As filed with the Securities and Exchange Commission onJanuary 31, 2020on January4, 2022

Registration No. 333-235724-_______

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_______________________________________________

AMENDMENT NO.2 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

_______________________________________________

GREENROSE ACQUISITION CORP.The Greenrose Holding Company Inc.
(Exact name of registrant as specified in its charter)

_______________________________________________

Delaware

 

67702833

 

84-2845696

(State or other jurisdictionOther Jurisdiction of
incorporation
Incorporation or organization)Organization)

 

(Primary Standard Industrial
Classification Code Number)

 

(I.R.S. Employer
Identification Number)

___________________111 Broadway
Amityville, NY 11701
(516) 346-5270
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

____________________________

William F. Harley III, Chief Executive Officer
Greenrose Acquisition Corp.111 Broadway
1000 Woodbury Road
Suite #212
Woodbury,Amityville, NY 11797
(516) 346
-527011701
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

___________________

William F. Harley III, Chief Executive Officer
Greenrose Acquisition Corp.
1000 Woodbury Rd.
Suite #212
Woodbury, NY 11797
(516) 346
-5270346-5270
(Name, address, including zip code,Address, Including Zip Code, and telephone number, including area code,Telephone Number, Including Area Code, of agentAgent for service)Service)

_______________________________________________

Copies to:

Guy Molinari, Esq.
Elishama Rudolph, Esq.
Tarter Krinsky & Drogin LLP
1350 Broadway
New York, New York 10018
(212) 216-8000
(212) 216
-8001 — Facsimile

Leib Orlanski, Esq.
Robert Matlin, Esq.
Jacqulyn Lewis, Esq.
K&L Gates LLP
10100 Santa Monica Blvd.
Los Angeles, California 90067
(310) 552
-5000
(310) 552
-5001 — Facsimile

_______________________________________________

Approximate date of commencement of proposed sale to the public:As soon as practicable From time to time after the effective date of this registration statement.Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. £

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

 

£

 

Accelerated filer

 

£

Non-accelerated filer

 

S

 

Smaller reporting company

 

S

    

Emerging growth company

 

S

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.£

 

Table of Contents

CALCULATION OF REGISTRATION FEE

Title of Each Class of Security Being Registered

 

Amount being Registered

 

Proposed Maximum Offering Price Per Security(1)

 

Proposed Maximum Aggregate Offering Price(1)

 

Amount ofRegistration Fee

Units, each consisting of one share of common stock, $0.0001 par value, and one Warrant(2)

 

17,250,000 Units

 

$

10.00

 

$

172,500,000

 

$

22,390.50

 

Shares of common stock included as part of the Units(3)

 

17,250,000 Shares

 

 

 

 

 

 

(4)

Redeemable Warrants included as part of the Units(3)

 

17,250,000
Warrants

 

 

 

 

 

 

(4)

Total

   

 

  

$

172,500,000

 

$

22,390.50

(5)

Title of Each Class of Securities to be Registered

 

Amount to be Registered(1)

 

Proposed Maximum Aggregate Offering Price(2)

 

Amount of Registration Fee

Common Stock, $0.0001 par value per share

 

12,806,728

 

$

3.265

 

$

3,876.15

Warrants to purchase Common Stock

 

660,000

 

$

0.20

 

$

12.24

____________

(1)      Estimated solely forRepresents (i) 12,806,728 shares of Common Stock and (ii) 660,000 warrants issued or to be issued to the purposeSelling Stockholders named herein. Pursuant to Rule 416(a) under the Securities Act of calculating1933, the registration fee.

(2)      Includes 2,250,000 Units, 2,250,000sharesregistrant is also registering hereunder an indeterminate number of common stock and 2,250,000 Redeemable Warrants underlying such Units whichshares that may be issued on exercise of a 30-day option granted to the underwriter.

(3)      Pursuant to Rule 416, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilutionand resold resulting from stock splits, stock dividends or similar transactions.

(4)      No(2)      Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(g).457(c) under the Securities Act of 1933, as amended, the proposed maximum offering price per share is $3.265 and price per warrant is $0.20, respectively, which are individually the average of the $3.52 (high) and $3.01 (low) of our shares of Common Stock and $0.22 (high) and $0.18 (low) private warrants, respectively, on December 30, 2021 on the OTCQX, which date is within five business days prior to filing this Registration Statement.

(5)      Previously paid.____________________________

The registrant hereby amends this registration statementRegistration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statementRegistration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statementRegistration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

Table of Contents

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS

SUBJECT TO COMPLETION, DATED JANUARY 4, 2022

SUBJECT TO COMPLETION, DATED JANUARY31, 2020The Greenrose Holding Company Inc.

PRELIMINARY PROSPECTUSUp to 12,806,728 Shares of Common Stock
Up to 660,000 Warrants Exercisable for Common Stock

$150,000,000

Greenrose Acquisition Corp.

15,000,000 Units

_______________________

Greenrose Acquisition Corp. is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities, which we refer to as a “target business.” Our efforts to identify a prospective target business will not be limited to a particular industry or geographic region although we intend to focus our search for target businesses on companies in the cannabis industry. We do not currently have any specific business combination under consideration and we have not (nor has anyone on our behalf), directly or indirectly, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to such a transaction. If we are unable to consummate an initial business combination within 18months from the closing of this offering (subject to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in this prospectus), we will redeem 100% of the public shares for a pro rata portion of the trust account, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us, divided by the number of then outstanding public shares, subject to applicable law and as further described herein.____________________________

This is an initial public offeringprospectus relates to the resale from time to time of (i) 5,000,000shares of our securities. Each unitcommon stock, $0.0001 par value per share (our “common stock”), held by the former equity holders of Theraplant, LLC (“Theraplant”) in connection with the Theraplant Merger (defined below); (ii) 3,266,350shares of our common stock held or that we are offering has a price of $10.00 and consists of one sharewill be held by our sponsor, Greenrose Associates LLC (our “Sponsor”), including up to 1,000,000shares of common stock and one warrant. Each whole warrant entitles the holder to purchase one sharebe issued to our Sponsor in satisfaction of an aggregate principal amount of $1,235,000 interest free notes held by Sponsor; (iii) 4,430,378shares of our common stock at a price of $11.50 per share. Each whole warrant will become exercisable onissued to True Harvest, LLC in connection the later of 30 days after the completion of an initial business combination or 12True Harvest Acquisition (defined below); (iv) 88,000months from the closing of this offering and will expire on the fifth anniversaryshares of our completion of an initial business combination, or earlier upon redemption or liquidation. We have granted the underwriters a 30-day option to purchase up to an additional 2,250,000 units to cover over-allotments, if any.

Greenrose Associates LLC, which we refer to throughout this prospectus as our “sponsor,”common stock and 528,000 private warrants (the “private warrants”) held by Imperial Capital, LLC, the representative of the underwriters in thisour initial public offering have committed that they or their designees will purchase from us an aggregate(“Imperial”); and (v) 22,000shares of 300,000 units, or “private units,” at $10.00 per unit, and 1,500,000 warrants, or “private warrants,” at $1.00 per warrant for a total purchase price of $4,500,000 in a private placement that will occur simultaneously with the consummation of this offering. Each private unit will consist of one share ofour common stock or “private shares,and 132,000 Private warrants held by I-Bankers Securities, Inc, an underwriter in our initial public offering (“I-Bankers” and, one private warrant. They have also agreed that iftogether with Theraplant, our Sponsor and Imperial, the over“Selling Stockholders”).

-allotment option is exercisedWe are not selling any securities under this prospectus and will not receive any of the proceeds from the sale of our common stock by the underwriters in full or in part, they or their designees will purchase fromSelling Stockholders, except with respect to amounts received by us additional private units and private warrants on a pro rata basis (up to a maximum of 30,000 private units at a price of $10.00 per private unit and an additional 150,000 private warrants at a price of $1.00 per warrant) in an amount that is necessary to maintain in the trust account $10.00 per unit sold to the public in this offering. These additional private units and private warrants will be purchased in a private placement that will occur simultaneously with the purchase of units resulting from theupon exercise of the over-allotment option. The private units and private warrants are identical to the units and warrants sold in this offering, subject to certain limited exceptions as described in this prospectus.Warrants.

There is presently no public market for our units,The Selling Stockholders may sell the shares of common stock or warrants.and private warrants, as applicable, included in this prospectus in a number of different ways and at varying prices. We intendprovide more information about how the Selling Stockholders may sell the shares in the section entitled “Plan of Distribution.” Each of the Selling Stockholders is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act of 1933, as amended (the “Securities Act”).

The Selling Stockholders will pay all brokerage fees and commissions and similar expenses in connection with the offer and sale of the shares by the Selling Stockholders pursuant to apply to have our units listed onthis prospectus. We will pay the Nasdaq Capital Market, or Nasdaq,expenses (except brokerage fees and commissions and similar expenses) incurred in registering under the symbol “GNRSU” on or promptly afterSecurities Act the dateoffer and sale of the shares included in this prospectus. Theprospectus by the Selling Stockholders. See “Plan of Distribution.”

Our common stock and our public warrants comprising the units will begin separate trading on the 90th day following the date of this prospectus unless Imperial Capital informs us of its decision to allow earlier separate trading, subject to our filing a Current Report on Form 8-K with the SEC containing an audited balance sheet reflecting our receipt of the gross proceeds of this offering and issuing a press release announcing when such separate trading will begin; provided that no fractional warrants will be issued upon separation of the units and only whole warrants will trade. We cannot guarantee that our securities will be approved for listing. Once the securities comprising the units begin separate trading, the common stock and warrants will be(our “Public Warrants) are traded on NasdaqThe Over The Counter “OTCQX” Market and OTCQB Market under the symbols “GNRS” and “GNRSW,“GNRS.W,” respectively. On December30, 2021, the closing price of our common stock was $3.01 per share and the closing price of our Public Warrants was $0.19 per warrant.

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Actunder applicable federal securities laws and will therefore be subject to reduced public company reporting requirements.

Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 189 of this prospectus for a discussion of information that should be considered in connection with an investment in our securities.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

Per Unit

 

Total

Public offering price

 

$

10.00

 

$

150,000,000

Underwriting discounts and commissions(1)

 

$

0.20

 

$

3,000,000

Proceeds, before expenses, to us

 

$

9.80

 

$

147,000,000

____________

(1)       We have agreed to pay the Imperial a commission of 2% of the gross proceeds raised in the Offering. See “Underwriting” for further information relating to the underwriting compensation we will pay in this offering.

Upon consummation of the offering, an aggregate of $150,000,000 (or $172,500,000 if the over-allotment option is exercised in full) or $10.00 per unit sold to the public in this offering will be deposited into a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee. Except as described in this prospectus, these funds will not be released to us until the earlier of the completion of a business combination and our redemption of our public shares.

The underwriters are offering the units on a firm commitment basis. The underwriters expect to deliver the units to purchasers on or about[•], 2020.

Sole Book-Running Manager

Imperial Capital, LLC

Co-Manager

I-Bankers Securities, Inc.____________________________

The date of this prospectus is [•], 2020January 4, 2022

 

Table of Contents

TABLE OF CONTENTS

 

Page

Cautionary Note Regarding Forward Looking Statements

ii

About this Prospectus

iii

Prospectus Summary

 

1

Summary Financial DataRecent Developments

 

176

Risk Factors

 

189

Cautionary Note Regarding Forward Looking StatementsThe Theraplant Transaction

 

3641

The Greenrose Associates Transactions

43

The Imperial and I-Banking Transactions

44

Use of Proceeds

 

3745

Determination Of Offering Price

46

Market Information For Common Stock And Dividend Policy

 

4047

DilutionUnaudited Pro Forma Condensed Combined Financial Information

 

41

Capitalization

4348

Management’s Discussion and Analysis of Financial Condition and Results of Operations of
Greenrose for the three and nine months ended September 30, 2021 and 2020

 

4464

ProposedManagement’s Discussion and Analysis of Financial Condition and Results of Operations of
Greenrose for the year ended December 31, 2020 and 2019

71

Management’s Discussion and Analysis of Financial Condition and Results of Operations of
Theraplant

76

Description of the Business

 

4887

Management

 

6595

Executive Compensation

100

Certain Relationships and Related Party Transactions

102

Principal Stockholders

 

72

Certain Transactions

75103

Description of Securities

 

78106

Shares Eligible for Future SalePlan of Distribution

 

84109

Material U.S. Federal Income Tax Considerations

 

86111

Underwriting

 

92

Legal Matters

 

101117

Experts

 

101117

Where You Can Find Additional Information

 

101117

Index to Financial Statements

 

F-1

We are responsible for the information contained in this prospectus.prospectus, other than information relating to specified Selling Stockholders. We have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus. We and the underwriter take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the unitssecurities offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

Until _____, 2020,2022, all dealers that effect transactions in these securities whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.

i

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

The statements contained in this prospectus that are not purely historical are forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predicts,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements about:

•        our success in retaining or recruiting, or changes required in, our officers, key employees or directors;

•        our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business, as a result of which they would then receive expense reimbursements;

•        our potential ability to obtain additional financing to complete future business combinations;

•        our pool of prospective target businesses;

•        the ability of our officers and directors to generate a number of potential investment opportunities;

•        potential changes in control of us if we acquire one or more target businesses for stock;

•        our public securities’ potential liquidity and trading;

•        the limited market for our securities;

•        our expectations regarding the time during which we will be an “emerging growth company” under the JOBS Act; or

•        our financial performance following this offering.

The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

ii

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ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement on Form S-1 that we filed with the Securities and Exchange Commission (the “SEC”). The Selling Stockholders may, from time to time, sell the securities described in this prospectus.

You should rely only on the information provided in this prospectus, as well as the information incorporated by reference into this prospectus and any applicable prospectus supplement. Neither we nor the Selling Stockholders have authorized anyone to provide you with different information. Neither we nor the Selling Stockholders have authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus, or any applicable prospectus supplement or any free writing prospectuses prepared by or on behalf of us or to which we have referred you. Neither we nor the Selling Stockholders take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. You should not assume that the information in this prospectus or any applicable prospectus supplement is accurate as of any date other than the date of the applicable document. Since the date of this prospectus and the documents incorporated by reference into this prospectus, our business, financial condition, results of operations and prospects may have changed. Neither we nor the Selling Stockholders will make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.

We may also provide a prospectus supplement or post-effective amendment to the registration statement to add information to, or update or change information contained in, this prospectus. You should read both this prospectus and any applicable prospectus supplement or post-effective amendment to the registration statement together with the additional information to which we refer you in the section of this prospectus entitled “Where You Can Find More Information.”

On November 26, 2021 (the “Closing Date”), Greenrose Acquisition Corp. consummated its previously announced business combination of Theraplant, LLC, a Connecticut limited liability company (“Theraplant”) pursuant to the Agreement and Plan of Merger dated March 12, 2021 (as amended pursuant to that certain Amendment No. 1, dated as of August 10, 2021, to the Agreement and Plan of Merger (“Amendment No. 1”), and that certain Amendment No. 2, dated as of November 26, 2021, to the Agreement and Plan of Merger (“Amendment No. 2”), collectively, the “Theraplant Merger Agreement”), pursuant to which GNRS CT Merger Sub, a Connecticut limited liability company and a wholly-owned subsidiary of Greenrose (“TPT Merger Sub”) was merged with and into Theraplant (the “Theraplant Merger” or the “Business Combination”), with Theraplant surviving the merger as a wholly owned subsidiary of Greenrose.

On the Closing Date, and in connection with the closing of the Theraplant Merger (the “Closing”), Greenrose Acquisition Corp. changed its name to The Greenrose Holding Company Inc. Unless the context otherwise requires, “we,” “us,” “our,” “Greenrose,” “Registrant” and the “Company” refer to The Greenrose Holding Company Inc., a Delaware corporation, and its consolidated subsidiaries.

This prospectus contains our registered and unregistered trademarks and service marks, as well as trademarks and service marks of third parties. Solely for convenience, these trademarks and service marks are referenced without the®, ™ or similar symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and service marks. All brand names, trademarks and service marks appearing in this prospectus are the property of their respective holders.

TRADEMARKS

This prospectus contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the® or symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

iiii

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PROSPECTUS SUMMARY

This summary only highlights the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information under “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus, before investing. References in this prospectus to “we,” “us”“us,” “Greenrose,” “our Company” or “our company”the “Company” refer to The Greenrose Acquisition Corp.Holding Company Inc. References in this prospectus to our “public shares” are to shares of our common stock sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market)Common Stock and references to “public stockholders” refer to the holders of our public shares of Common Stock, including our sponsorSponsor (as defined below), officers and directors to the extent they purchase public shares, provided that their status as “public stockholders” shall only exist with respect to such public shares. References in this prospectus to our “management” or our “management team” refer to our officers and directors, references to our “sponsor”“Sponsor” refer to Greenrose Associates LLC, a company affiliated withfounded by William Harley III, our Chief Executive Officer and Director, Daniel Harley, our Executive Vice-President and Director and Brendan Sheehan, our Executive Vice-President and Director. The term “equity-linked securities” refers to any debt or equity securities issued in a transaction, including but not limited to a private placement of equity or debt, that are convertible, exercisable or exchangeable for shares of common stock. Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option.

GeneralThe Greenrose Holding Company Inc.

We areGreenrose is focused on providing access to quality cannabis and cannabinoid-based products at competitive pricing through state-of-the-art customer engagement channels, in store, online and at home. The Greenrose team believes that a blank check company formed under“cultivation led” vertically integrated approach will bring enhanced operating performance to our shareholders while also bringing the laws of the State of Delaware on August26, 2019. We were formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities, which we referbest value to as a “target business.” To date, our efforts have been limited to organizational activities as well as activities related to this offering. None of our officers, directors, promoters and other affiliates has engaged in any substantive discussions on our behalf with representatives of other companies regarding the possibility of a potential merger, capital stock exchange, asset acquisition or other similar business combination with us.consumers. Our initial operational strategy revolves around five primary areas of focus: (1) cultivation & genetics; (2) retail & distribution; (3) manufacturing & processing; (4) wholesale; and (5) proprietary data and insights. While we focus on these five areas, we have determined that we have just one reportable business combination and value creation strategy will be to identify, acquire and, after our initial business combination, assist in the growth of a business in the cannabis industry. However, we are not limited to this industry and we may pursue a business combination opportunity in any business or industry we choose and we may pursue a company with operations or opportunities outside of the United States.

Although the cannabis industry has experienced rapid, evolutionary growth and continues to mature, we believe the industry is still highly fragmented and undercapitalized and companies operating across multiple verticals consistently have trouble accessing capital from traditional sources. Historically, businesses that operate within the legal cannabis industry in the U.S. have relied largely on private money — friends and family, high net-worth individuals and small-to-medium-sized private investment firms, as institutional investors have shied away from companies in the cannabis industry, in particular those that are directly involved insegment: the production distribution and sale of cannabis (businessesproducts.

Greenrose has developed an operating model that “touchwill govern its businesses with a team of functional experts at the plant”). Even businessescorporate level that do not “touchsupport local operators in execution of their vertically integrated businesses. This will include cultivation expertise to leverage best practices in phenotyping and strain development. The focus will be on indoor, growth methodology and technology deployment, with state-of-the-art control and monitoring systems. Additionally, Greenrose will continue to elevate retail knowledge and customer experience to reinforce brand and product adoption.

Consistently selecting and growing high-quality cannabis is one of the plant”most important aspects of our business. The business needs to start with high quality, high yielding inputs to drive the best end results. In general, cannabis cultivation takes place in three settings: indoor, outdoor and instead provide ancillary servicesin greenhouses. While it is cost effective to grow cannabis outdoors, it is also hard to control pest infestations without the industry, have founduse of significant amounts of pesticides, and it extremely difficultis subject to access large pools of institutional capital.other risks such as severe weather, diseases and mold. As a result, we believe we havecannabis grown outdoors is in general significantly lower in quality than cannabis grown indoors or in greenhouses. Our current focus is growing the opportunityhighest quality medicinal cannabis. We therefore currently grow all of our cannabis in an indoor facility, which allows us to create a compelling structure that will enable one or more targetgrow under ideal climate controls and manage key variables to deliver optimal yielding plants. New strain development and phenotyping operations are in place across our platform, enabling Greenrose companies to go public, thereby accessing significant capital for both organic growthidentify the differentiated offerings to drive downstream production and for acquisitions of synergistic and often undercapitalized assets.

Given the rapid and continued growth of the legal cannabis market, management believes that the ability to move quickly to capitalize on new opportunitiesconsumer offerings. Our cultivation teams will be critical to success in creating stakeholder value. Potential areas of interest in the cannabis industry include but are not limited to domestic and international businesses that are involved in the production, distribution and sale of cannabis as well as businesses that legally cultivate, process and/or aid in theleverage retail and direct-to-consumer distribution of cannabis. Management intendsmarket data to pursue consolidationidentify future trends that need to be supported back up the value chain. We will invest regularly to maintain, and integration in mature cannabis markets — e.g. Washington, California, Colorado, Oregonwhere possible, to expand our high performing facilities, leveraging growth techniques and Nevada — with a focus on production, distribution/processing, and retail sale, which it believes will provide attractive returns to vertical integration throughouttechnology across our platform.

Background

Our company was originally known as Greenrose Acquisition Corp. On the cannabis supply chain as well as scale gains from horizontal consolidation. Additionally, management will consider whether to selectively invest in newly legalized markets such as Massachusetts, Florida and Illinois. Notwithstanding the foregoing, we will not invest in or consummate aClosing Date (as described above, November 26, 2021), Greenrose consummated its previously announced business combination with a target business that we determine has been operating in violation of U.S. federal laws, including the Controlled Substances Act.

1

Our management team consists of experienced deal makers, operators, and investors who have worked in the agricultural and investment services industries. William F. Harley III, our Chief Executive Officer and Director has more than 30 years of experience as an entrepreneur in the agriculture, real estate and finance industries.

For most of the past decade Mr.Harley has visioned, planned and built-out a vertically integrated branded organic blueberry business called Bhavana Berries LLC (“Bhavanna”). His responsibilities included developing the concept, which employed both branding and vertical integration as new strategies, designing and planting the orchard, developing and creating the packing plant, and creating the sales and distribution strategy. Simultaneously with the creation of Bhavana, Mr.Harley served as the Chief Executive Office of National Pecan Company (“NPC”) from 2010 through 2012. At NPC Mr.Harley developed the concept of horizontal consolidation and vertical integration in the pecan industry — identifying the initial acquisition targets and raising $200,000,000 to launch the company. NPC became the largest, vertically integrated pecan company in the world, and was later acquired by Diamond Foods Inc. in 2017. In addition to his work in the agriculture industry Mr.Harley has been involved in the acquisition, remediation and redevelopment of a “brownfield” industrial real estate project that he has managed through full environmental remediation and started the commercial redevelopment of the industrial project. Prior to that Mr.Harley had a career in investment management.

Brendan Sheehan, our Executive Vice President, Corporate Strategy and Investor Relations and Director, has over 25 years of experience in business development, sales and operations in the finance, technology and healthcare industries. This has allowed him to build an extensive network of family offices and high net-worth individuals who have invested in the cannabis industry.

Along with Mr.Harley and Mr.Sheehan, members of our management team have extensive experience in the agriculture, real estate and investment spaces.

We believe our competitive strengths include the following:

•        Our ability to utilize our professional networks to identify opportunities and quickly assess potentially interesting leads;

•        Our successful track record of developing, operating and exiting industrial scale vertically integrated agricultural and branded food businesses;

•        Our significant senior level experience in operations, finance, marketing, business improvement and capital markets; and

•        Our extensive networks of family offices, high net-worth individuals and institutions who are involved in the cannabis industry.

In order to consummate an initial business combination, we intend to:

•        Utilize our management team’s deep professional network, which they have cultivated over the course of their respective careers, to identify leading companies and assets in the cannabis industry that we believe are either underperforming or can use assistance in implementing a growth strategy, and leverage our network to streamline the diligence process, and achieve a deep level of understanding of a target’s business. Our management’s expertise in agriculture and finance, as well as our reputation in the industry as active investors has enabled us to build strong relationships with company owners, executives, stakeholders, industry experts, consultants, professionals and financial intermediaries. We believe these relationships will help provide us with attractive acquisition opportunities. We also intend to rely on our management team’s reputation and history of investing and operating in the finance, agriculture and cannabis industries. Understanding the dynamics, competitors, trends, risks, and opportunities of the segment enables us to target selected companies and efficiently pursue a potential transaction.

•        Conduct rigorous research and analysis. Performing disciplined, bottom-up fundamental research and analysis is core to our strategy using both publicly available and non-public information sourced by our management team, and we intend to conduct extensive due diligence to evaluate the impact that a transaction may have on a target business.

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•        Create a comprehensive universe of potential targets by identifying all license holders within each vertical on a state by state basis and identify restrictions on cultivation quantities and retail license limitations in order to assess the ability to vertically integrate. This will allow us to create a ranking of each company within each vertical to identify a potential transaction.

•        Acquire the target company at an attractive price relative to our view of intrinsic value. By supplementing company comparable analysis with analysis and input from industry and financial experts, we intend to develop our view of the intrinsic value of a potential business combination. In doing so, our management team will evaluate, among others, future cash flow potential, relative industry valuation metrics and precedent transactions to inform its view of intrinsic value, with the intention of creating a business combination at an attractive price relative to such intrinsic value.

•        Implement operational and financial structuring opportunities. We intend to structure and execute a business combination that will provide the combined business with a capital structure that will support the growth in shareholder value and give it the flexibility to grow organically and/or through strategic acquisitions or divestitures. We also intend to develop and implement strategies to improve the business’s operational and financial performance and create a platform for growth. Specifically, our management team intends to evaluate opportunities for industry consolidation in the company’s core lines of business as well as opportunities to vertically or horizontally integrate with other industry participants in order to maximize shareholder value. Moreover, using our management’s recognized expertise in agriculture will provide us a unique perspective in value creation.

Notwithstanding the foregoing, past performance of our management team is not a guarantee either (i) of success with respect to any business combination we may consummate or (ii) that we will be able to identify a suitable candidate for our initial business combination. You should not rely on the historical performance record of our management as indicative of our future performance.

Effecting a Business Combination

We will either (1) seek stockholder approval of our initial business combination at a meeting called for such purpose at which stockholders may seek to convert their shares, regardless of whether they vote for or against the proposed business combination or don’t vote at all, into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), or (2) provide our stockholders with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), in each case subject to the limitations described herein. The decision as to whether we will seek stockholder approval of our proposed business combination or allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Unlike certain other blank check companies which require stockholder votes and conduct proxy solicitations in conjunction with their initial business combinations and related conversions of public shares for cash upon consummation of such initial business combinations even when a vote is not required by law, we will have the flexibility to avoid such stockholder vote and allow our stockholders to sell their sharesTheraplant pursuant to the tender offer rulesAgreement and Plan of Merger dated March 12, 2021 (as amended pursuant to that certain Amendment No. 1, dated as of August 10, 2021, to the Agreement and Plan of Merger (“Amendment No. 1”), and that certain Amendment No. 2, dated as of November 26, 2021, to the Agreement and Plan of Merger (“Amendment No. 2”), collectively, the “Theraplant Merger Agreement”), pursuant to which GNRS CT Merger Sub, a Connecticut limited liability

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company and a wholly-owned subsidiary of Greenrose (“TPT Merger Sub”) was merged with and into Theraplant (the “Theraplant Merger” or the “Business Combination”), with Theraplant surviving the Theraplant Merger as a wholly owned subsidiary of Greenrose.

