Mr. Gunther Roehlig reports
DARIEN BUSINESS DEVELOPMENT CORP. ANNOUNCES PROPOSED REVERSE TAKEOVER BY VIREO HEALTH, INC.
Darien Business Development Corp. and Vireo Health Inc. have confirmed, further to Darien's press release dated Jan. 10, 2019, the business combination between Darien and Vireo that will result in a reverse takeover of Darien by the security holders of Vireo. The proposed transaction will be an arm's-length transaction.
Vireo is one of America's leading multistate cannabis companies. Vireo is a physician-led, science-focused organization dedicated to providing patients with best-in-class cannabis-based products and compassionate care. Vireo cultivates cannabis in environmentally friendly greenhouses, manufactures pharmaceutical-grade cannabis extracts and sells its products at both company-owned and third party dispensaries. Vireo has a strong record of competing for and winning merit-based licensing processes and has been awarded licences in some of the most selective state-based markets, including Minnesota, New York, Pennsylvania, Maryland and Ohio.
Terms of the transaction
The arm's-length proposed transaction will be structured as an amalgamation, merger, arrangement, takeover bid, share purchase or other similar form of transaction or series of transactions that will allow Darien to acquire all of the voting securities of Vireo. The final structure for the proposed transaction is subject to satisfactory tax, corporate and securities law advice for both Darien and Vireo.
Completion of the proposed transaction is subject to a number of conditions, including the completion of the Vireo financing (defined herein), receipt of all necessary shareholder and regulatory approvals, the execution of related transaction documents, the delisting of the common shares of Darien from the TSX Venture Exchange, the consolidation of the Darien common shares, and the conditional approval of the Canadian Securities Exchange for the listing of the postconsolidation common shares of Darien following completion of the proposed transaction.
Vireo currently intends to complete a brokered private placement of subscription receipts to accredited investors through a special purpose vehicle. Vireo has engaged Eight Capital and Canaccord Genuity Corp. to act as co-bookrunners in connection with the Vireo financing. The Vireo subscription receipts are proposed to be exchanged, upon the satisfaction of certain conditions, for common shares of the special purpose vehicle, which shares will then be exchanged for subordinate voting shares (as defined herein) on a one-for-one basis or for multiple voting shares (as defined herein) on a 100-for-1 basis.
In connection with the proposed transaction, the company will be required to, among other things: (i) change its name to a name requested by Vireo and acceptable to applicable regulatory authorities; (ii) consolidate its outstanding common shares on a basis to be determined; (iii) replace all directors and officers of the company on closing of the proposed transaction with nominees of Vireo; and (iv) alter the articles and notice of articles of Darien to redesignate the postconsolidation common shares as subordinate voting shares, create a new class of super voting shares that would be issued to certain principals of Vireo and create a new class of multiple voting shares to be issued to United States resident holders of Vireo securities, under the proposed transaction.
Under the proposed transaction, the shareholders of the company as of immediately prior to the completion of the proposed transaction would hold upon consummation of the transaction subordinate voting shares with a value, based on the Vireo financing price, of $3-million (U.S.). Further details of the proposed transaction will be included in subsequent news releases and disclosure documents (which will include business and financial information in respect of Vireo) to be filed in Canada by the company in connection with the proposed transaction. It is anticipated that the annual and special shareholders meeting of the company to approve, among other matters, any necessary matters in connection with the proposed transaction will take place March 8, 2019, and closing of the proposed transaction will take place later in the first quarter of 2019.
The common shares of the company will remain halted until all necessary filings have been accepted by applicable regulatory authorities.
About Vireo Health Inc.
Vireo is one of America's leading multistate cannabis companies. Vireo is physician-led, science-focused organization and is dedicated to providing patients with best-in-class quality cannabis-based products and compassionate care. Vireo cultivates cannabis in environmentally friendly greenhouses, manufactures pharmaceutical-grade cannabis extracts and sells its products at both company-owned and third party dispensaries. Vireo has a strong record of competing for and winning merit-based licensing processes and has been awarded licences in some of the most selective state-based markets, including Minnesota, New York, Pennsylvania, Maryland and Ohio.
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