Red White & Bloom Brands selected as successful bidder in Aleafia Health sale

Red White & Bloom Brands Inc. (RWBYF) is providing an update on matters relating to Aleafia Health (ALEAF). RWB is pleased to announce that it has been selected as the successful bidder under the sale and investment solicitation process approved by the Ontario Superior Court of Justice in connection with the proceedings of Aleafia and certain of its subsidiaries under the Companies’ Creditors Arrangement Act. On August 22, 2023, the Court approved, among other matters, the terms of a SISP which included a stalking horse asset purchase and share subscription agreement pursuant to which RWB would acquire certain assets from Aleafia Health and subscribe for shares of certain subsidiaries of Aleafia Health if RWB were to become the successful bidder pursuant to the SISP. As previously disclosed, the Stalking Horse Agreement provides for a reverse vesting transaction whereby a wholly-owned subsidiary of RWB would subscribe for shares of certain of Aleafia Health’s subsidiaries and acquire specific intellectual property owned, licensed or leased by Aleafia Health. Certain excluded assets and liabilities of the Aleafia Purchased Entities would be transferred to one or more corporations that would not be included among the Aleafia Purchased Entities at closing. RWB’s subsidiary would be the sole shareholder of the Aleafia Purchased Entities following closing. The consummation of the transactions contemplated under the Stalking Horse Agreement are subject to satisfaction or waiver of certain conditions set forth in the Stalking Horse Agreement, including, among other things, the Court granting the requisite approval and vesting order as a final order, receipt of all required regulatory approvals and Aleafia Group’s Health Canada and cannabis excise licences being in good standing and continuing in good standing and not suspended or terminated following the closing date. The Approval Order hearing is set for October 27, 2023 and, should the Court issue the Approval Order, the parties anticipate closing the transactions contemplated under the Stalking Horse Agreement following satisfaction of the remaining conditions to closing, and in any event no later than November 22, 2023. At the October 27 hearing, RWB anticipates that the Aleafia Group will ask the Court for an extension of the current stay period in the Aleafia CCAA Proceedings that expires on October 31, 2023, in order to, among other things, permit the parties to complete the transactions contemplated under the Stalking Horse Agreement.