On December 31, 2021, Greenrose and True Harvest Holdings, Inc., a Delaware corporation and a wholly-owned subsidiary of the SEC. InCompany (“TH Buyer”), and True Harvest, LLC, an Arizona limited liability company (“True Harvest”), consummated the acquisition of substantially all of True Harvest’s assets and the assumption of certain of True Harvest’s liabilities (the “True Harvest Acquisition”), pursuant to that case, we will file tender offer documents withcertain Asset Purchase Agreement dated March 12, 2021, as amended by that Amendment No. 1 to the SEC which will contain substantiallyAsset Purchase Agreement dated July 2, 2021, that certain Amendment No. 2 to the same financialAsset Purchase Agreement dated October 28, 2021, and other information aboutthat certain Amendment No. 3 to the initial business combination as is required underAsset Purchase Agreement dated December 31, 2021 (as it may be amended from time to time, the SEC’s proxy rules. We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and, if we seek stockholder approval, a majority“Asset Purchase Agreement”).

At the special meeting of the outstanding shares of common stock voted are voted in favor ofGreenrose shareholders held on October 27, 2021 (the “Special Meeting”), the business combination.

We will have up to 18months fromGreenrose shareholders considered, approved and adopted, among other matters, the closing of this offering to consummate an initial business combination, subject to our right to extendTheraplant Merger, the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in this prospectus. If we are unable to consummate an initial business combination within such time period, we will redeem 100% of our outstanding public shares for a pro rata portion of the funds held in the trust account, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us, divided by the number of then outstanding public shares, subject to applicable law and as further described herein, and then seek to dissolve and liquidate. We expect the pro

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rata redemption price to be at least $10.00 per share of common stock (regardless of whether or not the underwriters exercise their over-allotment option), without taking into account any interest earned on such funds. However, we cannot assure you that we will in fact be able to distribute such amounts as a result of claims of creditors which may take priority over the claims of our public stockholders. In the event that our target(s) is involved in activities that “touch the plant,” e.g. production and processing of cannabis, and federal laws continue to prohibit such activities, we may be required to delist from Nasdaq and list on a foreign exchange, such as the Neo Exchange Inc., a Canadian listing exchange.

Nasdaq listing rules require that our initial business combination must occur with one or more target businesses that together have a fair market value of at least 80% of the assets held in the trust account (excluding taxes payable on the income earned on the trust account) at the time of the agreement to enter into the initial business combination. The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). Even though our board of directors will rely on generally accepted standards, our board of directors will have discretion to select the standards employed. In addition, the application of the standards generally involves a substantial degree of judgment. Accordingly, investors will be relying on the business judgment of the board of directors in evaluating the fair market value of the target or targets. The proxy solicitation materials or tender offer documents used by us in connection with any proposed transaction will provide public stockholders with our analysis of the fair market value of the target business,True Harvest Acquisition, as well as the basischange of our corporate name.

Our Sponsor

Our Sponsor, Greenrose Associates LLC, a New York limited liability company, was established by William “Mickey” Harley, Daniel Harley and Brendan Sheehan in 2018 to investigate and assess the United States’ cannabis marketplace and potential acquisition opportunities for investment. The team recognized the opportunity for building a platform with vertically integrated businesses that also possessed differentiated cultivation talent. Mickey Harley’s background in agriculture, namely farming pecans and blueberries, offered a window into the importance of critical cultivation skills that not only understood how to grow the best quality plants, but also how to maximize yields and manage operating costs to deliver the best price to output.

Corporate Information

The mailing address of our determinations. Ifprincipal executive office is 111 Broadway, Amityville, NY 11701. Our telephone number is (516) 346-5270. Our website address is www.greenroseholdings.com. The content on our boardwebsite is not able independently to determineincorporated into this registration statement. Our common stock and public warrants are currently traded on the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm, or another independent entity that commonly renders valuation opinions, with respect to the satisfaction of such criteria.

We currently anticipate structuring a business combination to acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination where we merge directly with the target business or where we acquire less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment companyOTCQX and OTCQB under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the targetsymbols “GNRS” and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we could acquire a 100% controlling interest in the target; however, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% fair market value test. Notwithstanding the foregoing, if we are not then listed on the Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% fair market value test.“GNRS.W,” respectively.

Potential Conflicts

Members of our management team will directly or indirectly own shares of our common stock, or other instruments, such as warrants, linked to our common stock, following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.

Our officers and directors have agreed to present to us all target business opportunities that have a fair market value of at least 80% of the assets held in the trust account (excluding taxes payable on the income accrued in the trust account), subject to any pre-existing fiduciary or contractual obligations. As more fully discussed in “Management — Conflicts of Interest,” if any of our officers or directors becomes aware of an initial business combination opportunity that falls within the line of business of any entity to which he has pre-existing fiduciary or contractual obligations,

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he may be required to present such initial business combination opportunity to such entity prior to presenting such initial business combination opportunity to us. Certain of our officers and directors currently have certain relevant pre-existing fiduciary duties or contractual obligations. For more information on the relevant pre-existing fiduciary duties or contractual obligations of our management team, see the section titled “Management — Conflicts of Interest.”

JOBS ActEmerging Growth Company

We are an emerging“emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (which(the “JOBS Act”), and we refertake advantage of certain exemptions from various reporting requirements that are applicable to hereinother public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), exemptions from or delays in being required to comply with new or revised financial accounting standards, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. See “Risk Factors — Greenrose is an emerging growth company and a smaller reporting company and, as a result of the JOBS Act)reduced disclosure and will remain suchgovernance requirements applicable to emerging growth companies and smaller reporting companies, our common stock may be less attractive to investors.”

Summary of Risk Factors

This summary only highlights the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information under “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus, before investing.

•        An active trading market for up to five years. However,our common stock and warrants may never develop or be sustained, which would adversely affect the liquidity and price of our securities.

•        The private warrants may be exercised at a time when the public warrants may not be exercised and have certain inherent differences.

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•        The sponsor can earn a positive rate of return on its investment, even if our annual gross revenue is $1.07billion or more, if our nonother shareholders experience a negative rate of return in the post- business-convertible-combination debt issued within a three year period exceeds $1billion orcompany.

•        Greenrose’s stockholders cannot be sure of the market value of Greenrose’s securities due to many factors, some of which are beyond our sharescontrol.

•        We do not intend to pay cash dividends for the foreseeable future.

•        The unaudited pro forma condensed combined financial information included in this prospectus may not be indicative of what the Company’s actual financial position or results of operations would have been.

•        Our internal controls over financial reporting including controls and procedures required by Section 404 of the Sarbanes-Oxley Act of 2002 may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness.

•        Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”

•        Management of Theraplant have interests in competing businesses that may create a conflict of interest in allocating their time.

•        Greenrose is an “emerging growth company” and a “smaller reporting company” and, as a result of the reduced disclosure and governance requirements applicable to emerging growth companies and smaller reporting companies, the common stock may be less attractive to investors.

•        Greenrose will incur significant increased expenses and administrative burdens as a public company.

•        A member of our management team may be subject to litigation with respect to the Piney Point, Florida.

•        Greenrose may be required to take write-downs or write-offs, restructuring and impairment or other charges.

•        If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings.

•        Our ability to successfully operate the business will be largely dependent upon the efforts and proper behavior of certain key personnel of Theraplant, our business partners, employees or agents.

•        Changes in cannabis related laws or regulations, our inability to adapt or a failure to comply with any laws and regulations, may adversely affect our business, investments, results of operations and tax rate.

•        There may be tax consequences to the Theraplant Merger or the True Harvest Acquisition that may adversely affect us, and changes in existing laws, regulations or other factors could negatively impact our future effective tax rate. Cannabis businesses are held by nonsubject to unfavorable U.S. tax treatment so that an otherwise profitable cannabis business may operate at a loss after considering its U.S. income tax expense.

-affiliates•         exceeds $700millionThe Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.

•        The impact of COVID-19, global, regional or local economic and market conditions may adversely affect our business, operating results and financial condition.

•        The development and implementation of regulatory framework for the recently legalized adult use market in Connecticut may create uncertainties relating to issuance of new cultivation licenses.

•        Expansion of our business is dependent on the last daycontinued legalization and market acceptance of cannabis.

•        Our clients and we are subject to a variety of U.S. and foreign laws regarding financial transactions and applicable anti-money laundering laws and regulations related to cannabis.

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•        Cannabis businesses may be subject to proceeds of crime statutes and civil asset forfeiture under the federal law enforcement of which could adversely affect our revenues.

•        Greenrose’s Board did not obtain a fairness opinion in determining whether to proceed with the True Harvest Acquisition, therefore there can be no assurance that the consideration paid in connection with the True Harvest acquisition reflects the fair market value of the second fiscal quarterassets being purchased in that transaction.

•        Theraplant and True Harvest are located in different jurisdictions, and we may find it difficult integrating each into the Company following the True Harvest acquisition.

•        We operate in a highly regulated sector and may not always succeed in complying fully with applicable regulatory requirements in all jurisdictions where we carry on business. State regulation of any given fiscal year, we would ceasecannabis is uncertain and state regulatory agencies may require us to be an emerging growth company as of the following fiscal year. As an emerging growth company, we have elected, under Section 107(b) of the JOBS Act, to take advantage of the extended transition period provided in Section 7(a) (2)(B) of the Securities Act of 1933, as amended (the “Securities Act”), for complying with newpost bonds or revised accounting standards.significant fees.

Private Placements•        We may become subject to Food and Drug Administration or Bureau of Alcohol, Tobacco, Firearms and Explosives regulation and we may face limitations on ownership of cannabis licenses.

•        We have limited trademark protection and we face risks related to the results of future clinical research.

On August26, 2019,•        Competition for the acquisition and leasing of properties suitable for the cultivation, production and sale of medical and adult use cannabis may impede our ability to make acquisitions or may increase the cost of these acquisitions, and may generally impede our ability to expand.

•        We face risks due to industry immaturity or limited comparable, competitive or established industry best practices and we issued an aggregate of 4,312,500sharesface security, cyber-attacks, fraudulent or illegal activity information technology systems related risks.

•        Our business is subject to the risks inherent in agricultural operations, such as climate change and environmental risks as well as to risks related to any rising or volatile energy costs.

•        We may be subject to securities, product liability, infringement, misappropriation or other litigation.

•        If the analysts cease publishing research or reports or adversely change their recommendations regarding our securities, then the price and trading volume of our common stock, which we refer to throughout this prospectus as the “founder’s shares,” for an aggregate purchase pricesecurities could decline.

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Table of $25,000, or approximately $0.006 per share, to our sponsor. The founder’s shares held by our sponsor includes an aggregate of up to 562,500shares subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that our sponsor will continue to own 20% of our issued and outstanding shares after this offering (not including the private units and assuming the sponsor does not purchase units in this offering).

In addition, our sponsor and Imperial Capital have agreed that they and/or their designees will purchase from us an aggregate of 300,000 units (200,000 private units by our sponsor and 100,000 private units by Imperial Capital) at a price of $10.00 per unit, and 1,500,000 private warrants (1,000,000 private warrants by our sponsor and 500,000 private warrants by Imperial Capital) at a price of $1.00 per warrant, for an aggregate purchase price of $4,500,000 in a private placement that will occur simultaneously with the closing of this offering. They have also agreed that if the over-allotment option is exercised by the underwriters in full or in part, they and/or their designees will purchase from us an additional number of private units and private warrants (up to a maximum of 30,000 private units at $10.00 per private unit and 150,000 private warrants at $1.00 per private warrant, of which up to 20,000 private units and 100,000 private warrants will be purchased by our sponsor and up to 10,000 private units and 50,000 private warrants will be purchased by Imperial Capital) in order to maintain in the trust account $10.00 per unit sold to the public in this offering. These additional private units and private warrants will be purchased in a private placement that will occur simultaneously with the purchase of units resulting from the exercise of the over-allotment option. The proceeds from the private placement of the private units and private warrants, which we collectively sometimes refer to herein as the “private securities,” will be added to the proceeds of this offering and placed in a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, as trustee. If we do not complete an initial business combination within 18months from the closing of this offering (subject to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in this prospectus), the proceeds from the sale of the private securities will be included in the liquidating distribution to our public stockholders and the private securities will be worthless.

Our executive offices are located at 1000 Woodbury Road, Suite #212, Woodbury, NY 11797 and our telephone number is (516) 346-5270.

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THE OFFERINGSecurities Offered

Securities offeredShares of Common Stock Offered by the Selling Stockholders

 

15,000,000 units, at $10.00 per unit, each unit consisting
(i) 5,000,000 shares of one shareour common stock issued to the former equity holders of Theraplant. (ii) 3,266,350 shares of our common stock held or that will be held by our Sponsor, including up to 1,000,000 shares of Common Stock to be issued to our Sponsor in satisfaction of an aggregate principal amount of $1,235,000 interest free notes held by Sponsor; (iii) 4,430,378 shares of our common stock issued to True Harvest, LLC in connection the True Harvest Acquisition; (iv) 88,000 shares of our common stock and 528,000 private warrants held by Imperial; and (v) 22,000 shares of our common stock and 132,000 Private warrants held by I-Bankers Securities, Inc

Shares of Common Stock Outstanding
Prior to this Offering


16,061,190 shares of common stock and one warrant, each whole warrant allows the holder to purchase one shareas of January 4, 2022

Shares of Common Stock Outstanding
After this Offering


16,061,190 shares of common stock.

Listing of our securities and
proposed symbolsWarrants offered by the Selling Stockholders

 


We anticipate that the units, and the shares of common stock and660,000 private placement warrants once they begin separate trading, will be listed on Nasdaq under the symbols “GNRSU,” “GNRS” and “GNRSW,” respectively.

Trading commencement and
separation of common stock
and warrants



The units will begin trading on or promptly after the date of this prospectus. The common stock and warrants comprising the units will begin separate trading on the 90th day following the date of this prospectus unless Imperial Capital informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release and filed a Current Report on Form 8-K announcing when such separate trading will begin.exercisable at

 

Once the shares of common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component pieces. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of common stock and warrants. No fractional warrants will be issued upon separation of the units and only whole warrants will trade.

In no event will the common stock and warrants be traded separately until we have filed a Current Report on Form 8-K with the SEC containing an audited balance sheet reflecting our receipt of the gross proceeds at the closing of this offering. We will file the Current Report on Form 8-K promptly after the closing of this offering, which is anticipated to take place three business days from the date of this prospectus. If the underwriters’ over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option. We will also include the Form 8-K, or amendment thereto, or in a subsequent Form 8-K, information indicating if Imperial Capital, Inc. has allowed separate trading of the common stock and warrants prior to the 90th day after the date of this prospectus.

Units:

Number outstanding before this
offering:


0 units

Number to be sold in private
placement:


300,000 units

Number outstanding after this offering and private placement:


15,300,000 units

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Shares of common stock:

Number outstanding before this
offering:


4,312,500shares(1)

Number to be sold in private
placement:


300,000shares

Number to be outstanding after this offering and private placement:


19,050,000shares(2)

Warrants:

Number outstanding before this
offering:


0 warrants

Number to be sold in private
placement:


1,500,000 warrants(3)

Number to be outstanding after this offering and private placement:


16,800,000 warrants

Exercisability

Each whole warrant is exercisable for one (1) share of common stock at a price of $11.50 per share and only whole warrants are exercisable. The warrants will become exercisable on the later of thirty (30) days after the completion of an initial business combination and twelve (12) months from the date of this prospectus. The warrants will expire at 5:00 p.m., New York City time, on the fifth anniversary of our completion of an initial business combination, or earlier upon redemption.

We structured each unit to contain one warrant, with each whole warrant exercisable for one share of common stock, as compared to units issued by some other similar blank check companies which contain whole warrants exercisable for one whole share, in order to reduce the dilutive effect of the warrants upon completion of an initial business combination as compared to units that each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive initial business combination partner for target businesses.

Exercise price

 

$11.50 per share, subject to adjustment as described herein. In addition, if (x) we issue additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.50 per share of common stock (with such issue price or effective issue price to be determined in good faith by our board of directors, and in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder’s shares held by them prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our common stock during the twenty (20) trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.50 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the price at which we issue the additional shares of common stock or equity-linked securities.

____________

(1)      Represents 4,312,500 founder’s shares. The 4,312,500 founder’s shares includes an aggregate of up to 562,500 founder’s shares that are subject to forfeiture if the over-allotment option is not exercised by the underwriters in full.

(2)      Assumes the over-allotment option has not been exercised and an aggregate of 562,500 founder’s shares have been forfeited.

(3)      Assumes the over-allotment option has not been exercised and no additional warrants are purchased in the private placement.

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No warrants will be exercisable for cash unless we have an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the warrants is not effective within a specified period following the consummation of our initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis.herein

RedemptionUse of Proceeds

 

We may redeemwill not receive any proceeds from the outstanding warrants (excluding the private warrants, the private warrants underlying the private units, and any warrants issued or underlying additional units issued to our sponsor, officers, directors, or their affiliates in paymentsale of working capital loans made to us) in whole and not in part, at a price of $0.01 per warrant at any time while the warrants are exercisable, upon a minimum of thirty (30) days’ prior written notice of redemption, if, and only if, the last sales price of our shares of common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any twenty (20) trading days within a thirty (30) trading day period ending three business days before we send the notice of redemption; and if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants.

If the foregoing conditions are satisfied and we issue a notice of redemption, each warrant holder can exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the shares of common stock may fall below the $18.00 trigger price as well as the $11.50 warrant exercise price after the redemption notice is issued.

If we call the warrants for redemption as described above, our management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value”(defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the shares of common stock for the five trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.

Securities purchased, or being
purchased, by insiders in
connection with this offering



Our sponsor has purchased an aggregate of 4,312,500 founder’s shares for an aggregate purchase price of $25,000, or approximately $0.006 per share. The 4,312,500 founder’s shares held by our sponsor includes an aggregate of up to 562,500shares of common stock subject to forfeiture to the extent that the over-allotment option is not exercised by the underwriters in full or in part. Our sponsor will be required to forfeit only a number of shares of common stock necessary to continue to maintain the twenty percent (20%) ownership interest in our shares of common stock after giving effect to the offering and exercise, if any, of the underwriters’

8

over-allotment option (excluding the private units, private warrants and any units purchased in this offering). The founder’s shares are identical to the shares of common stock included in this prospectus by the units being sold in this offering. However, our sponsor has agreed (A) to vote any shares owned by it in favorSelling Stockholders. Any proceeds that we receive upon conversion of any proposed business combination, (B) not to convert any shares in connection with a stockholder vote to approve a proposed initial business combination or sell any shares to us in a tender offer in connection with a proposed initial business combination and (C) that the founder’s shares will not participate in any liquidating distributions from our trust account upon winding up if a business combination is not consummated.

Simultaneously with the consummation of this offering, our sponsor and Imperial Capital have committed that they and/or their designees will purchase an aggregate of 300,000 private units at $10.00 per private unit and 1,500,000 private warrants at $1.00 per private warrant for a total purchase price of $4,500,000 pursuant to subscription agreements with us. They have also agreed that if the over-allotment option is exercised by the underwriters in full or in part, they will purchase from us, on a pro rata basis, an additional number of private units and private warrants (up to a maximum of 30,000 private units at a price of $10.00 per private unit and 150,000 private warrants at a price of $1.00 per private warrant) in an amount necessary to maintain in the trust account $10.00 per unit sold to the public in this offering. These additional private units and private warrants will be purchased in a private placement that will occur simultaneously with the purchaseused for working capital and general corporate purposes. See “Use of units resulting from the exercise of the over-allotment option. The amounts to be paid upon consummation of the private placement will be placed in escrow with our counsel prior to the consummation of this offering and after placement in escrow with our counsel, our counsel is instructed to deposit those funds into escrow upon the consummation of the offering. The private units (and underlying private shares and private warrants) and private warrants are identical to the units and warrants sold in this offering except that the private warrants: (i) will not be redeemable by us and (ii) may be exercised for cash or on a cashless basis, as described in this prospectus, in each case so long as they are held by the initial purchasers or any of their permitted transferees. If the private warrants are held by holders other than the initial purchasers or any of their permitted transferees, the private warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering. Furthermore, our sponsor and Imperial Capital have agreed (A) to vote the private shares in favor of any proposed business combination, (B) not to convert any private shares in connection with a stockholder vote to approve a proposed initial business combination or sell any private shares to us in a tender offer in connection with a proposed initial business combination and (C) that the private shares shall not participate in any liquidating distribution from our trust account upon winding up if a business combination is not consummated. In the event of a liquidation prior to our initial business combination, the private securities will likely be worthless.

9

Restrictions on transfer of founder’s shares and private units


On the date of this prospectus, the founder’s shares will be placed into an escrow account maintained in New York, New York by Continental Stock Transfer & Trust Company, acting as escrow agent. Subject to certain limited exceptions, these shares will not be transferred, assigned, sold or released from escrow (subject to certain limited exceptions) (i) with respect to 50% of such shares, for a period ending on the earlier of the one-year anniversary of the date of the consummation of our initial business combination and the date on which the closing price of our common stock equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within a 30-trading day period following the consummation of our initial business combination and (ii) with respect to the remaining 50% of such shares, for a period ending on the one-year anniversary of the date of the consummation of our initial business combination, or earlier if, subsequent to our initial business combination, we consummate a liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property. The limited exceptions include transfers, assignments or sales (i) to our or our sponsor’s officers, directors, consultants or their affiliates, (ii) to an entity’s members upon its liquidation, (iii) to relatives and trusts for estate planning purposes, (iv) by virtue of the laws of descent and distribution upon death, (v) pursuant to a qualified domestic relations order, (vi) to us for no value for cancellation in connection with the consummation of our initial business combination, or (vii) in connection with the consummation of a business combination at prices no greater than the price at which the shares were originally purchased, in each case (except for clause (vi) or with our prior consent) where the transferee agrees to the terms of the escrow agreement and to be bound by these transfer restrictions.

The purchasers of the private securities have also agreed not to transfer, assign or sell any of the private securities, including the underlying private shares and private warrants (except in connection with the same limited exceptions that the founder’s shares may be transferred as described above), until after the completion of our initial business combination.Proceeds.”

Offering proceeds to be held in trust

An aggregate of $10.00 per unit sold to the public in this offering (regardless of whether or not the over-allotment option is exercised) will be placed in a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee pursuant to an agreement to be signed on the date of this prospectus. Except as set forth below, the proceeds held in the trust account will not be released until the earlier of the completion of an initial business combination and our redemption of one hundred percent (100%) of the outstanding public shares if we have not completed a business combination in the required time period. Therefore, except as set forth below, unless and until an initial business combination is consummated, the proceeds held in the trust account will not be availableMarket for our use for any expenses related to this offering or expenses which we may incur related to the investigation and selection of a target business and the negotiation of an agreement to acquire a target business.Common Stock

10

Notwithstanding the foregoing, there can be released to us from the trust account any interest earned on the funds in the trust account that we need to pay our income or other tax obligations. With these exceptions, expenses incurred by us may be paid prior to a business combination only from the net proceeds of this offering not held in the trust account (initially estimated to be $750,000); provided, however, that in order to meet our working capital needs following the consummation of this offering if the funds not held in the trust account are insufficient, our sponsor, officers, directors, or their affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of our initial business combination, without interest, or, at the holder’s discretion, up to $2,000,000 of the notes may be converted into units at a price of $10.00 per unit and/or warrants at a price of $1.00 per warrant. These units and warrants would be identical to the private units and private warrants, respectively. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust account, or which we are allowed to withdraw from the trust account for working capital purposes, to repay such loaned amounts, but no other proceeds from our trust account would be used for such repayment.

None of the warrants may be exercised until the later of thirty (30) days after the consummation of a business combination or twelve (12) months from the closing of this offering and, thus, after the proceeds of the trust account have been disbursed. Accordingly, the warrant exercise price will be paid directly to us and not placed in the trust account.

Limited payments to insiders

There will be no fees, reimbursements or other cash payments paid to our sponsor, officers, directors, or their affiliates for any services they render prior to, the consummation of an initial business combination (regardless of the type of transaction that it is) other than the following payments, none of which will be made from the proceeds of this offering held in the trust account prior to the completion of our initial business combination:

•   repayment at the closing of this offering of an aggregate of $493,515 of funds advanced by our sponsor on our behalf;

•   payment of $10,000 per month to our sponsor, for office space and related services;

•   payment of consulting, success or finder fees to our sponsor, officers, directors, or their affiliates in connection with the consummation of our initial business combination; and

•   reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on our behalf, such as identifying and investigating possible target businesses and business combinations.

There is no limit on the amount of out-of-pocket expenses reimbursable by us. Our audit committee will review and approve all reimbursements and payments made to our sponsor, officers, directors, or our or their respective affiliates, with any interested director abstaining from such review and approval.

11

Stockholder approval of, or tender offer in connection with, initial business combination



In connection with any proposed initial business combination, we will either (1) seek stockholder approval of such initial business combination at a meeting called for such purpose at which stockholders may seek to convert their shares, regardless of whether they vote for or against the proposed business combination or don’t vote at all, into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), or (2) provide our stockholders with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), in each case subject to the limitations described herein. If we determine to engage in a tender offer, such tender offer will be structured so that each stockholder may tender all of his, her or its shares rather than some pro rata portion of his, her or its shares. If enough stockholders tender their shares so that we are unable to satisfy any applicable closing condition set forth in the definitive agreement related to our initial business combination, or we are unable to maintain net tangible assets of at least $5,000,001, we will not consummate such initial business combination. The decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Unlike other blank check companies which require stockholder votes and conduct proxy solicitations in conjunction with their initial business combinations and related conversions of public shares for cash upon consummation of such initial business combinations even when a vote is not required by law, we will have the flexibility to avoid such stockholder vote and allow our stockholders to sell their shares pursuant to Rule 13e-4 and Regulation 14E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which regulate issuer tender offers. In that case, we will file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business combination as is required under the SEC’s proxy rules. We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and, if we seek stockholder approval, a majority of the outstanding shares of common stock voted are voted in favor of the business combination.

