MINNEAPOLIS, March 31, 2021 /PRNewswire/ -- Vireo Health International Inc. ("Vireo" or the "Company") (CNSX: VREO;OTCQX: VREOF), a leading physician-led, science-focused, multi-state cannabis company, today announced that it has entered into a mutual release (the "Mutual Release") with Bruce Linton, a globally recognized authority in cannabinoid policy and business and the Company's former Executive Chairman, relating to all outstanding matters between them.
Mr. Linton joined Vireo in November of 2019. On June 8, 2020, the Company elected to terminate its employment agreement with Mr. Linton as Executive Chairman, on an entirely without-cause basis. In connection with Mr. Linton's employment agreement, Mr. Linton received warrants (the "Warrants") to acquire up to 15 million subordinate voting shares (each, a "Share") in the Company. 10 million of the Warrants (the "First TrancheWarrants") have an exercise price of US$1.02 per Share.
As part of the Mutual Release, Vireo has issued 8,000,000 Shares to Mr. Linton. 7,110,381 Shares were issued to Mr. Linton pursuant to the exercise of the First Tranche Warrants on a cashless basis. The remaining 889,519 Shares were issued to Mr. Linton pursuant to a private placement exemption resulting in no cash consideration being paid to Vireo. The Shares issued pursuant to the First Tranche Warrants are free of trading restrictions and the 889,519 Shares are subject to a hold period expiring on August 1, 2021. In addition, as part of the Mutual Release, Mr. Linton has surrendered all right, title and interest in all other Warrants for cancellation.
The issuance of Shares pursuant to the Debt Settlement constitutes a "related party transaction" as this term is defined in Multilateral Instrument 61-101 – Protection of Minority Securityholders in Special Transactions ("MI 61-101"). All of the independent directors of the Company, acting in good faith, determined that the fair market value of the Shares being issued pursuant to the Debt Settlement and the consideration being paid is reasonable. The Company intends to rely on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 as neither the fair market value of the Shares nor the debt exceeds 25% of the Company's market capitalization. The Company did not file a material change report more than 21 days before the expected closing of the Debt Settlement as the details and amounts of debts settled under the transaction were not finalized until closer to the closing and the Company wished to close the Debt Settlement as soon as practicable. All Shares issued to pursuant to the Debt Settlement will be subject to a four (4) month hold period.
About Vireo Health International, Inc.
Vireo Health International, Inc. is a physician-led cannabis company focused on bringing the best of technology, science, and engineering to the cannabis industry. Vireo manufactures proprietary, branded cannabis products in environmentally friendly facilities, state-of-the-art cultivation sites and distributes its products through its growing network of Green Goods™ and other retail locations and third-party dispensaries. Vireo's team of more than 400 employees, led by scientists, engineers, and cultivation experts, is focused on efficiency and the creation of best-in-class products, while driving scientific innovation within the cannabis industry and developing meaningful intellectual property. Today, Vireo is licensed to grow and/or process cannabis in nine markets and operates 16 dispensaries nationwide. Vireo holds additional retail licenses in four markets. For more information about Vireo Health, please visit www.vireohealth.com. The Canadian Securities Exchange ("CSE") has not reviewed and does not accept responsibility for the adequacy of this news release. Neither the CSE nor its "regulation services provider" (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.