/NOT FOR DISTRIBUTION IN THE U.S. OR OVER U.S.
NEWSWIRES/
TORONTO, March 1, 2019 /CNW/ - Green Rise Capital
Corporation ("Green Rise") (TSX VENTURE: GRCC.P), a capital
pool company, is pleased to announce that it and its wholly owned
subsidiary have entered into a definitive agreement dated
March 1, 2019
(the "Definitive Agreement") with Bull Market Farms
Inc. ("Bull Market"), to provide for the completion of a
business combination with Green Rise (the "Transaction"), as
more particularly described below.
In connection with the Transaction, it is anticipated that Green
Rise will complete, a private placement (the "Offering") of
18,343,000 shares at a deemed issue price of $0.20 per share for gross proceeds of
approximately C$3.67 million through
a non-brokered Offering.
The Transaction is subject to a number of terms and conditions
as set forth in the Definitive Agreement, including (among other
things) the approval of the TSX Venture Exchange
(the "TSXV"). If completed, the Transaction will
constitute Green Rise's "Qualifying Transaction" (as such term is
defined in TSXV Policy 2.4 – Capital Pool Companies).
About Bull Market
Bull Market is a company based in Leamington, Ontario and carries on the
business of the greenhouse production of vegetables. It owns
an 81 acre site located at 2100 Road 4 East in the Town of Kingsville, Ontario comprised of
approximately 2,196,129 square feet (50.42 acres) of double poly
greenhouses with 114,500 square feet of ancillary buildings and
11,000 square feet of housing for workers. On this site, it
conducts the business of growing vegetables in its greenhouses
situated on approximately 36 acres of the 81 acre parcel and it has
leased, pursuant to a lease agreement dated June 15, 2018 (the "Organic Acreage
Lease"), a further 15 acres for organic production to an
affiliate of one of the largest greenhouse producers and marketers
of produce in North America. Such greenhouse producer and
marketer is referred to herein as "ProduceCo.". The
principal vegetables grown in the 36 acres of greenhouses are
hydroponic tomatoes, while under the Organic Acreage Lease, the
ProduceCo. affiliate grows peppers.
On June 15, 2018, Bull Market
acquired from an affiliate of ProduceCo. the assets related to the
business it now carries on (and which the ProduceCo. affiliate
previously carried on) pursuant to an agreement of purchase and
sale of assets dated June 15, 2018
between the ProduceCo. affiliate and Bull Market. As part of
this acquisition which had a C$25
million purchase price, C$17.5
million of secured financing was obtained and ProduceCo.
provided through its affiliate C$5
million of vendor take-back secured financing. The
parties to the acquisition entered into various other agreements
relating to the 81 acre site and other assets including, without
limitation, a restrictive covenant agreement, right of first
refusal agreement, option agreement and other documents.
Further, each of the secured lenders and Bull Market have entered
into an intercreditor agreement relating to the relative priorities
of the lenders and a cross default agreement in the event of a Bull
Market default under the loans.
Also, ProduceCo. has entered into with Bull Market an Exclusive
Purchase and Marketing Agreement dated June
15, 2018 having a ten year term (the "Exclusive Purchase
and Marketing Agreement") pursuant to which Bull Market agrees
to grow tomatoes, peppers, strawberries and/or cucumbers, and
ProduceCo. agrees to purchase 100% of the products produced by Bull
Market.
Bull Market was incorporated under the Business Corporations
Act (Ontario) on March 21, 2018. The company is headquartered in
Leamington, Ontario.
Based on the Definitive Agreement, Bull Market currently has 95
Class 1 Common Shares issued and outstanding (collectively, the
"Bull Market Shares") and Bull Market currently has three
shareholders holding more than 10% of its issued and outstanding
shares: (a) Galifi Inc. (controlled by Vito
Galifi) owning 42%; (b) 851393 Ontario Inc. (controlled by
Matthew Tatomir) owning 24%; and (c)
2626547 Ontario Limited (controlled by Scott Linnell) owning
21%. Each of Messrs. Galifi, Tatomir and Linnell are
residents of Ontario.
The Qualifying Transaction and Private Placement
Pursuant to the Transaction, Green Rise and Bull Market will
complete a "three-cornered" amalgamation under the provisions of
the Business Corporation Act (Ontario), pursuant to which Bull Market will
amalgamate with a wholly-owned subsidiary of Green Rise
(the "Amalgamation").
Prior to the Amalgamation, a shareholders' meeting of Green Rise
will be held pursuant to which Green Rise will seek approval from
shareholders to change its name to "Green Rise Foods Inc." and the
board of directors of Green Rise may be increased and its members
potentially changed. Further, the rights to the name "Green
Rise Capital Corporation" will be assigned to certain founders of
Green Rise for nominal consideration.