We chose our net tangible asset threshold of $5,000,001 to ensure that we would avoid being subject to Rule 419 promulgated under the Securities Act. However, if we seek to consummate an initial business combination with a target business that imposes any type of working capital closing condition or requires us to have a minimum amount of funds available from the trust account upon consummation of such initial business combination, we may need to have more than $5,000,001 in net tangible assets upon consummation and this may force us to seek third party financing which may not be available on terms acceptable to us or at all. As a result, we may not be able to consummate such initial business combination and we may not be able to locate another suitable target within the applicable time period, if at all.

12

 

Our sponsor and officers and directors and their affiliates have agreed (i) to vote any shares owned by them in favor of any proposed business combination, (ii) not to convert any shares in connection with a stockholder vote to approve a proposed initial business combination and (iii) not to sell any shares to us in a tender offer in connection with any proposed business combination.

None of our sponsor, officers, directors or their affiliates has indicated any intention to purchase units in this offering or any units or shares of common stock from persons inand public warrants are currently traded on the open market or in private transactions (other than inOTCQX and OTCQB Markets under the private placement to occur simultaneously with the closing of the offering). However, if we hold a meeting to approve a proposed business combinationsymbols “GNRS” and a significant number of stockholders vote, or indicate an intention to vote, against a proposed business combination, our sponsor, officers, directors or their affiliates could make such purchases in the open market or in private transactions in order to influence any vote held to approve a proposed initial business combination. Notwithstanding the foregoing, our officers, directors, sponsor and their affiliates will not make purchases of shares of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act, which are rules designed to stop potential manipulation of a company’s stock.“GNRS.W,” respectively.

Conversion rightsRisk Factors

 

In connection with any stockholder meeting called to approveSee “Risk Factors” and other information included in this prospectus for a proposed initial business combination, each public stockholder will have the right, regardlessdiscussion of whether he is voting for or against such proposed business combination or does not vote at all, to demand that we convert his shares into a pro rata share of the trust account.

We may require public stockholders, whether they are a record holder or hold their sharesfactors you should consider before investing in “street name,” to either (i) physically tender their certificates to our transfer agent or (ii) deliver their shares to the transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, in each case prior to a date set forth in the tender offer documents or proxy materials sent in connection with the proposal to approve the business combination. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker $45 and it would be up to the broker whether or not to pass this cost on to the converting holder.securities.

13

Liquidation if no business
combination


If we are unable to complete an initial business combination by 18months from the closing of this offering (subject to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in below), we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest not previously released to us (net of taxes payable), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. We cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims. Although we are required to have all third parties (including any vendors or other entities we engage after this offering) and any prospective target businesses enter into agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account, there is no guarantee that they will execute such agreements. There is also no guarantee that the third parties would not challenge the enforceability of these waivers and bring claims against the trust account for monies owed them. Our sponsor has agreed that it will be liable to ensure that the proceeds in the trust account are not reduced below $10.00 per share by the claims of target businesses or claims of vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us. The agreement entered into by our sponsor specifically provides for two exceptions to the indemnity it has given: it will have no liability (1) as to any claimed amounts owed to a target business or vendor or other entity who has executed an agreement with us waiving any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, or (2) as to any claims for indemnification by the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Marcum LLP, our independent registered public accounting firm, and the underwriters of the offering, will not execute agreements with us waiving such claims to the monies held in the trust account. We have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Therefore, we believe it is unlikely that our sponsor will be able to satisfy its indemnification obligations if it is required to do so.

The holders of the founder’s shares and private shares will not participate in any redemption distribution from our trust account with respect to such shares.

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If we are unable to conclude an initial business combination and we expend all of the net proceeds of this offering not deposited in the trust account, we expect that the initial per-share redemption price will be approximately $10.00 (which is equal to the anticipated aggregate amount then on deposit in the trust account excluding interest earned on the funds held in the trust account). The proceeds deposited in the trust account could, however, become subject to claims of our creditors that are in preference to the claims of our stockholders. In addition, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. Therefore, we cannot assure you that the actual per-share redemption price will not be less than approximately $10.00.

We will pay the costs of any subsequent liquidation from our remaining assets outside of the trust account. If such funds are insufficient, our sponsor has contractually agreed to advance us the funds necessary to complete such liquidation (currently anticipated to be no more than approximately $15,000) and has contractually agreed not to seek repayment for such expenses. Our sponsor, officers and directors have agreed that they will not propose any amendment to our amended and restated certificate of incorporation that would affect our public stockholders’ ability to convert or sell their shares to us in connection with a business combination as described herein or affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete a business combination within 18months from the closing of this offering (subject to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in below) unless we provide our public stockholders with the opportunity to convert their shares of common stock upon the approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest not previously released to us but net of franchise and income taxes payable, divided by the number of then outstanding public shares. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our sponsor, executive officers, directors or any other person.

15

Ability to extend time to complete business combination


We will have until 18months from the closing of this offering to consummate our initial business combination. However, if we anticipate that we may not be able to consummate our initial business combination within 18months, we may, by resolution of our board if requested by our sponsor, extend the period of time to consummate a business combination up to three times, each by an additional one month (for a total of up to 21months to complete a business combination), subject to the sponsor depositing additional funds into the trust account as set out below. Pursuant to the terms of the trust agreement to be entered into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, in order for the time available for us to consummate our initial business combination to be extended, our sponsor or its affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit into the trust account $495,000, or $569,250 if the underwriters’ over-allotment option is exercised in full ($0.033 per unit in either case), up to an aggregate of $1,485,000 (or $1,707,750 if the underwriters’ over-allotment option is exercised in full), or $0.033 per unit, on or prior to the date of the applicable deadline, for each one month extension for a total of $0.099 per unit if extended three times. In the event that we receive notice from our sponsor five days prior to the applicable deadline of its wish for us to effect an extension, we intend to issue a press release announcing such intention at least three days prior to the applicable deadline. In addition, we intend to issue a press release the day after the applicable deadline announcing whether or not the funds had been timely deposited. Our sponsor and its affiliates or designees are not obligated to fund the trust account to extend the time for us to complete our initial business combination.

Risks5

In making your decision on whether to invest in our securities, you should take into account the special risks we face as a blank check company, as well as the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act, and, therefore, you will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. For additional information concerning how Rule 419 blank check offerings differ from this offering, please see “Proposed Business — Comparison to offeringsTable of blank check companies subject to Rule 419.” You should carefully consider these and the other risks set forth in the section entitled “Risk Factors” beginning on page 18 of this prospectus.

16Contents

SUMMARY FINANCIAL DATARECENT DEVELOPMENTS

The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in this prospectus. We have not had any significant operations to date, and accordingly only balance sheet data is presented.

 

September 30, 2019

  

Actual

 

As Adjusted

Balance Sheet Data:

 

 

 

 

 

 

 

Working capital (deficiency)(1)

 

$

(118,165

)

 

$

150,773,377

Total assets(2)

 

 

166,542

 

 

 

150,773,377

Total liabilities

 

 

143,165

 

 

 

Value of common stock subject to possible conversion/tender(3)

 

 

 

 

 

145,773,370

Stockholders’ equity(4)

 

 

23,377

 

 

 

5,000,007

____________True Harvest Acquisition

(1)      The “as adjusted” calculation includes $150,000,000 cash held in trust from the proceeds of this offering and the sale of the private securities, plus $750,000 of cash held outside the trust account, plus $23,377 of actual stockholder’s equity at September 30, 2019.

(2)      The “as adjusted” calculation equals $150,000,000 cash held in trust from the proceeds of this offering and the sale of the private securities, plus $750,000 in cash held outside the trust account, plus $23,377 of actual stockholder’s equity at September 30, 2019.

(3)      The “as adjusted” calculation equals the “as adjusted” total assets, less the “as adjusted” total liabilities, less the “as adjusted” stockholders’ equity, which is set to approximate the minimum net tangible assets threshold of at least $5,000,001.

(4)      Excludes 14,577,337shares of common stock purchased in the public market which are subject to conversionOn December 31, 2021, in connection with our initial business combination.the closing of its previously announced acquisition of substantially all of the assets and the assumption of certain liabilities of True Harvest, LLC, an Arizona limited liability company (“True Harvest”) by True Harvest Holdings, Inc., a Delaware corporation and a wholly-owned subsidiary (“TH Buyer”) of The “as adjusted” calculation equalsGreenrose Holding Company Inc. (“Greenrose” or the “as adjusted” total“Company”), the Company, TH Buyer and True Harvest entered into a third amendment (“Amendment No. 3”) to the Asset Purchase Agreement dated March 12, 2021 (as amended from time to time, the “True Harvest Asset Purchase Agreement”). The Acquisition of substantially all of the assets lessand the “as adjusted” totalassumption of certain liabilities lessof True Harvest, along with the valueother transactions contemplated thereby, was completed on December 31, 2021 and is referred to as the “True Harvest Acquisition”.

Pursuant to the True Harvest Asset Purchase Agreement, the Company paid aggregate consideration of $57.6 million at closing, consisting of:

•        $12.5 million in cash;

•        $23.0 million in the form of a convertible note, of which all principal and interest is payable in shares of common stock that may be converted in connection with our initial business combination ($10.00 per share).

The “as adjusted” information gives effect to the sale of the units we are offering and the saleCompany, par value $0.0001 per share (“Common Stock”) at a conversion price of the private securities, including the application$10.00 per share of the related gross proceeds and the payment of the estimated remaining costs from such sale and the repayment of the accrued and other liabilities required to be repaid.Common Stocks;

The “as adjusted” working capital and total assets amounts include the $150,000,000 to be held•        $4.6 million in the trust account, which, except for limited situations described in this prospectus, will be available to us only upon the consummation of a business combination within the time period described in this prospectus. If a business combination is not so consummated, the trust account, less amounts we are permitted to withdraw from interest earned on the funds in the trust account as described in this prospectus, will be distributed solely to our public stockholders (subject to our obligations under Delaware law to provide for claims of creditors).

We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and, solely if we seek stockholder approval, a majority of the outstanding shares of common stock voted are votedassumed debt evidenced by three (3) promissory notes in favor of the business combination.Sellers; and

•        $17.5 million in shares of Common Stock of the Company valued at $3.95 per share of Common Stock.

Pursuant to an Amended Earnout Payment Agreement entered into by the Company, TH Buyer and True Harvest simultaneously with the entry into Amendment No. 3, contingent upon True Harvest achieving a certain price point per pound of cannabis flower relative to total flower production within 36 months following the close of the acquisition, Greenrose will pay additional consideration of up to $35.0 million in the form of an earnout, payable in shares of Common Stock of the Company.

The Company financed the True Harvest Acquisition using the proceeds of the Company’s delayed draw commitment from the Company’s existing lenders, DXR-GL HOLDINGS I, LLC, DXR-GL HOLDINGS II, LLC, and DXR-GL HOLDINGS III, LLC (collectively the “Lenders”) of Seventeen Million Dollars ($17,000,000) (the “Delayed Draw Commitment”) to fund the purchase.

The Common Stock issued to True Harvest as consideration for the True Harvest Acquisition was issued in a private placement exempt from registration pursuant to Rule 506(b) of Regulation D under Section 4(a)(2 of the Securities Act of 1933, as amended.

The foregoing description of Amendment No. 3 to the True Harvest Asset Purchase Agreement and the Amended Earnout Payment Agreement are not complete and is qualified in its entirety by reference to the complete text of Amendment No. 3 (including the exhibits thereto), a copy of which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.

True Harvest Registration Rights Agreement

On December 31, 2021, in connection with the closing of the True Harvest Acquisition, Greenrose entered into a Registration Rights Agreement (the “True Harvest Registration Rights Agreement”) with True Harvest, as holder, pursuant to which Greenrose agreed that, at the request of True Harvest, Greenrose will file a registration statement with the Securities and Exchange Commission covering the resale of the shares of Common Stock of the Company issued as part of the consideration in the True Harvest Acquisition, and Greenrose will use its reasonable best efforts to have the resale registration statement declared effective as soon as reasonably practicable after the filing thereof. Additionally, True Harvest is entitled to piggyback registration rights.

The foregoing description of True Harvest Registration Rights Agreement is not complete and is qualified in its entirety by reference to the complete text of True Harvest Registration Rights Agreement, a copy of which is attached hereto as Exhibit 4.3 and is incorporated herein by reference.

176

Table of Contents

Convertible Promissory Note

Also on December 31, 2021, TH Buyer entered into a convertible promissory note (the “Convertible Promissory Note”) with True Harvest, as lender, in aggregate principal amount of $23 million, representing a portion of the consideration paid to True Harvest in the True Harvest Acquisition. The Convertible Promissory Note bears interest at a rate of 8.0% per annum and matures on December 31, 2024. Obligations under the Convertible Promissory Note are guaranteed by Greenrose. All amounts of principal and interest will be paid in shares of Common Stock of the Company at a conversion price equal to $10.00, subject to adjustment.

The foregoing description of the Convertible Promissory Note is not complete and is qualified in its entirety by reference to the complete text of Convertible Promissory Note, a copy of which is attached as an exhibit to the Amendment No. 3 to the Asset Purchase Agreement attached hereto as Exhibit 2.1 and is incorporated herein by reference.

Unsecured Promissory Notes

Also on December 31, 2021, TH Buyer entered into three (3) unsecured promissory notes (the “Unsecured Promissory Notes”) with certain existing creditors of True Harvest in aggregate amount of $4.6 million, representing the assumption of certain liabilities of True Harvest in connection with the True Harvest Acquisition.

The Unsecured Promissory Notes accrue interest on all outstanding principal amounts at a rate of twelve percent (12.0%) per annum. The Unsecured Promissory Notes are payable in twenty-four (24) equal consecutive monthly payments beginning on January 15, 2022 until January 15, 2024. On January 15, 2022, all amounts then outstanding including principal and accrued but unpaid interest, shall be due. The lenders under the Unsecured Promissory Notes may choose to accelerate all amounts (including principal, accrued but unpaid interest and fees, if any) upon the occurrence and continuation of specified events of default.

The foregoing description of the Unsecured Promissory Notes is not complete and is qualified in its entirety by reference to the complete text of the Form of Unsecured Promissory Notes, a copy of which is attached as an exhibit to the Amendment No. 3 to the Asset Purchase Agreement attached hereto as Exhibit 2.1 and is incorporated herein by reference.

Amendment No. 1 to the Credit Agreement

On December 31, 2021, immediately prior to the closing of the True Harvest Acquisition, the Company entered into Amendment No. 1 to Credit Agreement (“Amendment No. 1 to Credit Agreement”) with DXR Finance, LLC (the “Agent”), and DXR-GL HOLDINGS II, LLC and DXR-GL HOLDINGS III, LLC (the “Lenders”). Pursuant to Amendment No. 1 to Credit Agreement, the Company agreed to issue to the Agent on the delayed draw funding date a Warrant (“Warrant No. 2”) representing 550,000 nonvoting shares of Common Stock of the Company. Amendment No. 1 to Credit Agreement also provided for certain technical amendments to the Credit Agreement to facilitate the True Harvest Acquisition, including, but not limited to, permitting the Convertible Promissory Note, the Unsecured Promissory Notes, and the Amended Earnout Payment Agreement.

The loan matures on November 26, 2024 and bears an interest rate of the LIBOR plus the applicable margin of 16% per annum, subject to a LIBOR floor of 1.0%, provided that for the first 12 months after the Closing Date, interest at the rate of 8.5% per annum may be payable-in-kind and thereafter interest at the rate of 5% per annum may be payable in kind. Interest is payable on the last business day of each quarter.

The Delayed Draw resulted in an incremental 550,000 warrants on the same terms and conditions issued to the lender for a total of 2,550,000 issued, with a modification to Floor Amount (defined below) for any Cash Election made, and providing at least one (1) business day prior notice to the Agent to exercise the Delayed Draw Commitment.

The foregoing description of the Amendment No. 1 to Credit Agreement is not complete and is qualified in its entirety by reference to the complete text of the Amendment No. 1 to Credit Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

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Amended and Restated Warrant No. 1

In connection with the Amendment No. 1 to Credit Agreement, the Company on December 31, 2021 amended and restated warrant no. 1 (the “Amended and Restated Warrant No. 1”), originally issued to the Agent on November 26, 2021. The Amended and Restated Warrant No. 1 is subject to an exercise price of $0.01 per share and are exercisable at any time from issuance and expires on December 31, 2026, provided, the expiration may be extended for additional one-year periods if the cultivation, manufacture, distribution, or possession of cannabis remains illegal under U.S. federal law, up to a maximum extension date of December 31, 2031.

Pursuant to the Amended and Restated Warrant No. 1, the Agent may elect to receive cash in lieu of shares of Common Stock, then such cash payment would be subject to a floor amount (the “Floor Amount”). The “Floor Amount” means:

(1)    6.00 per share for any cash election made following December 31, 2021 and prior to November 26, 2022;

(2)    $7.00 per share for any cash election made on or after November 27, 2022 and before November 26, 2023;

(3)    $8.00 per share for any cash election made on or after November 27, 2023 and before November 26, 2024;

(4)    $9.00 per share for any cash election made on or after November 27, 2024 and before November 26, 2025; and

(5)    $10.00 per share for any cash election made on or after November 27, 2025 and before November 26, 2026.

The Amended and Restated Warrant No. 1 was issued to the Agent in a private placement exempt from registration pursuant to Rule 506(b) of Regulation D under Section 4(a)(2 of the Securities Act of 1933, as amended.

Warrant No. 2

In connection with the Amendment No. 1 to Credit Agreement, the Company on December 31, 2021 issued warrant no. 2 (“Warrant No. 2”) to the Agent providing for an incremental 550,000 warrants on the same terms and conditions as the Amended and Restated Warrant No. 1, for a total of 2,550,000 issued, with the same modification to the Floor Amount for any cash election made. Warrant No. 2 is subject to the same exercise price, conversion terms and expiration terms as Amended and Restated Warrant No. 1.

The Warrant No. 2 was issued to the Agent in a private placement exempt from registration pursuant to Rule 506(b) of Regulation D under Section 4(a)(2 of the Securities Act of 1933, as amended.

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RISK FACTORS

An investment in our securities involves a high degree of risk. You should carefully consider carefully the risks described below which we believe represent the material risks related to the offering, together with the other information contained in this prospectus, before making a decisionan investment decision. Our business, prospects, financial condition, or operating results could be harmed by any of these risks, as well as other risks not known to invest in our units.us or that we consider immaterial as of the date of this prospectus. This prospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks described below. The trading price of our securities could decline due to any of these risks, and, as a result, you may lose all or part of your investment.

Unless the context otherwise requires, references in this section to “we,” “us,” “our,” “Greenrose” and the “Company” refer to The Greenrose Holding Company Inc. and its subsidiaries following the Theraplant Merger, or to Greenrose Acquisition Corp. prior to the Theraplant Merger, as the case may be.

Risks Associated with Our BusinessRelated to Certain Outstanding Greenrose Securities

We are a newly formed company with no operating historyAn active trading market for our common stock and accordingly, you will not have any basis onwarrants may never develop or be sustained, which to evaluate our ability to achieve our business objective.

We are a newly formed company with no operating results to date. Therefore, our ability to commence operations is dependent upon obtaining financing throughwould adversely affect the public offeringliquidity and price of our securities. Since we do not have an operating history, you will have no basis upon which to evaluate

An active trading market for our ability to achieve our business objective, which is to acquire an operating business. We have not conducted any substantive discussions and we have no plans, arrangementssecurities may never develop or, understandings with any prospective acquisition candidates. We will not generate any revenues until, at the earliest, after the consummation of a business combination.

Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”

As of September30, 2019, we had $25,000 cash and a working capital deficiency of $118,165. Further, we have incurred and expect to continue to incur significant costs in pursuit of our finance and acquisition plans. Management’s plans to address this need for capital through this offering are discussed in the section of this prospectus titled“Management’s Discussion and Analysis of Financial Condition and Results of Operations.”We cannot assure you that our plans to raise capital or to consummate an initial business combination will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The financial statements contained elsewhere in this prospectus do not include any adjustments that might result from our inability to consummate this offering or our inability to continue as a going concern.

If we are unable to consummate a business combination, our public stockholders may be forced to wait more than 18 months (21 months if we fully exercise our option to extend) before receiving distributions from the trust account.

We have 18months from the closing of this offering (subject to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in this prospectus) in which to complete a business combination. We have no obligation to return funds to investors prior to such date unless we consummate a business combination prior thereto and only then in cases where investors have sought to convert or sell their shares to us. Only after the expiration of this full time period will public security holders be entitled to distributions from the trust account if we are unable to complete a business combination. Accordingly, investors’ funds may be unavailable to them until after such date and to liquidate your investment, public security holders may be forced to sell their public shares or warrants, potentially at a loss.

If we do not complete an initial business combination within 18 months our sponsor may, but is not required, to extend the period of time to consummate an initial business combination for up to an additional 3 months.

Pursuant to the terms of the trust agreement to be entered into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, in order for the time available for us to consummate our initial business combination to be extended, our sponsor or its affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit into the trust account $495,000, or $569,250 if the underwriters’ over-allotment option is exercised in full ($0.033 per unit in either case), up to an aggregate of $1,485,000 (or $1,707,750 if the underwriters’ over-allotment option is exercised in full), or $0.033 per unit, on or prior to the date of the applicable deadline, for each one month extension for a total of $0.099 per unit if extended three times. Our sponsor is not obligated to extend the period of time available to us to consummate our initial business and there is no guarantee that it will agree to do so.

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Our public stockholdersdeveloped, may not be afforded an opportunity to vote on our proposed business combination.

We will either (1) seek stockholder approvalsustained. In addition, the price of our initial business combinationsecurities could fluctuate significantly for various reasons, many of which are outside our control, such as our performance, large purchases or sales of our common stock, legislative changes and general economic, political or regulatory conditions. The release of our financial results may also cause our share price to vary. If an active market for our securities does not develop, it may be difficult for you to sell our common stock and/or warrants you own or purchase without depressing the market price for our securities or to sell the securities at all.

If we fail to maintain the requirements for eligibility to be included for trading on the OTC Markets, or if our securities, including the public warrants were to cease to be eligible for trading on the OTC Markets, there could be significant material adverse consequences, including a meeting calledlack of liquidity for such purpose at whichour securities (including our public stockholders may seekwarrants), a limited availability of market quotations for our securities (including our public warrants), a limited amount of news and analyst coverage for the combined company, and a decreased ability to convert their shares, regardlessobtain capital or pursue acquisitions by issuing additional equity or convertible securities.

On June 21, 2021, Greenrose filed a Form 25 with the SEC and voluntarily delisted its securities from the Nasdaq market as Greenrose’s securities were approved for quotation on over the counter (OTC) markets as of whether they vote for or against the proposed business combination or don’t vote at all, into their pro rata shareJune 22, 2021. Greenrose determined to voluntarily delist from Nasdaq because completion of the aggregate amount thenTheraplant Merger would cause Greenrose to be out of compliance with Nasdaq requirements that companies traded on deposit in the trust account (net of taxes payable), or (2) provide our public stockholders with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), in each case subject to the limitations described elsewhere in this prospectus. Accordingly, it is possible that we will consummate our initial business combination even if holders of a majority of our public shares do not approve of the business combination we consummate. The decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. For instance, Nasdaq rules currently allow us to engage in a tender offer in lieu of a stockholder meeting but would still require us to obtain stockholder approval if we were seeking to issue more than 20% of our outstanding shares to a target business as consideration in any business combination. Therefore, if we were structuring a business combination that required us to issue more than 20% of our outstanding shares, we would seek stockholder approval of such business combination instead of conducting a tender offer.

You willmay not be entitled to protections normally afforded to investors of blank check companies.

Since the net proceeds of this offering are intended to be used to complete a business combination with a targetengaged in business that hasis not been identified, we may be deemed to be a “blank check” company underlegal in the United States, and cannabis is not legal under current U.S. federal law. Greenrose believes the OTC marketplaces have not historically enjoyed the same degree of liquidity as the Nasdaq market. Accordingly, Greenrose securityholders may encounter lower trading volumes, broader spreads between bid and ask prices and generally less liquidity for Greenrose’s securities laws. However, since we will have net tangible assets in excess of $5,000,000 upon the successful consummation of this offering and will file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors of blank check companies such as Rule 419. Accordingly, investors will not be afforded the benefits or protections ofthan if those rules which would,securities remained eligible, for example, completely restrict the transferability of our securities, require us to complete a business combination within 18months of the effective date of the initial registration statement (subject to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in this prospectus) and restrict the use of interest earnedquotation on the funds held in the trust account. Because we are not subject to Rule 419, our units will be immediately tradable, we will be entitled to withdraw amounts from the funds held in the trust account prior to the completion of a business combination and we will have a longer period of time to complete such a business combination than we would if we were subject to such rule.

If we determine to change our acquisition criteria or guidelines, many of the disclosures contained in this prospectus would not be applicable and you would be investing in our company without any basis on which to evaluate the potential target business we may acquire.

We could seek to deviate from the acquisition criteria or guidelines disclosed in this prospectus although we have no current intention to do so. For instance, we currently anticipate acquiring a target business ancillary to the cannabis industry. However, we are not obligated to do so and may determine to merge with or acquire a company which is not ancillary to the cannabis industry if the terms of the transaction are determined by us to be favorable to our public stockholders. In such event, many of the acquisition criteria and guidelines set forth in this prospectus would not be applicable. Accordingly, investors may be making an investment in our company without any basis on which to evaluate the potential target business we may acquire. Regardless of whether or not we deviate from the acquisition criteria or guidelines in connection with any proposed business combination, investors will always be given the opportunity to convert their shares in connection with any proposed business combination as described in this prospectus.

We may issue shares of our capital stock or debt securities to complete a business combination, which would reduce the equity interest of our stockholders and likely cause a change in control of our ownership.

As of the date of this prospectus, our amended and restated certificate of incorporation will authorize the issuance of up to 70,000,000shares of common stock, par value $0.0001 per share, and 1,000,000shares of preferred stock, par value

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$0.0001 per share. Immediately after this offering and the purchase of the private securities (assuming no exercise of the underwriters’ over-allotment option), there will be authorized but unissued shares of common stock available for issuance (after appropriate reservation for the issuance of the shares underlying the private units and public and private warrants). Although we have no commitment as of the date of this offering, we may issue a substantial number of additional shares of common stock or shares of preferred stock, or a combination of common stock and preferred stock, to complete a business combination. The issuance of additional shares of common stock will not reduce the per-share conversion amount in the trust account. The issuance of additional shares of common stock or preferred stock:

•        may significantly reduce the equity interest of investors in this offering;

•        may subordinate the rights of holders of shares of common stock if we issue shares of preferred stock with rights senior to those afforded to our shares of common stock;

•        may cause a change in control if a substantial number of shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and

•        may adversely affect prevailing market prices for our shares of common stock.

Similarly, if we issue debt securities, it could result in:

•        default and foreclosure on our assets if our operating revenues after a business combination are insufficient to repay our debt obligations;

•        acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

•        our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; and

•        our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding.

