Vancouver, British Columbia–(Newsfile Corp. – February 25, 2019) – Tidal Royalty Corp. (CSE: RLTY.U) (“Tidal” or the “Company“) is pleased to announce that, further to its press release of February 14, 2019, the Company has completed an advance of C$15,000,000 to MichiCann Medical Inc. (operating as Red White & Bloom) (“MichiCann“) pursuant to a senior secured convertible debenture (the “MichiCann Debenture“). The MichiCann Debenture is non-interest bearing, other than in the event of a default by MichiCann thereunder, and will mature August 25, 2019 (the “Maturity Date“), with the Maturity Date being extendable in certain circumstances.
The obligations under the MichiCann Debenture are secured by way of a first ranking security against the personal property of MichiCann. In the event that the proposed acquisition by the Company of all of the issued and outstanding shares of MichiCann (the “Proposed Transaction“) is not completed by the Maturity Date as result of, among other things, MichiCann’s failure to comply with the definitive documentation for the Proposed Transaction, and MichiCann is at such time pursing an alternative go public transaction or a change of control transaction (an “Alternate Liquidity Transaction“), the Company may elect to convert, in whole or in part, the outstanding amount under the MichiCann Debenture into common shares of MichiCann (“MichiCann Shares“) at a price per MichiCann Share that is the lesser of (i) $2.50 per MichiCann Share, and (ii) a 20% discount to the issue or effective price per MichiCann Share under the Alternate Liquidity Transaction.
In the event that the Proposed Transaction is not capable of being completed by October 25, 2019 for reasons beyond the control of the parties, acting in good faith, MichiCann may elect to prepay the outstanding amount under the MichiCann Debenture, with a prepayment penalty of 10%.
It is anticipated that MichiCann will use the funds advanced by the Company, solely to fund the acquisition of additional cannabis Provisioning Centers (dispensaries) in Michigan by its Michigan based investee (“Opco“), and for general working capital purposes.
Please refer to the Company’s press release of February 14, 2019, available under the Company’s profile at www.sedar.com, for further details as to Opco and as to the Proposed Transaction, the completion of which remains subject to the negotiation and execution of all related definitive documentation as well as certain other conditions, including each party being satisfied with the results of its due diligence investigation and receipt of all required shareholder, third party and regulatory consents and approvals, including the approval of the Canadian Securities Exchange.
In addition, the Company would like to announce that Mr. Paul Rosen has tendered his resignation as Chairman and director of the Company’s board of directors (the “Board“). The Company would like to sincerely thank Mr. Rosen for the contributions that he has made during his tenure on the Board.
For further information, please contact:
Tidal Royalty Corp.
Theo van der Linde, Chief Financial Officer
Source: Tidal Royalty Corp.
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