Green Rise Enters into Definitive Agreement with Bull Market Farms Inc. for Qualifying Transaction and Private Placement

/NOT FOR DISTRIBUTION IN THE U.S. OR OVER U.S. NEWSWIRES/

TORONTO, March 1, 2019 /CNW/ - Green Rise Capital Corporation ("Green Rise") (TSX VENTURE: GRCC.P), a capital pool company, is pleased to announce that it and its wholly owned subsidiary have entered into a definitive agreement dated March 1, 2019 (the "Definitive Agreement") with Bull Market Farms Inc. ("Bull Market"), to provide for the completion of a business combination with Green Rise (the "Transaction"), as more particularly described below.

In connection with the Transaction, it is anticipated that Green Rise will complete, a private placement (the "Offering") of 18,343,000 shares at a deemed issue price of $0.20 per share for gross proceeds of approximately C$3.67 million through a non-brokered Offering.

The Transaction is subject to a number of terms and conditions as set forth in the Definitive Agreement, including (among other things) the approval of the TSX Venture Exchange (the "TSXV"). If completed, the Transaction will constitute Green Rise's "Qualifying Transaction" (as such term is defined in TSXV Policy 2.4 – Capital Pool Companies).

About Bull Market

Bull Market is a company based in Leamington, Ontario and carries on the business of the greenhouse production of vegetables.  It owns an 81 acre site located at 2100 Road 4 East in the Town of Kingsville, Ontario comprised of approximately 2,196,129 square feet (50.42 acres) of double poly greenhouses with 114,500 square feet of ancillary buildings and 11,000 square feet of housing for workers.  On this site, it conducts the business of growing vegetables in its greenhouses situated on approximately 36 acres of the 81 acre parcel and it has leased, pursuant to a lease agreement dated June 15, 2018 (the "Organic Acreage Lease"), a further 15 acres for organic production to an affiliate of one of the largest greenhouse producers and marketers of produce in North America.  Such greenhouse producer and marketer is referred to herein as "ProduceCo.".  The principal vegetables grown in the 36 acres of greenhouses are hydroponic tomatoes, while under the Organic Acreage Lease, the ProduceCo. affiliate grows peppers. 

On June 15, 2018, Bull Market acquired from an affiliate of ProduceCo. the assets related to the business it now carries on (and which the ProduceCo. affiliate previously carried on) pursuant to an agreement of purchase and sale of assets dated June 15, 2018 between the ProduceCo. affiliate and Bull Market.  As part of this acquisition which had a C$25 million purchase price, C$17.5 million of secured financing was obtained and ProduceCo. provided through its affiliate C$5 million of vendor take-back secured financing.  The parties to the acquisition entered into various other agreements relating to the 81 acre site and other assets including, without limitation, a restrictive covenant agreement, right of first refusal agreement, option agreement and other documents.  Further, each of the secured lenders and Bull Market have entered into an intercreditor agreement relating to the relative priorities of the lenders and a cross default agreement in the event of a Bull Market default under the loans.

Also, ProduceCo. has entered into with Bull Market an Exclusive Purchase and Marketing Agreement dated June 15, 2018 having a ten year term (the "Exclusive Purchase and Marketing Agreement") pursuant to which Bull Market agrees to grow tomatoes, peppers, strawberries and/or cucumbers, and ProduceCo. agrees to purchase 100% of the products produced by Bull Market. 

Bull Market was incorporated under the Business Corporations Act (Ontario) on March 21, 2018. The company is headquartered in Leamington, Ontario.

Based on the Definitive Agreement, Bull Market currently has 95 Class 1 Common Shares issued and outstanding (collectively, the "Bull Market Shares") and Bull Market currently has three shareholders holding more than 10% of its issued and outstanding shares: (a) Galifi Inc. (controlled by Vito Galifi) owning 42%; (b) 851393 Ontario Inc. (controlled by Matthew Tatomir) owning 24%; and (c) 2626547 Ontario Limited (controlled by Scott Linnell) owning 21%.  Each of Messrs. Galifi, Tatomir and Linnell are residents of Ontario. 

The Qualifying Transaction and Private Placement

Pursuant to the Transaction, Green Rise and Bull Market will complete a "three-cornered" amalgamation under the provisions of the Business Corporation Act (Ontario), pursuant to which Bull Market will amalgamate with a wholly-owned subsidiary of Green Rise (the "Amalgamation").

Prior to the Amalgamation, a shareholders' meeting of Green Rise will be held pursuant to which Green Rise will seek approval from shareholders to change its name to "Green Rise Foods Inc." and the board of directors of Green Rise may be increased and its members potentially changed.  Further, the rights to the name "Green Rise Capital Corporation" will be assigned to certain founders of Green Rise for nominal consideration.

