Eden Empire and Rosehearty Energy Announce Going Public Transaction

Vancouver, British Columbia, CANADA

VANCOUVER, British Columbia, April 16, 2020 (GLOBE NEWSWIRE) -- Eden Empire Inc. ("Eden") and Rosehearty Energy Inc. ("Rosehearty") are pleased to announce that they have entered into a business combination agreement (the "BCA") dated April 16, 2020 whereby Rosehearty will acquire all of the issued and outstanding common shares of Eden, in exchange for common shares of Rosehearty (the "Transaction"). As presently contemplated, it is expected that the Transaction will be completed by way of a "three-cornered amalgamation" between Eden and a wholly owned subsidiary of Rosehearty (the "Rosehearty Subsidiary") pursuant to the Business Corporations Act (British Columbia) (the “BCBCA”).

Amalgamation Transaction

Eden, Rosehearty and the Rosehearty Subsidiary entered into the BCA pursuant to which Eden and the Rosehearty Subsidiary will amalgamate, and ultimately Rosehearty will continue as the resulting issuer and change its name to "Eden Empire Inc." (the “Resulting Issuer”) or such other name as is acceptable to the Registrar of Companies under the BCBCA. Under the terms of the BCA:

  • the outstanding common shares of Eden (the "Eden Shares") will be exchanged for common shares of the Resulting Issuer (the "Resulting Issuer Shares") on the basis of one Resulting Issuer Share for each Eden Share. It is anticipated that 65,222,500 Resulting Issuer Shares will be issued in exchange for the Eden Shares; and
  • the outstanding common share purchase warrants of Eden (the "Eden Warrants") will ultimately be exchanged for common share purchase warrants of the Resulting Issuer (the "Resulting Issuer Warrants") on the basis of one Resulting Issuer Warrant for each Eden Warrant. It is anticipated that approximately 661,630 Resulting Issuer Warrants will be issued in exchange for the Eden Warrants.

Prior to the completion of the Transaction, Rosehearty has agreed to consolidate its common shares on a 6:1 basis, such that Rosehearty will have approximately 3,705,092 common shares issued and outstanding immediately prior to completing the Transaction. Completion of the Transaction will be subject to a number of closing conditions, including but not limited to, shareholder approval on the part of Eden.

Completion of the Transaction will result in a reverse takeover of Rosehearty. Rosehearty is currently a reporting issuer in good standing under Canadian securities legislation.

CSE Listing

Contemporaneous with the closing of the BCA, it is the intention to make application to the Canadian Securities Exchange (the "CSE") to list the common shares of the Resulting Issuer (the "Listing"), subject to the Resulting Issuer meeting listing requirements and obtaining approval of the CSE. It is expected that if, as and when approved, the Resulting Issuer’s CSE Listing Statement will be publicly available on the CSE website and the Resulting Issuer’s sedar profile on www.sedar.com in the form prescribed by the CSE.

Conversion of Eden Debentures

Upon completion of the Transaction and Eden obtaining conditional approval of the CSE for the Listing, the principal amount of the approximately $5.9 million outstanding convertible debentures of Eden (the "Eden Debentures") will be converted into Eden Shares at a conversion price of $0.30 per Eden Share and subsequently be exchanged for 19,679,985 Resulting Issuer Shares.

Pursuant to the terms of the Eden Debentures, Eden must become a reporting issuer and obtain approval for listing on a recognized stock exchange prior to November 17, 2020, failing which holders of the Eden Debentures will have the option to: (i) be repaid the principal aggregate amount of the Eden Debentures held plus interest at a rate of 10% per annum in cash; or (ii) convert the Eden Debentures (and the interest accrued thereon) into Eden Shares at a conversion price of $0.30 per Eden Share.

It is expected that following the closing of the Transaction and the conversion of the Eden Debentures, current holders of Eden securities (including the Eden Debentures and Eden Shares) will hold approximately 85,564,115 Resulting Issuer Shares (or 96% of the Resulting Issuer Shares on an undiluted basis).

New Directors and Officers

On the closing of the Transaction, Mr. Kolten Taekema will be appointed as the President of the Resulting Issuer and Mr. Gerry Trapasso will be the Chief Executive Officer. In addition, Mr. Cale Moodie will be appointed as the Resulting Issuer's Chief Financial Officer. The Board of Directors of the Resulting Issuer will include Mr. Kolten Taekema, Mr. Gerry Trapasso, Mr. Cale Moodie and Mr. Dario Meli.

Kolten Taekema – Director and President

Mr. Taekema is currently the President and a Director of Eden and is expected to be the President and a Director of the Resulting Issuer following completion of the Transaction. Mr. Taekema was the founder and visionary of the Eden Medicinal Society brand from 2011 until 2017. His experience as an MMPR holder in conjunction with his marketing background compelled him to create the Eden brand, where he developed its intellectual property assets and successfully used them as tools in developing a national brand image. At its peak, his branding campaigns gained national recognition. His invaluable industry knowledge gained through more than a decade of branding a cannabis company from the ground up provides him with an understanding of the industry, aligning him to propel innovation. His successes have proven him a natural business leader with the ability to achieve Eden's current and future objectives.