If we incur indebtedness, our lenders will not have a claim on the cash in the trust account and such indebtedness will not decrease the per-share conversion amount in the trust account.

If the net proceeds of this offering not being held in trust, together with the interest earned on the funds in the trust account available to us, are insufficient to allow us to operate for at least the next 18 months, we may be unable to complete a business combination.

Of the net proceeds of this offering, only approximately $750,000 will be available to us initially outside the trust account to fund our working capital requirements. We will also have access to interest earned on the funds held in the trust account for taxes. We believe that, upon closing of this offering, such funds will be sufficient to allow us to operate for at least the next 18months (subject to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in this prospectus); however, we cannot assure you that our estimate is accurate. Accordingly, if we use all of the funds held outside of the trust account and all interest available to us, we may not have sufficient funds available with which to structure, negotiate or close an initial business combination. In such event, we would need to borrow funds from our sponsor, officers or directors or their affiliates to operate or may be forced to liquidate. Our sponsor, officers, directors and their affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount that they deem reasonable in their sole discretion for our working capital needs. Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of our initial business combination, without interest, or, at holder’s discretion, up to $2,000,000 of the notes may be converted into units at a price of $10.00 per unit and/or warrants at a price of $1.00 per warrant. The units and warrants would be identical to the private units and private warrants, respectively.

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If third parties bring claims against us, the proceeds held in trust could be reduced and the per-share redemption price received by stockholders may be less than $10.00.

Our placing of funds in trust may not protect those funds from third party claims against us. Although we will seek to have all vendors and service providers we engage and prospective target businesses we negotiate with execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, they may not execute such agreements. Furthermore, even if such entities execute such agreements with us, they may seek recourse against the trust account. A court may not uphold the validity of such agreements. Accordingly, the proceeds held in trust could be subject to claims which could take priority over those of our public stockholders. If we are unable to complete a business combination and distribute the proceeds held in trust to our public stockholders, our sponsor has agreed (subject to certain exceptions described elsewhere in this prospectus) that it will be liable to ensure that the proceeds in the trust account are not reduced below $10.00 per share by the claims of target businesses or claims of vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Therefore, we believe it is unlikely that our sponsor will be able to satisfy its indemnification obligations if it is required to do so. As a result, the per-share distribution from the trust account may be less than $10.00, plus interest, due to such claims.

Additionally, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we may not be able to return to our public stockholders at least $10.00.

Our stockholders may be held liable for claims by third parties against us to the extent of distributions received
by the
m.

Our amended and restated certificate of incorporation provides that we will continue in existence only until 18months from the closing of this offering (subject to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in this prospectus). If we have not completed a business combination by such date, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest not previously released to us but net of franchise and income taxes payable, divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of the date of distribution. Accordingly, we cannot assure you that third parties will not seek to recover from our stockholders amounts owed to them by us.

If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. Furthermore, because we intend to distribute the proceeds held in the trust account to our public stockholders promptly after expiration of the time we have to complete an initial business combination, this may be viewed or interpreted as giving preference to our public stockholders over any potential creditors with respect to access to or distributions from our assets. Furthermore, our board may be viewed as having breached their fiduciary duties to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

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Our directors may decide not to enforce our sponsor’s indemnification obligations, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders.

In the event that the proceeds in the trust account are reduced below $10.00 per public share and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce such indemnification obligations. It is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share.

If we do not file and maintain a current and effective prospectus relating to the common stock issuable upon exercise of the warrants, holders will only be able to exercise such warrants on a “cashless basis.”

If we do not file and maintain a current and effective prospectus relating to the common stock issuable upon exercise of the warrants at the time that holders wish to exercise such warrants, they will only be able to exercise them on a “cashless basis” provided that an exemption from registration is available. As a result, the number of shares of common stock that holders will receive upon exercise of the warrants will be fewer than it would have been had such holder exercised his warrant for cash. Further, if an exemption from registration is not available, holders would not be able to exercise on a cashless basis and would only be able to exercise their warrants for cash if a current and effective prospectus relating to the common stock issuable upon exercise of the warrants is available. Under the terms of the warrant agreement, we have agreed to use our best efforts to meet these conditions and to file and maintain a current and effective prospectus relating to the common stock issuable upon exercise of the warrants until the expiration of the warrants. However, we cannot assure you that we will be able to do so. If we are unable to do so, the potential “upside” of the holder’s investment in our company may be reduced or the warrants may expire worthless.

An investor will only be able to exercise a warrant if the issuance of shares of common stock upon such exercise has been registered or qualified or is deemed exempt under the securities laws of the state of residence of the holder of the warrants.

No warrants will be exercisable and we will not be obligated to issue shares of common stock unless the shares of common stock issuable upon such exercise has been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the warrants. If the shares of common stock issuable upon exercise of the warrants are not qualified or exempt from qualification in the jurisdictions in which the holders of the warrants reside, the warrants may be deprived of any value, the market for the warrants may be limited and they may expire worthless if they cannot be sold.Nasdaq market.

The private warrants may be exercised at a time when the public warrants may not be exercised.exercised and have certain inherent differences.

Once the private warrants become exercisable, such warrants may immediately be exercised on a cashless basis, at the holder’s option, so long as they are held by the initial purchasers or their permitted transferees. The public warrants, however, will only be exercisable on a cashless basis at the option of the holders if we fail to register the shares issuable upon exercise of the warrants under the Securities Act within 90 days following the closing of our initial business combination.the Theraplant Merger. Accordingly, it is possible that the holders of the private warrants could exercise such warrants at a time when the holders of public warrants could not.

We may amend the terms of the warrants in a manner that may be adverse to holders with the approval by the holders of at least 50% of the then outstanding public warrants.

Our warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent,On June 21, 2021, Greenrose voluntarily delisted its securities from Nasdaq and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision. The warrant agreement requires the approval by the holders of at least 50% of the then outstanding public warrants in order to make any change that adversely affects the interests of the registered holders.

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A provision of our warrant agreement may make it more difficultits securities were approved for us to consummate an initial business combination.

Unlike most blank check companies, if

•        we issue additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.50 per share of common stock,

•        the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combinationquotation on the date of the consummation of our initial business combination (net of redemptions), and

•        the Market Value is below $9.50 per share,

then the exercise price of theOTC markets. Greenrose’s publicly traded warrants will be adjusted to be equal to 115% of the higher of the Market Value and the price at which we issue the additional shares of common stock or equity-linked securities. This may make it more difficult for us to consummate an initial business combination with a target business.

Since we have not yet selected a particular industry or target business with which to complete a business combination, we are unable to currently ascertain the merits or risks of the industry or business in which we may ultimately operate.

Although we intend to focus on companies in the cannabis industry as described in this prospectus, we may pursue an acquisition opportunity in any business industry or sector. Accordingly, there is no current basis for you to evaluate the possible merits or risks of the particular industry in which we may ultimately operate or the target business which we may ultimately acquire. To the extent we complete a business combination with a financially unstable company or an entity in its development stage, we may be affected by numerous risks inherent in the business operations of those entities. If we complete a business combination with an entity in an industry characterized by a high level of risk, we may be affected by the currently unascertainable risks of that industry. Although our management will endeavor to evaluate the risks inherent in a particular industry or target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in this offering than a direct investment, if an opportunity were available, in a target business.

Our ability to successfully effect a business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following a business combination. While we intend to closely scrutinize any individuals we engage after a business combination, we cannot assure you that our assessment of these individuals will prove to be correct.

Our ability to successfully effect a business combination is dependent upon the efforts of our key personnel. We believe that our success dependsnow quoted on the continued serviceOTCQB market which may provide Greenrose warrant holders significantly less liquidity than Nasdaq.

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Table of our key personnel, at least until we have consummated our initial business combination. We cannot assure you that any of our key personnel will remain with us for the immediate or foreseeable future. In addition, none of our officers are required to commit any specified amount of time to our affairs and, accordingly, our officers will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. WeContents

Furthermore, publicly traded warrants issued by Greenrose do not have employment agreements with, or key-man insurance on the life of, any of our officers. The unexpected loss of the services of our key personnel could have a detrimental effect on us.

The role of our key personnel after a business combination, however, cannot presently be ascertained. Although some of our key personnel serve in senior management or advisory positions following a business combination, it is likely that most, if not all, of the management of the target business will remain in place. While we intendterms identical to closely scrutinize any individuals we engage after a business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a public company which could cause us to have to expend time and resources helping them become familiar with such requirements. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.

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Our officers and directors may not have significant experience or knowledge regarding the jurisdiction or industry of the target business we may seek to acquire.

We may consummate a business combination with a target business in any geographic location or industry we choose, although we intend to focus on companies or assets ancillary to the cannabis industry. We cannot assure you that our officers and directors will have enough experience or have sufficient knowledge relating to the jurisdiction of the target or its industry to make an informed decision regarding a business combination.

Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation following a business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.

Our key personnel will be able to remain with the company after the consummation of a business combination only if they are able to negotiate employment or consulting agreements or other appropriate arrangements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to the company after the consummation of the business combination. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business.

Our officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This could have a negative impact on our ability to consummate a business combination.

Our officers and directors will not commit their full time to our affairs. We presently expect each of our officers and directors to devote such amount of time as they reasonably believe is necessary to our business. We do not intend to have any full-time employees prior to the consummation of our initial business combination. The foregoing could have a negative impact on our ability to consummate our initial business combination.

Our officers and directors have limited experience with blank check companies. This could have a negative impact on our ability to consummate a business combination.

While our officers and directors have extensive experience in the agriculture, real estate and investment spaces, this is the first blank check company that they have been involved in at the management level. This lack of experience and track record could have a negative impact on our ability to consummate our initial business combination.

Our officers and directors may have a conflict of interest in determining whether a particular target business is appropriate for a business combination.

Our sponsor has waived its right to convert its founder’s shares or any other shares purchased in this offering or thereafter, or to receive distributions from the trust account with respect to its founder’s shares upon our liquidation if we are unable to consummate a business combination. Accordingly, the shares acquired prior to this offering, as well as the private securities and any warrants purchased by our officers or directors in the aftermarket, will be worthless if we do not consummate a business combination. The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our stockholders’ best interest.

Imperial Capital may have a conflict of interest in rendering services to us in connection with our initial business combination.

We have engaged Imperial Capital to assist us in connection with our business combination. We will pay Imperial Capital a cash fee for such services in an aggregate amount of 4.5% of the gross proceeds raised upon closing of the offering upon the consummation of our initial business combination. Additionally, we will pay Imperial Capital a cash fee in an aggregate amount equal to 5% of the face amount of any equity securities and 3% of the face amount of any debt sold or arranged as part of the initial business combination. These financial interests may result in Imperial Capital having a conflict of interest when providing the services to us in connection with an initial business combination.

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Nasdaq has added a new requirement that at least 50% of a company’s round lot holder must each hold unrestricted securities with a market value of at least $2,500, which could make it more difficult for us to meet Nasdaq’s listing requirements.

Nasdaq defines a “round lot” as 100shares of equity securities and our offering price is $10 per share, meaning that a holder owning only a single round lot would own unrestricted securities with a market value of only $1,000. Because of Nasdaq’s new requirement that at least 50% of a company’s round lot holders must each hold unrestricted securities with a market value of at least $2,500, which could make it more difficult for us to meet Nasdaq’s listing requirements of at least 450 round lot holders.

Nasdaq may delist our securities from quotation on its exchange which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

We anticipate that our securities will be listed on Nasdaq, a national securities exchange, upon consummation of this offering. Although, after giving effect to this offering, we expect to meet on a pro forma basis Nasdaq’s minimum initial listing standards, which generally only requires that we meet certain requirements relating to stockholders’ equity, market capitalization, aggregate market value of publicly held shares and distribution requirements, we cannot assure you that our securities will continue to be listed on Nasdaq in the future prior to an initial business combination. Additionally, in connection with our initial business combination, it is likely that Nasdaq will require us to file a new initial listing application and meet its initial listing requirements as opposed to its more lenient continued listing requirements. We cannot assure you that we will be able to meet those initial listing requirements at that time. Nasdaq will also have discretionary authority to not approve our listing if Nasdaq determines that the listing of the company to be acquired is against public policy at that time.

If Nasdaq delists our securities from trading on its exchange, or we are not listed in connection with our initial business combination, we could face significant material adverse consequences, including:

•        a limited availability of market quotations for our securities;

•        reduced liquidity with respect to our securities;

•        a determination that our shares of common stock are “penny stock” which will require brokers trading in our shares of common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our shares of common stock;

•        a limited amount of news and analyst coverage for our company; and

•        a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect that our units and eventually our common stock and warrants will be listed on Nasdaq, our units, common stock and warrants will be covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities.

We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our shares of common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act. We will remain an “emerging growth company” for up to five years. However, if our non-convertible debt issued within a three year period or revenues exceeds $1.07billion, or the market value of our shares of common stock that are held by non-affiliates exceeds $700million on the last day of the second fiscal quarter of any given fiscal year, we would cease to be an emerging growth company as of the following fiscal year. As an emerging growth company, we are not required to comply with the auditor attestation

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requirements of Section 404 of the Sarbanes-Oxley Act, we have reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and we are exempt from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Additionally, as an emerging growth company, we have elected to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates. We cannot predict if investors will find our shares of common stock less attractive because we may rely on these provisions. If some investors find our shares of common stock less attractive as a result, there may be a less active trading market for our shares and our share price may be more volatile.

We may only be able to complete one business combination with the proceeds of this offering, which will cause us to be solely dependent on a single business which may have a limited number of products or services.

It is likely we will consummate a business combination with a single target business, although we have the ability to simultaneously acquire several target businesses. By consummating a business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry.

Accordingly, the prospects for our success may be:

•        solely dependent upon the performance of a single business, or

•        dependent upon the development or market acceptance of a single or limited number of products, processes or services.

This lack of diversification may subject us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to a business combination.

We may be required to complete multiple business combinations in order to meet the requirement that we use at least 80% of the balance in the trust account in connection with an initial business combination.

If we determine to simultaneously acquire several businesses and such businesses are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete the business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations. Furthermore, simultaneously closing multiple transactions with unrelated third parties may result in unforeseen delays that and may make it difficult for us to complete such combination within the 18-month time period (or 21months if we fully exercise our option to extend).

The ability of our stockholders to exercise their conversion rights or sell their shares to us in a tender offer may not allow us to effectuate the most desirable business combination or optimize our capital structure.

If our business combination requires us to use substantially all of our cash to pay the purchase price, because we will not know how many stockholders may exercise conversion rights or seek to sell their shares to us in a tender offer, we may either need to reserve part of the trust account for possible payment upon such conversion, or we may need to arrange third party financing to help fund our business combination. In the event that the acquisition involves the issuance of our stock as consideration, we may be required to issue a higher percentage of our stock to make up for a shortfall in funds. Raising additional funds to cover any shortfall may involve dilutive equity financing or incurring indebtedness at higher than desirable levels. This may limit our ability to effectuate the most attractive business combination available to us.

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In connection with any vote to approve a business combination, we will offer each public stockholder the option to vote in favor of a proposed business combination and still seek conversion of his, her or its shares.

In connection with any vote to approve a business combination, we will offer each public stockholder (but not our sponsor, officers or directors) the right to have his, her or its shares of common stock converted to cash (subject to the limitations described elsewhere in this prospectus) regardless of whether such stockholder votes for or against such proposed business combination or does not vote at all. The ability to seek conversion while voting in favor of our proposed business combination may make it more likely that we will consummate a business combination.

In connection with any stockholder meeting called to approve a proposed initial business combination, we may require stockholders who wish to convert their shares in connection with a proposed business combination to comply with specific requirements for conversion that may make it more difficult for them to exercise their conversion rights prior to the deadline for exercising their rights.

In connection with any stockholder meeting called to approve a proposed initial business combination, each public stockholder will have the right, regardless of whether he is voting for or against such proposed business combination or does not vote at all, to demand that we convert his shares into a pro rata share of the trust account as of two business days prior to the consummation of the initial business combination. We may require public stockholders who wish to convert their shares in connection with a proposed business combination to either (i) tender their certificates to our transfer agent or (ii) deliver their shares to the transfer agent electronically using the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holders’ option, in each case prior to a date set forth in the tender offer documents or proxy materials sent in connection with the proposal to approve the business combination. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC and our transfer agent will need to act to facilitate this request. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because we do not have any control over this process or over the brokers or DTC, it may take significantly longer than two weeks to obtain a physical stock certificate. While we have been advised that it takes a short time to deliver shares through the DWAC System, we cannot assure you of this fact. Accordingly, if it takes longer than we anticipate for stockholders to deliver their shares, stockholders who wish to convert may be unable to meet the deadline for exercising their conversion rights and thus may be unable to convert their shares.

If, in connection with any stockholder meeting called to approve a proposed business combination, we require public stockholders who wish to convert their shares to comply with specific requirements for conversion, such converting stockholders may be unable to sell their securities when they wish to in the event that the proposed business combination is not approved.

If we require public stockholders who wish to convert their shares to comply with specific requirements for conversion and such proposed business combination is not consummated, we will promptly return such certificates to the tendering public stockholders. Accordingly, investors who attempted to convert their shares in such a circumstance will be unable to sell their securities after the failed acquisition until we have returned their securities to them. The market price for our shares of common stock may decline during this time and you may not be able to sell your securities when you wish to, even while other stockholders that did not seek conversion may be able to sell their securities.

Because of our structure, other companies may have a competitive advantage and we may not be able to consummate an attractive business combination.

We expect to encounter intense competition from entities other than blank check companies having a business objective similar to ours, including venture capital funds, leveraged buyout funds and operating businesses competing for acquisitions. Many of these entities are well established and have extensive experience in identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors.Greenrose private warrants. While we believe that there are numerous potential target businesses that we could acquire with the net proceeds of this offering, our ability to compete in acquiring certain sizable target businesses will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, seeking stockholder approval or engaging in a tender offer in connection with any proposed business combination may delay the consummation of such a transaction. Additionally, our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Any of the foregoing may place us at a competitive disadvantage in successfully negotiating a business combination.

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We may be unable to obtain additional financing, if required, to complete a business combination or to fund the operations and growth of the target business, which could compel us to restructure or abandon a particular business combination.

Although we believe that the net proceeds of this offering, together with interest earned on the funds held in the trust account available to us, will be sufficient to allow us to consummate a business combination, because we have not yet identified any prospective target business, we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of this offering prove to be insufficient, either because of the size of the business combination, the depletion of the available net proceeds in search of a target business, or the obligation to convert into cash a significant number of shares from dissenting stockholders, we will be required to seek additional financing. Such financing may not be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to consummate a particular business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. In addition, if we consummate a business combination, we may require additional financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our sponsor, officers, directors or stockholders is required to provide any financing to us in connection with or after a business combination.

Our sponsor will control a substantial interest in us and thus may influence certain actions requiring a stockholder vote.

Upon consummation of our offering, our sponsor will own approximately 20% of our issued and outstanding shares of common stock (assuming they do not purchase any units in this offering and excluding the private units and warrants purchased in the private placement occurring simultaneously with this offering). None of our sponsor, officers, directors, or their affiliates has indicated any intention to purchase units in this offering or any units or shares of common stock from persons in the open market or in private transactions (other than in the private placement to occur simultaneously with the closing of this offering). However, our sponsor, officers, directors, or their affiliates could determine in the future to make such purchases in the open market or in private transactions, to the extent permitted by law, in order to influence the vote or magnitude of the number of shareholders seeking to tender their shares to us. In connection with any vote for a proposed business combination, our sponsor, as well as all of our officers and directors, have agreed to vote the shares of common stock owned by them immediately before this offering as well as any shares of common stock acquired in this offering or in the aftermarket in favor of such proposed business combination.

Our board of directors is and will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. It is unlikely that there will be an annual meeting of stockholders to elect new directors prior to the consummation of a business combination, in which case all of the current directors will continue in office until at least the consummation of the business combination. Accordingly, you may not be able to exercise your voting rights under corporate law for up to 18months (subject to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in this prospectus). If there is an annual meeting, as a consequence of our “staggered” board of directors, only a minority of the board of directors will be considered for election and our sponsor, because of their ownership position, will have considerable influence regarding the outcome. Accordingly, our sponsor will continue to exert control at least until the consummation of a business combination.

Our sponsor paid a nominal price for the founder’s shares and, accordingly, you will experience immediate and substantial dilution from the purchase of our shares of common stock.

The difference between the public offering price per share and the pro forma net tangible book value per share of common stock after this offering constitutes the dilution to the investors in this offering. Our sponsor acquired the founder’s shares at a nominal price, significantly contributing to this dilution. Upon consummation of this offering, you and the other new investors will incur an immediate and substantial dilution of approximately 88.8% or $8.88 per share (the difference between the pro forma net tangible book value per share $1.12, and the initial offering price of $10.00 per unit). This is because investors in this offering will be contributing approximately 98% of the total amount paid to us for our outstanding securities after this offering but will only own approximately 79% of our outstanding securities. Accordingly, the per-share purchase price you will be paying substantially exceeds our per share net tangible book value.

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Our outstanding warrants may have an adverse effect on the market price of our common stock and make it more difficult to effect a business combination.

We will be issuing warrants to purchase 15,000,000shares of common stock as part of the units offered by this prospectus, 300,000 warrants included in the private units and private warrants to purchase 1,500,000shares of common stock (warrants to purchase 17,250,000shares of common stock will be offered by this prospectus, 330,000 warrants included in the private units and private warrants to purchase 1,650,000shares of common stock if the over-allotment is exercised). We may also issue other units or warrants to our sponsor, officers, directors or their affiliates in payment of working capital loans made to us as described in this prospectus. To the extent we issue shares of common stock to effect a business combination, the potential for the issuance of a substantial number of additional shares upon exercise of these warrants could make us a less attractive acquisition vehicle in the eyes of a target business. Such securities, when exercised, will increase the number of issued and outstanding shares of common stock and reduce the value of the shares issued to complete the business combination. Accordingly, our warrants may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business. Additionally, the sale, or even the possibility of sale, of the shares underlying the warrants could have an adverse effect on the market price for our securities or on our ability to obtain future financing. If and to the extent these warrants are exercised, you may experience dilution to your holdings.

We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

We have the ability to redeem outstanding warrants (excluding the private warrants are non-callable, the public warrants are callable, in whole and any warrants underlying additional units issued to our sponsor, officers or directorsnot in payment of working capital loans made to us) at any time after they become exercisable and prior to their expiration,part, at a price of $0.01 per warrant, provided that(i) at any time after the warrants become exercisable, (ii) upon not less than 30 days’ prior written notice of redemption to each warrant holder, if, and only if, the reported last reported salessale price of the shares of common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading-day day period ending on the third business day prior to proper notice of such redemption provided that on the date we give notice of redemption to warrant holders; and during the entire period thereafter until the time we redeem the warrants, we have an effective(iii) if, and only if, there is a current registration statement under the Securities Act coveringin effect with respect to the shares of common stock issuable uponunderlying such warrants. Accordingly, holders of Greenrose public warrants may lose the ability to exercise the warrants if Greenrose chooses to call such warrants and completes any such call prior to such warrant holders’ election to exercise their public warrants.

Greenrose’s stockholders cannot be sure of the warrantsmarket value of Greenrose’s securities.

The market value of our common stock may vary significantly. The market price of Greenrose’s securities may be influenced by many factors, some of which are beyond its control, including those described above and the following:

•        changes in financial estimates by analysts;

•        announcements by it or its competitors of significant contracts, productions, acquisitions or capital commitments;

•        fluctuations in its quarterly financial results or the quarterly financial results of companies perceived to be similar to it;

•        general economic conditions;

•        changes in market valuations of similar companies;

•        catastrophic events, including acts of terrorism, outbreak of war or hostilities, natural disasters and global health crises, including the coronavirus (COVID-19) pandemic;

•        changes in its capital structure, such as future issuances of securities or the incurrence of additional debt;

•        future sales of Common Stock;

•        investor perception of the cannabis industry;

•        regulatory developments in the United States;

•        litigation involving Greenrose, its subsidiaries or its general industry; and

•        additions or departures of key personnel;

•        the other risks discussed under the headings “Risks Related to our Business.”

We have identified a current prospectus relating to them is available.material weakness in our internal control over financial reporting as of December 31, 2020. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to registerdevelop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.

Management and our audit committee concluded that it was appropriate to restate our previously issued audited financial statements as of and for the period ended December 31, 2020 (the “Restatement”). We also restated the financial statements as of February 13, 2020; and as of and for the periods ended March 31, 2020, June 30, 2020 and September 30, 2020. As part of such process, we identified a material weakness in our internal controls over financial reporting.

A material weakness is a deficiency, or qualify the underlying securities for sale under all applicable state securities laws. Redemptiona combination of the outstanding warrants could force you (i) to exercise your warrants and pay the exercise price therefor atdeficiencies, in internal control over financial reporting such that there is a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the private warrants will be redeemable by us so long as they are held by the initial purchasers or their permitted transferees.

Our management’s ability to require holdersreasonable possibility that a material misstatement of our warrants to exercise such warrantsannual or interim financial statements will not be prevented or detected and corrected on a cashless basis will cause holders to receive fewer sharestimely basis.

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Table of common stock upon their exercise of the warrants than they would have received had they been able to exercise their warrants for cash.Contents

If we call our public warrants for redemption after the redemption criteriaAs described elsewhere in this prospectusreport, we have identified, in light of the prior reclassification of private warrants from equity to liability, as well as the reclassification of our redeemable common stock as temporary equity, a material weakness in our internal controls over financial reporting relating to our accounting for complex financial instruments.

Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.

If we identify any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.

We may face litigation and other risks as a result of the material weakness in our internal control over financial reporting.

As a result of the material weakness, referred to in the preceding risk factor, the Restatement, the change in accounting for complex financial instruments, and other matters raised or that may in the future be raised relating to any material weakness, we face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the Restatement and material weaknesses in our internal control over financial reporting and the preparation of our financial statements. As of the date of this Registration Statement, we have no knowledge of any such potential claim, litigation or dispute. However, we can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition or our ability to complete any future acquisition or merger transactions.

Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”

We have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. Management’s plans to address this need for capital are discussed in the section of the Greenrose Annual Report on Form 10-K/A filed on December 3, 2021 titled “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 1 of the notes to the financial statements included in the Greenrose Annual Report on Form 10-K/A filed on December 3, 2021. We cannot assure you that our plans to raise capital will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern.

Risks Related to our Business

Each of Greenrose, Theraplant, and True Harvest has incurred and will incur substantial costs in connection with the Theraplant Merger and the True Harvest Acquisition and related transactions, such as legal, accounting, consulting and financial advisory fees.

As part of the Theraplant Merger and the True Harvest Acquisitions, each of Greenrose, Theraplant, and True Harvest utilized professional service firms for legal, accounting and financial advisory services. Although the parties have been satisfied, ourprovided with estimates of the costs for each advisory firm, the total actual costs may exceed those estimates. In addition, the companies may retain consulting services to assist in the integration of the businesses upon closing. These consulting services may extend beyond the current estimated time frame thus resulting in higher than expected costs.

