Harborside Inc. (“Harborside”, or the “Company”) (CSE: HBOR) (OTCQX: HBORF), a California-focused, vertically-integrated cannabis enterprise, today announced that its shareholders voted overwhelmingly in favour of the issuance of approximately 151,427,786 Harborside subordinate voting shares (“SVS”) to acquire 100% equity interests in LPF JV Corporation (“Loudpack”) and UL Holdings Inc. (“Urbn Leaf”) in connection with the Company’s proposed business combination with Urbn Leaf and Loudpack (the “Transactions”).
Harborside shareholders also voted in favour of other matters related to the Company (the “Ancillary Matters”) aimed at positioning the Company for success in connection with the completion of the Transactions, including:
- Name Change: A change in the name (the “Name Change”) of the Company to StateHouse Holdings Inc. (“StateHouse”), subject to regulatory approval;
- Board of Directors: The election of Matthew Hawkins, Edward Schmults, Marc Ravner, Kevin Albert, Tiffany Liff, Jonathon Roy Pottle and James Scott to serve on the Company’s board of directors (the “Board”), conditional upon the completion of the Transactions;
- Share Consolidation: The consolidation all of the Company’s issued and outstanding SVS and multiple voting shares (“MVS”) on a basis to be determined by the Board, provided that the consolidation ratio will be no greater than one post-consolidation SVS and post-consolidation MVS, as applicable, for every six pre-consolidation SVS and pre-consolidation MVS, as applicable (the “Consolidation”);
- Amendments to the Articles of Harborside: Authorization for, amongst other things, the removal of certain restrictions relating to the conversion of MVS to SVS (the “Article Amendments”);
- Amendments to the Shareholder Rights Plan: Amendments to ensure that Harborside has the ability to support its growth, including in circumstances in which existing shareholders may choose to participate in financing alternatives and capital raising activities proposed by Harborside (the “Shareholder Rights Plan Amendments”);
- Amendments to Equity Incentive Plan: Amendments to increase the maximum number of SVS which may be allocated for issuance pursuant to certain incentive stock options; and
- Amendments to By-law No. 2 of Harborside: Amendments to authorize, amongst other things, the removal of the Canadian residency requirement for the Company’s directors.
“The shareholder approvals today represent important milestones on our path to complete these transformational Transactions, which will create a new powerhouse in the California cannabis industry,” said Matthew Hawkins, Chairman of the Board and Interim CEO of Harborside. “We believe StateHouse will be one of the largest publicly traded, vertically integrated cannabis operators in the state of California, with a fully installed and operational platform to consolidate the state’s cannabis sector.”
The results of the vote are as follows:
| Motions | NUMBER OF SHARES | PERCENTAGE OF VOTES CAST | ||||
| FOR | AGAINST | WITHHELD / ABSTAIN | FOR | AGAINST | WITHHELD / ABSTAIN | |
| Share Issuance | 24,228,981 | 111,404 | 0 | 99.54 | 0.46 | 0.00 |
| Name Change | 23,102,133 | 686,379 | 551,873 | 94.91 | 2.82 | 2.27 |
| Consolidation | 23,877,424 | 462,961 | 0 | 98.10 | 1.90 | 0.00 |
| Matthew Hawkins for Combined Board | 22,877,630 | 0 | 1,462,755 | 93.99 | 0.00 | 6.01 |
| Edward Schmults for Combined Board | 23,835,550 | 0 | 504,835 | 97.93 | 0.00 | 2.07 |
| Marc Ravner for Combined Board | 23,020,996 | 0 | 1,319,389 | 94.58 | 0.00 | 5.42 |
| Kevin Albert for Combined Board | 22,873,775 | 0 | 1,466,610 | 93.97 | 0.00 | 6.03 |
| Tiffany Liff for Combined Board | 23,242,220 | 0 | 1,098,165 | 95.49 | 0.00 | 4.51 |
| Jonathan Roy Pottle for Combined Board | 23,055,207 | 0 | 1,285,178 | 94.72 | 0.00 | 5.28 |
| James Scott for Combined Board | 23,242,715 | 0 | 1,097,670 | 95.49 | 0.00 | 4.51 |
| Shareholder Rights Plan | 6,658,846 | 815,118 | 0 | 89.09 | 10.91 | 0.00 |
| Articles Alteration | 23,800,428 | 539,957 | 0 | 97.78 | 2.22 | 0.00 |
| Equity Incentive Plan Amendment | 22,354,191 | 1,434,321 | 551,873 | 91.84 | 5.89 | 2.27 |
| By-Law Amendment | 23,806,074 | 534,311 | 0 | 97.80 | 2.20 | 0.00 |
“The overwhelming support our shareholders have given today for the Transactions and Ancillary Matters, is critical to making the business combination with Urbn leaf and Loudpack a reality,” added Mr. Hawkins. “In the coming days, we will be working to complete the steps required to close the Transactions, including complying with all necessary regulatory requirements. We expect to close the Urbn Leaf acquisition on or about March 1, 2022 and the Loudpack acquisition on or about March 15, 2022.”
