Plant-Based Investment Corp. (CSE:PBIC) (PBIC) said it has entered into an agreement to purchase all the shares of CGOC Management Corp from Four Eleven Technical Services Inc, Grayfor 2017 Trust, and 2017 Blundell Family Trust for C$1.4 million.
The purchase will be satisfied by the sale, transfer and assignment of an aggregate of 31,650,000 common shares in Grown Rogue International Inc (GRIN) currently held by the company, said PBIC.
The acquisition will result in the in-housing by PBIC of management functions outsourced to CGOC since January 16, 2018.
"The acquisition is designed to reposition PBIC to drive long-term shareholder value by providing a more traditional corporate governance and operational structure, and to make it more attractive for future capital providers," said Graham Simmonds, chairperson of PBIC, in a statement.
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PBIC said the acquisition was negotiated and recommended for approval by a special committee of the company’s board of directors, which consisted of all of the independent directors, based on the following benefits:
- Certain rights and obligations granted to CGOC to enable it to manage PBIC, including the right to nominate up to three directors and select the CEO, CFO, president, and chief investment officer of the company, will be terminated
- Provides the board with greater flexibility to determine the compensation of the company's senior management
- Options previously held by CGOC will be cancelled, providing additional option-pool availability for key managers at the direction of the board
"This transition will allow the company's shareholders to be more aligned with management and the board of the company on the future vision for the company," Simmonds added.
PBIC said it now holds an aggregate of 33,957,444 GRIN shares and warrants to acquire an additional 17,000,000 GRIN shares, representing approximately 19.9% of GRIN on an undiluted basis and 27.2% on a partially diluted basis, assuming the exercise of the warrants.
Following completion of the acquisition, PBIC is expected to hold 2,307,444 GRIN shares and warrants to acquire 17,000,000 GRIN shares, representing approximately 1.4% of GRIN on an undiluted basis and 10.3% on a partially diluted basis, assuming the exercise of the warrants.
CGOC is a “person that manages and directs the affairs and operations of the company” and accordingly, the acquisition constitutes a related-party transaction, the company said.
The acquisition is expected to be completed on or around May 9, 2022, pending the necessary closing and stock exchange requirements, it added.
Contact the author at jon.hopkins@proactiveinvestors.com