Mr. Sam Gibbons reports
VIREO HEALTH INTERNATIONAL, INC. ANNOUNCES COMPLETION OF ITS BUSINESS COMBINATION
Vireo Health International Inc., formerly Darien Business Development Corp., has completed its previously announced business combination with Vireo Health Inc. In connection with the business combination, on March 18, 2019, an affiliate of Vireo, Vireo Finco (Canada) Inc., completed a brokered and non-brokered private placement offering of subscription receipts for aggregate gross proceeds in the amount of $51,386,482 (U.S.). The brokered portion of the offering was co-led by Eight Capital and Canaccord Genuity Corp. as co-lead agents and joint bookrunners, together with GMP Securities LP, Beacon Securities Ltd. and Haywood Securities Inc. Eight Capital acted as the sole bookrunner in connection with the offering.
Completion of the offering
On March 18, 2019, Vireo Finco (Canada) completed the offering pursuant to which Vireo Finco (Canada) issued 12,090,937 subscription receipts at a price of $4.25 (U.S.) per subscription receipt (the equivalent of $5.67 (Canadian), based on the Bank of Canada exchange rate of $1.33 (Canadian) per $1 (U.S.) on March 18, 2019) for gross proceeds of $51,386,482 (U.S.). In connection with the closing of the business combination, 12,090,937 subscription receipts issued pursuant to the offering were automatically converted into 12,090,937 common shares in the capital of Vireo Finco (Canada) and then exchanged into subordinate voting shares of the company on a one-for-one basis.
Completion of the business combination and escrow release
The business combination was completed by way of, among other things: (i) a consolidation of the common shares of the company on the basis of one postconsolidation share for 19.4024 preconsolidation shares; (ii) several share exchanges between certain Canadian holders of preferred stock of Vireo and the company, pursuant to which such holders were issued subordinate voting shares of the company; (iii) a three-cornered amalgamation among the company, Vireo Finco (Canada) and 1197027 B.C. Ltd. (B.C. Subco), a wholly owned subsidiary of the company, pursuant to which Vireo Finco (Canada) shareholders (including former holders of subscription receipts) received subordinate voting shares of the company, and pursuant to which B.C. Subco amalgamated with Vireo Finco to form a new company, which was subsequently wound up into the company; and (iv) Darien Merger Sub LLC (U.S. Subco), a wholly owned subsidiary of the company, and Vireo effected a merger under Delaware law whereby U.S. Subco merged with and into Vireo with Vireo surviving and becoming a wholly owned subsidiary of the company, and the shareholders of Vireo in exchange for their common shares of Vireo, received super voting shares, subordinate voting shares or multiple voting shares of the corporation, as applicable. Each share of common stock of Vireo issued and outstanding immediately prior to the closing of the business combination and held by a non-U.S. resident was exchanged for 30.0048 subordinate voting shares. Each share of common stock of Vireo issued and outstanding immediately prior to the closing of the business combination and held by a U.S. resident was exchanged for 0.300048 of a multiple voting share. Each share of common stock of Vireo issued and outstanding immediately prior to the closing of the business combination and held by Kyle Kingsley was exchanged for 0.300048 of a super voting share. Pursuant to steps (ii) through (iv), the company issued 65,411 super voting shares, 514,388 multiple voting shares and 8,217,695 subordinate voting shares.
As part of the business combination, the company implemented a three-class voting structure on March 18, 2019, including the conversion of the existing common shares into subordinated voting shares and the creation of a new class of multiple voting shares and a new class of super voting shares, and changed its name to Vireo Health International Inc. Each subordinate voting share carries the right to one vote per share on all matters to be voted on by shareholders of the company, each multiple voting share carries the right to 100 votes per share on all matters to be voted on by shareholders of the company (or one vote per subordinate voting share into which each multiple voting shares is convertible) and each super voting share carries the right to 1,000 votes per share (or 10 votes per subordinate voting share into which the super voting shares are ultimately convertible) on all matters to be voted on by shareholders of the company.
The proceeds from the offering, less certain expenses, were placed into escrow on completion of the offering. The escrowed proceeds from the offering, less the commission of the agents and certain fees and expenses, were subsequently released from escrow upon closing of the business combination.
The company has received conditional approval from the Canadian Securities Exchange for the listing of its subordinate voting shares, which are expected to commence trading on the CSE under the ticker symbol VREO at market open on March 20, 2019. Listing is subject to the company fulfilling all listing requirements of the CSE. Full details of the company, including the business combination, are set out in the company's listing statement dated March 19th, 2019. A copy of the listing statement can be found under the company's profile on SEDAR.
About Vireo Health International Inc.
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 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.
We seek Safe Harbor.
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