VANCOUVER November 7, 2022– Primetime Holdings Inc. (“PrimeTime” or the “Company”) is pleased to announce that it has entered into a Restructuring Support Agreement (the “Restructuring Support Agreement”) (as described below) with certain holders (the “Consenting Debentureholders”) of its 8.0% secured convertible debentures (the “2021 Secured Convertible Debentures”), to effect a proposed restructuring transaction (the “Restructuring Transaction”).
Pursuant to the terms of the Restructuring Support Agreement, the Restructuring Transaction will be implemented pursuant to arrangement proceedings under the Business Corporations Act (British Columbia) (the “BCBCA”). The Restructuring Transaction is expected to consist of the following key elements:
- The 2021 Secured Convertible Debentures, which has a maturity of 24 months from the issuance date of the 2021 Secured Convertible Debentures, will be replaced with new secured convertible debentures (the “2022 Secured Convertible Debentures”), as further described below;
- The 2022 Secured Convertible Debentures will bear interest at an annualized rate of 8.0% per annum and will mature on June 30, 2026;
- The 2022 Secured Convertible Debentures will be secured against the assets of PrimeTime as of August 19, 2022;
- The 2022 Secured Convertible Debentures will be convertible into subordinate voting shares (the “SVS”) of the Company at a conversion price of the lower of:
(i) C$0.50 per SVS, or;
(ii) 20% discount to the deemed transaction price in any following triggering events:
(a) a change of control transaction;
(b) receipt of the final receipt for a final prospectus of the Company filed with Canadian
regulatory authorities; or,
(c) completion of a debt or equity financing with minimum gross proceeds of US$10,000,000.
Restructuring Transaction Details
In connection with the Restructuring Transaction, the Company and certain of its subsidiaries (collectively, the “Subsidiaries”) have entered into the Restructuring Support Agreement with the Consenting Debentureholders, and which hold in aggregate over 59% of the principal amount of 2021 Secured Convertible Debentures. Pursuant to the Restructuring Support Agreement, the Consenting Debentureholders have, among other things, agreed to support the Restructuring Transaction and vote in favour of the plan of arrangement (the “Plan of Arrangement”) to be filed by the Company in connection with proceedings (the “Arrangement Proceedings”) to be commenced under the BCBCA.
After an extensive review and consultation process with its legal and financial advisors, the Company’s board of directors (the “Board”) concluded that the Restructuring Transaction represents the best available alternative to improve the Company’s capital structure and to allow it to capitalize on its business plan to maximize value for the Company’s stakeholders.
On October 31, 2022, the Company obtained an interim order (the “Interim Order”) from the Supreme Court of British Columbia (the “Court”) authorizing, among other things, the holding of a meeting (the “Meeting”) of the holders of the 2021 Secured Convertible Debentures (the “Secured Debentureholders”), to consider and vote upon the Plan of Arrangement to implement on the Recapitalization Transaction.
The Meeting is scheduled to be held on November 28, 2022, at 10:00 a.m. (Vancouver time) at Suite 1500 – 1055, 1055 West Georgia Street, Vancouver, British Columbia, V6E 4N7.
Pursuant to the Interim Order, the record date for the right to receive notice of and to vote at the Meeting is the close of business (Vancouver time) on October 24, 2022 (the “Record Date”). The deadline for Secured Debentureholders to submit their respective proxies in order to vote on the Plan of Arrangement is 10:00 a.m. (Vancouver time), on November 24, 2022.
Requisite Approval for the Plan of Arrangement
The required level of approval for the Plan of Arrangement at the Meeting will be a majority in number of the Secured Debentureholders voting in person or by proxy at the Meeting, representing not less than three- quarters (75%) in value of the 2021 Secured Convertible Debentures. Each Secured Debentureholder will be entitled to one vote for each $1,000 principal amount of 2021 Secured Convertible Debentures held.
The management information circular (the “Circular”) contains information regarding procedures for voting on the Plan of Arrangement, as well as other background and material information regarding the Recapitalization Transaction. The Circular was mailed on November 4, 2022. The Circular and the forms of proxies will also be available on the Company’s website at www.primetimecap.com.
