TORONTO, Oct. 25, 2018 /PRNewswire/ - The Green Organic
Dutchman Holdings Ltd. (the "Company" or "TGOD")
(TSX:TGOD) (US:TGODF) and its wholly-owned subsidiary, TGOD
Acquisition Corporation ("SpinCo"), are pleased to announce
that they have entered into a definitive arrangement agreement (the
"Arrangement Agreement") pursuant to which the Company will,
subject to the terms and conditions of the Arrangement Agreement,
effect the previously announced spin-off transaction (the
"Spin-Off") whereby TGOD will distribute to TGOD
shareholders (the "Distribution") unit purchase warrants of
SpinCo (the "SpinCo Unit Warrants") by way of
a court-approved plan of arrangement (the
"Arrangement").
Pursuant to the Arrangement, TGOD shareholders of record as of
the distribution date (the "Distribution Record Date") will
receive 0.15 of one SpinCo Unit Warrant for each TGOD share held.
Each SpinCo Unit Warrant will entitle the holder to purchase one
unit of SpinCo (a "SpinCo Unit") at a price of $0.50 per SpinCo Unit for a period of 30 days
from completion of the Distribution. Each SpinCo Unit will consist
of one common share of SpinCo ("SpinCo Share") and one-half
of one common share purchase warrant of SpinCo (a "SpinCo
Warrant"). Each SpinCo Warrant is exercisable into one
SpinCo Share (a "SpinCo Warrant Share") at an
exercise price of $1.25 per SpinCo
Warrant Share for a period of 24 months from the date the SpinCo
Shares commence trading on a recognized stock exchange (the
"Listing Date"). The SpinCo Shares comprising part of the
SpinCo Units will be subject to a six month contractual escrow
period from the Listing Date. The SpinCo Shares issuable upon the
exercise of the SpinCo Warrants will be subject to a twelve month
contractual escrow period from the Listing Date.
The aggregate SpinCo Unit Warrants to be distributed to TGOD
shareholders will be issued by SpinCo to TGOD pursuant to a
transaction expense agreement which was entered into by the Company
and SpinCo concurrently with the Arrangement Agreement, pursuant to
which TGOD will pay SpinCo's costs related to the preparation and
completion of the Spin-Off up to a maximum of $200,000.
The structure of the Spin-Off has been approved by the board of
directors of the Company (the "TGOD Board") following
consultation with its financial and legal advisors and a review of
other strategic options available to transfer TGOD's expertise and
monetize TGOD's proprietary knowledge of the global cannabis
marketplace. Structuring the Spin-Off in a tax efficient
manner for TGOD shareholders has been a significant factor in the
TGOD Board's considerations. The TGOD Board has determined that the
Spin-Off is in the best interest of TGOD and its shareholders and,
having taken into account advice from its financial and legal
advisors, has unanimously approved the Arrangement giving effect to
the Spin-Off and recommends that TGOD shareholders vote in favour
of the Arrangement.
The Arrangement remains subject to the approval of at least
two-thirds of the votes cast by TGOD shareholders at the TGOD
Meeting (as defined below). Completion of the Arrangement is also
subject to other closing conditions customary for a transaction of
this nature, including requisite corporate, regulatory and court
approvals. The establishment of the Distribution Record Date
remains subject to the satisfaction of all conditions to the
Arrangement (including receipt of requisite corporate, regulatory,
shareholder and court approvals) and the approval of the TSX.
Subject to the foregoing, the Distribution Record Date is
anticipated to be in mid-December
2018. The Company will provide further updates on the
Distribution and the Distribution Record Date in due course.
TGOD Meeting
The resolutions to approve the Arrangement and the SpinCo
Offering (as defined below) will be presented to TGOD shareholders
together with annual meeting matters at an annual general and
special meeting of TGOD shareholders to be held on December 6, 2018 (the "TGOD Meeting").
Further details of the Arrangement, the SpinCo Offering and annual
meeting matters will be included in a management information
circular of TGOD (the "Circular") to be prepared in respect
of the TGOD Meeting. TGOD intends to mail the Circular in early
November, a copy of which will be concurrently filed under TGOD's
profile on SEDAR at www.sedar.com.
SpinCo Offering
As previously announced, in connection with the Spin-Off, SpinCo
intends to complete a non-brokered private placement offering (the
"SpinCo Offering") of up to 20,000,000 subscription
receipts (the "Subscription Receipts") at a price of
$0.50 per Subscription Receipt for
gross proceeds of up to $10,000,000.
Please refer to the Company's news release dated September 25, 2018 for additional details
regarding the terms of the SpinCo Offering including the escrow
release conditions thereunder (the "Escrow Release
Conditions").
