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TPCO Holding Corp. (OTCQX:GRAMF) (NEO:GRAM) and Gold Flora have entered into a definitive business combination agreement to combine the companies in an all-stock merger. Under the terms of the merger agreement, The Parent Company shareholders will own approximately 49%, and Gold Flora holders will own approximately 51%, of the outstanding common equity of the combined company on a pro forma basis upon consummation of the business combination.
"We are thrilled to embark on this groundbreaking effort to create a true vertical leader in the most exciting cannabis market in the world," stated Laurie Holcomb, CEO of Gold Flora. "By combining our proven approach to lean, effective infrastructure and vertically integrated operations from cultivation through distribution and The Parent Company's brand building expertise and retail and delivery footprint, we expect to achieve market defining performance at every level of the business. Our team has done a phenomenal job of optimizing our indoor cultivation capabilities, building our portfolio of proprietary genetics, and advancing our high-quality manufacturing and distribution operations, and we look forward to leveraging these strengths as we begin our work to combine our two companies."
Proposed Transaction Summary
Under the terms of the merger agreement, holders of TPCO shares will receive one share of common stock in the capital of New Parent for each TPCO share held pursuant to the merger agreement and holders of Gold Flora units will receive 1.5233 new parent shares for each Gold Flora unit held pursuant to the merger agreement, resulting in the issuance of an aggregate of approximately 312.1 million New Parent shares. The business combination values Gold Flora at $1.50 per Gold Flora unit and The Parent Company at $0.9847 per TPCO share.
Following completion of the business combination, current holders of TPCO shares will hold approximately 49% of New Parent and current holders of Gold Flora units will hold approximately 51% of New Parent.
In connection with the business combination, The Parent Company has agreed to make available to Gold Flora a line of credit of up to $5 million, which shall bear interest at a rate of 10% per annum, and shall be secured by certain assets of Gold Flora. The outstanding balance of the line of credit will become due and payable if the merger agreement is terminated, subject to certain conditions. It is anticipated that the line of credit shall be forgiven following completion of the business combination.
The New Parent will operate as Gold Flora Corporation and is anticipated to remain a reporting issuer in Canada on the Neo Exchange Inc. (the "NEO Exchange") and on the OTC Markets Group Inc, subject to receipt of all applicable stock exchange approvals.
Directors and Officers of the Resulting Issuer
Upon completion of the business combination, it is anticipated that Troy Datcher will be named chairman of the Board and that Laurie Holcomb will be named CEO of New Parent. The board of directors of New Parent will be comprised of three nominees of TPCO, including Troy Datcher as chair, and four nominees of Gold Flora, including Laurie Holcomb.
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Photo: Benzinga edit with photos by geralt and lindsayfox on Pixabay
Posted In: GRAMF
