The Green Organic Dutchman Holdings Ltd. (TSX:TGOD) will distribute a dividend to investors consisting of a warrant in a new corporation, TGOD Acquisitions
SmallCapPower | July 24, 2018: The Green Organic Dutchman Holdings Ltd. (TSX:TGOD) announced recently that it plans to complete a spinoff transaction and has proposed an arrangement under which the Company will distribute a dividend consisting of a warrant in a new corporation to shareholders. The new corporation, TGOD Acquisitions, will be engaged in the acquisition and development of worldwide opportunities.
Green Organic Dutchman will distribute to its shareholders a warrant to acquire a TGOD Acquisitions unit for $0.50. Each Unit will consist of one share plus an additional warrant for the investor. This additional warrant will be triggered by a subsequent financing to occur following the initial $0.50 offering. Green Organic Dutchman and TGOD Acquisitions management will have the right to backstop the unit in addition to participating in a financing on the same terms. This exclusive offering provides investors upside potential, in the sense that they can participate in future rounds of financing alongside Green Organic Dutchman management.
Upon fulfillment of the terms and conditions, the Board of Directors will distribute one warrant for every 6.67 Green Organic Dutchman shares owned on the record date. TGOD Acquisitions plans to execute a series of staged financings and acquisitions leading to a late 2018 target IPO date.
Green Organic Dutchman CEO Brian Athaide said, “This is an incredible opportunity for TGOD to transfer expertise and monetize our proprietary knowledge from the Canadian marketplace. We will partner with innovative and disruptive companies that we can assist with capital market knowledge and unique retail-exclusive financing methods. The intention is to raise additional capital and list TGOD Acquisitions on the Canadian Securities Exchange. We are excited about this unique opportunity to reward our investors and provide additional value to TGOD shareholders.”
Green Organic Dutchman and TGOD Acquisitions will enter into a repayable funding agreement, whereby Green Organic Dutchman will provide $25 million of working capital to TGOD Acquisitions. This will be repayable by TGOD Acquisitions prior to completion of any investment. In consideration for the funding agreement, TGOD Acquisitions will issue a restricted warrant to purchase 50 million common shares for a period of 25 years from the date upon which the shares of TGOD Acquisitions begin trading on the Canadian Securities Exchange.
Following the completion of the spin out, TGOD Acquisitions will operate at arm’s length to Green Organic Dutchman and will have an independent Board of Directors and management. Further details of the management team will be announced with the filing of the arrangement materials at a special meeting of Green Organic Dutchman shareholders.
The Green Organic Dutchman Holdings stock trades at a market capitalization of $1.37 billion and a price to book multiple of 9.80x.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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