Ayurcann Holdings Corp. (“Ayurcann” or the “Company”) (CSE: AYUR;
OTCQB: AYURF; FSE: 3ZQ0), an award winning Canadian cannabis
extraction company specializing in the processing and manufacturing
of pharma grade cannabis and hemp for various derivative cannabis
products, and Arogo Capital Acquisition Corporation (“Arogo”)
(NASDAQ: AOGOU, AOGO, AOGOW), a special purpose acquisition
company, announced today that they have entered into a definitive
business combination agreement dated June 26, 2024 (the “Business
Combination Agreement”, and the transactions contemplated therein,
the “Transaction”). The Business Combination is an arm’s length
agreement. In connection with the Transaction, ARC Group Limited
will receive finder’s fees in the amount of 799,731 common shares
of the Company.
"Ayurcann is one of the most innovative companies we have
encountered, particularly in cannabis extraction and product
development. With their impressive achievements and forward-looking
plans, this business combination is set to drive the business onto
a new growth trajectory, enhancing its capabilities and expanding
the market reach in meaningful ways,” says Suradech
Taweesaengsakulthai, CEO and Director of Arogo.
About Ayurcann
Ayurcann is focused on its operational expertise and gaining
market share in every product category, and its management team
believes that Ayurcann’s strong market share capture is driven by
the quality and reputation of its brands. By continuously providing
high-quality products, innovations and value that complement our
current market offerings, Ayurcann continues to look for
opportunities to increase revenue.
Efficiency.
Ayurcann continuously looks at its operation, creating better
partnerships and efficiencies in its systems, including better
manufacturing capacities and supply chain management. Ayurcann has
continuously implemented new systems to improve the efficiency of
its business enable growth.
Team.
Ayurcann’s outstanding team, both internal and external, make
the company. Ayurcann sets short-and long-term goals and objectives
that are directly linked to the success of the Company and
understands that reward and recognition is what makes the team meet
and exceed those objectives.
Ayurcann drives growth through its quality, brands, and product
offerings. Demand for its products has remained consistent and the
cannabis industry remains strong and growing. As a business focused
on quality and value, Ayurcann has seen market growth and demand
for its products translate into a strong competitive position.
Financial Highlights
Ayurcann financial highlights include 100% year over year growth
of gross revenue over the last three audited financial reporting
years, based on Ayurcann’s audited financial statements available
under its profile on SEDAR+. These results have been achieved only
2.5 years after being licensed to sell cannabis products in
Canada.
“We are proud of our team for what we have achieved as a
company,” said Igal Sudman, Chief Executive Officer of Ayurcann.
“The business combination with Arogo, is our next step in growing
the company nationally while allowing us to also look for
international opportunities.”
Summary of the Transaction
Under the terms of the Business Combination Agreement, by way of
a plan of arrangement under the provisions of the Business
Corporations Act (Ontario), a Canadian merger sub will amalgamate
with and into Ayurcann, which will become a direct, wholly owned
subsidiary of the post-business combination publicly traded entity,
and a Delaware merger sub will merge with and into Arogo, as a
result of which Arogo will become a direct, wholly owned subsidiary
of the post-business combination publicly traded entity. At the
effective time of the Transaction, shareholders of Ayurcann
immediately prior to the effective time will receive shares of
common stock of the publicly traded entity based on an implied pro
forma enterprise value of approximately $210 million, at a price of
$10.00 per share. Ayurcann’s common shares are anticipated to be
valued upon closing of the proposed Transaction at approximately
$1.00 based on the current number of fully diluted outstanding
common shares before consolidation to be completed in connection
with the proposed Transaction. At the closing of the proposed
Transaction, Arogo expects to have up to US$19.6 million in cash on
its balance sheet (assuming no redemptions by Arogo’s stockholders
and before payment of Transaction expenses and deferred
underwriting fees), including existing cash brought over from
Ayurcann’s balance sheet, any capital raised in connection with the
Transaction, and expected cash proceeds from Arogo’s trust account,
which is expected to be used to support general business
activities, including new product development, new distribution
networks, and exploring national and international acquisition
opportunities.
The Transaction is expected to close in the second half of 2024,
subject to the receipt of all regulators, court, shareholder and
other approvals, and the satisfaction or waiver of all customary
closing conditions. The Transaction is subject to the approval of
the Ontario Superior Court of Justice (Commercial List). The
Transaction will also require the approval at a special meeting of
Ayurcann's shareholders of not less than two-thirds (66 2/3%) of
the votes validly cast by Ayurcann’s shareholders, present in
person or by proxy at the special meeting. The Transaction will
also require the approval of Arogo’s stockholders and the U.S.
