True Leaf Brands Inc (CSE:MJ) (OTCPINK:TRLFF) (FRA:TLA) late Tuesday said it is set to emerge from creditor protection after closing its previously-announced refinancing transaction.
The company added that it will reacquire its True Leaf Cannabis Inc and True Leaf Investments Corp assets in a merger agreement with a private group of investors involved in the restructuring agreement, which also includes the participation of Lind Asset Management XV, The Australian Special Opportunity Fund, Canguard Mortgage Investment and its affiliates.
True Leaf Brands interim CEO Darcy Bomford said in a statement: "We are pleased to announce this significant milestone for True Leaf."
READ: True Leaf Brands moves closer to emerging from creditor protection after British Columbia Supreme Court approves proposals
He added: "This restructuring is a testament to our original vision for True Leaf and the confidence we have in our plan. The Company is now in a unique position to leverage its assets with a new balance sheet and a renewed focus on success in the Cannabis 2.0 marketplace-and beyond."
True Leaf Brands will also consolidate its outstanding common shares on the basis of 10 pre-consolidation common shares for each one post-consolidation share, as a condition of the merger agreement.
The company will issue about 17,416,980 post-consolidation common shares at a deemed price of $0.375 per share to the private investor group, results in existing True Leaf Brands shareholders owning around 40.8% of the outstanding post-consolidation common shares on a fully-diluted basis. The private investor group will also be permitted to nominate three members to the True Leaf Brands board of directors. Darcy Bomford will remain as interim chief executive officer and Jennifer Pace will remain as chief financial officer.
Shareholder approval is required for completion of the merger agreement, which may be terminated in the event that all conditions to closing are not completed on or before December 6, 2020. A cash finder's fee of $20,000 is to be paid to an arm's length third party on close of the amalgamation.
True Leaf Cannabis Inc is a Licensed Producer and owner of True Leaf Campus, an 18,000 square foot facility located on a 40-acre site zoned for the cultivation, processing, and sale of cannabis in Lumby, British Columbia.
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