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Greenrose’s management willlargely remained the same following consummation of the Theraplant Merger, and it does not have the option to require any holder that wishes to exercise his warrant (including any private warrants) to do so onexperience managing a “cashless basis.” If our management chooses to require holders to exercise their warrants on a cashless basis, the number of shares of common stock received by a holder upon exercisepublic company or complying with public company obligations, and fulfilling these obligations will be fewer thanexpensive, time consuming, and may divert management’s attention from the day-to-day operation of its business.

Greenrose’s senior management does not have experience managing a publicly-traded company and have limited experience complying with the increasingly complex laws pertaining to public companies. In particular, the significant regulatory oversight and reporting obligations imposed on public companies will require substantial attention from Greenrose’s senior management and may divert attention away from the day-to-day management of its after businesses, which could have a material adverse effect on Greenrose’s business, financial condition and results of operations. Similarly, corporate governance obligations, including with respect to the development and implementation of appropriate corporate governance policies, and concurrent service on the Board and possibly multiple board committees, will impose additional burdens on Greenrose’s non-executive directors.

Additionally, each of Theraplant and True Harvest have operated previously as a private company, Greenrose may be required to expend significant resources to ensure that Greenrose has sufficient systems in place to allow it wouldto comply with its obligations as a publicly-traded company.

Management of Theraplant have been had such holder exercised his warrant for cash. This will haveinterests in competing businesses that may create a conflict of interest in allocating their time.

While we intend to maintain the effect of reducing the potential “upside”key personnel of the holder’s investmentTheraplant following completion of the Business Combination, the management of Theraplant have interests in our company.competing businesses. For example:

Daniel Emmans, the Chief Executive Officer of Theraplant who will serve as Regional President, has an ownership interest in Northeast Bio, which is seeking to obtain a license to cultivate cannabis in the State of Connecticut. While Mr. Emmans’ employment agreement requires him to devote sufficient time to Greenrose’s business to carry out his duties, neither his employment agreement nor his non-competition agreement restrict him from assisting any of these businesses in a way that may be competitive to Greenrose.

If our security holders exercise their registration rights, it mayGreenrose will incur significant increased expenses and administrative burdens as a public company, which could have an adverse effect on its business, financial condition and results of operations.

Greenrose will face a significant increase in insurance, legal, accounting, administrative and other costs and expenses as a public company that none of the formerly corporate or company privately-held acquisition targets that we may attempt to purchase incur as a private company. The Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and the rules and regulations promulgated and to be promulgated thereunder, the Public Company Accounting Oversight Board, the SEC and the securities exchanges, impose additional reporting and other obligations on public companies. Compliance with public company requirements will increase costs and make certain activities more time-consuming. A number of those requirements will require Greenrose to carry out activities that Theraplant previously have not done. For example, Greenrose will adopt new internal controls and disclosure controls and procedures. In addition, additional expenses associated with SEC reporting requirements will be incurred. Furthermore, if any issues in complying with those requirements are identified (for example, if the auditors identify a material weakness or significant deficiency in the internal control over financial reporting), Greenrose could incur additional costs rectifying those issues, and the existence of those issues could adversely affect Greenrose’s reputation or investor perceptions of it. Being a public company could make it more difficult or costly for Greenrose to obtain certain types of insurance, including director and officer liability insurance, and Greenrose may be forced to accept reduced policy limits and coverage with increased self-retention risk or incur substantially higher costs to obtain the same or similar coverage. Being a public company could also make it more difficult and expensive for Greenrose to attract and retain qualified persons to serve on the Board, board committees or as executive officers. Furthermore, if Greenrose is unable to satisfy its obligations as a public company, it could be subject to delisting of its Common Stock, fines, sanctions and other regulatory action and potentially civil litigation.

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The additional reporting and other obligations imposed by various rules and regulations applicable to public companies will increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities. These increased costs will require Greenrose to divert a significant amount of money that could otherwise be used to expand the business and achieve strategic objectives. Advocacy efforts by shareholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase costs.

Failure to maintain effective internal controls over financial reporting could have a material adverse effect on Greenrose’s business, operating results and stock price.

Prior to the consummation of the Theraplant Merger or the pending consummation of the True Harvest Acquisition, neither Theraplant nor True Harvest was a publicly listed company, or an affiliate of a publicly listed company, and neither has dedicated accounting personnel and other resources to address internal control and other procedures commensurate with those of a publicly listed company. Effective internal control over financial reporting is necessary to increase the reliability of financial reports.

The standards required for a public company under Section 404(a) of the Sarbanes-Oxley Act are significantly more stringent than those required of Theraplant and True Harvest as a privately held company. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements. If Greenrose is not able to implement the additional requirements of Section 404(a) in a timely manner or with adequate compliance, it may not be able to assess whether its internal controls over financial reporting are effective, which may subject it to adverse regulatory consequences and could harm investor confidence and the market price of our sharesthe Common Stock.

Neither Theraplant nor True Harvest nor their respective auditors were required to perform an evaluation of common stockinternal control over financial reporting as of or for the years ended December 31, 2019 and 2020 in accordance with the existence of these rights may make it more difficult to effect a business combination.

Our sponsor is entitled to make a demand that we register the resaleprovisions of the founder’s shares at any time commencing three months priorSarbanes-Oxley Act as each of Theraplant nor True Harvest were private companies. Following completion of the Business Combination, Greenrose’s independent registered public accounting firm will not be required to report on the effectiveness of its internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 until Greenrose’s first annual report on Form 10-K following the date on which their sharesit ceases to qualify as an “emerging growth company,” which may be released from escrow. Additionally,up to five full fiscal years following the holdersdate of the privatefirst sale of common equity securities pursuant to an effective registration statement. If such evaluation were performed, control deficiencies could be identified by our management, and any unitsthose control deficiencies could also represent one or more material weaknesses. In addition, Greenrose cannot, at this time, predict the outcome of this determination and warrantswhether Greenrose will need to implement remedial actions in order to implement effective control over financial reporting. If in subsequent years Greenrose is unable to assert that Greenrose’s internal control over financial reporting is effective, or if Greenrose’s auditors express an opinion that Greenrose’s internal control over financial reporting is ineffective, Greenrose may fail to meet the future reporting obligations in a timely and reliable manner and its financial statements may contain material misstatements. Any such failure could also adversely cause our sponsor, officers, directors, or their affiliates may be issued in payment of working capital loans madeinvestors to us, are entitled to demand that we register the resale of the private securities and any other units and warrants we issue to them (and the underlying securities) commencing at any time after we

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consummate an initial business combination. The presence of these additional securities tradinghave less confidence in the public market mayaccuracy and completeness of our financial reports, which could have ana material adverse effect on the market price of Greenrose’s securities.

Greenrose is an emerging growth company and a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to emerging growth companies and smaller reporting companies, our securities. common stock may be less attractive to investors.

Greenrose is an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act, and it intends to take advantage of some of the exemptions from reporting requirements that are available to emerging growth companies, including:

•        not being required to comply with the auditor attestation requirements in the assessment of Greenrose’s internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act;

•        reduced disclosure obligations regarding executive compensation in periodic reports and registration statements; and

•        not being required to hold a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

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Greenrose may take advantage of these reporting exemptions until it is no longer an emerging growth company. Greenrose will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the date of the first sale of common equity securities pursuant to an effective registration statement, (b) in which Greenrose has total annual gross revenue of at least $1.07 billion, or (c) in which Greenrose is deemed to be a large accelerated filer, which means the market value of the Common Stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which Greenrose has issued more than $1.0 billion in non-convertible debt during the prior three-year period.

In addition, the existence of these rights may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business, as the stockholdersSection 107 of the target business may be discouraged from entering into a business combination with us or will request a higher price for their securities becauseJOBS Act also provides that an emerging growth company can take advantage of the potential effectexemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the exerciseSecurities Act as long as Greenrose is an emerging growth company. An emerging growth company can therefore delay the adoption of such rightscertain accounting standards until those standards would otherwise apply to private companies. Greenrose has elected to avail itself of this exemption from new or revised accounting standards and, therefore, it may havenot be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. Investors may find the Common Stock less attractive because Greenrose relies on thethese exemptions, which may result in a less active trading market for our sharesthe Common Stock and the price of common stock.the Common Stock may be more volatile.

If we areGreenrose is also deemed to be a “smaller reporting company” as defined in Rule 12b-2 under the Exchange Act, and is thus allowed to provide simplified executive compensation disclosures in its SEC filings, will be exempt from the provisions of Section 404(b) of Sarbanes-Oxley requiring that an investment company, weindependent registered public accounting firm provide an attestation report on the effectiveness of internal control over financial reporting and will have certain other reduced disclosure obligations with respect to its SEC filings. Greenrose will remain a “smaller reporting company” as long as, as of the last Business Day its recently completed second fiscal quarter, (i) the aggregate market value of its outstanding common stock held by non-affiliates (“public float”) is less than $250 million, or (ii) it has annual revenues of less than $100 million and public float of less than $700 million.

Greenrose cannot predict if investors will find its common stock less attractive because it will rely on the accommodations and exemptions available to emerging growth companies and smaller reporting companies. If some investors find Greenrose common stock less attractive as a result, there may be required to institute burdensome compliance requirementsa less active trading market for the common stock and our activitiesGreenrose’s share price may be restricted, which may make it difficult for us to completemore volatile.

The sponsor can earn a business combination.

A company that, amongpositive rate of return on its investment, even if other things, is or holds itself out as being engaged primarily, or proposes to engage primarily,shareholders experience a negative rate of return in the businesspost- business-combination company.

On August 26, 2019, Greenrose issued an aggregate of investing, reinvesting, owning, trading4,312,500 shares of its common stock (also referred to as the “Founder’s Shares”) for an aggregate purchase price of $25,000, or holding certain typesapproximately $0.006 per share, to Greenrose’s sponsor. In its initial public offering, the Company issued an aggregate of securities would be deemed17,250,000 of its units (each unit consisting of one share of Greenrose common stock, $0.0001 par value per share and one warrant to purchase one share of Greenrose common stock at a price of $11.50 per share), at an offering price of $10.00 per Unit. Consequently, the Company’s sponsor may realize a positive rate of return on its initial $25,000 investment company undereven if the Investmentpublic price per share of common stock of the Company Act, as amended, ordrops to below $10.00 per share, in which case the Investment Company Act. Since we will invest the proceeds held in the trust account, it is possible that we could be deemed an investment company. Notwithstanding the foregoing, we do not believe that our anticipated principal activities will subject uspublic shareholders may experience a negative rate of return on their investment.

Greenrose may incur successor liabilities due to conduct arising prior to the Investment Company Act. To this end, the proceeds held in trust may be invested by the trustee only in United States “government securities” within the meaning of Section 2(a)(16)completion of the Investment Company Act having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7Business Combination. promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. By restricting the investment of the proceeds to these instruments, we intend to meet the requirements for the exemption provided in Rule 3a-1 promulgated under the Investment Company Act.

If we are nevertheless deemed to be an investment company under the Investment Company Act, weGreenrose may be subject to certain restrictions thatsuccessor liabilities of Theraplant. Greenrose may make it more difficult for usbecome subject to complete alitigation claims in the operation of Theraplant’s business combination, including:

•        restrictions onprior to the nature of our investments; and

•        restrictions on the issuance of securities.

In addition, we may have imposed upon us certain burdensome requirements, including:

•        registration as an investment company;

•        adoption of a specific form of corporate structure; and

•        reporting, record keeping, voting, proxy, compliance policies and procedures and disclosure requirements and other rules and regulations.

Compliance with these additional regulatory burdens would require additional time and expense for which we have not allotted.

The determination for the offering price of our units is more arbitrary than the pricing of securities for an operating company in a particular industry.

Prior to this offering there has been no public market for any of our securities. The public offering priceclosing of the unitsBusiness Combination, including, but not limited to, with respect to tax, regulatory, employee or contract matters. Any litigation may be expensive and time-consuming and could divert the termsattention of Greenrose’s management from its business and negatively affect its operating results or financial condition. Furthermore, the warrants were negotiated between usoutcome of any litigation cannot be guaranteed, and Imperial Capital. Factors considered in determining the pricesadverse outcomes can affect Greenrose and termseach of the units, including the shares of common stock and warrants underlying the units, include:Theraplant or True Harvest negatively.

•        the history and prospects of companies whose principal business is the acquisition of other companies;

•        prior offerings of those companies;

•        our prospects for acquiring an operating business at attractive values;

•        our capital structure;

•        an assessmentA member of our management team may be subject to litigation.

In late March 2021, leakage was detected from the Piney Point, Florida site where HRK Holdings, LLC operates a ‘brownfield” industrial real estate project, including phosphogypsum containment ponds or “stacks” to remediate wastewater containing tailings from phosphate production. Operations at the phosphate plant for which the containment

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ponds were operated ceased twenty years ago. Wastewater more recently contained in the leaking stack was labeled “mixed seawater” by the Florida Department of Environmental Protection (“FDEP”) and their experiencecontained sea water from dredging of Manatee Bay, rainwater, surface water runoff from local farmland, and by-products of legacy phosphate production, making the mixed seawater high in identifying operating companies;phosphates and

•        general conditions nitrates. One stack at the Piney Point site experienced a serious liner tear in a pond estimated to contain approximately 480 million gallons of wastewater, and the FDEP issued an emergency discharge order to reduce water volume of the securities markets ataffected stack. To minimize potential risk to public health and safety that could occur in the timeevent of a potential catastrophic failure of the offering.

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However, although these factorsstack and any resultant uncontrolled discharge of water, Florida State and local County government officials ordered the immediate evacuation of more than 300 homes deemed to be within a zone of potential flooding in the proximity of the Piney Point facility. Efforts of County, State and Federal agencies, along with HRK, succeeded in preventing a catastrophic collapse of the stack after a four-day state of emergency, and on April 6, 2021, residents subject to the evacuation order were considered,permitted to return to their homes.

Efforts have been ongoing to develop and implement a permanent resolution to the determinationPiney Point facility’s challenges over a period of our offering priceyears in addressing the issues presented in operating the site. Possible environmental impact of the stack leakage and emergency discharge of wastewater into Manatee Bay are currently being evaluated. To date, FDEP testing of Tampa Bay affected by the discharged water meet “marine water quality standards”, as defined by FDEP.

In connection with responding to the Piney Point leak and emergency management thereof, public statements have made by County and State officials, including the Governor of Florida, to the effect that HRK will be held accountable for the incident.

Greenrose CEO William F. Harley III is more arbitrary than the pricingManaging Member and majority owner of securities for an operating companyThe Arsenal Group, a partial owner of HRK Holdings LLC. At this time, it is uncertain what impact on HRK, or on its investors, including The Arsenal Group, any effort to assert accountability or seek any remedy in a particular industry since we have no historical operationsconnection with the leak from the stack, subsequent emergency discharge of wastewater or financial results to compare them to.future site management efforts by government agencies may have.

If we do not conduct an adequate due diligence investigation of a target business, weGreenrose may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on ourGreenrose’s financial condition, results of operations and ourthe stock price, which could cause you to lose some or all of your investment.

We must conduct a due diligence investigation of the target businesses we intend to acquire. Intensive due diligence is time consuming and expensive due to the operations, accounting, finance and legal professionals who must be involved in the due diligence process. Even if we conduct extensiveAlthough Greenrose has conducted due diligence on a target business, thisTheraplant and True Harvest, there can be no assurance that Greenrose’s diligence may not revealsurfaced all material issues that may affectbe presented by the business of Theraplant and True Harvest, that it would be possible to uncover all material issues through a particular target business, andcustomary amount of due diligence, or that factors outside the control of the target businessTheraplant’s and True Harvest’s and outside of ourGreenrose’s control maywill not later arise. If our diligence fails to identify issues specific toAs a target business, industry or the environment in which the target business operates, weresult of these factors, Greenrose may be forced to later write-down or write-off off assets, restructure ourits operations, or incur impairment or other charges that could result in ourGreenrose reporting losses. Even if Greenrose’s due diligence successfully identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with Greenrose’s preliminary risk analysis. Even though these charges may be non-cash items and would not have an immediate impact on ourGreenrose’s liquidity, the fact that we reportGreenrose reports charges of this nature could contribute to negative market perceptions about usGreenrose or our common stock. In addition, chargesits securities. Accordingly, any stockholders who choose to remain stockholders could suffer a reduction in the value of this nature may cause ustheir shares. Such stockholders are unlikely to violate net worthhave a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by Greenrose’s officers or directors of a duty of care or other covenantsfiduciary duty owed to whichthem, or if they are able to successfully bring a private claim under securities laws that the proxy statement relating to the Business Combination contained an actionable material misstatement or material omission.

If our goodwill or intangible assets become impaired, we may be subject asrequired to record a significant charge to earnings.

Under generally accepted accounting principles, we review our amortizable intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill and indefinite-lived intangible assets are tested for impairment at least annually. Factors that may indicate that the carrying value of our goodwill or intangible assets may not be recoverable include a decline in stock price and market capitalization, reduced future cash flow estimates and slower growth rates in our industry. As a result of assuming pre-existing debt held byan annual impairment test or a target businesstest upon an impairment indicator, if our goodwill or by virtue of our obtaining post-combination debt financing.

The requirement that we complete an initial business combination within 18 months (or 21 months if we fully exercise our optionintangible assets are determined to extend) from the closing of this offering may give potential target businesses leverage over us in negotiating a business combination.

We have 18months from the closing of this offering (subject to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in this prospectus) to complete an initial business combination. Any potential target business with which we enter into negotiations concerning a business combination will be aware of this requirement. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete a business combination with that particular target business,impaired, we may be unablerequired to completerecord a significant charge to earnings.

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Greenrose’s and Theraplant’s ability to successfully operate the business combinationthereafter will be largely dependent upon the efforts of certain key personnel of Theraplant, all of whom are expected to stay with any other target business. This risk will increaseGreenrose following the Business Combination. The loss of such key personnel could negatively impact the operations and financial results of Greenrose.

Greenrose’s and Theraplant’s ability to successfully operate the business following the Closing is dependent upon the efforts of certain key personnel of Theraplant. Although such key personnel are generally expected to remain with Greenrose following the Business Combination, and Greenrose has entered into employment agreements with them that are effective as we get closer to the time limit referenced above.

Additionally, we may seek to simultaneously close multiple transactions in order to meet the requirement that one or more target businesses or assets have a fair market value of at least 80% of the balance in the trust account (excluding taxes payable on the income earned on the trust account), which would potentially give eachClosing and require such individual to agree to remain with Greenrose as of the target businesses leverage over us in negotiating a business combination. Furthermore, simultaneously closing multiple transactionsClosing, there can be no assurance that such individuals will continue to remain with unrelated third partiesGreenrose after the Closing. It is possible that Theraplant may result in unforeseen delays thatlose key personnel, the loss of which could negatively impact the operations and may make it difficult for us to complete such combination within the 18-month time period.profitability of Greenrose.

We may not obtain a fairness opinion with respect to the target business that we seek to acquire and therefore youThe operations of Greenrose may be relying solely on the judgment of our board of directors in approving a proposed business combination.

We will only be required to obtain a fairness opinion with respect to the target business that we seek to acquire if it is an entity that is affiliated with any of our sponsor, officers, directors or their affiliates. In all other instances, we will have no obligation to obtain an opinion. Accordingly, investors will be relying solely on the judgment of our board of directors in approving a proposed business combination.

Resources could be spent researching acquisitions that are not consummated, which could materially adversely affect subsequent attemptsaffected by the recent coronavirus (COVID-19) pandemic.

In December 2019, a novel strain of coronavirus was reported to locatehave surfaced in Wuhan, China, which has and acquire or merge with another business.

It is anticipated thatcontinuing to spread throughout the investigation of each specific target business and the negotiation, drafting, and execution of relevant agreements, disclosure documents, and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If a decision is made not to complete a specific business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, even if an agreement is reached relating to a specific target business, we may fail to consummate the

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business combination for any number of reasonsworld, including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.

Compliance with the Sarbanes-Oxley Act of 2002 will require substantial financial and management resources and may increase the time and costs of completing an acquisition.

Section 404 of the Sarbanes-Oxley Act of 2002 requires that we evaluate and report on our system of internal controls and may require that we have such system of internal controls audited beginning with our Annual Report on Form 10-K for the year ending December31, 2021. If we fail to maintain the adequacy of our internal controls, we could be subject to regulatory scrutiny, civil or criminal penalties and/or stockholder litigation. Any inability to provide reliable financial reports could harm our business. Section 404 of the Sarbanes-Oxley Act also requires that our independent registered public accounting firm report on management’s evaluation of our system of internal controls. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition. Furthermore, any failure to implement required new or improved controls, or difficulties encountered in the implementation of adequate controls over our financial processes and reporting in the future, could harm our operating results or cause us to fail to meet our reporting obligations. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.

If we effect a business combination with a company located in a foreign jurisdiction, we would be subject to a variety of additional risks that may negatively impact our operations.

If we are successful in consummating a business combination with a target business in a foreign country, we would be subject to any special considerations or risks associated with companies operating in the target business’ home jurisdiction, including any of the following:

•        rules and regulations or currency conversion or corporate withholding taxes on individuals;

•        tariffs and trade barriers;

•        regulations related to customs and import/export matters;

•        longer payment cycles;

•        tax issues, such as tax law changes and variations in tax laws as compared to the United States;

•        currency fluctuations and exchange controls;

•        challenges in collecting accounts receivable;

•        cultural and language differences;

•        employment regulations;

•        crime, strikes, riots, civil disturbances, terrorist attacks and wars; and

•        deterioration of political relations with the United States.

We cannot assure you that we would be able to adequately address these additional risks. If we were unable to do so, our operations might suffer.

On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVIDIf we effect-19) a business combination with“Public Health Emergency of International Concern.” On January 31, 2020, the U.S. Department of Health and Human Services declared a company located outside ofpublic health emergency for the United States to aid the laws applicable to such company will likely govern all of our material agreementsU.S., and we may not be able to enforce our legal rights.on March 11, 2020, the World Health Organization characterized the COVID-19 outbreak as a “pandemic.”

If we effect a business combination with a company located outside of the United States, the laws of the country in which such company operates will govern almost all of the material agreements relating to its operations. We cannot assure you that the target business will be able to enforce any of its material agreements or that remedies will be available in this new jurisdiction. The system of lawsCOVID-19 pandemic has resulted, and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce or obtain a remedy

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under any of our future agreementsother infectious diseases could result, in a significant loss of business, business opportunities or capital. Additionally, if we acquire a company located outside of the United States, it is likelywidespread health crisis that substantially all of our assets would be located outside of the United States and some of our officers and directors might reside outside of the United States. As a result, it may not be possible for investors in the United States to enforce their legal rights, to effect service of process upon our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties of our directors and officers under federal securities laws.

Provisions in our amended and restated certificate of incorporation and bylaws and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our common stockhas and could entrench management.

Our amendedcontinue to adversely affect the economies and restated certificate of incorporation and bylaws contain provisions thatfinancial markets worldwide, which may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. Our board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. As a result, at a given annual meeting only a minority of the board of directors may be considered for election. Since our “staggered board” may prevent our stockholders from replacing a majority of our board of directors at any given annual meeting, it may entrench management and discourage unsolicited stockholder proposals that may be in the best interests of stockholders. Moreover, our board of directors has the ability to designate the terms of and issue new series of preferred stock.

We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

Because we must furnish our stockholders with target business financial statements prepared in accordance with U.S. generally accepted accounting principles or international financial reporting standards, we will not be able to complete a business combination with prospective target businesses unless their financial statements are prepared in accordance with U.S. generally accepted accounting principles or international financial reporting standards.

The federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards as issued by the Internal Accounting Standards Board, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. We will include the same financial statement disclosure in connection with any tender offer documents we use, whether or not they are required under the tender offer rules. Additionally, to the extent we furnish our stockholders with financial statements prepared in accordance with IFRS, such financial statements will need to be audited in accordance with U.S. GAAP at the time of the consummation of any of the Business Combinations, and the business combination. Theseof any of Theraplant or True Harvest or Greenrose following Closing of any of the Business Combination could be materially and adversely affected. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.

The disruptions posed by COVID-19 and various variants, including most recently the omicron variant, have continued, and other matters of global concern may continue, for an extensive period of time, and if Greenrose is unable to recover from business disruptions due to COVID-19 or other matters of global concern on a timely basis, Greenrose’s financial statement requirementscondition and results of operations may limit the pool of potential target businesses webe materially adversely affected. Greenrose may acquire.

also incur additional costs due to delays caused by COVIDThere is currently no market for our securities and a market for our securities may not develop,-19, which wouldcould adversely affect the liquidityGreenrose’s financial condition and priceresults of our securities.

There is currently no market for our securities. Stockholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.operations.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation

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and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business and results of operations.

There may be tax consequences to our business combinationsthe Theraplant Merger or the True Harvest Acquisition that may adversely affect us.

While we expect to undertake any mergerThe Theraplant Merger or acquisition so as to minimize taxes both to the acquired business and/or asset and us, such business combinationTrue Harvest Business Combination might not meet the statutory requirements of a tax-free reorganization, or the parties might not obtain the intended tax-free treatment upon a transfer of shares or assets. A non-qualifying reorganization could result in the imposition of substantial taxes.

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Our amended and restated certificate of incorporation will provide,provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.

Our amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors, officers and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel.

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation.

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

Our amended and restated certificate of incorporation will provideprovides that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder and Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act, the Securities Act or any other claim for which the federal courts have exclusive jurisdiction.

There are risks related to the cannabis industry to which we may be subject.