Securities and Exchange Commission (“SEC”) declaring the
registration statement effective.
The directors, senior officers and certain other shareholders of
Ayurcann have entered into a support agreement with Arogo to, among
other things, support the Transaction and vote their Ayurcann
shares in favor of the Transaction. Shareholders of Ayurcann will
hold rights of dissent to the Transaction under the Business
Corporations Act (Ontario).
The Board of Directors of Ayurcann unanimously recommends that
Ayurcann shareholders vote in favor of the resolution to approve
the Transaction, which will be the subject of the Ayurcann meeting
expected to be held in the third quarter of 2024. There are
currently 194,703,863 common shares of the Company issued and
outstanding. Following the Transaction, the Company anticipates
that approximately 260,703,863 common shares of the Company will be
issued and outstanding, which will be consolidated on a 10:1 ratio
in connection with the Transaction, resulting in approximately
26,070,386 common shares.
The Transaction remains subject to certain other closing
conditions, including the receipt of certain approvals and the
satisfaction of certain customary closing conditions, including but
not limited to a committed PIPE financing or other mutually
satisfactory financing.
Further information regarding the Transaction will be included
in Ayurcann management information circular to be mailed to
Ayurcann shareholders in advance of the Ayurcann special meeting
and in Ayurcann’s material change report in respect of the
announcement of the Transaction, each of which will be filed with
the Canadian securities regulators and will be available under
Ayurcann’s profile on SEDAR+.
Advisors
Brown Rudnick LLP is representing Arogo as U.S. legal counsel
and Fasken Martineau DuMoulin LLP is representing Arogo as Canadian
legal counsel. Sichenzia Ross Ference Carmel LLP is representing
Ayurcann as U.S. legal counsel and Garfinkle Biderman LLP is
representing Ayurcann as Canadian legal counsel. ARC Group Limited
is acting as sole financial advisor to Ayurcann. EF Hutton,
division of Benchmark Investments, LLC, is serving as capital
markets advisor to Arogo.
About Arogo
Arogo Capital Acquisition Corp. is a blank check company. Arogo
aims to acquire one and more businesses and assets, via a merger,
capital stock exchange, asset acquisition, stock purchase, and
reorganization. For more information,
visit www.arogocapital.com.
Additional Information and Where to Find It
For additional information regarding the Business Combination
Agreement and the proposed Transaction, see Arogo’s Current Report
on Form 8-K, which was filed with the U.S. Securities and Exchange
Commission (“SEC”) concurrently with this press release. In
connection with the proposed Transaction, Arogo intends to file
with the SEC a registration statement on Form F-4 (the
“Registration Statement), and after the Registration Statement is
declared effective by the SEC, Arogo intends to mail a definitive
proxy statement/prospectus relating to the Transaction to its
stockholders. The management information circular to be mailed to
Ayurcann shareholders in advance of the Ayurcann special meeting
and Ayurcann’s material change report in respect of the
announcement of the Transaction will contain further details
regarding the Transaction and will be available under Ayurcann’s
profile on SEDAR+. This press release does not contain all the
information that should be considered concerning the proposed
Transaction and is not intended to form the basis of any investment
decision or any other decision in respect of the proposed
Transaction. Arogo’s stockholders and other interested persons are
advised to read, when available, the preliminary proxy
statement/prospectus and the amendments thereto and the definitive
proxy statement/prospectus and other documents filed in connection
with the proposed Transaction with the SEC by Arogo, as these
materials will contain important information about Ayurcann, Arogo,
and the proposed Transaction. When available, the definitive proxy
statement/prospectus and other relevant materials for the proposed
Transaction will be mailed to stockholders of Arogo as of a record
date to be established for voting on the proposed Transaction. Such
stockholders will also be able to obtain copies of the preliminary
proxy statement/prospectus, the definitive proxy
statement/prospectus and other documents filed with the SEC,
without charge, once available, at the SEC’s website at
www.sec.gov, or by directing a request to Arogo Capital Acquisition
Corporation, 848 Brickell Ave, Penthouse 5, Miami, FL 33131.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the U.S. Securities Act of 1933, as
amended (the “Securities Act”), Section 21E of the U.S. Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and
applicable Canadian securities laws, that are based on beliefs and
assumptions and on information currently available to Arogo and
Ayurcann. In some cases, you can identify forward-looking
statements by the following words: “may,” “will,” “could,” “would,”
“should,” “expect,” “intend,” “plan,” “anticipate,” “believe,”
“estimate,” “predict,” “project,” “potential,” “continue,”
“ongoing,” “target,” “seek” or the negative or plural of these
words, or other similar expressions that are predictions or
indicate future events or prospects, although not all