Pursuant to the Amalgamation, the outstanding Bull Market Shares will be exchanged for common shares of Green Rise on the basis of 315,789.47 Green Rise shares for each Bull Market share, resulting in the existing holders of Bull Market shares (including investors under the Offering) becoming holders of Green Rise common shares post-Transaction.  The amalgamated entity will be a wholly-owned subsidiary of Green Rise post-Transaction and Green Rise on a post-Transaction basis will be the "Resulting Issuer".

Based on the Definitive Agreement, a total of 30 million Resulting Issuer common shares will be issued to existing Bull Market shareholders, (collectively, the "Bull Market Shareholders"), all at a deemed issue price of $0.20 per share.

It is anticipated that prior to the Amalgamation and as a condition therefor, the Offering of 18,343,000 Green Rise shares for a deemed issue price of $0.20 per share and aggregate gross proceeds of C$3.67 million will be effected.

Material conditions required to be fulfilled prior to completion of the Transaction include the following: (i) Green Rise being satisfied with the results of its due diligence investigation of Bull Market and its business; (ii) the Definitive Agreement regarding the Transaction being acceptable to the TSXV and all conditions precedent to the Transaction having occurred or having been satisfied; (iii) completion of the increase in the size of the board of directors of Green Rise, if applicable, and the confirmation or appointment of the directors and the change in the name of Green Rise to "Green Rise Foods Inc." as mentioned above; (iv) the Resulting Issuer meeting the applicable minimum listing requirements, including, without limitation, the public float requirements of the TSXV; (v) the TSXV having conditionally approved the listing of the Resulting Issuer shares issuable pursuant to the Amalgamation and the Offering; (vi) the receipt of all regulatory, shareholder and third-party approvals, if any, required in connection with the Transaction; (vii) Green Rise being satisfied with the audited financial statements of the business of Bull Market for the fiscal years ended 2017 and 2018; and (viii) certain other conditions including customary closing conditions for a transaction of this nature.

The parties will be seeking an exemption from the requirement for sponsorship of the Transaction, but in the event an exemption is not available, will seek a sponsorship relationship for this Transaction and will update the market accordingly.

No Green Rise director, officer or insider or controlling person of Green Rise currently has any direct or indirect beneficial interest in the assets of Bull Market, are insiders of Bull Market for purposes of applicable securities laws or have a relationship with non-arm's length parties to the Qualifying Transaction. The Qualifying Transaction will not constitute a "Non-Arm's Length Qualifying Transaction" (as such term is defined in TSXV Policy 2.4 – Capital Pool Companies) and is not subject to shareholder approval.

Following the completion of the Transaction, the Bull Market Shareholders will own approximately 50% of the issued and outstanding Resulting Issuer shares, existing Green Rise shareholders and offerees participating in the Offer will own approximately 50% of the issued and outstanding Resulting Issuer shares, in each case calculated on a fully diluted basis.

In due course, Green Rise intends to prepare and submit a Filing Statement in connection with the Transaction and a more comprehensive press release with further details relating to the Transaction including the Offering will be issued in accordance with the policies of the TSXV.

ABOUT GREEN RISE

Green Rise is a capital pool company (CPC) formed under the TSXV CPC program. Green Rise's common shares will remain halted until Green Rise satisfies the requirements of the TSXV for resuming the trading of the Green Rise shares or until completion of the Transaction.

Completion of the Transaction is subject to a number of conditions including, but not limited to, TSXV acceptance. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the Filing Statement and/or an Information Circular to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

All information in this press release concerning Bull Market has been provided for inclusion herein by Green Rise. Although Green Rise has no knowledge that would indicate that any information contained herein concerning Bull Market is untrue or incomplete, Green Rise assumes no responsibility for the accuracy or completeness of any such information.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this Press Release. 

FORWARD-LOOKING STATEMENTS

This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the proposal to complete the Transaction and associated transactions, including statements regarding the terms and conditions of the Transaction and associated transactions. Any such forward-looking statements may be identified by words such as "expects", "anticipates", "believes", "projects", "plans" and similar expressions. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Transaction and associated transactions, that the ultimate terms of the Transaction and associated transactions will differ from those that currently are contemplated, and that the Transaction and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The statements in this news release are made as of the date of this release. Green Rise undertakes no obligation to update any such forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on any such forward-looking statements. Green Rise undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of Green Rise and Bull Market, or their respective financial or operating results or (as applicable), their securities.

SOURCE Green Rise Capital Corporation

Green Rise: Vincent Narang, Chief Executive Officer, Phone: [phone], E-mail: [email protected]; Bull Market, Matthew Tatomir, Phone: [phone], E-mail: [email protected]