We will not invest in or consummate a business combination with a target business that we determine has been operating in violation of U.S. federal laws, includingother than the Controlled Substances Act. Nevertheless, business combinations with companies with operations in the cannabis industry entail special considerations and risks. If we are successful in completing a business combination with a target business with operations in the cannabis industry, weWe will be subject to, and possibly adversely affected by, the following risks:

•        the cannabis industry is extremely speculative, and its legality is uncertain and constantly changing, making it subject to inherent risk;risks;

•        use of cannabis that is not in compliance with the Controlled Substances Act is illegal under federal law, and therefore, strict enforcement of federal laws regarding the use, cultivation, processing and/or sale of cannabis would likely result in our inability to execute a business plan in the cannabis industry;

•        any changes in the current policies of the TrumpBiden Administration and the Department of Justice resulting in heightened enforcement of federal cannabis laws may negatively impact our ability to pursue our prospective business operations and/or generate revenues;

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•        federal courts may refuse to recognize the enforceability of contracts pertaining to any business operations that are deemed illegal under federal law and, as a result, cannabis-related contracts could prove unenforceable in such courts;

•        consumer complaints and negative publicity regarding cannabis related products and services could lead to political pressure on states to implement new laws and regulations that are adverse to the cannabis industry or to reverse current favorable laws and regulations relating to cannabis;

•        assets leased or sold to cannabis businesses may be forfeited to the federal government in connection with government enforcement actions under federal law;

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•        U.S. Food and Drug Administration regulation of cannabis and the possible registration of facilities where cannabis is grown could negatively affect the cannabis industry, which could directly affect our financial condition;

•        due to our proposed involvement in the regulated cannabis industry, we may have a difficult time obtaining the various insurance policies that are needed to operate our business, which may expose us to additional risks and financial liabilities;

•        the cannabis industry may face significant opposition from other industries that perceive cannabis products and services as competitive with their own, including but not limited to the pharmaceutical industry, adult beverage industry and tobacco industry, all of which are have powerful lobbying and financial resources;

•        many national and regional banks have been resistant to doing business with cannabis companies because of the uncertainties presented by federal law and, as a result, we may have difficulty accessing the service of banks, which may inhibit our ability to open bank accounts, obtain financing in the future, or otherwise utilize traditional banking services;

•        laws and regulations affecting the regulated cannabis industry are varied, broad in scope and subject to evolving interpretations, and may restrict the use of the properties we acquire or require certain additional regulatory approvals, which could materially adversely affect our operations;

•        securities exchanges may not list companies engaged in the cannabis industry; and

•        Section 280E of the Internal Revenue Code, which disallows a tax deduction for any amount paid or incurred in carrying on any trade or business that consists of trafficking in controlled substances prohibited by federal or state law, mayis anticipated to prevent us from deducting certain business expenditures, which would increase our net taxable income.

Any of the foregoing could have a material and adverse impact on our operations following a business combination. However, our effortsoperations.

The cannabis industry is an evolving industry, and we must anticipate and respond to changes.

The cannabis industry in identifying prospective target businesses will notthe United States is growing significantly, although its development and evolution cannot yet be limitedaccurately predicted. While Greenrose has attempted to identify many risks specific to the cannabis industry. Accordingly, ifindustry, you should carefully consider that there are other risks that cannot be foreseen or are not described in this prospectus, which could materially and adversely affect Greenrose’s business and financial performance. Greenrose’s long-term success will depend on its ability to successfully adjust its strategy to meet the changing market dynamics. If Greenrose is unable to successfully adapt to changes in the cannabis industry, Greenrose’s operations could be adversely affected.

If we acquire a targetare unable to recruit, train, retain and motivate key personnel, we may not achieve our business objectives.

Our future success depends on our ability to recruit, train, retain and motivate key personnel, including members of the management of Theraplant. Additionally, we face challenges in anotherattracting, retaining and motivating highly qualified personnel due to our relationship to the cannabis industry, these risks will likelywhich is rapidly evolving and has varying levels of social acceptance. We do not affect usmaintain fixed term employment contracts or key man life insurance with any of our employees. Any failure to attract, train, retain and motivate qualified personnel could materially harm our operating results and growth prospects.

If we fail to manage our growth effectively, our brand, business and operating results could be harmed.

We have experienced rapid growth in our headcount and operations, which places substantial demands on management and our operational infrastructure. To manage the expected growth of our operations and personnel, we will be subjectrequired to other risks attendant withimprove existing, and implement new, transaction-processing, operational and financial systems, procedures and controls. We will also be required to expand our finance, administrative and operations staff. We intend to continue making substantial investments in our technology, sales and data infrastructure. As we continue to grow, we must effectively integrate, develop and motivate a significant number of new employees, while maintaining the specific industry inbeneficial aspects of our existing corporate culture, which we operate or target business which we acquire, none of which can be presently ascertained.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

The statements contained in this prospectus that are not purely historical are forward-looking statements. Our forward-looking statements include, but are not limited to, statements regardingbelieve fosters innovation, teamwork and a passion for our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future.products and clients. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predicts,” “project,” “should,” “would” and similar expressionsour revenue may identify forward-looking statements, butnot grow at the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements about:

•        our ability to complete our initial business combination;

•        our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;

•        our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination,same rate as a result of which they would then receive expense reimbursements;

•        our potential ability to obtain additional financing to complete a business combination;

•        our pool of prospective target businesses;

•        the abilityexpansion of our officers and directors to generate a numberbusiness.

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Table of potential investment opportunities;Contents

•        potential changes in control of us if we acquire one or more target businesses for stock;

•        our public securities’ potential liquidity and trading;

•        the lack of a market for our securities;

•        our expectations regarding the time during which we will be an “emerging growth company” under the JOBS Act;

•        our use of proceeds not held in the trust account or available to us from interest income on the trust account balance; or

•        our financial performance following this offering.

The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting usour current and planned personnel, systems, procedures and controls will be adequate to support our future operations or that management will be able to hire, train, retrain, motivate and manage required personnel. If we are unable to manage our growth effectively, the quality of our platform, efficiency of our operations, and management of our expenses could suffer, which could negatively impact our brand, business, profitability and operating results.

Changes in existing laws, regulations or other factors could negatively impact our future effective tax rate.

Our future effective tax rate may be affected by such factors as changing interpretation of existing laws or regulations, the impact of accounting for equity-based compensation, the impact of accounting for business combinations, and changes in overall levels of income before tax. In addition, in the ordinary course of our business, there are many intercompany transactions and calculations where the ultimate tax determination is uncertain.

Although we believe that our tax estimates are reasonable, we cannot ensure that the final determination of tax audits or tax disputes will not be different from what is reflected in our historical income tax provisions and accruals.

Natural disasters and other events beyond our control could harm our business.

Natural disasters or other catastrophic events, such as earthquakes, flooding, wildfires, power shortages, pandemics such as COVID-19, terrorism, political unrest, telecommunications failure, vandalism, cyberattacks, geopolitical instability, war, drought, sea level rise and other events beyond our control may cause damage or disruption to our operations, the operations of our suppliers and service providers, international commerce and the global economy, and could seriously harm our revenue and financial condition and increase our costs and expenses. The geographic location of our facilities, as well as the facilities of certain of our key suppliers and service providers, subject them to earthquake and wildfire risks. If a major earthquake, wildfire or other natural disaster were to damage our facilities or the facilities of suppliers and service providers or impact the ability of our employees or the employees of our suppliers and service providers to travel to their workplace, we may experience potential impacts ranging from production and shipping delays to lost revenues and increased costs, which could significantly harm our business. Moreover, planned widespread blackouts during the peak wildfire season, such as those instituted in October 2019 by Pacific Gas and Electric, the public electric utility in the Northern California region, to avoid and contain wildfires sparked during strong wind events by downed power lines or equipment failure particularly if prolonged or frequent, could impact our operations and the operations of our suppliers and service providers located in the region. Many of our employees and the employees of such suppliers and service providers reside in or surrounding counties and may be unable to travel to work for the duration of any power shut off. We do not have multiple-site capacity for all of our operations in the event of a business disruption, and our insurance may not be sufficient to cover losses or additional expense that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of whichmay sustain. Furthermore, other parties in our supply chain are beyond our control)similarly vulnerable to natural disasters or other assumptionssudden, unforeseen, and severe adverse events. A natural disaster or other catastrophic event in any of our major markets could have a material adverse impact on our business, financial condition, results of operations, or cash flows. Also, in the event of damage or interruption, our insurance policies may not adequately compensate us for any losses that we may cause actualincur.

The impact of global, regional or local economic and market conditions may adversely affect our business, operating results orand financial condition.

Our performance is subject to be materially different from those expressed or implied by these forward-looking statements. These risksglobal economic conditions and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Shouldeconomic conditions in one or more of our key markets, which impact spending by our clients and consumers. Many of our clients are small and medium-sized businesses that operate just a few retail locations, and their access to capital, liquidity and other financial resources is constrained due to the regulatory restrictions applicable to cannabis businesses. As a result, these risksclients may be disproportionately affected by economic downturns. Clients may choose to allocate their spending to items other than our platform, especially during economic downturns.

Economic conditions may also adversely impact retail sales of cannabis. Declining retail sales of cannabis could result in our clients going out of business or uncertainties materialize,deciding to stop using our platform to conserve financial resources. Negative economic conditions may also affect third parties with whom we have entered into relationships and upon whom we depend in order to grow our business.

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Furthermore, economic downturns could also lead to limitations on our ability to obtain debt or shouldequity financing on favorable terms or at all, reduced liquidity, decreases in the market price of our securities, decreases in the fair market value of our financial or other assets, and write-downs of and increased credit and collectability risk on our receivables, any of which could have a material adverse effect on our assumptions prove incorrect, actualbusiness, operating results or financial condition.

We will need to expand our organization and may experience difficulties in recruiting needed additional employees and consultants, which could disrupt operations.

As our development and commercialization plans and strategies develop, we will need additional managerial, operational, sales, marketing, financial, legal and other resources. The competition for qualified personnel in the cannabis industry is intense. Due to this intense competition, we may be unable to attract and retain the qualified personnel necessary for the development of our business or to recruit suitable replacement personnel.

Our management may need to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities. We may not be able to effectively manage the expansion of its operations, which may result in weaknesses in its infrastructure, operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Our expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of additional products. If our management is unable to effectively manage its growth, its expenses may increase more than expected, and its ability to generate and/or grow revenue could be reduced and it may not be able to implement its business strategy. Our future financial performance and its ability to commercialize products and services and compete effectively will depend, in part, on its ability to effectively manage any future growth.

As our costs increase, we may not be able to generate sufficient revenue to maintain profitability in the future.

Revenue for the business of Theraplant may not be sustainable due to a number of factors, including the maturation of our business and the eventual decline in the number of new major geographic markets in which the sale of cannabis is permitted and to which we have not already expanded. We may not be able to generate sufficient revenue to sustain profitability. Additionally, our costs may increase in future periods as we expend substantial financial and other resources on, among other things:

•        sales and marketing, including continued investment in our current marketing efforts and future marketing initiatives;

•        hiring of additional employees, including our product and engineering teams;

•        expansion domestically in an effort to increase our client usage, client base, and our sales to our clients;

•        development of new products, and increased investment in the ongoing development of our existing products; and

•        general administration, including a significant increase in legal and accounting expenses related to public company compliance, continued compliance with various regulations applicable to cannabis industry businesses and other work arising from the growth and maturity of our Company.

These expenditures may not result in additional revenue or the growth of our business. If we fail to continue to grow revenue or to sustain profitability, the market price of our securities could decline, and our business, operating results and financial condition could be adversely affected.

Ongoing compliance with applicable local suitability requirements for significant stockholders and senior officers

Under applicable State licensure requirements, if Greenrose’s policymaking senior officers and significant stockholders were to be found to be unsuitable under applicable law, there is a risk that the Company’s licensure in such State may be subject to administrative action, suspension or revocation. Significant stockholder thresholds vary by local regulatory framework but are generally set at 5% or 10% of the shares outstanding of the applicant for the license transfer. Officer suitability applications are also submitted for each natural person serving the applicant in a senior officer or policymaking role. In the event any person or stockholder whose suitability determination is a

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requirement of license transfer were in the future to become unsuitable under applicable law, local licensing may be put at risk of regulatory administrative action. To monitor compliance, Greenrose’s compliance procedures will include quarterly verification of ongoing suitability under applicable law. If any party whose suitability was established in connection with Greenrose’s applications for license transfer were in the future to become unsuitable, or any significant stockholder unknown to Greenrose were to be unsuitable under applicable law, to preclude or mitigate regulatory risk, Greenrose has the right to repurchase such unsuitable party’s stock. The repurchase price to be paid by Greenrose in any such repurchase may be material respects fromand unanticipated.

Risks Related to Theraplant’s Business

Issuance of new cultivation licenses

Introduction in Connecticut of legislation authorizing recreational adult use may have an impact on patient or usage rates for medical use of cannabis; it is unclear what impact such trends, if significant and prolonged, may have on the business or prospects of Theraplant. Additionally, the regulatory framework implementing and administering the recently legalized adult use market in Connecticut is not yet complete, and development and implementation of that framework may create uncertainties relating to the rules applicable to the issuance of new licenses as well as the timing of and any limitations on adult use sales of cannabis in Connecticut.

Because our business is dependent, in part, upon continued market acceptance of cannabis by consumers, any negative trends could adversely affect our business operations.

We are dependent on public support, continued market acceptance and the proliferation of consumers in the state-level cannabis markets. While we believe that the market and opportunities in the space will continue to grow, we cannot predict the future growth rate or size of the market. Any downturns in, or negative outlooks on, the cannabis industry may adversely affect our business and financial condition.

Expansion of our business is dependent on the continued legalization of cannabis.

Expansion of our business is in part dependent upon continued legislative authorization, including by voter initiatives and referenda, of cannabis in various jurisdictions worldwide. Any number of factors could slow, halt, or even reverse progress in this area. For example, some ballot measures in 2020 were delayed due to the COVID-19 pandemic. Further, progress for the industry, while encouraging, is not assured. While there may be ample public support for legislative action in a particular jurisdiction, numerous factors could impact the legislative process, including lobbying efforts by opposing stakeholders as well as legislators’ disagreements about how to legalize cannabis as well as the interpretation, implementation, and enforcement of applicable laws or regulations. Any one of these factors could slow or halt the legalization of cannabis, which would negatively impact our ability to expand our business. Additionally, the expansion of our business also depends on jurisdictions in which cannabis is currently legalized not narrowing, limiting or repealing existing laws legalizing and regulating cannabis, or altering the regulatory landscape in a way that diminishes the viability of cannabis businesses in those projectedjurisdictions. Additionally, if such challenges are successful in these forwardany other jurisdictions that have legalized or are in the process of legalizing cannabis, our ability to expand our business would be negatively impacted.

-lookingCannabis remains illegal under federal law, and therefore, strict enforcement of federal laws regarding cannabis would likely result in our inability to execute our business plan.

Cannabis, other than hemp (defined by the U.S. government as Cannabis sativa L. with a THC concentration of not more than 0.3% on a dry weight basis), is a Schedule I controlled substance under the Controlled Substances Act (“CSA”). Even in states or territories that have legalized cannabis to some extent, the cultivation, possession, and sale of cannabis all violate the CSA and are punishable by imprisonment, substantial fines and forfeiture. Moreover, individuals and entities may violate federal law if they aid and abet another in violating the CSA, or conspire with another to violate the law, and violating the CSA is a predicate for certain other crimes, including money laundering laws and the Racketeer Influenced and Corrupt Organizations Act. The U.S. Supreme Court has ruled that the federal government has the authority to regulate and criminalize the sale, possession and use of cannabis, even for individual medical purposes, regardless of whether it is legal under state law. For over five years, however, the U.S. government has not prioritized the enforcement of those laws against cannabis

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companies complying with state law and their vendors. No reversal of that policy of prosecutorial discretion is expected under a Biden administration given his campaign’s position on cannabis, discussed further below, although prosecutions against state-legal statements. We undertake no obligationentities cannot be ruled out.

On January 4, 2018, then U.S. Attorney General Jeff Sessions issued a memorandum for all U.S. Attorneys (the “Sessions Memo”) rescinding certain past DOJ memoranda on cannabis law enforcement, including the Memorandum by former Deputy Attorney General James Michael Cole (the “Cole Memo”) issued on August 29, 2013, under the Obama administration. Describing the criminal enforcement of federal cannabis prohibitions against those complying with state cannabis regulatory systems as an inefficient use of federal investigative and prosecutorial resources, the Cole Memo gave federal prosecutors discretion not to updateprosecute state law compliant cannabis companies in states that were regulating cannabis, unless one or revise any forwardmore of eight federal priorities were implicated, including use of cannabis by minors, violence, or the use of federal lands for cultivation. The Sessions Memo, which remains in effect, states that each U.S. Attorney’s Office should follow established principles that govern all federal prosecutions when deciding which cannabis activities to prosecute. As a result, federal prosecutors could and still can use their prosecutorial discretion to decide to prosecute even state-looking-legal statements, whethercannabis activities. Since the Sessions Memo was issued nearly three years ago, however, U.S. Attorneys have generally not prioritized the targeting of state law compliant entities.

Then Attorney General William Barr testified in his confirmation hearing on January 15, 2019, that he would not upset “settled expectations,” “investments,” or other “reliance interest[s]” arising as a result of new information, future events or otherwise, exceptthe Cole Memo, and that he does not intend to devote federal resources to enforce federal cannabis laws in states that have legalized cannabis “to the extent people are complying with the state laws.” He stated: “My approach to this would be not to upset settled expectations and the reliance interests that have arisen as a result of the Cole Memorandum and investments have been made and so there has been reliance on it, so I don’t think it’s appropriate to upset those interests.” He also implied that the CSA’s prohibitions of cannabis may be required under applicable securities laws.

36

implicitly nullified in states that have legalized cannabis: “[T]he current situation … is almost like a backUSE OF PROCEEDS-door

We estimate nullification of federal law.” Industry observers generally have not interpreted former Attorney General Barr’s comments to suggest that the net proceedsDOJ would proceed with cases against participants who entered the state-legal industry after the Cole Memo’s rescission.

As such, we cannot assure that each U.S. Attorney’s Office in each judicial district where we operate will not choose to enforce federal laws governing cannabis sales against state-legal companies like our business clients. The basis for the federal government’s lack of this offering, in addition to the funds we will receive from the sale of the private securities (all of which will be deposited into the trust account), will be as set forth in the following table:

Gross proceeds

 

Without
Over-Allotment
Option

 

Over-Allotment
Option
Exercised

From offering

 

$

150,000,000

 

 

$

172,500,000

 

From private placement

 

$

4,500,000

 

 

$

4,950,000

 

Total gross proceeds

 

$

154,500,000

 

 

$

177,450,000

 

Offering expenses(1)

 

 

 

 

 

 

 

 

Underwriting discount (2% of gross proceeds from units offered to public)

 

$

3,000,000

(2)

 

$

3,450,000

(2)

Legal fees and expenses

 

 

250,000

 

 

 

250,000

 

Nasdaq Listing Fees

 

 

75,000

 

 

 

75,000

 

Printing and engraving expenses

 

 

32,500

 

 

 

32,500

 

Accounting fees and expenses

 

 

32,500

 

 

 

32,500

 

FINRA filing fee

 

 

26,400

 

 

 

26,400

 

SEC registration fee

 

 

22,391

 

 

 

22,391

 

Miscellaneous expenses

 

 

311,209

 

 

 

311,209

 

Total expenses

 

 

3,750,000

 

 

 

4,200,000

 

Net proceeds

 

 

 

 

 

 

 

 

Held in trust

 

 

150,000,000

 

 

 

172,500,000

 

Not held in trust

 

 

750,000

 

 

 

750,000

 

Total net proceeds

 

$

150,750,000

 

 

$

173,250,000

 

 

Amount

 

Percentage

Use of net proceeds not held in trust(3)(4)

 

 

   

 

Legal, accounting and other third-party expenses attendant to the search for target businesses and to the due diligence investigation, structuring and negotiation of a business combination

 

$

100,000

 

13.3

%

Due diligence of prospective target businesses by officers, directors
and sponsor

 

 

50,000

 

6.7

%

Legal and accounting fees relating to SEC reporting obligations

 

 

100,000

 

13.3

%

Payment of administrative fee to our sponsor ($10,000 per month for
up to 18 months)(5)

 

 

180,000

 

24.0

%

Working capital to cover miscellaneous expenses, including D&O insurance

 

 

320,000

 

42.7

%

Total

 

$

750,000

 

100

%

____________

(1)      A portion of the offering expenses, including the SEC registration fee, the FINRA filing fee, the non-refundable portion of the Nasdaq listing fee and a portion of the legal and audit fees, have been paid from the loan we received from our sponsor described below. These funds will be repaid out of the proceeds of this offering available to us.

(2)      No discounts or commissions will be paidrecent enforcement with respect to the purchasecannabis industry extends beyond the strong public sentiment and ongoing prosecutorial discretion. Since 2014, versions of the private securities.U.S. omnibus spending bill have included a provision prohibiting the DOJ, which includes the Drug Enforcement Administration, from using appropriated funds to prevent states from implementing their medical-use cannabis laws. In USA vs. McIntosh, the U.S. Court of Appeals for the Ninth Circuit held that the provision prohibits the DOJ from spending funds to prosecute individuals who engage in conduct permitted by state medical-use cannabis laws and who strictly comply with such laws. The court noted that, if the spending bill provision were not continued, prosecutors could enforce against conduct occurring during the statute of limitations even while the provision was previously in force. Other courts that have considered the issue have ruled similarly, although courts disagree about which party bears the burden of proof of showing compliance or noncompliance with state law. Our policies do not prohibit our state-licensed cannabis retailers from engaging in the cannabis business for adult use that is permissible under state and local laws. Consequently, certain of our retailers currently (and may in the future) sell adult-use cannabis, if permitted by such state and local laws now or in the future, and therefore may be outside any protections extended to medical-use cannabis under the spending bill provision. This could subject our clients to greater and/or different federal legal and other risks as compared to businesses where cannabis is sold exclusively for medical use, which could in turn materially adversely affect our business. Furthermore, any change in the federal government’s enforcement posture with respect to state-licensed cannabis sales, including the enforcement postures of individual federal prosecutors in judicial districts where we operate, would result in our inability to execute our business plan, and we would likely suffer significant losses with respect to client base, which would adversely affect our operations, cash flow and financial condition.

(3)While President Biden’s campaign position on cannabis falls short of full legalization, he has campaigned on a platform of relaxing enforcement of cannabis proscriptions, including decriminalization generally. According to the Biden campaign website: “A Biden Administration will support the legalization of cannabis for medical purposes and reschedule cannabis as a CSA Schedule II drug so researchers can study its positive and negative impacts. This will include allowing the VA to research the use of medical cannabis to treat veteran-specific health needs.” He has pledged to “decriminalize” cannabis, which could prompt his U.S. Attorney General to issue policy guidance to U.S. Attorneys that they should not enforce federal cannabis prohibition against state law compliant entities and others

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legally transacting business with them. Indeed, the Biden-Sanders Unity Platform, which was released at the time President Biden won the Democratic Party nomination for President, affirmed that his administration would seek to “[de]criminalize marijuana use and legalize marijuana for medical purposes at the federal level;” “allow states to make their own decisions about legalizing recreational use;” and “automatically expunge all past marijuana convictions for use and possession.” Vice President Harris echoed these intentions during the vice-presidential debate, saying that “[w]e will decriminalize marijuana and we will expunge the records of those who have been convicted of marijuana [-related offenses].” While President Biden’s promise to decriminalize likely would mean that the federal government would not criminally enforce the Schedule II status against state legal entities, the implications are not entirely clear.

Although the U.S. Attorney General could issue policy guidance to federal prosecutors that they should not interfere with cannabis businesses operating in compliance with states’ laws, any such guidance would not have the force of law and could not be enforced by the courts. The President alone cannot legalize medical cannabis, and as states have demonstrated, legalizing medical cannabis can take many different forms. While rescheduling cannabis to the CSA’s Schedule II would ease certain research restrictions, it would not make the state medical or adult-use programs federally legal. Additionally, President Biden has not appointed any known proponents of cannabis legalization to the Office of National Drug Control Policy transition team. Furthermore, while industry observers are hopeful that changes in Congress, along with a Biden presidency, will increase the chances of federal cannabis policy reform, such as the Marijuana Opportunity Reinvestment and Expungement Act (or MORE Act), which was originally co-sponsored by now Vice President Harris in the Senate, or banking reform, such as the SAFE Banking Act, we cannot provide assurances about the content, timing or chances of passage of a bill legalizing cannabis, particularly in the Senate. Accordingly, we cannot predict the timing of any change in federal law or possible changes in federal enforcement. In the unlikely event that the federal government were to reverse its long-standing hands-off approach to the state legal cannabis markets and start more broadly enforcing federal law regarding cannabis, we would likely be unable to execute our business plan, and our business and financial results would be adversely affected.

There is currently no interstate commerce in the cannabis industry due to the federal prohibition of cannabis as a Schedule I narcotic. The relaxation of the federal laws prohibiting the sale of cannabis products across state lines will eventually lead to interstate commerce, which could have a material adverse effect on the business of the company.

Our business and our clients are subject to a variety of U.S. and foreign laws regarding financial transactions related to cannabis, which could subject our clients to legal claims or otherwise adversely affect our business.

We and our clients are subject to a variety of laws and regulations in the United States regarding financial transactions. Violations of the U.S. anti-money laundering (AML) laws require proceeds from enumerated criminal activity, which includes trafficking in cannabis in violation of the CSA. Financial institutions that both we and our clients rely on are subject to the Bank Secrecy Act, as amended by Title III of the USA Patriot Act. The penalties for violation of these laws include imprisonment, substantial fines and forfeiture.

In 2014, the DOJ under the Obama administration directed federal prosecutors to exercise restraint in prosecuting AML violations arising in the state legal cannabis programs and to consider the federal enforcement priorities enumerated in the Cole Memo when determining whether to charge institutions or individuals based upon cannabis-related activity. Around the same time, the Treasury Department issued guidance that clarified how financial institutions can provide services to cannabis-related businesses, consistent with financial institutions’ obligations under the Bank Secrecy Act. Then-Attorney General Sessions’ rescission of the DOJ’s guidance on the state cannabis programs in early 2018 increased uncertainty and heighted the risk that federal law enforcement authorities could seek to pursue money laundering charges against entities, or individuals, engaged in supporting the cannabis industry. On January 31, 2018, the Treasury Department issued additional guidance that the 2014 Guidance would remain in place until further notice, despite the rescission of the DOJ’s earlier guidance memoranda.

We are subject to a variety of laws and regulations in the United States and the Money Laundering Control Act (U.S.), as amended, and the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by governmental authorities in the United States. If any of our clients’ business activities, any dividends or distributions therefrom, or any profits or revenue accruing thereby are found to be in violation of money laundering statutes, our clients could be subject to criminal liability and significant penalties and fines. Any violations of these laws, or allegations of such violations, by our clients could disrupt our operations and involve significant management distraction and expenses. As a result, a significant number of our clients facing money laundering charges could materially affect our business, operations and financial condition. Additionally,

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proceeds from our clients’ business activities, including payments we have received from those clients, could be subject to seizure or forfeiture if they are found to be illegal proceeds of a crime transmitted in violation of anti-money laundering laws, which could have a material adverse effect on our business. Finally, if any of our clients are found to be violating the above statutes, this could have a material adverse effect on their ability to access or maintain financial services, as discussed in detail below, which could, in turn, have a material adverse effect on our business.

We are dependent on our banking relations, and we may have difficulty accessing or consistently maintaining banking or other financial services due to our connection with the cannabis industry.

