PBIC Announces Internalization of Management Company Structure and Related Matters

Toronto, Ontario–(Newsfile Corp. – May 6, 2022) – Plant-Based Investment Corp. (CST: PBIC) (“PBIC“, or the “Company“), is pleased to announce that it has entered into a Share Purchase Agreement (the “SPA“) with Four Eleven Technical Services Inc., Grayfor 2017 Trust and 2017 Blundell Family Trust (collectively, the “Sellers“), pursuant to which the Company agreed to acquire 100% of the issued and outstanding shares of CGOC Management Corp. (“Management company“), which provides management services to the Company pursuant to the management agreement (the “Management contract“) dated January 16, 2018 between Management Corp. and PBIC. The acquisition (the “Acquisition“) contemplated by the SPA is expected to close on or about May 9, 2022, subject to satisfaction or waiver of customary closing conditions and satisfaction of applicable exchange requirements.

Under the terms of the SPA, PBIC will acquire the outstanding shares of Management Corp. from the sellers for an aggregate purchase price of $1,400,000 (Canadian dollars). The purchase price will be satisfied and paid by the sale, transfer and disposition by the Company of an aggregate of 31,650,000 common shares (“GRIN-Shares“) in the capital of Grown Rogue International Inc. currently held by the Company.

The Company now holds a total of 33,957,444 GRIN Shares and warrants to acquire an additional 17,000,000 GRIN Shares, representing approximately 19.9% ​​of the issued and outstanding GRIN Shares on a non-diluted basis and 27.2% of the GRIN issued and outstanding on a partially diluted basis. , assuming the exercise of the warrants. Following the 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 the issued and outstanding GRIN Shares on a non-diluted basis and 10. 3% of GRIN Shares issued and outstanding on a partially diluted basis, assuming exercise of warrants. A copy of the alert statement to be filed by the Company in connection with the disposition of GRIN shares in connection with the acquisition will be available under Grown Rogue’s issuer profile on SEDAR at www.sedar.com or by contacting Paul Crath, the company’s chief executive, by phone at (647) 660-0566.

The SPA was negotiated and recommended for approval by a special committee (the “Special Committee“) of the board of directors of the Company (the “Plank“), which was comprised of all of the independent directors. The Special Committee engaged Evans & Evans, Inc. to provide advice on the valuation ranges and approaches for the acquisition and the purchase price consideration used in acquisition, and received extensive advice and guidance from a leading governance and compliance advisory firm, in addition to independent legal advice.Based on the foregoing, the Special Committee determined that the acquisition on the terms set out in the SPA was fair and reasonable to the company and in the best interests of the Company, and recommended that the Board approve the Acquisition. Thereafter, the Board unanimously (with all interested directors having abstained from voting) approved the Acquisition and the Company’s entry into the SPA. Further information regarding previous valuations will be contained in a change statement import ant to be filed by the Company under its profile on SEDAR at www.sedar.com. A copy of the material change report and previous valuations may also be obtained free of charge by contacting Paul Crath, Chief Executive Officer of the Company, by telephone at (647) 660-0566.

Justification and advantages of the acquisition

The acquisition will effectively result in PBIC integrating management functions previously outsourced to Management Corp. under the management agreement. The Special Committee and the Board believe that the Acquisition will have the following benefits for the Company:

  • Certain rights and obligations granted to Management Corp. to enable it to manage PBIC, including the right to appoint up to three directors and to select the Company’s Chief Executive Officer, Chief Financial Officer, President and Chief Investment Officer, will be terminated.
  • Provides the Board with greater flexibility in determining the compensation of the Company’s senior management.
  • Options previously held by Management Corp. will be forfeited as part of the acquisition, providing an additional pool of options for key executives under the direction of the Board of Directors.

“The acquisition is designed to reposition PBIC to generate long-term shareholder value, by providing a more traditional corporate governance and operating structure, and to make it more attractive to future providers of capital,” said Graham Simmonds, president of PBIC. He added, “This transition will allow the shareholders of the Company to be more aligned with management and the Board of Directors of the Company on the future vision of the Company.

Management Corp. is a person who manages and directs the affairs and operations of the Company pursuant to the Management Agreement and, therefore, the Acquisition constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101- Protection of holders of minority shares. in special transactions (“MI 61-101“).

With respect to the acquisition, PBIC is relying on exemptions from the formal valuation and minority shareholder approval requirements pursuant to Sections 5.5(a) and 5.7(1)(a), respectively, of NI 61- 101 on the basis that the time the Acquisition was agreed, neither the fair market value of the object of the Acquisition, nor the fair market value of the consideration for the Acquisition, insofar as it involved interested parties , did not exceed 25% of PBIC’s market capitalization, as calculated in accordance with MI 61-101.

In connection with the acquisition, a material change report will be filed in accordance with applicable securities laws. A copy of the material change report will be available for review under PBIC’s profile on SEDAR at www.sedar.com. The Company has not filed a material change report with respect to the related party transaction at least 21 days prior to the expected closing date of the acquisition because the parties wish to complete the acquisition quickly, which the Company has determined is necessary. and reasonable in the circumstances to allow the management of the Company to focus its attention on other matters relating to the business of the Company.

About Plant-Based Investment Corp.

Plant-Based Investment Corp. is an investment company that seeks to provide shareholders with long-term total returns through capital appreciation and periodic distributions by investing in an actively managed portfolio of securities of public and private companies that derive a portion of their revenues, profits, or intellectual property-based value of products, equipment, services, and/or technology related to the herbal industries, including the cannabis plant family and its various compounds, the mushroom industry (including medicinal, functional and psychedelics), superfoods and/or organic ingredient industries in addition to investing in specialty retail outlets, clinics and treatment centers focused on functional medicine and wellness.

Forward-looking statements

This press release contains certain forward-looking statements regarding the Company, including with respect to the timing and completion of the Acquisition. These forward-looking statements, by their nature, involve risks and uncertainties that could cause actual results to differ materially from those contemplated by such forward-looking statements and information. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or other future events, to be materially different from the results, performance or future achievements expressed or implied by such forward-looking statements. These factors include, among others, the following risks: the risk that all of the conditions to closing the Acquisition will not be satisfied in order to meet the expected timing of the closing of the transaction or at all, the risks associated with the affairs of the Company and matters relating thereto and the risks associated with the Company’s investments and financial objectives, as well as other risks and uncertainties, including, but not limited to, those detailed from time to time. other in the Company’s public filings on SEDAR. Forward-looking statements are made based on the beliefs, estimates and opinions of management as of the date the statements are made and the Company undertakes no obligation to update any forward-looking statements if such beliefs, estimates and opinions or Other circumstances were to change. Investors are cautioned against attributing undue certainty to forward-looking statements.

For more information, please contact:

Plant-based investment company.
Paul Crath
Chief executive officer
Such. : (647) 660-0566
Email: ir@plantbasedinvest.com

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