forward-looking statements contain these words. Any statements that
refer to expectations, projections or other characterizations of
future events or circumstances, including the consummation of the
proposed Transactions under the Business Combination Agreement,
projections of market opportunity and market share, the capability
of Ayurcann’s business plans including its plans to expand, the
sources and uses of cash from the proposed Transaction, the
anticipated enterprise value of the combined company following the
consummation of the Transaction, any perceived benefits of
Ayurcann’s partnerships, strategies or plans as they relate to the
Transaction, anticipated benefits of the Transaction, and
expectations related to the terms and timing of the Transaction are
also forward-looking statements. These statements involve risks,
uncertainties and other factors that may cause actual results,
levels of activity, performance or achievements to be materially
different from those expressed or implied by these forward-looking
statements. Although the management team of each of Arogo and
Ayurcann believes that it has a reasonable basis for each
forward-looking statement contained in this press release, each of
Arogo and Ayurcann cautions you that these statements are based on
assumptions made as of the date hereof and are subject to risks,
uncertainties and other factors that could cause actual results to
differ materially from those expressed or implied by such
forward-looking statements. Factors that may cause actual results
to differ materially from current expectations include, but are not
limited to: the ability to complete the Transaction due to the
failure to obtain approval from Arogo’s stockholders or satisfy
other closing conditions in the Business Combination Agreement, the
receipt of court approvals, the receipt of regulatory approvals,
the occurrence of any event that could give rise to the termination
of the Business Combination Agreement, the ability to recognize the
anticipated benefits of the Transaction, the amount of redemption
requests made by Arogo’s public stockholders, costs related to the
Transaction, the risk that the Transaction disrupts current plans
and operations as a result of the announcement and consummation of
the Transaction, the outcome of any potential litigation,
government or regulatory proceedings and other risks and
uncertainties, including those included under the heading “Risk
Factors” and “Cautionary Note Regarding Forward-Looking Statements”
in Arogo’s Annual Report on Form 10-K for the year ended December
31, 2023 and Form 10-Q for the quarter ended March 31, 2024, in the
proxy statement/prospectus relating to the proposed Transaction to
be filed with the SEC, and in any subsequent filings with the SEC,
including the definitive proxy statement relating to the proposed
Transaction and other filings made by Arogo with the SEC from time
to time. There may be additional risks that neither Arogo or
Ayurcann presently know or that Arogo and Ayurcann currently
believe are immaterial that could also cause actual results to
differ from those contained in the forward-looking statements.
Nothing contained herein should be regarded as a representation by
any person that the forward-looking statements set forth herein
will be achieved or that any of the contemplated results of such
forward-looking statements will be achieved. You should not place
undue reliance on forward-looking statements, which speak only as
of the date they are made. Neither Arogo nor Ayurcann undertakes
any duty, and each of Arogo and Ayurcann express disclaim any
obligations, to update or alter any projections or forward-looking
statements, whether as a result of new information, future events
or otherwise.
No Offer or Solicitation
This press release shall not constitute a proxy statement or
solicitation of a proxy, consent or authorization with respect to
any securities or in respect of the proposed Transaction and does
not constitute an offer to sell or a solicitation of an offer to
buy any securities of Ayurcann or Arogo, nor shall there be any
sale of any such securities in any state or jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of such
state or jurisdiction. No offer of securities shall be made except
by means of a prospectus meeting the requirements of the Securities
Act.
Participants in Solicitation
Ayurcann, Arogo, and their respective directors, executive
officers, other members of management, and employees, under SEC
rules, may be deemed to be participants in the solicitation of
proxies of Arogo’s stockholders in connection with the proposed
Transaction. Information regarding the persons who may, under SEC
rules, be deemed participants in the solicitation of Arogo’s
stockholders in connection with the proposed Transaction will be
set forth in the Registration Statement, of which the proxy
statement/prospectus forms a part, when it is filed with the
SEC.
Contact Information:
Ayurcann Holdings Corp.:Igal Sudman,
CEOigal@ayurcann.com416-720-6264
Arogo Capital Acquisition Corp. :Nisachon
Rattanameenisachon@arogocapital.com
1 Based on reporting by Hifyre IQTM, as of March 30, 2024.2
Based on data produced by the Ontario Cannabis Store as of March
30, 2024. 3 According to a Statista Online Services report
available at
https://www.statista.com/outlook/hmo/cannabis/canada.