Majesta Minerals Inc. Announces Definitive Agreement for Reverse Takeover by Verano Holdings, LLC

Calgary, Alberta--(Newsfile Corp. - December 15, 2020) - Majesta Minerals Inc. ("Majesta" or the "Company") announced that it entered into a definitive arrangement agreement (the "Definitive Agreement") today related to the proposed business combination (the "Transaction") with industry-leading, Chicago-based cannabis company Verano Holdings, LLC ("Verano"). The Definitive Agreement sets out the proposed terms and conditions pursuant to which Majesta and Verano will effect a business combination that will result in a reverse takeover of Majesta by the securityholders of Verano as well as the completion of the merger previously announced by Verano with Alternative Medical Enterprises, LLC, Plants of Ruskin, LLC, and affiliated companies (collectively, the "AME Parties"). The resulting issuer under the Transaction (the "Resulting Issuer") will be known as Verano Holdings Corp.

Terms of the Transaction

The Transaction is structured as a plan of arrangement (the "Plan of Arrangement") pursuant to the laws of British Columbia. The Plan of Arrangement contemplates that:

  • Majesta will amend its share capital such that the common shares of Majesta (the "Shares") will be known as subordinate voting shares and an additional class of shares, known as proportionate voting shares, will be created (the "Share Amendment");
  • Majesta's existing Shares will be consolidated and exchanged for subordinate voting shares of the Resulting Issuer with an expected aggregate value of US$1 million, which valuation will not be affected by the exercise, conversion, termination or release of any of the convertible securities prior to the effective time of the Transaction and is expected to occur on an approximate 195:1 basis;
  • Majesta will acquire (directly and indirectly) in consideration for subordinate voting and/or proportionate voting shares of Majesta (and in certain instances cash consideration and convertible notes) in a series of transactions the securities of Verano and certain subsidiaries of Verano that it partially owns and securities of the AME Parties such that upon completion of the Business Combination, the Resulting Issuer will indirectly hold all of the securities of these persons and the business of the Resulting Issuer will encompass the business of Verano and the AME Parties.

In connection with the Transaction, a concurrent subscription receipt offering (the "Financing") will be conducted by a special purpose financing vehicle ("Finco") to raise gross proceeds of between US$50 million and US$100 million. The subscription receipts are anticipated to be priced at US$10 per subscription receipt and are based on a US$2.8 billion pre-money valuation of the combined companies. Canaccord Genuity Corp and Beacon Securities Limited have been engaged as co-lead agents and co-bookrunners in the financing. Under the terms of the Definitive Agreement and pursuant to the Plan of Arrangement, after conversion of the subscription receipts into common shares of Finco in accordance with their terms, a subsidiary of Majesta will amalgamate with Finco and the holders of Finco shares will receive under the Plan of Arrangement subordinate voting shares of the Resulting Issuer on a one for one basis and the proceeds of the financing will be conveyed to the Resulting Issuer.

On completion of the Transaction, former holders of the Shares are expected to hold in the aggregate approximately 100,000 Resulting Issuer subordinate voting shares or 0.03% of the outstanding Resulting Issuer subordinate voting and proportionate voting shares (on a fully converted basis). Former holders of Verano units (directly or indirectly) and the partially owned Verano subsidiaries are expected to hold in the aggregate approximately 73.84% of the Resulting Issuer shares (on a fully converted basis) and former holders of units of the AME Parties are expected to hold in the aggregate approximately 22.5% of the Resulting Issuer shares (on a fully converted basis). Investors in the Financing (assuming that Finco raises gross proceeds of US$100 million) are expected to hold 3.45% of the Resulting Issuer shares (on a fully converted basis).

Completion of the Transaction is subject to a number of conditions, which include receipt of all necessary shareholder and regulatory approvals, court approval and conditional approval of the listing of the subordinate voting shares of the Resulting Issuer on the CSE. In addition, it is a condition to the closing of the Transaction that Majesta will continue from the laws of the province of Alberta to be governed by the laws of British Columbia (the "Continuance").

On December 14, 2020, the Board of Directors of Majesta received a verbal and written fairness opinion from Echelon Wealth Partners Inc. ("Echelon"), based on and subject to assumptions, limitations and other qualifications set forth therein, and other matters as Echelon considered relevant, to the effect that, as of the date thereof, the consideration to be received by shareholders of Majesta pursuant to the Arrangement Agreement at the time of consummation of, and giving effect and pursuant to, the Transaction is fair, from a financial point of view, to shareholders.

The board of directors of Majesta has unanimously approved the Transaction and unanimously recommends that all Shareholders vote in favor of the Transaction.

Pursuant to the terms of the Definitive Agreement, Majesta has called a meeting of its shareholders (the "Majesta Meeting") for January 18, 2021 to approve, the Plan of Arrangement and all matters included therein and ancillary thereto, including without limitation, the Continuance, the appointment of the auditor of the Resulting Issuer, and the adoption of a stock option plan for the Resulting Issuer.

Certain shareholders of Majesta (holding 57% of the issued and outstanding Shares) have entered into voting support agreements with Verano and Majesta pursuant to which they have agreed, among other things, to support the Transaction and vote the Shares they now hold or have a right to hold in favour of the Continuance, the Transaction, the resolution appointing the Resulting Issuer's auditor and the equity incentive plan of the Resulting Issuer.

Further details of the Transaction and the business and operations of Verano (including applicable financial statements) will be included in a management information circular, as well as a listing statement to be prepared and filed with the CSE. Closing of the Transaction is expected to take place in the first quarter of 2021.

For more information please contact:

Majesta
Michael Stein
CEO and Director
michael.stein@rogers.com
416-410-7722

Verano
Aaron Miles
Head of Investor Relations
investors@verano.holdings

About Verano

Verano is a leading vertically-integrated multi-state cannabis operator in the U.S. An operator of licensed cannabis cultivation, processing and retail facilities, Verano is devoted to the ongoing development of communal wellness by providing responsible access to regulated cannabis products to the discerning high-end customer. Active in 12 U.S. states, with 19 active retail locations and approximately 440,000 square feet across its cultivation facilities, Verano has been profitable since it was founded. Verano produces a full suite of premium, artisanal cannabis products sold under its trusted portfolio of consumer brands: Encore™, Avexia™ and Verano™. Verano designs, builds and operates inimitable Zen Leaf™ branded dispensary environments that deliver a superior cannabis shopping experience in both medical and adult-use markets. Learn more at http://verano.holdings/.

Forward Looking Statements

This press release contains certain "forward-looking information" within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company's beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company's control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved". The forward-looking information and forward-looking statements contained herein may include, but are not limited to, information concerning the proposed Transaction, expectations regarding whether the proposed Transaction will be consummated, including whether conditions to the consummation of the proposed Transaction will be satisfied, the timing for holding a special meeting of shareholders of the Company to approve matters relating to the proposed Transaction, expectations for the effects of the proposed Transaction or the ability of the combined company to successfully achieve business objectives, expectations regarding the availability of additional financing, and expectations for other economic, business, and/or competitive factors.

Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward- looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward- looking information and statements attributable to the Company or persons acting on its behalf is expressly qualified in its entirety by this notice.

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