition. Although G2G and
Magical Brands have attempted to identify important factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be
other factors that cause actions, events or results to differ from
those anticipated, estimated or intended. No forward-looking
statement can be guaranteed. Except as required by applicable
securities laws, forward-looking statements speak only as of the
date on which they are made and G2G and Magical Brands undertake no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events,
or otherwise.
SOURCE Good2Go Corp.