Court Approval and Implementation
If the Plan of Arrangement is approved by the requisite threshold at the Meeting, the Company will attend a hearing before the Court currently scheduled for December 9, 2022, or such other date as may be set by the Court to seek final Court approval for the Plan of Arrangement (the “Final Order”).
Completion of the Restructuring Transaction through the Arrangement Proceedings will be subject to, among other things, requisite stakeholder approval of the Plan of Arrangement at meetings expected to be held in Q4 of 2022, such other approvals as may be required by the Court and approval of the Plan of Arrangement by the Court.
This news release provides only summary information with respect to the Restructuring Support Agreement and the proposed Restructuring Transaction. Readers are urged to consult the full text of the Restructuring Support Agreement, a copy of which is available on the Company’s website (www.primetimecap.com).
For more information please visit the Company’s website at www.primetimecap.com.
About Primetime Holdings Inc.
Primetime Holdings Inc. is a leading California-based cannabis company with focus on bulk cannabis distribution as well as Branded sales. Through its superior expertise and widespread industry network, PrimeTime has become a trusted supplier of best-in-class Cannabis products and is able to offer advanced solutions for manufacturing.
For more information, please visit the company’s website at: www.primetimecap.com.
PRIMETIME HOLDINGS INC.
Per: “Gregory Crowe”
Chief Executive Officer
For further information about Primetime Holdings Inc., please contact the Company at:
Forward Looking Statements
Statements in this news release that are forward-looking statements are subject to various risks and uncertainties, including concerning COVID-19 and the specific factors disclosed here and elsewhere in Icanic’s periodic filings with Canadian securities regulators. When used in this news release, words such as “will”, “hope”, “could”, “plan”, “estimate”, “expect”, “intend”, “may”, “potential”, “believe”, “should”, “our vision” and similar expressions, are forward-looking statements.
Forward-looking statements may include, without limitation, statements relating to: the implementation and completion of the Recapitalization Transaction and the Plan of Arrangement, potential implementation of the Recapitalization Transaction pursuant to the CCAA, the approval of the Plan of Arrangement by Secured Debentureholders, the Company obtaining the Final Order, the provision of liquidity to Secured Debentureholders, the Recapitalization Transaction providing the Company with the resources needed to execute its vision and the impact of the Plan of Arrangement on the future growth of the Company.
Readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this release. The Company disclaims any intention or obligation to update or revise such information, except as required by applicable law, and the Company does not assume any liability for disclosure relating to any other company mentioned herein.
Forward-looking statements are based on assumptions that may prove to be incorrect, including but not limited to the ability of the Company to execute its business plan, the continued growth of the medical and/or recreational cannabis markets in the countries in which the Company operates or intends to operate, that the Company can obtain requisite approval from Secured Debentureholders of the Plan of Arrangement at the Meeting and can obtain the Final Order from the Court. The Company considers these assumptions to be reasonable in the circumstances. However, forward-looking statements are subject to business and economic risks and uncertainties and other factors that could cause actual results of operations to differ materially from those expressed or implied in the forward-looking information. Such risks include, without limitation: the requisite approval of the Secured Debentureholders for the Plan of Arrangement may not be obtained at the Meeting and the Recapitalization Transaction will be required to be proceed pursuant to the terms of CCAA, the Court may not provide the Final Order, risks related to the COVID-19 global pandemic or other disease
outbreaks including a resurgence in the cases of COVID-19; engaging in activities, considered illegal under United States federal law, the ability of the Company to comply with applicable government regulations in a highly regulated industry; unexpected changes in governmental policies and regulations affecting the production, distribution, manufacture or use of cannabis in the United States, or any other foreign jurisdictions in which the Company intends to operate, unexpected changes in governmental policies and regulations affecting the production, distribution, manufacture or use of adult-use recreational cannabis in the United States or Canada, any change in accounting practices or treatment affecting the consolidation of financial results, the Company’s reliance on management; inconsistent public opinion and perception regarding the use of cannabis, perceived effects of medical cannabis products, adverse market conditions; the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses; costs of inputs, crop failures, litigation; currency fluctuations, competition; availability of capital and financing on acceptable terms, industry consolidation, loss of key management and/or employees, and other risks detailed herein and from time to time in the filings made by the Company with securities regulators.