FORT LAUDERDALE, Fla. & TORONTO– Flora Growth Corp. (NASDAQ: FLGC), a leading all-outdoor cultivator, manufacturer and distributor of global cannabis products and brands, announced today that the holders of over 73% of the outstanding shares of Franchise Global Health Inc. (TSXV: FGH) (“FGH”) have entered into voting and support agreements, pursuant to which they have agreed to vote their shares in favor of Flora’s acquisition of FGH at FGH’s special meeting of shareholders to be held on December 13, 2022 (the “Meeting”).
“We are pleased that FGH shareholders clearly recognize the value of this transaction, as well as the enormous potential of our companies joining forces,” said Luis Merchan, Chairman and CEO of Flora Growth. “This acquisition is tremendously accretive and will solidify Flora’s foothold, not only in what we view as the most relevant emerging cannabis market, Germany, but in the EU more broadly.”
As noted in last month’s announcement of the signing of the definitive agreement between the two companies, completion of the transaction is subject to certain closing conditions customary for transactions of this nature including, among other things, approval of the plan of arrangement by the Supreme Court of British Columbia and the approval of at least 66 2/3% of the votes cast by shareholders of FGH at the Meeting. While voting and support agreements represent legally binding obligations to vote in favor of the transaction at the Meeting, entering into such agreements is not a substitute for formally voting, in person or by proxy. All FGH shareholders are encouraged to vote in person or by proxy at the Meeting.
“We have been encouraged by the positive feedback we’ve received from our shareholders regarding this acquisition, as well as the speed at which we’ve been able to secure the support of our shareholders for this deal,” said Clifford Starke, CEO of FGH. “We look forward to working closely with the Flora leadership team to integrate our teams and to bring Flora’s high-quality cannabis to consumers in Germany and markets around the world.”
On October 21, 2022, Flora and FGH entered into an Arrangement Agreement (the “Arrangement Agreement”) pursuant to which Flora intends to acquire all the issued and outstanding common shares of FGH by way of a statutory plan of arrangement (the “Arrangement”) under the Business Corporations Act (British Columbia). As consideration for the acquisition of 100% of the issued and outstanding FGH common shares, at the closing of the Arrangement, Flora will issue between 36,515,060 and 43,525,951 of its common shares, based upon a formula set forth in the Arrangement Agreement. In accordance with the terms set forth in the Arrangement Agreement, upon the completion of the Arrangement, all Flora common shares to be delivered to the former shareholders of FGH shall be restricted from being sold for a period of ninety (90) days following the completion of the Arrangement. In addition, Clifford Starke, the Chairman and Chief Executive Officer of FGH, shall have the right to name two designees to serve on Flora’s board of directors immediately following the closing of the Arrangement. For further information on the Arrangement Agreement and the Arrangement, reference is made to Flora’s current report on Form 6-K, filed with the Securities and Exchange Commission on October 24, 2022.
