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Red White & Bloom provides update relating to Aleafia Health and other corporate matters

Grow Opportunity, Media Partners

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(Globe Newswire) Toronto — Red White & Bloom Brands Inc. is providing an update on matters relating to Aleafia Health Inc. and other corporate matters.

Update relating to Aleafia Health

RWB is pleased to announce that in connection with the proceedings of Aleafia Health and certain of its subsidiaries under the Companies’ Creditors Arrangement Act, the Ontario Superior Court of Justice has granted an approval and reverse vesting order in respect of the previously announced sale transactions.

The approval and vesting order is the sole authorization required by the Aleafia Group to implement the transactions provided for under the previously announced stalking horse asset purchase and share subscription agreement, as amended and restated on October 24, 2023 among RWB, Aleafia Health and certain of Aleafia Health’s subsidiaries.

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The approval and vesting order approves the implementation of the transactions contemplated by the Amended Stalking Horse Agreement, whereby a wholly-owned subsidiary of RWB would subscribe for shares of the Aleafia purchased entities and acquire specific intellectual property owned, licensed or leased by Aleafia Health. Certain excluded assets and liabilities of the Aleafia Purchased Entities would be transferred to one or more corporations that would not be included among the Aleafia Purchased Entities at closing. RWB’s subsidiary would be the sole shareholder of the Aleafia purchased entities following closing.

The court also granted an ancillary relief order approving, among other things, (i) amendments to the debtor-in-possession term sheet to increase the DIP financing available to the Aleafia Group from $6.6 million to $8 million; and (ii) an extension to the current stay period in the Aleafia CCAA proceedings to November 30, 2023, in order to, among other things, permit the parties to complete the transactions contemplated under the Amended Stalking Horse Agreement.

The consummation of the transactions contemplated under the Amended Stalking Horse Agreement is subject to satisfaction or waiver of certain conditions set forth in the Amended Stalking Horse Agreement, including, among other things, receipt of all required regulatory approvals and the Aleafia purchased entities’ Health Canada and cannabis excise licences being in good standing and continuing in good standing and not suspended or terminated following the closing date.

The parties anticipate closing the transactions contemplated under the Amended Stalking Horse Agreement following satisfaction of the remaining conditions to closing, and in any event no later than November 22, 2023 (the outside date specified in the Amended Stalking Horse Agreement).

Share issuance in connection with asset purchase

In accordance with the policies of the Canadian Securities Exchange, the company announces that its board of directors has approved the issuance of 700,000 common shares on October 30, 2023, at a deemed price of $0.06 per share, as final consideration for an asset purchase completed by a wholly-owned subsidiary of the company. All securities issued pursuant to the asset purchase are subject to a statutory hold period which will expire on the date that is four months and one day from the date of issuance. None of the securities issued in connection with the asset purchase will be registered under the United States Securities Act of 1933, as amended, and none of them will be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act. This news release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities in any state where such offer, solicitation, or sale would be unlawful.

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