The Green Organic Dutchman Announces Release of Escrowed Shares and New Share Issuance

Rhea-AI Summary

The Green Organic Dutchman Holdings Ltd. (TGOD) announced the release of 1,142,857 common shares from an indemnity escrow account to vendors involved in the acquisition of Galaxie Brands Corporation. Additionally, 1,120,226 common shares will be issued to its largest shareholder following the acquisition of BZAM Holdings Inc. at a price of $0.596 per share. Both transactions are classified as related party transactions under Multilateral Instrument 61-101, with the Company relying on exemptions from formal valuation and minority shareholder approval due to their market capitalization not exceeding 25%.

Positive

• Release of 1,142,857 shares to vendors strengthens TGOD's operational dealings.
• Issuance of 1,120,226 shares to largest shareholder may enhance support for business initiatives.

Negative

• Related party transactions might raise concerns about corporate governance and transparency.

TORONTO, Jan. 23, 2023 /PRNewswire/ - The Green Organic Dutchman Holdings Ltd. (the "Company" or "TGOD") (CSE: TGOD) (US-OTC: TGODF), a sustainable global cannabis company and leading producer of premium cannabis brands, announces that in accordance with certain earn-out provisions relating to the Company's acquisition (the "Transaction") of all of the issued and outstanding shares (the "Galaxie Shares") of Galaxie Brands Corporation on November 17, 2021, the Company has released 1,142,857 common shares of the Company (the "Released Shares") held in an indemnity escrow account upon closing of the Transaction, to two vendors of the Galaxie Shares (the "Vendors"). The remaining 7,428,571 common shares of the Company held in the indemnity escrow account will be returned to treasury and cancelled.

In addition, pursuant to the terms of the definitive agreement relating to the acquisition of all of the issued and outstanding common shares of BZAM Holdings Inc. by the Company, which closed on November 3, 2022, an aggregate of 1,120,226 common shares of the Company (the "BZAM Shares") will be issued to the Company's largest shareholder (the "Shareholder"), at a deemed issuance price of $0.596 per BZAM Share (the "BZAM Issuance"). Such BZAM Shares will be issued in reliance on certain prospectus exemptions available under securities legislation and will be subject to a four-month plus one day statutory hold period.

One of the Vendors and the Shareholder are insiders of the Company, and therefore the issuance of Released Shares to such Vendor (the "Vendor Issuance"), and the BZAM Issuance are considered to be a "related party transaction" for purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Pursuant to MI 61-101, the Company will file a material change report providing disclosure in relation to each "related party transaction" on SEDAR under TGOD's issuer profile at www.sedar.com. The Company did not file the material change report more than 21 days before the expected closing date of the Vendor Issuance and the BZAM Issuance as the details of such were not settled until shortly prior to the closing of the Vendor Issuance and the BZAM Issuance. The Company is relying on exemptions from the formal valuation and minority shareholder approval requirements available under MI 61-101. The Company is exempt from the formal valuation requirement in section 5.4 of MI 61-101 in reliance on section 5.5(a) of MI 61-101 as the fair market value of the Vendor Issuance and the BZAM Issuance is not more than the 25% of the Company's market capitalization. Additionally, the Company is exempt from minority shareholder approval requirement in section 5.6 of MI 61-101 in reliance on section 5.7(1)(a) as the fair market value of the Vendor Issuance and the BZAM Issuance is not more than the 25% of the Company's market capitalization.

About The Green Organic Dutchman Holdings Ltd.
The Green Organic Dutchman Holdings Ltd. (CSE: TGOD) (US–OTC: TGODF) is a multi-licensed Canadian cannabis producer with a focus on branded consumer goods, innovation, quality, consistency, integrity and transparency. The Company is committed to cultivating a better tomorrow by producing its products responsibly, with less waste and impact on the environment. In Canada, TGOD serves the recreational market with a brand portfolio including BZAM, The Green Organic Dutchman, -ness, Highly Dutch Organics, TABLE TOP, Cruuzy and partner brands Dunn Cannabis, FRESH, Superflower and Snackbar.  TGOD operates facilities in BC, Alberta, Ontario and Quebec, as well as retail stores in Winnipeg, Manitoba and Regina, Saskatchewan, and is rapidly expanding its offerings to a growing number of consumers across Canada.

TGOD's Common Shares and certain warrants issued under the indentures dated June 12, 2020, October 23, 2020 and December 10, 2020 trade on the Canadian Securities Exchange (the "CSE") under the symbol "TGOD", "TGOD.WR", "TGOD.WA", and "TGOD.WB" respectively. TGOD's Common Shares trade in the U.S. on the OTCQX under the symbol "TGODF". For more information on The Green Organic Dutchman Holdings Ltd., please visit www.tgod.ca and www.bzamheadquarters.com.

Neither the CSE nor the CSE's Regulation Services Provider (as that term is defined in the policies of CSE) accept responsibility for the adequacy or accuracy of this release.

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SOURCE The Green Organic Dutchman Holdings Ltd.

FAQ

What recent share issuance did TGOD announce?

TGOD announced the release of 1,142,857 common shares to vendors as part of its acquisition of Galaxie Brands Corporation.

What is the significance of the new share issuance for TGOD?

The issuance of 1,120,226 shares to its largest shareholder raises questions regarding potential conflicts of interest due to related party transactions.

When did TGOD finalize the acquisition of Galaxie Brands?

TGOD completed the acquisition of Galaxie Brands Corporation on November 17, 2021.

What is the purpose of the exemptions in the recent TGOD transactions?

TGOD is utilizing exemptions from formal valuation and minority shareholder approval as the transactions do not exceed 25% of the company's market capitalization.

What is the impact of the latest share release on TGOD's stock?

The release of the shares may influence investor sentiment due to its implications for corporate governance and share dilution concerns.