Amalgamation Transaction
Eden and Rosehearty completed an amalgamation under the Business Corporations Act (British Columbia) ("BCBCA") and subsequently changed its name to "Eden Empire Inc." Pursuant to the terms of the Business Combination, the issued and outstanding common shares of Eden (the "Eden Shares") were exchanged for common shares of the resulting issuer to the Business Combination (the "Resulting Issuer Shares") on the basis of one Resulting Issuer Share for each Eden Share. At the closing of the Business Combination, 65,222,500 Resulting Issuer Shares, representing 94.6% of the Resulting Issuer Shares, were issued in exchange for the Eden Shares. The outstanding common share purchase warrants of Eden (the "Eden Warrants") were exchanged for common share purchase warrants of Eden Empire (the "Resulting Issuer Warrants") on the basis of one Resulting Issuer Warrant for each Eden Warrant, resulting in 661,630 Resulting Issuer Warrants issued.
The Business Combination was conditional on the receipt of Eden of approval by its shareholder, which was unanimously approval at the special meeting of the shareholders of Eden held on May 12, 2020.
Corporate Update
Following the closing of the Business Combination, the board of directors of the Company is now comprised of Gerry Trapasso, Kolten Taekema, Cale Moodie and Dario Meli. In addition, on the Closing Date, Gerry Trapasso was appointed Chief Executive Officer, Kolten Taekema was appointed President and Cale Moodie was appointed as Chief Financial Officer. Prior to the completion of the Business Combination, Rosehearty consolidated its common shares on a 6:1 basis, such that it had 3,705,092 common shares issued and outstanding immediately before giving effect to the Business Combination.
Eden has applied to list (the "Listing") its common shares on the Canadian Securities Exchange (the "CSE") under the ticker symbol "EDEN", subject to meeting listing requirements and obtaining approval of the CSE. Upon Eden obtaining conditional approval of the CSE for the Listing, the principal amount of the approximately $5.9 million outstanding convertible debentures of Eden Empire will be converted into Eden Shares at a conversion price of $0.30 resulting in an additional 19,679,985 Eden Shares.
About Eden Empire
Eden Empire is reporting issuer in the business of investments and operations in the cannabis sector and engaging in retail, cultivation, extraction and activities in respect of cannabis in Canada and the United States. It is the intention that Eden becomes a fully integrated cannabis product company in Canada and the United States. Eden holds a number of trademarks, some with common law rights and some registered trademarks, agreements for the acquisition of licence applicants in various U.S. States and Canadian Provinces, and has acquired interests in land where it anticipates operating. Eden has an award winning and established nationwide brand, including a substantial intellectual property portfolio, and a dedicated management team with over 20 years of combined cannabis industry experience. Upon completion of Eden Empire's currently intended acquisitions, and approval to operate its retail locations, the Company is expected to have the largest retail cannabis footprint in British Columbia.
Eden is expecting the approval of regulators in British Columbia, Ontario and Michigan for licenses to operate cannabis retail stores, and cultivation and processing facilities. It is expected that following the issuances of these licenses and the commencement of its operations, Eden will have a significant presence in the retail cannabis space in British Columbia.
Retail cannabis operations are an emerging sector with significant cash flow potential. Public information shows that cannabis retail currently has one of the highest grossing sales per square foot of all retail segments in North America.
This press release is not an offer of securities for sale in the United States, and the securities described in this press release may not be offered or sold in the United States absent registration or an exemption from registration. The securities have not been and will not be registered under the United States Securities Act of 1933.
Completion of the Transaction is subject to a number of conditions, including but not limited to, Eden Empire Inc. shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. Investors are cautioned that there can be no assurance that the Transaction will be completed as proposed or at all.
Forward-Looking Statements
This release contains certain "forward looking statements" and certain "forward-looking information" as defined under applicable Canadian securities laws. Forward-looking statements and information can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology. Forward-looking statements and information include, but are not limited to, statements with respect to the transactions contemplated under the Business Combination Agreement, the Transaction, the requisite regulatory and shareholder approvals in respect thereof, and proposed future transactions Resulting Issuer may undertake and their expected timing. Forward-looking statements and information are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that, while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements and information are subject to various known and unknown risks and uncertainties, many of which are beyond the ability of Eden Empire to control or predict, that may cause Eden Empire's actual results, performance or achievements to be materially different from those expressed or implied thereby, and are developed based on assumptions about such risks, uncertainties and other factors set out here in, including but not limited to: Eden Empire may not obtain regulatory approval and may not begin operating cannabis retail or cultivation and processing operations, that the actual use of proceeds may differ from those currently stated; the inherent risks involved in the general securities markets; uncertainties relating to the availability and costs of financing needed in the future; the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, currency fluctuations; regulatory restrictions, liability, competition, loss of key employees and other related risks and uncertainties. Eden Empire does not undertake any obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements.
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