CEDT CAPI NOT FOR DISSEMINATION IN
In anticipation of the Proposed Transaction, ShinyBud and mīhī have also entered into an engagement letter with
Additional details with respect to the Proposed Transaction and the Private Placement will be announced at a later date.
ShinyBud
Founded in 2019 by Mr.
ShinyBud was incorporated under the Canada Business Corporations Act (“CBCA”) in
mīhī
mīhī is an
mīhī was incorporated under the Business Corporations Act (
Cedarmont
The Company was incorporated under the Business Corporations Act (
Summary of Proposed Transaction
The Proposed Transaction involves the acquisition by the Company of ShinyBud and mīhī in consideration for the common shares of the Company. It is anticipated that the acquisition will be effected by way of an amalgamation of ShinyBud, mīhī and a new subsidiary of the Company to be formed for this purpose (the “Amalgamation”), on a basis that results in the Company becoming the sole shareholder of the amalgamated corporation continuing therefrom (“Amalco”) and the current shareholders of ShinyBud and mīhī becoming shareholders of the Company. The final transaction structure will, however, be determined in connection with entering into a definitive agreement for the Proposed Transaction (“Definitive Agreement”).
In connection with the Proposed Transaction, the Company will seek to change its name to “Shiny
The number of common shares of the Company to be issued to shareholders of ShinyBud and mīhī under the Proposed Transaction and, accordingly, the proportionate share ownership interest in the Resulting Issuer of existing shareholders of the Company, on the one hand, relative to shareholders of ShinyBud and mīhī, on the other, will depend on the final value determined for ShinyBud and mīhī. That value is expected to be based on the contemplated Private Placement, the details of which will be provided in a further announcement as such details are established. Pursuant to the LOI, Cedarmont has been ascribed a value of
The Proposed Transaction is subject to the parties entering into a Definitive Agreement not later than
Pursuant to the LOI, an introductory fee of
Private Placement
On or before
The gross proceeds from the Private Placement, other than 50% of the total Agents’ commission plus their reimbursable costs and expenses, will be placed in escrow and released to the Resulting Issuer only in connection with Closing.
Each Subscription Receipt will entitle the holder thereof to receive, upon satisfaction or waiver of the applicable escrow release conditions (including all conditions precedent to Closing), for no additional consideration, a unit (“Unit”) consisting of a ShinyBud share and one-half of one share purchase warrant. Such shares and warrants of ShinyBud will in turn be exchanged for common shares and share purchase warrants of the Resulting Issuer pursuant to the Amalgamation. Each whole warrant will entitle the holder to subscribe for and purchase one common share of the Resulting Issuer at an exercise price to be determined in the context of marketing the Private Placement, for a period of 24 months after Closing.
The consideration payable to the Agents in respect of the Private Placement will be comprised of a cash commission equal to 7% of the gross proceeds plus broker warrants equal to 7% of the total number of Subscription Receipts issued under the Private Placement. Each broker warrant will entitle the holder to subscribe for and purchase one Unit, at the price at which the Subscription Receipts are sold, for a period of 24 months after Closing.
Completion of the Private Placement will be subject to the receipt of all necessary regulatory approvals and other customary conditions.
Assuming that Closing occurs and all other escrow release conditions for the Subscription Receipts are satisfied or waived, the net proceeds from the sale of the Subscription Receipts will be released to the Resulting Issuer and are expected to be used for growth initiatives, potential strategic acquisitions and working capital and general corporate purposes.
All securities issued pursuant to the Private Placement will be subject to a four-month resale restriction from the date of issuance of the Subscription Receipts.
Directors, Officers and Other Insiders of Resulting Issuer
In connection with Closing, the Company’s board of directors and officers will be reconstituted with nominees determined by ShinyBud and mīhī to serve as directors of the Resulting Issuer. TSXV acceptance will be required in respect of all such individuals, following review of all materials to be filed in connection with the Proposed Transaction.
The proposed directors are:
The backgrounds of the proposed directors and officers of the Resulting Issuer, together with information regarding other anticipated insiders, will be included in a subsequent news release of the Company to be issued in accordance with TSXV Policy 2.4.
Shareholder Approvals
The Proposed Transaction is not a Non-Arm’s Length Qualifying Transaction as none of the parties, nor any of their respective Associates or Affiliates, is a Control Person of another party (as those terms are defined under TSXV rules). Accordingly, the Proposed Transaction itself is not subject to approval by the shareholders of the Company under TSXV Policy 2.4.
Under the terms of the LOI, ShinyBud and mīhī may also require the Company to seek shareholder approval of such ancillary matters as may be required in connection with the Proposed Transaction, including the reconstitution of the board of directors. Accordingly, the Company may call and hold a special meeting of shareholders to approve all such matters in connection with the Proposed Transaction that require shareholder approval under applicable laws.
Trading Halt
Trading in the Company’s shares has been halted in accordance with TSXV policies, and will remain halted pending TSXV review of the Proposed Transaction, completion of various regulatory filings with the TSXV in connection therewith, and satisfaction of other conditions of the TSXV for the resumption of trading. Trading in the Company’s shares may not resume before Closing.
Sponsorship
Absent an available exemption under TSXV rules, the TSXV generally requires that a member firm provide a sponsor report in respect of CPC’s qualifying transaction. The Company anticipates that it may qualify for an exemption from sponsorship in the circumstances of the Proposed Transaction and intends to seek the same in accordance with TSXV rules. There can, however, be no assurance that an exemption will be granted.
Further Information
A summary of significant financial information with respect to ShinyBud and mīhī, as well as information regarding the expected directors, officers and other insiders of the Resulting Issuer following Closing, will be included in a subsequent news release of the Company to be issued in accordance with TSXV Policy 2.4.
Further details about the Proposed Transaction, the Private Placement and the Resulting Issuer will also be contained in the disclosure document to be prepared and filed with the TSXV and on SEDAR in connection with the Proposed Transaction. Investors are cautioned that, except as disclosed in such disclosure document, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon.
For further information, contact
Reader Advisories
The information provided in this news release regarding ShinyBud and mīhī has been provided by ShinyBud and mīhī and has not been independently verified by the Company.
Completion of the transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV Requirements, majority of the minority shareholder approval. 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 TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release.
NEITHER THE TSXV NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSXV) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
The securities referred to in this news release have not been, and will not be, registered under the United States Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold within the United States or to, or for the account or benefit of, any
Cautionary Statement Regarding Forward-Looking Information
This news release contains “forward-looking information” within the meaning of Canadian securities legislation. Forward-looking information generally refers to information about an issuer’s business, capital, or operations that is prospective in nature, and includes future-oriented financial information about the issuer’s prospective financial performance or financial position. The forward-looking information in this news release includes disclosure about the terms of the Proposed Transaction, a proposed Private Placement, the anticipated management team of the Resulting Issuer and ShinyBud’s and mīhī’s business operations and prospects, including mīhī launching its first mīhī Express store during the third quarter. The Company, ShinyBud and mīhī have made certain material assumptions, including but not limited to: prevailing market conditions; general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; and the ability of ShinyBud and mīhī to execute and achieve its business objectives, to develop the forward-looking information in this news release. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Actual results may vary from the forward-looking information in this news release due to certain material risk factors. These risk factors include, but are not limited to: adverse market conditions; the inability of the Company, ShinyBud or mīhī to complete the Proposed Transaction on the terms disclosed in this news release, or at all; reliance on key and qualified personnel; regulatory and other risks associated with the cannabis industry in general, as well as those risk factors discussed or referred to in disclosure documents filed by the Company with the securities regulatory authorities in certain provinces of
Source:
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