We are dependent on the banking industry to support the financial functions of our products and solutions. Our business operating functions including payroll for our employees, real estate leases, and other expenses are reliant on traditional banking. Additionally, many of our clients pay us via wire transfer to our bank accounts, or via checks that we deposit into our banks. We require access to banking services for both us and our clients to receive payments in a timely manner. Lastly, to the extent we rely on any lines of credit, these could be affected by our relationships with financial institutions and could be jeopardized if we lose access to a bank account. Important components of our offerings depend on client accounts and relationships, which in turn depend on banking functions. Most federal and federally-insured state banks currently do not serve businesses that grow and sell cannabis products on the stated ground that growing and selling cannabis is illegal under federal law, even though the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, issued guidelines to banks in February 2014 that clarified how financial institutions can provide services to cannabis-related businesses, consistent with financial institutions’ obligations under the Bank Secrecy Act. While the federal government has generally not initiated financial crimes prosecutions against state-law compliant cannabis companies or their vendors, the government theoretically could, at least against companies in the adult-use markets. The continued uncertainty surrounding financial transactions related to cannabis activities and the subsequent risks this uncertainty presents to financial institutions may result in their discontinuing services to the cannabis industry or limit their ability to provide services to the cannabis industry or ancillary businesses providing services to the cannabis industry.

As a result of federal-level illegality and the risk that providing services to state-licensed cannabis businesses poses to banks, cannabis-related businesses face difficulties accessing banks that will provide services to them. When cannabis businesses are able to find a bank that will provide services, they face extensive client due diligence in light of complex state regulatory requirements and guidance from FinCEN, and these reviews may be time-consuming and costly, potentially creating additional barriers to financial services for, and imposing additional compliance requirements on, us and our clients. FinCEN requires a party in trade or business to file with the U.S. Internal Revenue Service, or the IRS, a Form 8300 report within 15 days of receiving a cash payment of over $10,000. If we fail to comply with these laws and regulations, the imposition of a substantial penalty could have a material adverse effect on our business, results of operations and financial condition. We cannot assure that our strategies and techniques for designing our products and solutions for our clients will operate effectively and efficiently and not be adversely impacted by any refusal or reluctance of banks to serve businesses that grow and sell cannabis products. A change in banking regulations or a change in the position of the banking industry that permits banks to serve businesses that grow and sell cannabis products may increase competition for us, facilitate new entrants into the industry offering products or solutions similar to those that we offer, or otherwise adversely affect our results of operations. Also, the inability of potential clients in our target market to open accounts and otherwise use the services of banks or other financial institutions may make it difficult for us to conduct business, including receiving payments in a timely manner.

We may have difficulty using bankruptcy courts due to our involvement in the regulated cannabis industry.

We currently have no need or plans to seek bankruptcy protection. U.S. courts have held that debtors whose income is derived from cannabis or cannabis assets in violation of the CSA cannot seek federal bankruptcy protections. A U.S. court could determine that our revenue is derived from cannabis or cannabis assets and prevent us from obtaining bankruptcy protections if necessary.

We may continue to be subject to constraints on marketing our products.

Certain of the states in which we operate have enacted strict regulations regarding marketing and sales activities on cannabis products, which could affect our cannabis retail clients’ demand for our listing and marketing services. There may be restrictions on sales and marketing activities of cannabis businesses imposed by government regulatory bodies that can hinder the development of our business and operating results because of the restrictions our clients

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face. If our clients are unable to effectively market our products and compete for market share, or if the costs of compliance with government legislation and regulation cannot be absorbed through increased selling prices for our products for our clients, this could hamper demand for our products and services from licensed cannabis retailers, which could result in a loss of revenue.

Cannabis businesses are subject to unfavorable U.S. tax treatment.

Section 280E of the Code does not allow any deduction or credit for any amount paid or incurred during the taxable year in carrying on business, other than costs of goods sold, if the business (or the activities which comprise the trade or business) consists of trafficking in controlled substances (within the meaning of Schedules I and II of the Controlled Substances Act). The IRS has applied this provision to cannabis operations, prohibiting them from deducting expenses associated with cannabis businesses beyond costs of goods sold and asserting assessments and penalties for additional taxes owed. Section 280E may have a lesser impact on cannabis cultivation and manufacturing operations than on sales operations, which directly affects our clients, who are cannabis retailers. However, Section 280E and related IRS enforcement activity have had a significant impact on the operations of all cannabis companies. An otherwise profitable cannabis business may operate at a loss after considering its U.S. income tax expenses.

Cannabis businesses may be subject to civil asset forfeiture.

Any property owned by participants in the cannabis industry used in the course of conducting such business, or that represents proceeds of such business or is traceable to proceeds of such business, could be subject to seizure by law enforcement and subsequent civil asset forfeiture because of the illegality of the cannabis industry under federal law. Even if the owner of the property is never charged with a crime, the property in question could still be seized and subject to an administrative proceeding by which, with minimal due process, it could be subject to forfeiture. Forfeiture of assets of our cannabis business clients could adversely affect our revenues if it impedes their profitability or operations and our clients’ ability to continue to subscribe to our services.

Due to our involvement in the cannabis industry, we may have a difficult time obtaining the various insurances that are desired to operate our business, which may expose us to additional risk and financial liability.

Insurance that is otherwise readily available, such as general liability and directors’ and officers’ insurance, is more difficult for us to find and is more expensive or contains significant exclusions because we are cannabis industry participants. There are no guarantees that we will be able to find such insurance coverage in the future or that the cost will be affordable to us. If we are forced to go without such insurance coverage, it may prevent us from entering into certain business sectors, may inhibit our growth, and may expose us to additional risk and financial liabilities. If we experience an uninsured loss, it may result in loss of anticipated cash flow and could materially adversely affect our results of operations, financial condition, and business.

There may be difficulty enforcing certain of our commercial agreements and contracts.

Courts will not enforce a contract deemed to involve a violation of law or public policy. Because cannabis remains illegal under U.S. federal law, parties to contracts involving the state-legal cannabis industry have argued that the agreement was void as federally illegal or against public policy. Some courts have accepted this argument in certain cases, usually against the company trafficking in cannabis. While courts have enforced contracts related to activities by state-legal cannabis companies, and the trend is generally to enforce contracts with state-legal cannabis companies and their vendors, there remains doubt and uncertainty that we will be able to enforce our commercial agreements in court for this reason. We cannot be assured that we will have a remedy for breach of contract, which would have a material adverse effect on our business.

If we fail to expand effectively into new markets, our revenue and business will be adversely affected.

While a key part of our business strategy is to add clients and consumers in our existing geographic markets, we intend to expand our operations into new markets if and as cannabis continues to be legalized. Any such expansion places us in competitive markets with which we may be unfamiliar, requires us to analyze the potential applicability of new and potentially complicated regulations regarding the usage, sale and marketing of cannabis, and involves various risks, including the need to invest significant time and resources and the possibility that returns on such investments

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will not be achieved for several years, if at all. As a result of such expansion, we may incur losses or otherwise fail to enter new markets successfully. In attempting to establish a presence in new markets, we expect to incur significant expenses and face various other challenges, such as expanding our compliance efforts to cover those new markets. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenues sufficiently to offset these expenses. Our current and any future expansion plans will require significant resources and management attention.

RISKS RELATING TO THE TRUE HARVEST ACQUISITION

Greenrose’s Board did not obtain a fairness opinion in determining whether to proceed with the True Harvest Acquisition.

In analyzing the True Harvest acquisition, the Board conducted significant due diligence on True Harvest. The Board believes because of the financial skills and background of its directors, and the financial information supporting the True Harvest acquisition provided by Greenrose’s management team, it was qualified to conclude that the True Harvest acquisition was fair from a financial perspective to Greenrose’s stockholders. Notwithstanding the foregoing, the Board did not obtain a fairness opinion to assist it in its determination. There can be no assurance that the consideration paid in connection with the True Harvest acquisition reflects the fair market value of the assets being purchased in that transaction.

Theraplant and True Harvest are located in different jurisdictions, and we may find it difficult integrating each into the Company following the True Harvest acquisition.

As a result of the Theraplant Merger and the True Harvest Acquisition, Greenrose acquired operations in two (2) states and managing each of these businesses and integrating them into a single unified company may be difficult and could have a material adverse effect on Greenrose’s business, financial condition and results of operations.

True Harvest has previously been subject to litigation.

True Harvest is engaged in litigation relating to various business matters, including a dispute relating to a consulting services agreement with a consulting firm asserting that True Harvest is in breach of certain payment obligations, and that such party has filed liens securing its claims. Pursuant to the asset purchase agreement between Greenrose and True Harvest, Greenrose is not assuming liability for any litigation affecting True Harvest through the date of closing, and Greenrose understands any liability payable by True Harvest is to be paid by True Harvest in accordance with any settlement agreement entered to resolve pending litigation.

ADDITIONAL REGULATORY RISKS

Marijuana remains illegal under federal law, and enforcement of cannabis laws could change.

Cannabis is illegal under U.S. federal law. In those states in which the use of cannabis has been legalized, its use remains a violation of federal law pursuant to the Controlled Substances Act (21 U.S.C. § 811). The Controlled Substances Act classifies cannabis as a Schedule I controlled substance, and as such, medical and adult use cannabis use is illegal under U.S. federal law. Unless and until Congress amends the Controlled Substances Act with respect to cannabis (and the President approves such amendment), there is a risk that federal authorities may enforce current federal law. If that occurs, we may be deemed to be producing, cultivating or dispensing cannabis and drug paraphernalia in violation of federal law. Since federal law criminalizing the use of cannabis pre-empts state laws that legalize its use, enforcement of federal law regarding cannabis is a significant risk and would greatly harm our business, prospects, revenue, results of operation and financial condition.

Our activities are, and will continue to be, subject to evolving regulation by governmental authorities. We are directly or indirectly engaged in the medical and adult use cannabis industry in the United States where local state law permits such activities. The legality of the production, cultivation, extraction, distribution, retail sales, transportation and use of cannabis differs among states in the United States. Due to the current regulatory environment in the United States, new risks may emerge, and management may not be able to predict all such risks.

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As of June 2021, there are 36 states in the U.S., in addition to Washington D.C., Puerto Rico, Guam and the U.S. Virgin Islands, that have laws and/or regulations that recognize, in one form or another, legitimate medical uses for cannabis and consumer use of cannabis in connection with medical treatment. Alaska, Arizona, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Montana, Nevada, New Jersey, New York, Oregon, South Dakota, Vermont, Washington, Washington, D.C., and Guam have legalized cannabis for adult use.

Our activities in the medical and adult use cannabis industry may be illegal under the applicable federal laws of the United States. There can be no assurances that the federal government of the United States will not seek to enforce the applicable laws against us. The consequences of such enforcement would be materially adverse to us and our business, including our reputation, profitability and the market price of our publicly traded shares, and could result in the forfeiture or seizure of all or substantially all of our assets.

Due to the conflicting views between state legislatures and the federal government regarding cannabis, cannabis businesses are subject to inconsistent laws and regulations.

There can be no assurance that the federal government will not enforce federal laws relating to cannabis and seek to prosecute cases involving cannabis businesses that are otherwise compliant with state laws in the future.

The U.S. administration under President Obama attempted to address the inconsistent treatment of cannabis under state and federal law in the Cole Memorandum which Deputy Attorney General James Cole sent to all U.S. Attorneys in August 2013 that outlined certain priorities for the U.S. Department of Justice (“DOJ”) relating to the prosecution of cannabis offenses. The Cole Memorandum held that enforcing federal cannabis laws and regulations in trustjurisdictions that have enacted laws legalizing cannabis in some form and that have also implemented strong and effective regulatory and enforcement systems to control the cultivation, processing, distribution, sale and possession of cannabis, conduct in compliance with those laws and regulations was not a priority for the DOJ. Instead, the Cole Memorandum directed U.S. Attorney’s Offices discretion not to investigate or prosecute state law compliant participants in the medical cannabis industry who did not implicate certain identified federal government priorities, including preventing interstate diversion or distribution of cannabis to minors.

As discussed above, on January 4, 2018, then U.S. Attorney General Jeff Sessions formally issued the Sessions Memorandum, which rescinded the Cole Memorandum effective upon its issuance. The Sessions Memorandum stated, in part, that current law reflects “Congress’ determination that cannabis is a dangerous drug and cannabis activity is a serious crime”, and Mr. Sessions directed all U.S. Attorneys to enforce the laws enacted by Congress and to follow well-established principles that govern all federal prosecutions when deciding whether to pursue prosecutions related to cannabis activities. As a result, federal prosecutors could, and still can, use their prosecutorial discretion to decide to prosecute actors compliant with their state laws. Although there have not been any identified prosecutions of state law compliant cannabis entities, there can be no assurance that the federal government will remain constant at approximately $750,000not enforce federal laws relating to cannabis in the future. Jeff Sessions resigned as U.S. Attorney General on November 7, 2018. On February 14, 2019, William Barr was confirmed as U.S. Attorney General. However, in a written response to questions from U.S. Senator Cory Booker made as a nominee, Attorney General Barr stated, “I do not intend to go after parties who have complied with state law in reliance on the Cole Memo.” Nonetheless, there is no guarantee that state laws legalizing and regulating the sale and use of cannabis will not be repealed or overturned, or that local governmental authorities will not limit the applicability of state laws within their respective jurisdictions. Unless and until the United States Congress amends the CSA with respect to cannabis (and as to the timing or scope of any such potential amendments there can be no assurance), there is a risk that federal authorities may enforce current U.S. federal law.

The Department of Justice under Mr. Barr did not take a formal position on federal enforcement of laws relating to cannabis. Mr. Barr has stated publicly that his preference would be to have a uniform federal rule against cannabis, but absent such a uniform rule, his preference would be to permit the existing federal approach of leaving it up to the states to make their own decisions.

Furthermore, Acting Attorney General Monty Wilkinson, who began in his position on January 20, 2021, has not provided a clear policy directive for the United States as it pertains to state-legal cannabis-related activities. President Biden has nominated, and the United States Senate has confirmed, Merrick Garland to serve as Attorney General in the Biden administration. It is not yet known whether the Department of Justice under President Biden and Attorney General Garland, will re-adopt the Cole Memorandum or announce a substantive cannabis enforcement policy.

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If the Department of Justice policy under Acting Attorney General Wilkinson or Attorney General Garland were to aggressively pursue financiers or owners of cannabis-related businesses, and United States Attorneys followed such Department of Justice policies through pursuing prosecutions, then the Company could face (i) seizure of its cash and other assets used to support or derived from its cannabis operations, (ii) the arrest of its employees, directors, officers, managers and investors, and charges of ancillary criminal violations of the CSA for aiding and abetting and conspiring to violate the CSA by virtue of providing financial support to cannabis companies that service or provide goods to state-licensed or permitted cultivators, processors, distributors, and/or retailers of cannabis, and/or (iii) the barring of its employees, directors, officers, managers and investors who are not United States citizens from entry into the United States for life.

One legislative safeguard for the medical cannabis industry, appended to federal appropriations legislation, remains in place. Currently referred to as the “Rohrabacher-Blumenauer Amendment”, this so-called “rider” provision has been appended to the Consolidated Appropriations Acts for fiscal years 2015, 2016, 2017, 2018, and 2019. Under the terms of the Rohrabacher-Blumenauer rider, the federal government is prohibited from using congressionally appropriated funds to enforce federal cannabis laws against regulated medical cannabis actors operating in compliance with state and local law. On December 20, 2019, then President Donald Trump signed the Consolidated Appropriations Act, 2020 which included the Rohrabacher-Blumenauer Amendment, which prohibits the funding of federal prosecutions with respect to medical cannabis activities that are legal under state law. On December 27, 2020, the omnibus spending bill passed including the Rohrabacher-Blumenauer Amendment, extending its application until September 30, 2021. There can be no assurances that the Rohrabacher-Blumenauer Amendment will be included in future appropriations bills to prevent the federal government from using congressionally appropriated funds to enforce federal cannabis laws against regulated medical cannabis actors operating in compliance with state and local law.

There is no guarantee that state laws legalizing and regulating the sale and use of cannabis will not be repealed, amended or overturned, or that local governmental authorities will not limit the applicability of state laws within their respective jurisdictions. Unless and until the United States Congress amends or repeals the CSA with respect to medical and/or adult-use cannabis (and as to the timing or scope of any such potential amendment or repeal there can be no assurance), there is a significant risk that federal authorities may enforce current federal law. If the federal government begins to enforce federal laws relating to cannabis in states where the sale and use of cannabis is currently legal, or if existing applicable state laws are repealed or curtailed, the Company’s business, results of operations, financial condition and prospects would be materially adversely affected.

Marijuana (cannabis) remains a Schedule I controlled substance under the CSA, and neither the Cole Memorandum nor its rescission nor the continued passage of the Rohrabacher/Blumenauer Amendment has altered that fact. The federal government of the United States has always reserved the right to enforce federal law in regard to the sale and disbursement of medical or adult-use marijuana, even if state law sanctions such sale and disbursement. If the overUnited States federal government begins to enforce United States federal laws relating to cannabis in states where the sale and use of cannabis is currently legal, or if existing applicable state laws are repealed or curtailed, the Company’s business, results of operations, financial condition and prospects would be materially adversely affected.

The uncertainty of U.S. federal enforcement practices going forward and the inconsistency between U.S. federal and state laws and regulations present major risks for us.

-allotmentWe may be subject to action by the U.S. federal government.

Since the cultivation, processing, production, distribution and sale of cannabis for any purpose, medical, adult use or otherwise, remain illegal under U.S. federal law, it is possible that we may be forced to cease activities. The U.S. federal government, though, among others, the Department of Justice, its sub-agency the Drug Enforcement Administration and the Internal Revenue Service, has the right to actively investigate, audit and shut down cannabis growing facilities, processors and retailers. The U.S. federal government may also attempt to seize our property. Any action taken by the Department of Justice, the Drug Enforcement Administration and/or the IRS to interfere with, seize or shut down our operations will have an adverse effect on our business, prospects, revenue, results of operation and financial condition.

Since federal law criminalizing the use of cannabis pre-empts state laws that legalize its use, the federal government can assert criminal violations of federal law despite state laws permitting the use of cannabis. It does not appear that federal law enforcement and regulatory agencies are focusing resources on licensed marijuana related

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businesses that are operating in compliance with state law, although the position of the current administration is exercised. The amountunclear with respect efforts to reform, repeal or amendment the CSA to decriminalize cannabis, or the timing of any such efforts. As the recession of the Cole Memorandum and the implementation of the Sessions Memorandum demonstrate, the Department of Justice may at any time issue additional guidance that directs federal prosecutors to devote more resources to prosecuting marijuana related businesses. We could face:

(i)     seizure of our cash and other assets used to support or derived from our cannabis subsidiaries;

(ii)    the arrest of our employees, directors, officers, managers and investors; and

(iii)   ancillary criminal violations of the Controlled Substances Act for aiding and abetting, and conspiracy to violate the Controlled Substances Act by providing financial support to cannabis companies that service or provide goods to state-licensed or permitted cultivators, processors, distributors and/or retailers of cannabis.

Because the Cole Memorandum was rescinded, the Department of Justice under the current administration or an aggressive federal prosecutor could allege that Greenrose and our Board, our executive officers and, potentially, our shareholders, “aided and abetted” violations of federal law by providing finances and services to our portfolio cannabis companies. Under these circumstances, federal prosecutors could seek to seize our assets, and to recover the “illicit profits” previously distributed to shareholders resulting from any of our financing or services. In these circumstances, our operations would cease, shareholders may lose their entire investments and directors, officers and/or shareholders may be left to defend any criminal charges against them at their own expense and, if convicted, be sent to federal prison.

Additionally, there can be no assurance as to the position any new administration may take on marijuana, and a new administration could decide to enforce the federal laws strongly. Any enforcement of current federal marijuana laws could cause significant financial damage to us and our shareholders. Further, future presidential administrations may choose to treat marijuana differently and potentially enforce the federal laws more aggressively.

Violations of any federal laws and regulations could result in significant fines, penalties, administrative sanctions, convictions or settlements arising from civil proceedings conducted by either the federal government or private citizens, or criminal charges, including, but not limited to, disgorgement of profits, cessation of business activities or divestiture. These results could have a material adverse effect on us, including our reputation and ability to conduct business, our holding (directly or indirectly) of cannabis licenses in the table above doesUnited States, the listing of our securities on various stock exchanges, our financial position, operating results, profitability or liquidity or the market price of our common stock. In addition, it is difficult to estimate the time or resources that would be needed for the investigation or final resolution of any such matters because: (i) the time and resources that may be needed depend on the nature and extent of any information requested by the authorities involved, and (ii) such time or resources could be substantial.

State regulation of cannabis is uncertain.

There is no assurance that state laws legalizing and regulating the sale and use of cannabis will not include interest availablebe amended, repealed or overturned, or that local governmental authorities will not limit the applicability of state laws within their respective jurisdictions. If the U.S. federal government begins to enforce U.S. federal laws relating to cannabis in states where the sale and use of cannabis is currently legal, or if existing state laws are repealed or curtailed, our business or operations in those states or under those laws would be materially and adversely affected. Federal actions against any individual or entity engaged in the cannabis industry, or a substantial repeal of cannabis related legislation could adversely affect us, our business and our assets or investments.

The rulemaking process at the state level that applies to cannabis operators in any state will be ongoing and result in frequent changes. As a result, a compliance program is essential to manage regulatory risk. All of our implemented operating policies and procedures are compliance-based and are derived from the trust account. The proceeds heldstate regulatory structure governing ancillary cannabis businesses and their relationships to state-licensed or permitted cannabis operators, if any. Notwithstanding our efforts and diligence, regulatory compliance and the process of obtaining regulatory approvals can be costly and time-consuming. No assurance can be given that we will receive the requisite licenses, permits or cards to continue operating our businesses.

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In addition, local laws and ordinances could restrict our business activity. Although our operations are legal under the laws of the states in which we operate, local governments have the ability to limit, restrict and ban cannabis businesses from operating within their jurisdiction. Land use, zoning, local ordinances and similar laws could be adopted or changed and have a material adverse effect on our business.

Multiple states where medical and/or adult use cannabis is legal have or are considering special taxes or fees on businesses in the trust accountmarijuana industry. It is uncertain at this time whether other states are in the process of reviewing such additional taxes and fees. The implementation of special taxes or fees could have a material adverse effect upon our business, prospects, revenue, results of operation and financial condition.

Following completion of the Theraplant Merger and the True Harvest Acquisition, we will operate in Arizona and Connecticut and intend to operate in other states as deemed appropriate by management.

State regulatory agencies may require us to post bonds or significant fees.

There is a risk that a greater number of state regulatory agencies will begin requiring entities engaged in certain aspects of the business or industry of legal marijuana to post a bond or significant fees when applying, for example, for a dispensary license or renewal as a guarantee of payment of sales and franchise taxes. We are not able to quantify at this time the potential scope of such bonds or fees in the states in which we currently operate or may in the future operate. Any bonds or fees of material amounts could have a negative impact on the ultimate success of our business.

We may face limitations on ownership of cannabis licenses.

In certain states, the cannabis laws and regulations limit not only the number of cannabis licenses issued, but also the number of cannabis licenses that one person or entity may own. Such limitations on the ownership of additional licenses within certain states may limit our ability to expand in such states. We may employ joint ventures from time to time to ensure continued compliance with the applicable regulatory guidelines. We will structure our joint ventures on a case-by-case basis but will generally try to maintain operational control over the joint venture business and a variable economic interest through the applicable governing documents.

We may become subject to Food and Drug Administration or Bureau of Alcohol, Tobacco, Firearms and Explosives regulation.

Cannabis remains a Schedule I controlled substance under U.S. federal law. If the federal government reclassifies cannabis to a Schedule II controlled substance, it is possible that the Food and Drug Administration would seek to regulate cannabis under the Food, Drug and Cosmetics Act of 1938. Additionally, the Food and Drug Administration may issue rules and regulations, including good manufacturing practices, related to the growth, cultivation, harvesting, processing and labeling of medical cannabis. Clinical trials may be invested only in U.S. government treasury obligationsneeded to verify the efficacy and safety of cannabis. It is also possible that the Food and Drug Administration would require facilities where medical use cannabis is grown to register with a maturity of 180 days or less or in money market funds meetingthe Food and Drug Administration and comply with certain conditions under Rule 2a-7 underfederally prescribed regulations. In the Investment Company Act which invest only in direct U.S. government treasury obligations. We estimate the after-tax interest earned on the trust account will be approximately $1,875,000 per year, assuming an interest rate of 1.25% per year; however, we can provide no assurances regarding this amount.

(4)      These are estimates only. Our actual expenditures forevent that some or all of these itemsregulations are imposed, the impact they would have on the cannabis industry is unknown, including the costs, requirements and possible prohibitions that may differbe enforced. If we are unable to comply with the potential regulations or registration requirements prescribed by the Food and Drug Administration, it may have an adverse effect on our business, prospects, revenue, results of operation and financial condition.

It is also possible that the federal government could seek to regulate cannabis under the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. The Bureau of Alcohol, Tobacco, Firearms and Explosives may issue rules and regulations related to the use, transporting, sale and advertising of cannabis or cannabis products, including smokeless cannabis products.

Cannabis businesses are subject to applicable anti-money laundering laws and regulations and have restricted access to banking and other financial services.

We are subject to a variety of laws and regulations in the United States that involve money laundering, financial record-keeping and proceeds of crime, including the U.S. Currency and Foreign Transactions Reporting Act of 1970, (which we refer to as the Bank Secrecy Act), as amended by Title III of the Uniting and Strengthening America by

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Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (which we refer to as the USA Patriot Act), and any related or similar rules, regulations or guidelines, issued, administered or enforced by governmental authorities in the United States. Accordingly, pursuant to the Bank Secrecy Act, banks or other financial institutions that provide a cannabis business with a checking account, debit or credit card, small business loan or any other service could be found guilty of money laundering, aiding and abetting, or conspiracy.

The United States Department of the Treasury’s Financial Crimes Enforcement Network, which we refer to as FinCEN, issued a memorandum on February 14, 2014, which we refer to as the FinCEN Memorandum, outlining the pathways for financial institutions to bank cannabis businesses in compliance with federal enforcement priorities. The FinCEN Memorandum states that in some circumstances, it is permissible for banks to provide services to cannabis-related businesses without risking prosecution for violation of federal money laundering laws. The FinCEN Memorandum refers to the Cole Memorandum’s enforcement priorities.

The revocation of the Cole Memorandum has not yet affected the status of the FinCEN Memorandum, nor has FinCEN given any indication that it intends to rescind the FinCEN Memorandum itself. Shortly after the Sessions Memorandum was issued, FinCEN did state that it would review the FinCEN Memorandum, but FinCEN has not yet issued further guidance.

Although the FinCEN Memorandum remains intact, it is unclear whether the current administration will continue to follow its guidelines. The Department of Justice continues to have the right and power to prosecute crimes committed by banks and financial institutions, such as money laundering and violations of the Bank Secrecy Act, that occur in any state including states that have in some form legalized the sale of cannabis. Further, the conduct of the Department of Justice’s enforcement priorities could change for any number of reasons. A change in the Department of Justice’s priorities could result in the prosecution of banks and financial institutions for crimes that were not previously prosecuted.

