Red White & Bloom Provides Update Relating to Aleafia Health and Other Corporate Matters

Court grants order approving the Amended Stalking Horse Agreement under the Aleafia CCAA Proceedings

TORONTO, Oct. 31, 2023 (GLOBE NEWSWIRE) -- Red White & Bloom Brands Inc. (CSE: RWB and OTC: RWBYF) (“RWB” or the “Company”) is providing an update on matters relating to Aleafia Health Inc. (“Aleafia Health”) and other corporate matters.

Update Relating to Aleafia Health

RWB is pleased to announce that in connection with the proceedings of Aleafia Health and certain of its subsidiaries (collectively, the “Aleafia Group”) under the Companies’ Creditors Arrangement Act (the “Aleafia CCAA Proceedings”), the Ontario Superior Court of Justice (Commercial List) (the “Court”) has granted an approval and reverse vesting order in respect of the previously announced sale transactions (the “Approval and Vesting Order”).

The Approval and Vesting Order is the sole authorization required by the Aleafia Group to implement the transactions provided for under the previously announced stalking horse asset purchase and share subscription agreement, as amended and restated on October 24, 2023 (the “Amended Stalking Horse Agreement”) among RWB, Aleafia Health and certain of Aleafia Health’s subsidiaries (collectively, the “Aleafia Purchased Entities”).

The Approval and Vesting Order approves the implementation of the transactions contemplated by the Amended Stalking Horse Agreement, whereby a wholly-owned subsidiary of RWB would subscribe for shares of the Aleafia Purchased Entities 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 Court also granted an ancillary relief order approving, among other things, (i) amendments to the debtor-in-possession (“DIP”) term sheet to increase the DIP financing available to the Aleafia Group from $6.6 million to $8 million; and (ii) an extension to the current stay period in the Aleafia CCAA Proceedings to November 30, 2023, in order to, among other things, permit the parties to complete the transactions contemplated under the Amended Stalking Horse Agreement.