Pursuant to the Amalgamation, the outstanding Bull Market Shares
will be exchanged for common shares of Green Rise on the basis of
315,789.47 Green Rise shares for each Bull Market share, resulting
in the existing holders of Bull Market shares (including investors
under the Offering) becoming holders of Green Rise common shares
post-Transaction. The amalgamated entity will be a
wholly-owned subsidiary of Green Rise post-Transaction and Green
Rise on a post-Transaction basis will be the "Resulting
Issuer".
Based on the Definitive Agreement, a total of 30 million
Resulting Issuer common shares will be issued to existing Bull
Market shareholders, (collectively, the "Bull Market
Shareholders"), all at a deemed issue price of $0.20 per share.
It is anticipated that prior to the Amalgamation and as a
condition therefor, the Offering of 18,343,000 Green Rise shares
for a deemed issue price of $0.20 per
share and aggregate gross proceeds of C$3.67
million will be effected.
Material conditions required to be fulfilled prior to completion
of the Transaction include the following: (i) Green Rise being
satisfied with the results of its due diligence investigation of
Bull Market and its business; (ii) the Definitive Agreement
regarding the Transaction being acceptable to the TSXV and all
conditions precedent to the Transaction having occurred or having
been satisfied; (iii) completion of the increase in the size of the
board of directors of Green Rise, if applicable, and the
confirmation or appointment of the directors and the change in the
name of Green Rise to "Green Rise Foods Inc." as mentioned above;
(iv) the Resulting Issuer meeting the applicable minimum listing
requirements, including, without limitation, the public float
requirements of the TSXV; (v) the TSXV having conditionally
approved the listing of the Resulting Issuer shares issuable
pursuant to the Amalgamation and the Offering; (vi) the receipt of
all regulatory, shareholder and third-party approvals, if any,
required in connection with the Transaction; (vii) Green Rise
being satisfied with the audited financial statements of the
business of Bull Market for the fiscal years ended 2017 and 2018;
and (viii) certain other conditions including customary closing
conditions for a transaction of this nature.
The parties will be seeking an exemption from the requirement
for sponsorship of the Transaction, but in the event an exemption
is not available, will seek a sponsorship relationship for this
Transaction and will update the market accordingly.
No Green Rise director, officer or insider or controlling person
of Green Rise currently has any direct or indirect beneficial
interest in the assets of Bull Market, are insiders of Bull Market
for purposes of applicable securities laws or have a relationship
with non-arm's length parties to the Qualifying Transaction. The
Qualifying Transaction will not constitute a "Non-Arm's Length
Qualifying Transaction" (as such term is defined in TSXV Policy 2.4
– Capital Pool Companies) and is not subject to shareholder
approval.
Following the completion of the Transaction, the Bull Market
Shareholders will own approximately 50% of the issued and
outstanding Resulting Issuer shares, existing Green Rise
shareholders and offerees participating in the Offer will own
approximately 50% of the issued and outstanding Resulting Issuer
shares, in each case calculated on a fully diluted basis.
In due course, Green Rise intends to prepare and submit a Filing
Statement in connection with the Transaction and a more
comprehensive press release with further details relating to the
Transaction including the Offering will be issued in accordance
with the policies of the TSXV.
ABOUT GREEN RISE
Green Rise is a capital pool company (CPC) formed under the TSXV
CPC program. Green Rise's common shares will remain halted until
Green Rise satisfies the requirements of the TSXV for resuming the
trading of the Green Rise shares or until completion of the
Transaction.
Completion of the Transaction is subject to a number of
conditions including, but not limited to, TSXV acceptance. 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 Filing Statement
and/or an Information Circular 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.
All information in this press release concerning Bull
Market has been provided for inclusion herein by Green Rise.
Although Green Rise has no knowledge that would indicate that any
information contained herein concerning Bull Market is untrue or
incomplete, Green Rise assumes no responsibility for the accuracy
or completeness of any such information.
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.
FORWARD-LOOKING STATEMENTS
This news release contains "forward-looking information" within
the meaning of applicable securities laws relating to the proposal
to complete the Transaction and associated transactions, including
statements regarding the terms and conditions of the Transaction
and associated transactions. Any such forward-looking statements
may be identified by words such as "expects", "anticipates",
"believes", "projects", "plans" and similar expressions. Readers
are cautioned not to place undue reliance on forward-looking
statements. Actual results and developments may differ materially
from those contemplated by these statements depending on, among
other things, the risks that the parties will not proceed with the
Transaction and associated transactions, that the ultimate terms of
the Transaction and associated transactions will differ from those
that currently are contemplated, and that the Transaction and
associated transactions will not be successfully completed for any
reason (including the failure to obtain the required approvals or
clearances from regulatory authorities). The statements in this
news release are made as of the date of this release. Green Rise
undertakes no obligation to update any such forward-looking
statements if circumstances or management's estimates or opinions
should change except as required by applicable securities laws. The
reader is cautioned not to place undue reliance on any such
forward-looking statements. Green Rise undertakes no obligation to
comment on analyses, expectations or statements made by third
parties in respect of Green Rise and Bull Market, or their
respective financial or operating results or (as applicable), their
securities.
SOURCE Green Rise Capital Corporation