Trees Corporation (“Trees“) and 1287406 B.C. Ltd., (“406“) are pleased to announce that Trees has called an annual and special meeting (the “Meeting“) of holders (“Trees Shareholders“) class A shares in the capital of Trees (“Trees Shares“) to consider the previously proposed amalgamation (the “Amalgamation“) with 406.
Trees is also pleased to announce that it has received conditional approval of the Neo Exchange Inc. (“NEO“) for the listing of the shares (“Resulting Issuer Shares“) of the company resulting from the Amalgamation (the “Resulting Issuer“) on the NEO. In connection with the calling of the Meeting, Trees completed the mailing and filing of its joint information circular (the “Circular“) with 406 dated November 12, 2021. The Circular constitutes Trees’ “Listing Document” in the context of its NEO listing application, and is available on the SEDAR profile of 406 at www.sedar.com.
Jon Conquergood, Trees CEO, states “Trees is very proud to have achieved these significant milestones on our path to becoming a publicly listed Canadian cannabis retailer. Assuming the closing of the acquisition in British Columbia, which is expected to close in 2022, Trees will have a solid foundation of 11 operating storefronts in Ontario and British Columbia, two more opening soon and a growth inventory of an additional nine conditionally licensed locations. I couldn’t be more excited for our future.”
Jeff Holmgren, Trees CFO adds “We are delighted to be partnered with NEO through which we expect to increase our investor reach and access to capital to fund further our organic growth and acquisitions strategy. With our strong presence in Ontario and British Columbia, two of Canada’s largest cannabis markets, we believe that Trees will provide a differentiated investment alternative to the increasingly sophisticated and discriminating cannabis sector investor.”
At the Meeting, Trees Shareholders will be asked to approve, among other things, the Amalgamation, which, if approved by Trees Shareholders and shareholders of 406, will be completed pursuant to the terms of the amended and restated amalgamation agreement dated November 10, 2021 (the “Amended Amalgamation Agreement“). In connection with the transactions contemplated by the Amalgamation Agreement, Trees Shareholders will also be asked to approve the consolidation of all of the outstanding Trees Shares at a ratio of between 2:1 and 50:1 (the “Trees Consolidation“). If approved by Trees Shareholders, and provided the directors of Trees resolve to proceed with the Trees Consolidation at consolidation ratio of 50:1, it is expected that there will be approximately [25,164,481] Resulting Issuer Shares issued and outstanding at the Effective Time (as defined in the Amended Amalgamation Agreement), assuming the conversion of certain indebtedness, the issuance of Subscription Receipts (as defined below) representing minimum gross proceeds of $2,000,000, and the vesting of certain performance share units. Completion of the Amalgamation and listing of Resulting Issuer Shares on NEO is subject to the satisfaction of a number of conditions precedent, including, but not limited to, receipt of all necessary regulatory and shareholder approvals.
The Amended Amalgamation Agreement amended and restated the original amalgamation agreement dated October 26, 2021 to, among other minor matters, reflect a change in the jurisdiction of the Amalgamation from the Province of Ontario to the federal jurisdiction of Canada, with the remaining terms of the Amalgamation otherwise the same as those set out in the press release of the parties dated October 27, 2021 (the “October Press Release“).
As previously announced in the October Press Release, Trees has launched a non-brokered private placement (the “Private Placement“) of subscription receipts (the “Subscription Receipts“) at a price of $0.02 (the “Subscription Price“) per Subscription Receipt for gross proceeds of a minimum of $2,000,000. The material terms of the Private Placement and Subscription Receipts are set out in the October Press Release.