There can be no assurance as to whether or when the SpinCo
Offering will be completed or whether the Escrow Release Conditions
will ever be met and the SpinCo Units underlying the Subscription
Receipts released to the subscribers. If the Escrow Release
Conditions are not satisfied in accordance with the terms of the
Offering on or before December 31,
2018 (or such other date as the Company may determine),
holders of the Subscription Receipts will be entitled to the return
of their subscription amount without interest.
U.S. Securities and Tax Matters
As previously announced, the SpinCo Unit Warrants to be
distributed pursuant to the Distribution will not be registered
under the laws of any foreign jurisdiction, including the United
States Securities Act of 1933, as amended (the "U.S. Securities
Act"). Consequently, no SpinCo Unit Warrants will be delivered
to any registered or beneficial holder of TGOD shares who is, or
who appears to TGOD or Computershare Trust Company of Canada, as custodian (the "Custodian")
to be, an individual or entity that qualifies as a U.S. Person
under applicable U.S. securities laws (collectively, "U.S.
Shareholders"). Such SpinCo Unit Warrants will be delivered by
TGOD to the Custodian for sale by the Custodian on behalf of all
U.S. Shareholders and U.S. Shareholders will receive from the
Custodian their pro rata share of the cash proceeds from the sale
of such SpinCo Unit Warrants, less any commissions, expenses and
any applicable withholding taxes.
The SpinCo Unit Warrants, the SpinCo Units underlying the SpinCo
Unit Warrants, and the Subscription Receipts are not expected to be
qualified investments under the Tax Act for RRSPs, TFSAs or other
registered plans as at the time of issuance and could therefore
subject the plan or its annuitant or holder to adverse tax results.
While additional details will be included in the Circular, affected
TGOD shareholders, and potential subscribers of Subscription
Receipts, are strongly encouraged to consult
their tax advisors to determine the implications specific
to their situation.
Further Information
To learn more about the foregoing including SpinCo Offering, the
Spin-Off and the Distribution, please contact the investor
relations team at: invest@tgod.ca or (416) 900-7621.
ABOUT TGOD ACQUISITION CORPORATION
SpinCo is an investment company guided by an investment policy
primarily focused on investments in the cannabis industry in
Canada and internationally.
SpinCo's investments may include the acquisition of equity, debt or
other securities of publicly traded or private companies or other
entities, financing in exchange for pre-determined royalties or
distributions and the acquisition of all or part of one or more
businesses, portfolios or other assets, in each case as SpinCo
believes will enhance value for the shareholders of SpinCo in the
long term. SpinCo's board of directors and management team have
considerable financial, mergers and acquisitions and cannabis
industry experience and will consist of David Doherty, Chief Executive Officer and
Director who has transitioned from TGOD, Nick Demare, Chief Financial Officer, and
Jeff Scott, Director.
ABOUT THE GREEN ORGANIC DUTCHMAN HOLDINGS LTD
The Green Organic Dutchman Holdings Ltd. is a premium global
organic cannabis company, with operations focused on medical
cannabis markets in Canada,
Europe and Latin America and the Canadian adult-use
market. The Company grows high quality, organic cannabis with
sustainable, all-natural principles. TGOD's products are laboratory
tested to ensure patients have access to a standardized, safe and
consistent product. TGOD has a funded capacity of 170,000 kg and is
building 1,382,000 sq. ft. of cultivation facilities across
Ontario, Quebec and Jamaica.
TGOD's Common Shares and warrants issued under the indenture
dated November 1, 2017 trade on the
TSX under the symbol "TGOD" and "TGOD.WT", respectively.
Forward-Looking Information Cautionary Statement
This news release includes statements containing certain
"forward-looking information" within the meaning of applicable
securities law ("forward-looking statements"). Forward looking
statements in this release includes, but is not limited to,
statements regarding the timing, closing and approval of the
Arrangement, the Distribution and the SpinCo Offering, about the
future legalization of recreational cannabis and cannabis-infused
products in Canada, statements
about future research, development and innovation by the Company,
statements about the offering of any particular products by the
Company in any particular territory and statements regarding the
future performance of the Company. Forward-looking statements are
frequently characterized by words such as "plan", "continue",
"expect", "project", "intend", "believe", "anticipate", "estimate",
"may", "will", "potential", "proposed" and other similar words, or
statements that certain events or conditions "may" or "will" occur.
These statements are only predictions. Various assumptions were
used in drawing the conclusions or making the projections contained
in the forward-looking statements throughout this news release.
Forward-looking statements are based on the opinions and estimates
of management at the date the statements are made, and are subject
to a variety of risks and uncertainties and other factors that
could cause actual events or results to differ materially from
those projected in the forward-looking statements. The Company is
under no obligation, and expressly disclaims any intention or
obligation, to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as expressly required by applicable law.
Neither the TSX nor its Regulation Services Provider (as that
term is defined in the policies of Toronto Stock Exchange) accept
responsibility for the adequacy or accuracy of this
release.
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SOURCE The Green Organic Dutchman Holdings Ltd.