Gerry Trapasso – Director and Chief Executive Officer

Mr. Trapasso is currently the Chief Executive Officer and a Director of Eden and is expected to be the Chief Executive Officer and a Director of the Resulting Issuer following completion of the Transaction. Mr. Trapasso is a lifelong entrepreneur, with a history of operation and ownership in customer service and retail businesses. He transitioned early on to become a pioneer in the cannabis space, consulting with industry representatives across the country. Gerry has experience consulting with other organizations to guide them in the development of a strong network, reaching out to care givers, social workers, physicians, and individuals.

Cale Moodie, BSF, CPA, CA – Chief Financial Officer

Mr. Moodie is currently the Chief Financial Officer and a Director of Eden and is expected to be the Chief Financial Officer and a Director of the Resulting Issuer following completion of the Transaction. Mr. Moodie is also the CFO for a number of smallcap public venture companies on the Toronto Stock Exchange. Mr. Moodie's career in public market finance spans well over a decade in roles as founder, chief financial officer, director and audit committee chair for numerous publicly traded companies in Canada. Mr. Moodie is a member in good standing with the Institute of Chartered Professional Accountants of British Columbia and the Canadian Institute of Chartered Professional Accountants.

Dario Meli – Director

Mr. Meli is currently a Director of Eden and is expected to be a Director of the Resulting Issuer following completion of the Transaction. Mr. Meli is the founder and CEO of Quietly, a company that helps brands and publishers create great content. He is also a co-founder of HootSuite, a leading social media dashboard, Foodee, a food delivery service tailored for corporate culture, and Brightkit, a media marketing company. Mr. Meli is also on the board of Pacific Ballet British Columbia Society and Neptune Dash Technologies Corp., a blockchain technology company.

About Eden

Eden is currently a private company formed and existing in the province of British Columbia.

Eden is in the business of investments and operations in the cannabis sector and engaging in retail, cultivation, extraction and activities in respect of cannabis in Canada and the United States. It is the intention that Eden becomes a fully integrated cannabis product company in Canada and the United States. Eden holds a number of trademarks, some with common law rights and some registered trademarks, agreements for the acquisition of licence applicants in various U.S. States and Canadian Provinces, and has acquired interests in land where it anticipates operating. Eden has an award winning and established nationwide brand, including a substantial intellectual property portfolio, and a dedicated management team with over 20 years of combined cannabis industry experience.

Eden is expecting the approval of regulators in British Columbia, Ontario and Michigan for licenses to operate cannabis retail stores, and cultivation and processing facilities. It is expected that following the issuances of these licenses and the commencement of its operations, Eden will have a significant presence in the retail cannabis space in British Columbia, and its expected reporting issuer status and the Listing of the Resulting Issuer is expected to provide greater access to capital markets so as to be in a better position to obtain the financing required to undertake their business objectives and improve liquidity for the security holders of the Resulting Issuer. 

Retail cannabis operations are an emerging sector with significant cash flow potential. Public information shows that cannabis retail currently has one of the highest grossing sales per square foot of all retail segments in North America.

For further information please contact:

Eden Empire Inc.:
Gerry Trapasso, CEO
Tel: 778-898-5045

Rosehearty Energy Inc.:
Robin Dow, CEO
Tel: 604-355-9986
email: robin@dowgroup.ca

This press release is not an offer of securities for sale in the United States, and the securities described in this press release may not be offered or sold in the United States absent registration or an exemption from registration. The securities have not been and will not be registered under the United States Securities Act of 1933.

Completion of the Transaction is subject to a number of conditions, including but not limited to, Eden Empire Inc. shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. Investors are cautioned that there can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in press releases issued by Eden or press releases, material change reports or other similar securities law disclosure documents filed by Rosehearty, information with respect to the Transaction may not be accurate or complete and should not be relied upon.

Forward-Looking Statements

This release contains certain "forward looking statements" and certain "forward-looking information" as defined under applicable Canadian securities laws. Forward-looking statements and information can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology. Forward-looking statements and information include, but are not limited to, statements with respect to the transactions contemplated under the Business Combination Agreement, the Transaction, the requisite regulatory and shareholder approvals in respect thereof, and proposed future transactions Resulting Issuer may undertake and their expected timing. Forward-looking statements and information are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that, while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements and information are subject to various known and unknown risks and uncertainties, many of which are beyond the ability of Eden and Rosehearty to control or predict, that may cause Eden and Rosehearty's actual results, performance or achievements to be materially different from those expressed or implied thereby, and are developed based on assumptions about such risks, uncertainties and other factors set out here in, including but not limited to: the risk that the Listing will not be approved by the CSE; the Resulting Issuer or Eden may not obtain regulatory approval and may not begin operating cannabis retail or cultivation and processing operations, that the actual use of proceeds may differ from those currently stated; risks and uncertainties related to the Transaction not being completed in the event that the conditions precedent thereto are not satisfied; the inherent risks involved in the general securities markets; uncertainties relating to the availability and costs of financing needed in the future; the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, currency fluctuations; regulatory restrictions, liability, competition, loss of key employees and other related risks and uncertainties. Neither Rosehearty, Eden nor the Resulting Issuer undertake any obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements.


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