Mr. Liam Corcoran reports
GCIT ANNOUNCES FINANCING UP TO $5.5 MILLION AND PROPOSED ACQUISITION OF AEROBLOOM, A DISRUPTIVE AGTECH COMPANY BASED IN CALIFORNIA
Glorious Creation Ltd. has entered into a definitive share exchange agreement dated May 3, 2022, with Aeroponics Integrated Systems Inc. (AeroBloom) and the holders of AeroBloom shares. Pursuant to the definitive agreement, Glorious Creation will, subject to certain conditions, acquire all of the issued and outstanding securities of AeroBloom.
The transaction is an arm's-length transaction that is expected to constitute a change of business pursuant to Canadian Securities Exchange Policy 8, Fundamental Changes and Changes of Business. Following completion of the proposed transaction, the resulting issuer will hold all of the assets and continue the business of AeroBloom.
About AeroBloom
AeroBloom is a private company incorporated under the laws of California. AeroBloom's core business is the development and use of proprietary aeroponics technology to harvest and cultivate various crops, including tomatoes, bell peppers and cannabis, for distribution and retail.
AeroBloom's technology, which includes hardware, software and know-how (unique growing protocols) for the optimal cultivation of plant crops in controlled environments, provides advantages in terms of yield, water conservation, speed of growth and quality of crops relative to other similar systems available for controlled environment agriculture. This, in turn, allows AeroBloom to produce food at a lower cost relative to other producers using similar systems.
AeroBloom intends to construct a greenhouse capable of growing tomatoes and bell peppers using its proprietary aeroponics technology and has already secured (through AeroSynergy, as described as follows) a lease for a legal indoor cannabis cultivation site. At the same time, AeroBloom has retained Kevin McDoneld as chief technical officer to develop and implement an AI (artificial intelligence) software and robotics system that can be integrated into the existing aeroponics system. Mr. McDoneld has over 25 years of engineering experience, including working on projects for NASA, General Electric and the U.S. Navy.
Additional information regarding AeroBloom can be found on AeroBloom's website. Financial information regarding AeroBloom will be provided in a future news release once available.
About AeroSynergy LLC
AeroSynergy is a Delaware limited liability company controlled by certain founders of AeroBloom. AeroSynergy has leased a cannabis-licensed building (cultivation, manufacturing, and distribution licences) and is near completion of obtaining its power upgrade and building permit. This facility is expected to serve as a commercial-scale showcase for the yield, resource and efficiency advantages of AeroBloom's patent-pending aeroponics system to be utilized on various crops.
The transaction
Pursuant to the definitive agreement, Glorious Creation will acquire all of the issued and outstanding securities of AeroBloom from the AeroBloom shareholders in exchange for 40,608,322 common shares of Glorious Creation at the closing of the transaction for aggregate deemed consideration of $9,896,033 (based on the price of 25 cents per acquisition share, being the financing price (as defined as follows)). Upon completion of the transaction, AeroBloom will become a wholly owned subsidiary of Glorious Creation and Glorious Creation will change its name to AeroBloom Integrated Systems Inc. and carry on the business of AeroBloom.
The completion of the transaction is subject to a number of conditions precedent, including: (i) satisfactory due diligence review by the company; (ii) completion of the financing (as defined as follows); (iii) completion of the acquisition by Glorious Creation of a controlling interest in AeroSynergy; (iv) receipt of requisite approvals from the shareholders and directors of each of AeroBloom and the company; and (v) receipt of all requisite regulatory and third party approvals (including the conditional approval of exchange). There can be no assurance that the transaction will be completed on the terms set out in the definitive agreement or at all. The company intends to obtain majority shareholder approval of the transaction through written consent of its shareholders.
Upon closing of the transaction, subject to the approval of the exchange, the company will pay finders' fees consisting of two million common shares of the resulting issuer issued in the following denominations: (i) 500,000 finder shares to Liam L. Corcoran Law Corp. (LLCLC); and 1.5 million finder shares to certain arm's-length finders.
The issuance of LLCLC finder shares to LLCLC, a corporation owned and controlled by Liam Corcoran, a director of the company, will be considered to be a related party transaction as defined under Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions; however, the issuance of the LLCLC finder shares is exempt from the minority shareholder approval and formal valuation requirements of MI 61-101, pursuant to subsections 5.5(a) and 5.7(1)(a) of MI 61-101, as the fair market value of the LLCLC finder shares does not exceed 25 per cent of the company's market capitalization.
All acquisition shares and finder shares will be subject to contractual restrictions on transfer for a period of 36 months from the closing date, to be released in accordance with the schedule as shown in the attached table.
The financing
Prior to the completion of the transaction, Glorious Creation is expected to complete a non-brokered private placement consisting of a minimum of 16 million securities up to a maximum of 22 million financing securities at a price of 25 cents per financing security for aggregate gross proceeds of a minimum of $4-million up to maximum of $5.5-million. Except for up to two million financing securities, which may, in the company's discretion, be common shares of Glorious Creation, all financing securities will be subscription receipts of Glorious Creation.
