THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO THE UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
VANCOUVER, British Columbia, June 28, 2019 (GLOBE NEWSWIRE) -- Wildflower Brands Inc. (CSE: SUN, OTC: WLDFF) (the “Company” or “Wildflower”) is pleased to announce the closing of its acquisition of City Cannabis Corp. (“City Cannabis”), pursuant to which the Company acquired all of the issued and outstanding shares of City Cannabis in exchange for 60 million common shares of the Company (the “Consideration Shares”) at a deemed price of $0.75 per Consideration Share for aggregate consideration of $45 million (the “Acquisition”). The Acquisition was previously announced by the Company on April 9, 2019, May 28, 2019 and June 18, 2019, respectively.
98% of the Consideration Shares will be subject to a voluntary lock-up in connection with the closing of the Acquisition as the large majority of the shareholders receiving the Consideration Shares are existing Wildflower shareholders. Pursuant to the lock-up arrangement, 10% of the Consideration Shares will be available as of June 28, 2019 and 15% of the Consideration Shares will be released every six months thereafter for three years.
City Cannabis has two operating retail cannabis stores, two new retail cannabis stores anticipated to open in July 2019 and another five leases with retail applications at various stages of the regulatory process. With Wildflower and City Cannabis achieving combined revenues in excess of $1.5 million in May 2019, Wildflower expects to have a solid cash flow base for the continued expansion of its business.
The Company convened an Annual General and Special Meeting of its shareholders on June 26, 2019 during which the Acquisition was approved by a simple majority of votes cast by shareholders, excluding the votes held or controlled by “interested parties” as defined under the rules of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.
In connection with the closing of the Acquisition, Wildflower has subsequently delivered an escrow release notice (the “Escrow Release Notice”) to Odyssey Trust Company (the “Subscription Receipt Agent”) pursuant to the terms of a subscription receipt agreement dated June 25, 2019 (the “Subscription Receipt Agreement”) between the Company, the Subscription Receipt Agent and Industrial Alliance Securities Inc. (the “Lead Agent") confirming that Wildflower has satisfied all of the escrow release conditions, including the completion or satisfaction or waiver of all conditions precedent to the completion of the Acquisition.
In connection with the delivery of the Escrow Release Notice, the escrowed funds held by the Subscription Receipt Agent, less certain commissions and expenses, have been released from escrow to the Company and the Lead Agent and 3,561,202 Subscription Receipts will be automatically converted, without any further consideration or action by the holders thereof, into 3,561,202 common shares in the capital of the Company (the “Common Shares”) and 3,561,202 common share purchase warrants (the “Warrants”). Each Warrant is exercisable into one Common Share at an exercise price of C$0.65 for a period of 24 months commencing on the date hereof that the Common Shares, subject to certain acceleration and adjustment provisions, as described in the warrant indenture governing the Warrants.
ABOUT WILDFLOWER
Wildflower is a Vancouver-based company developing and designing brands that focus on plant-based health and wellness products and providing a premier retail experience in Canada for cannabis consumers. All of our product brands work in synergy, toward becoming a global wellness leader.
The securities issued in connection with the Acquisition have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as defined in Regulation S promulgated under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Cautionary and Forward-Looking Statements
This news release contains forward‐looking statements and forward‐looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward‐looking statements or information. Forward‐looking statements and information are often, but not always, identified by the use of words such as "appear", "seek", "anticipate", "plan", "continue", "estimate", "approximate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "would" and similar expressions.
Forward-looking statements and information are provided for the purpose of providing information about the current expectations and plans of management of the Company relating to the future. Readers are cautioned that reliance on such statements and information may not be appropriate for other purposes, such as making investment decisions. Since forward‐looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the marijuana industry in general such as operational risks in growing; competition; incorrect assessment of the value and potential benefits of various transactions; ability to access sufficient capital from internal and external sources; failure to obtain required regulatory and other approvals and changes in legislation, including but not limited to tax laws and government regulations. Accordingly, readers should not place undue reliance on the forward‐looking statements, timelines and information contained in this news release. Readers are cautioned that the foregoing list of factors is not exhaustive.
The forward‐looking statements and information contained in this news release are made as of the date hereof and no undertaking is given to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws or the Canadian Securities Exchange. The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.
The Canadian Securities Exchange Inc. has in no way passed upon the merits of the Acquisition and has neither approved nor disapproved of the contents of this press release.
For more information about Wildflower Brands, visit wildflowerbrands.co. To learn, engage and shop our wellness products visit buywildflower.com.
Investor Relations Contact:
Will Elston, Investor Relations
ir@wildflowerbrands.co
1-604-559-0420