The financing shares and subscription receipts will be issued pursuant to subscription agreements entered into by Glorious Creation and each of the subscribers. Each subscription receipt will be automatically converted, without payment of additional consideration or further action by the holder thereof, into one Glorious Creation common share upon satisfaction of the escrow release conditions in accordance with the subscription agreements, which conditions include: (i) satisfaction or waiver of all conditions to the exchange's conditional approval of the transaction; (ii) satisfaction or waiver of all conditions to the exchange's conditional approval of the financing; and (iii) the closing of transaction.
It is anticipated that finders' fees will be paid to certain arm's-length finders in relation to the financing consisting of a cash payment in an amount up to a maximum of 8 per cent of the gross proceeds of the financing directly resulting from the introductions of such finders. The finders will consist of registered arm's-length dealers or other permitted individuals under Canadian securities laws.
It is intended that the net proceeds from the financing will be used for general working capital purposes of the resulting issuer, growing and expanding its business through the operation of greenhouses, development of a proprietary AI system, payment of employee salaries, and investor relations and marketing activities following completion of the transaction; however, the company may use net proceeds arising from the sale of financing shares in the financing (up to a maximum of $500,000) to cover costs and expenses related to the transaction prior to completion of the transaction. The finders' fees and the financing are subject to CSE approval.
Directors and officers of the resulting issuer
Upon completion of the transaction, it is anticipated that Darren Walz and Dale Devore will join the board of directors of the resulting issuer, alongside Glorious Creation's current directors, Mr. Corcoran and Nick Luksha, and that Toby Lim will resign as a director of the company. It is further anticipated that Glorious Creation's current chief executive officer, Mr. Corcoran, will resign and be replaced by Mr. Walz upon completion of the transaction.
Darren Walz, chief executive officer and director
Mr. Walz is a serial entrepreneur with previous experience in retail and marketing. In 2009, he launched his own successful apparel company. In 2013, he co-founded a luxury cannabis dispensary with Mr. Devore, which went on to be one of the largest in Riverside county, California. During that time, Mr. Walz managed over 40 employees and the dispensary, which included over 15,000 members and over $7.5-million (U.S.) in annual revenue. In 2016, Mr. Devore and Mr. Walz decided to leave the dispensary behind and broaden their focus by using their proprietary aeroponics system to grow a variety of crops and try to find a solution to the issues about which they were passionate, such as food security and climate change.
Dale Devore, chief innovative officer
Mr. Devore has been growing crops and developing aeroponics systems for over 30 years and is the creative mind behind AeroBloom's proprietary technology. For several years, Mr. Devore compared notes directly with Richard Stoner, head of the NASA-financed aeroponics research team developing systems for the growth of crops in space without soil. Mr. Devore also co-founded two of the most highly rated luxury medical cannabis dispensaries during their time of operation in California: Cafe Vale Tudo in Orange county and Cafe Canna Cabana near Palm Springs.
Kevin McDoneld, chief technical officer and director
Mr. McDoneld has over 25 years of experience in engineering, team and project management, including management of worldwide engineering teams across five continents, with a hands-on approach in the development of predictive analytic algorithms to support leading-edge projects in predictive performance, predictive maintenance and predictive failure; creation of AI data-gathering algorithms to support AI initiatives for various equipment, apparatus and systems; predictive analytics engineering and AI innovation in the agricultural, offshore oil and gas, shipping fields, and for the U.S. Navy; and mechanical, piping and HVAC (heating, ventilation and air conditioning) system engineering and design for automated agricultural systems, oil exploration and drilling, ships, military, NASA, and other land and sea industries, which has been the focus for most of his professional career.
Liam Corcoran, director
Mr. Corcoran has extensive legal and business experience and is currently a partner of a multidisciplinary legal practice with an emphasis on property insurance and related litigation. Mr. Corcoran currently holds several positions as a director of Canadian publicly traded companies. As a former chief executive officer, Mr. Corcoran oversaw the successful acquisition of a biotechnology company for over $30-million, resulting in a peak market cap over $200-million and $20-million in access to non-dilutive government grants. Mr. Corcoran has widespread experience in all areas of the public markets, including restructuring, financing, M&A (mergers and acquisitions), and due diligence. Mr. Corcoran obtained his juris doctorate from Thompson Rivers University Law School and holds an undergraduate degree from McGill University.
Nick Luksha, director
Mr. Luksha has been a leader in numerous sectors, including real estate development, investment, asset management, technology, franchising and building management teams to help small to medium-sized businesses achieve controlled growth. He has considerable experience providing access to capital for high-growth businesses around the world. Mr. Luksha's vast network of value-add capital sources include high-net-worth retail investors, family offices, institutional investors and broker dealers. Having operated across Canada, the United States and Latin America, Mr. Luksha has cultivated a sophisticated approach to a diverse range of professional environments. Mr. Luksha studied math and statistics at Concordia University and attended Harvard University for continuing studies.
Listing statement
In connection with the transaction and pursuant to the requirements of the CSE, the company will file a listing statement on its issuer profile on SEDAR, which will contain details regarding the transaction, the name change, the financing and AeroBloom.
About Glorious Creation Ltd.
Glorious Creation is incorporated under the provisions of the Business Corporations Act (British Columbia) with its registered and head office in Vancouver, B.C. Glorious Creation is a reporting issuer in the provinces of Ontario, British Columbia and Alberta.
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