If our operations, or proceeds thereof, dividend distributions or profits or revenues derived from our operations were found to be in violation of money laundering legislation or otherwise, such transactions may be viewed as proceeds from a crime (the sale of a Schedule I drug) under the estimates set forth herein. For example,Bank Secrecy Act’s money laundering provisions. This may restrict our ability to declare or pay dividends or effect other distributions.

The FinCEN Memorandum does not provide any safe harbors or legal defenses from examination or regulatory or criminal enforcement actions by the Department of Justice, FinCEN or other federal regulators. Thus, most banks and other financial institutions in the United States do not appear comfortable providing banking services to cannabis-related businesses or relying on this guidance given that it has the potential to be amended or revoked by the current administration. In addition to the foregoing, banks may refuse to process debit card payments and credit card companies generally refuse to process credit card payments for cannabis-related businesses. As a result, we may incur greaterhave limited or no access to banking or other financial services in the United States. In addition, federal money laundering statutes and Bank Secrecy Act regulations discourage financial institutions from working with any organization that sells a controlled substance, regardless of whether the state it operates in permits cannabis sales. Our inability or limitation of our ability to open or maintain bank accounts, obtain other banking services and/or accept credit card and debit card payments may make it difficult for us to operate and conduct our business as planned or to operate efficiently.

Banks and other depository institutions are currently hindered by federal law from providing financial services to marijuana businesses, even in states where those businesses are regulated. On March 7, 2019, Democratic representative Ed Perlmutter of Colorado introduced house bill H.R. 1595, known as the Secure and Fair Enforcement (SAFE) Banking Act of 2019 (H.R. 1595), which we refer to as the SAFE Banking Act, which was reintroduced in March 2021, and would protect banks and their employees from punishment for providing services to cannabis businesses that are legal and accounting expenses than our current estimateson a state level. The SAFE Banking Act has passed the U.S. House of Representatives five times, most recently in connection with negotiating and structuring our initialSeptember 2021 as an amendment to the FY22 National Defense Authorization Act. Previously, the SAFE Banking Act passed the House by a vote of 321 to 101 on April 19, 2021 but was not included in the most recent version December, 2021 of the National Defense Authorization Act.

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We may face difficulties acquiring additional financing.

We may require equity and/or debt financing to support on-going operations, to undertake capital expenditures or to undertake acquisitions and/or other business combination basedtransactions. There can be no assurance that additional financing will be available to us when needed or on terms which are acceptable. Our inability to raise financing through traditional banking to fund on-going operations, capital expenditures or acquisitions could limit our growth and may have a material adverse effect upon our business, prospects, revenue, results of operation and financial condition.

We operate in a highly regulated sector and may not always succeed in complying fully with applicable regulatory requirements in all jurisdictions where we carry on business.

Our business and activities are heavily regulated in all jurisdictions where we carry on business. Our operations are subject to various laws, regulations and guidelines by state and local governmental authorities relating to the levelmanufacture, marketing, management, transportation, storage, sale, pricing and disposal of complexitycannabis and cannabis oil, and also including laws and regulations relating to health and safety, insurance coverage, the conduct of operations and the protection of the environment. Laws and regulations, applied generally, grant government agencies and self-regulatory bodies broad administrative discretion over our activities, including the power to limit or restrict business activities as well as impose additional disclosure requirements on our products and services. Achievement of our business objectives is contingent, in part, upon compliance with regulatory requirements enacted by these governmental authorities and obtaining all necessary regulatory approvals for the manufacture, production, storage, transportation, sale, import and export, as applicable, of our products. The commercial cannabis industry is still a new industry at the state and local level. The effect of relevant governmental authorities’ administration, application and enforcement of their respective regulatory regimes and delays in obtaining, or failure to obtain, applicable regulatory approvals which may be required may significantly delay or impact the development of markets, products and sales initiatives and could have a material adverse effect on our business, prospects, revenue, results of operation and financial condition.

While we endeavor to comply with all relevant laws, regulations and guidelines and, to our knowledge, we are in compliance or are in the process of being assessed for compliance with all such laws, regulations and guidelines, any failure to comply with the regulatory requirements applicable to our operations may lead to possible sanctions including the revocation or imposition of additional conditions on licenses to operate our business; the suspension or expulsion from a particular market or jurisdiction or of our key personnel; the imposition of additional or more stringent inspection, testing and reporting requirements; and the imposition of fines and censures. In addition, changes in regulations, more vigorous enforcement thereof or other unanticipated events could require extensive changes to our operations, increase compliance costs or give rise to material liabilities and/or revocation of our licenses and other permits, which could have a material adverse effect on our business, results of operations and financial condition. Furthermore, governmental authorities may change their administration, application or enforcement procedures at any time, which may adversely impact our ongoing costs relating to regulatory compliance.

We may face difficulties in enforcing our contracts.

Because our contracts involve cannabis and other activities that business combination.are not legal under federal law and in some state jurisdictions, we may face difficulties in enforcing our contracts in federal courts and certain state courts. We docannot be assured that we will have a remedy for breach of contract, which could have a material adverse effect on us.

We have limited trademark protection.

We will not anticipatebe able to register any changefederal trademarks for our cannabis products. Because producing, manufacturing, processing, possessing, distributing, selling and using cannabis is a crime under the Controlled Substances Act, the Patent and Trademark Office will not permit the registration of any trademark that identifies cannabis products. As a result, we likely will be unable to protect our cannabis product trademarks beyond the geographic areas in our intendedwhich it conducts business. The use of proceeds,our trademarks outside the states in which we operate by one or more other than fluctuations amongpersons could have a material adverse effect on the current categoriesvalue of allocated expenses,such trademarks.

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We are and may continue to be subject to constraints on marketing our products.

Certain of the states in which fluctuations,we operate have enacted strict regulations regarding marketing and sales activities on cannabis products. There may be restrictions on sales and marketing activities imposed by government regulatory bodies that can hinder the development of our business and operating results. Restrictions may include regulations that specify what, where and to whom product information and descriptions may appear and/or be advertised. Marketing, advertising, packaging and labeling regulations also vary from state to state, potentially limiting the consistency and scale of consumer branding communication and product education efforts. The regulatory environment in the U.S. limits our ability to compete for market share in a manner similar to other industries. If we are unable to effectively market our products and compete for market share, or if the costs of compliance with government legislation and regulation cannot be absorbed through increased selling prices for our products, our sales and operating results could be adversely affected.

We face risks related to the extent they exceed current estimatesresults of future clinical research.

Research regarding the medical benefits, viability, safety, efficacy, dosing and social acceptance of cannabis or isolated cannabinoids (such as cannabidiol, commonly referred to as CBD, and tetrahydrocannabinol, commonly referred to as THC) remains in early stages. There have been relatively few clinical trials on the benefits of cannabis or isolated cannabinoids (such as CBD and THC). Although we believe that various articles, reports and studies support our beliefs regarding the medical benefits, viability, safety, efficacy, dosing and social acceptance of cannabis, future research and clinical trials may prove such statements to be incorrect, or could raise concerns regarding, and perceptions relating to, cannabis. Further, the federal illegality of cannabis and associated limits on our ability to properly fund and conduct research on cannabis and the lack of formal Food and Drug Administration oversight of cannabis, there is limited information about the long-term safety and efficacy of cannabis in its various forms, when combusted or combined with various cannabis and/or non-cannabis derived ingredients and materials or when ingested, inhaled, or topically applied. Future research or oversight may reveal negative health and safety effects, which may significantly impact our reputation, operations and financial performance.

Given these risks, uncertainties and assumptions, prospective purchasers should not place undue reliance on such articles and reports. Future research studies and clinical trials may draw opposing conclusions to those stated in this prospectus or reach negative conclusions regarding the medical benefits, viability, safety, efficacy, dosing, social acceptance or other facts and perceptions related to cannabis, which could have a material adverse effect on the demand for our products, with the potential to have a material adverse effect on our business, prospects, revenue, results of operation and financial condition.

We are subject to proceeds of crime statutes.

We will be subject to a variety of laws that concern money laundering, financial recordkeeping and proceeds of crime. These include: the Bank Secrecy Act, as amended by Title III of the USA Patriot Act, the Proceeds of Crime (Money Laundering) and the Corporate Transparency Act enacted in January 2021 and any specific category of expenses, would be deducted from our excess working capital.related or similar rules, regulations or guidelines, issued, administered or enforced by governmental authorities in the United States.

(5)      In the event that any of our license agreements, or any proceeds thereof, in the United States were found to be in violation of money laundering legislation or otherwise, such transactions may be viewed as proceeds of crime under one or more of the statutes noted above, or any other applicable legislation. This could have a material adverse effect on us and, among other things, could restrict or otherwise jeopardize our ability to declare or pay dividends, effect other distributions or subsequently repatriate such funds back to Canada.

We face security risks.

The business premises of our operating locations are targets for theft. While we exercisehave implemented security measures at each location and continue to monitor and improve such security measures, our rightcultivation, processing and dispensary facilities could be subject to extendbreak-ins, robberies and other breaches in security. If there was a breach in security and we fell victim to a robbery or theft, the periodloss of cannabis plants, cannabis oils, cannabis flowers, other cannabis goods and cultivation and processing equipment could have a material adverse impact on our business, prospects, revenue, results of operation and financial condition.

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As our business involves the movement and transfer of cash which is collected from dispensaries or patients/customers and deposited into our bank, there is a risk of theft or robbery during the transport of cash. Our transport, distribution, and delivery of finished cannabis goods inventory including but not limited to wholesale delivery of finished products to retail customers and delivery of finished goods to end consumers and other intermediaries, also is subject to risks of theft and robbery. We have engaged a security firm to provide security in the transport and movement of large amounts of cash and products. Employees sometimes transport cash and/or products and, if requested, may be escorted by armed guards. While we have taken robust steps to prevent theft or robbery of cash during transport, there can be no assurance that there will not be a security breach during the transport and the movement of cash involving the theft of product or cash.

We face exposure to fraudulent or illegal activity.

We face exposure to the risk that employees, independent contractors or consultants may engage in fraudulent or other illegal activities. Misconduct by these parties could be intentional, reckless and/or negligent conduct. There may be disclosure of unauthorized activities that violate government regulations, manufacturing standards, healthcare laws, abuse laws and other financial reporting laws. Further, it may not always be possible for us to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent these activities may not always be effective. As a result, we could face potential penalties and litigation.

There can be no assurance that our current and future strategic alliances or expansions of scope of existing relationships will have a beneficial impact on our business, financial condition and results of operations.

We currently have, and may in the future enter into, additional strategic alliances and partnerships with third parties that we believe will complement or augment our existing business. Our ability to complete strategic alliances is dependent upon, and may be limited by, the availability of suitable candidates and capital. In addition, strategic alliances could present unforeseen integration obstacles or costs, may not enhance our business and may involve risks that could adversely affect us, including significant amounts of management time that may be diverted from operations in order to consummate an initial business combination for up to anpursue and complete such transactions or maintain such strategic alliances. Future strategic alliances could result in the incurrence of additional 3months wedebt, costs and contingent liabilities, and there can be no assurance that future strategic alliances will achieve, or that our existing strategic alliances will continue to achieve, the expected benefits to our business or that we will be able to consummate future strategic alliances on satisfactory terms, if at all. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

Competition for the acquisition and leasing of properties suitable for the cultivation, production and sale of medical and adult use cannabis may impede our ability to make acquisitions or increase the cost of these acquisitions, and may generally impede our ability to expand, which could adversely affect our operating results and financial condition.

We compete for the acquisition of properties suitable for the cultivation, production and sale of medical and adult use cannabis with entities engaged in agriculture, real estate investment, consumer products manufacturing and retail activities, including corporate agriculture companies, cultivators, producers and sellers of cannabis. These competitors may prevent us from acquiring and leasing desirable properties, may cause an increase in the price we must pay for properties or may result in us having to lease our sponsorproperties on less favorable terms than we expect. Our competitors may have greater financial and operational resources than we do and may be willing to pay more for certain assets or may be willing to accept more risk than we believe can be prudently managed. In particular, larger companies may enjoy significant competitive advantages that result from, among other things, a lower cost of capital and enhanced operating efficiencies. Our competitors may also adopt transaction structures similar to ours, which would decrease our competitive advantage in offering flexible transaction terms. In addition, due to a number of factors, including but not limited to potential greater clarity of the administrative fee untillaws and regulations governing medical use cannabis by state and federal governments, the consummationnumber of entities and the amount of funds competing for suitable investment properties may increase, resulting in increased demand and increased prices paid for these properties. If we pay higher prices for properties or enter into leases for such properties on less favorable terms than we expect, our profitability and ability to generate cash flow and make distributions to our stockholders may decrease. Increased competition for properties may also preclude us from acquiring those properties that would generate attractive returns to us.

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Our reputation and ability to do business may be negatively impacted by the improper conduct by our business partners, employees or agents.

We cannot provide assurance that our internal controls and compliance systems will protect us from acts committed by our employees, agents or business partners in violation of U.S. federal or state or local laws. Any improper acts or allegations could damage our reputation and subject us to civil or criminal investigations and related shareholder lawsuits, could lead to substantial civic and criminal monetary and non-monetary penalties and could cause us to incur significant legal and investigatory fees.

We face risks due to industry immaturity or limited comparable, competitive or established industry best practices.

As a relatively new industry, there are not many established operators in the medical and adult use cannabis industries whose business models we can follow or build upon. Similarly, there is no or limited information about comparable companies available for potential investors to review in making a decision about whether to invest in us.

Shareholders and investors should consider, among other factors, our prospects for success in light of the risks and uncertainties encountered by companies, like us, that are in their early stages. For example, unanticipated expenses and problems or technical difficulties may occur, which may result in material delays in the operation of our initialbusiness. We may fail to successfully address these risks and uncertainties or successfully implement our operating strategies. If we fail to do so, it could materially harm our business combination.

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Our sponsorto the point of having to cease operations and Imperial Capitalcould impair the value of the Common Stock to the extent that investors may lose their entire investments.

We face risks related to our products.

We have committed and expect to continue committing significant resources and capital to develop and market existing products and new products and services. These products are relatively untested in the marketplace, and we cannot assure shareholders and investors that theywe will achieve market acceptance for these products, or other new products and services that we may offer in the future. Moreover, these and other new products and services may be subject to significant competition with offerings by new and existing competitors in the industry. In addition, new products and services may pose a variety of challenges and require us to attract additional qualified employees. The failure to successfully develop, manage and market these new products and services could seriously harm our business, prospects, revenue, results of operation and financial condition.

We are dependent on the popularity of consumer acceptance of our brand portfolio.

Our ability to generate revenue and be successful in the implementation of our business plan is dependent on consumer acceptance of and demand for our products produced and sold. Acceptance of our products depends on several factors, including availability, cost, ease of use, familiarity of use, convenience, effectiveness, safety and reliability. If these customers do not accept our products, or if such products fail to adequately meet customers’ needs and expectations, our ability to continue generating revenues could be reduced.

Our business is subject to the risks inherent in agricultural operations.

Our business involves the growing of cannabis, an agricultural product. Our business is subject to the risks inherent in the agricultural business, such as insects, plant diseases and similar agricultural risks that could deplete the viability of harvested cannabis and our revenue generating abilities. Although our cultivation is substantially completed indoors under climate control, some cultivation may be completed outdoors, and there can be no assurance that natural elements will not have a material adverse effect on any future production. In addition, events such as system failures or utility outages, which could result from natural or man-made conditions, could limit our ability to control the climates of our indoor grow and/or their designeesstorage facilities that could result in damage, disease or rot to our products and our revenue generating abilities.

Climate change risk to our future operations from natural disasters and extreme weather conditions.

Climate change resulting from increased concentrations of carbon dioxide and other greenhouse gases in the atmosphere could present risks to the Company’s future operations from natural disasters and extreme weather conditions, such as droughts, heat waves, hurricanes, tornadoes, wildfires or flooding. Such extreme weather conditions could pose physical risks to our facilities and disrupt operation of our supply chain and may impact operational costs.

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The impacts of climate change on global water resources may result in water scarcity, which could in the future impact the Company’s ability to access sufficient quantities of water in certain locations and result in increased costs. The Company is dependent upon electricity to power equipment at the indoor growing facilities. Impacts of climate change may also impact the availability of electricity at its current and future locations. In recent years, shortages of electricity have resulted in increased costs to users and interruptions in service. For example, California has experienced rolling blackouts due to excessive demands on the electrical grid or as precautionary measures against the risk of wildfire, Texas recently experienced widespread outages, rolling blackouts and electricity price spikes arising from cold weather conditions and other markets in which the Company operates can experience significant power outages from time to time. Climate change may increase the frequency of such weather-related energy security issues. In the event of a power outage or shortage, the Company will purchasetypically be dependent on the private unitsutility company and/or the site host to restore power or provide power at a reasonable cost.

Concern over climate change could result in new legal or regulatory requirements designed to mitigate the effects of climate change on the environment. If such laws or regulations are more stringent than current legal or regulatory requirements, we may experience increased compliance burdens and costs to meet the regulatory obligations and may adversely affect raw material sourcing, manufacturing operations and the distribution of our products.

We may be adversely impacted by rising or volatile energy costs.

Our cannabis growing operations consume considerable energy, which makes us vulnerable to rising energy costs. Accordingly, rising or volatile energy costs may adversely affect our business and our ability to operate profitably.

We may encounter unknown environmental risks.

There can be no assurance that we will not encounter hazardous conditions, such as asbestos or lead, at the sites of the real estate used to operate our businesses, which may delay the development of our businesses. Upon encountering a hazardous condition, work at our facilities may be suspended. If we receive notice of a hazardous condition, we may be required to correct the condition prior to continuing construction. If additional private warrants (for an aggregate purchase pricehazardous conditions were present, it would likely delay construction and may require significant expenditure of $4,500,000)our resources to correct the conditions. Such conditions could have a material impact on our investment returns.

We face risks related to our information technology systems, and potential cyber-attacks and security breaches.

Our operations depend, in part, on how well we and our suppliers protect networks, equipment, information technology, which we refer to as IT, systems and software against damage and threats, including, but not limited to, cable cuts, damage to physical plants, natural disasters, intentional damage and destruction, fire, power loss, hacking, computer viruses, vandalism and theft. Our operations also depend on the timely maintenance and replacement of network equipment, IT systems and software, as well as pre-emptive expenses to mitigate associated risks. Given the nature of our products and the lack of legal availability outside of channels approved by the federal government, as well as the concentration of inventory in our facilities, there remains a risk of shrinkages, as well as theft. If there was a breach in security and we fell victim to theft or robbery, the loss of cannabis plants, cannabis oils, cannabis flowers and cultivations and processing equipment, or if there was a failure in information systems, it could adversely affect our reputation and business continuity.

Additionally, we may store and collect personal information about customers and are responsible for protecting that information from privacy breaches that may occur through procedural or process failure, IT malfunction or deliberate unauthorized intrusions. Any such theft or privacy breach would have a material adverse effect on our business, prospects, revenue, results of operation and financial condition.

We are subject to laws, rules and regulations in the United States (such as the California Consumer Privacy Act which became effective on January 1, 2020) and other jurisdictions relating to the collection, processing, storage, transfer and use of personal data. Our ability to execute transactions and to possess and use personal information and data in conducting our business subjects us to legislative and regulatory burdens that may require us to notify regulators and customers, employees and other individuals of a data security breach. Evolving compliance and operational requirements under the California Consumer Privacy Act and the privacy laws, rules and regulations of other jurisdictions in which we operate impose significant costs that are likely to increase over time. In addition, non-compliance could result in proceedings against us by governmental entities and/or significant fines, could negatively impact our reputation, and may otherwise adversely impact our business, financial condition and operating results.

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We are dependent on key inputs, suppliers and skilled labor.

The marijuana business is dependent on a private placement basis simultaneously with the consummation of this offering. They have also agreed that if the over-allotment option is exercised by the underwriters in full or in part, they will purchase from us an additional number of private warrantskey inputs and private units (uptheir related costs, including raw materials and supplies related to growing operations, as well as electricity, water and other local utilities. Any significant interruption or negative change in the availability or economics of the supply chain for key inputs, such as the raw material cost of cannabis, or natural or other disruptions to power or other utility systems, could materially impact our business, financial condition, results of operations or prospects. Some of these inputs may only be available from a maximumsingle supplier or a limited group of 30,000 private unitssuppliers. If a sole source supplier were to go out of business, we might be unable to find a replacement for such source in a timely manner, or at all. If a sole source supplier were to be acquired by a competitor, that competitor may elect not to sell to us in the future. Any inability to secure required supplies and services, or to do so on appropriate terms, could have a materially adverse impact on our business, prospects, revenue, results of operation and financial condition. We aim to provide our vendor base with annual projections so that our vendors can better ensure a steady supply of raw materials and packaging. We check in with our vendors at least once quarterly to update them to relevant real time changes in our annual plan. For most important raw materials and packaging, we aim to have both a primary vendor supplier and a secondary vendor supplier to ensure redundancy.

Our ability to compete and grow will be dependent on us having access, at a pricereasonable cost and in a timely manner, to skilled labor, equipment, parts and components. No assurances can be given that we will be successful in maintaining our required supply of $10.00 per private unitskilled labor, equipment, parts and 150,000 private warrants atcomponents. This could have an adverse effect on our financial results.

Our sales are difficult to forecast.

As a priceresult of $1.00 per private warrant) necessary to maintainrecent and ongoing regulatory and policy changes in the trust account $10.00 per unit soldmedical and adult use cannabis industries and unreliable levels of market supply, the market data available is limited and unreliable. We must rely largely on our own market research to forecast sales, as detailed forecasts are not generally obtainable from other sources in the publicstates in this offering. These additional private unitswhich our business operates. Additionally, any market research and private warrants willour projections of estimated total retail sales, demographics, demand and similar consumer research, are based on assumptions from limited and unreliable market data. A failure in the demand for our products to materialize as a result of competition, technological change or other factors could have a material adverse effect on our business, results of operations and financial condition.

We may be purchased in a private placement that will occur simultaneously with the purchase of units resulting from the exercise of the over-allotment option. The private units and private warrants are identical to the units and warrants sold in this offering subject to certain limited exceptions as described elsewhere in this prospectus. All of the proceeds we receivelitigation.

We may become party to litigation from these purchases will be placedtime to time in the trust account described below.ordinary course of business, which could adversely affect our business. Should any litigation in which we become involved be determined against us, such a decision could adversely affect our ability to continue operating and the market price for the Common Stock and could potentially use significant resources. Even if we are involved in litigation and win, litigation can redirect significant resources of Greenrose.

$150,000,000,We face an inherent risk of product liability and similar claims.

As a distributor of products designed to be ingested by humans, we face an inherent risk of exposure to product liability claims, regulatory action and litigation if our products are alleged to have failed to meet expected standards or $172,500,000 if the over-allotment option is exercised in full, of net proceeds of this offering andto have caused significant loss or injury. In addition, the sale of our products involves the private securities,risk of injury to consumers due to tampering by unauthorized third parties or product contamination. Previously unknown adverse reactions resulting from human consumption of our products alone or in combination with other medications or substances could occur. We may be subject to various product liability claims, including, among others, that our products caused injury, illness or death, include inadequate instructions for use or include inadequate warnings concerning possible side effects or interactions with other substances. As an agricultural product, the quality of cannabis is inherently variable, and consumers may raise claims that our quality control or labeling processes have not sufficiently ensured that our grown and manufactured processes are sufficient to meet expected standards. A product liability claim or regulatory action against us could result in increased costs, could adversely affect our reputation with our clients and consumers generally and could have a material adverse effect on our business, results of operations and financial condition. There can be no assurances that we will be placedable to obtain or maintain product liability insurance on acceptable terms or with adequate coverage against potential liabilities. Such insurance is expensive and may not be available in the future on acceptable terms, or at all. The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims could prevent or inhibit the commercialization of our potential products.

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We may be exposed to infringement or misappropriation claims by third parties, which, if determined adversely to us, could subject us to significant liabilities and other costs.

Our success may depend on our ability to use and develop new extraction technologies, recipes, know-how and new strains of marijuana without infringing the intellectual property rights of third parties. We cannot assure that third parties will not assert intellectual property claims against us. We are subject to additional risks if entities licensing intellectual property to us do not have adequate rights to the licensed materials. If third parties assert copyright or patent infringement or violation of other intellectual property rights against us, we will be required to defend ourselves in litigation or administrative proceedings, which can be both costly and time consuming and may significantly divert the efforts and resources of management personnel. An adverse determination in any such litigation or proceedings to which we may become a party could subject us to significant liability to third parties, require us to seek licenses from third parties, require us to pay ongoing royalties or subject us to injunctions that may prohibit the development and operation of our applications.

The unaudited pro forma condensed combined financial information included in this prospectus may not be indicative of what the Company’s actual financial position or results of operations would have been.

The unaudited pro forma condensed combined financial information in this prospectus is presented solely for illustrative purposes only and is not necessarily indicative of what the Company’s actual financial position or results of operations would have been had the business combinations completed on the dates indicated. See the section titled “Unaudited Pro Forma Condensed Combined Financial Information” for more information.

If the Company fails to introduce or acquire new products or services that achieve broad market acceptance on a timely basis, or if its products or services are not adopted as expected, the combined company will not be able to compete effectively.

The Company will operate in a U.S.-based trust account maintained by Continental Stock Transfer & Trusthighly competitive, quickly changing environment, and the combined company’s future success depends in part on its ability to develop or acquire and introduce new products and services that achieve broad market acceptance. The Company’s ability to successfully introduce and market new products is unproven. Because the Company New York, New York, as trustee. The funds held in trust will be invested only in United States “government securities” withinhave a limited operating history and the meaning of Section 2(a)(16) ofmarket for its products, including newly acquired or developed products, is rapidly evolving, it is difficult to predict the Investment Company Act having a maturity of 180 days or less, or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations, so that we are not deemed to be an investment company under the Investment Company Act. Exceptcombined Company’s operating results, particularly with respect to interest earned on the funds heldany new products that it may introduce. The Company’s future success will depend in large part upon its ability to identify demand trends in the trust accountmarket in which it will operate and quickly develop or acquire, and design, manufacture and sell, products and services that satisfy these demands in a cost-effective manner. In order to differentiate the Company’s products and services from competitors’ products, the Company will need to increase focus and capital investment in research and development. If the Company’s new products or services fail to achieve widespread market acceptance, or if we are unsuccessful in capitalizing on opportunities in the market in which the Company will operate, the Company’s future growth may be releasedslowed and its business, results of operations and financial condition could be materially adversely affected. Successfully predicting demand trends is difficult, and it is difficult to predict the effect that introducing a new product or service will have on existing product or service sales. It is possible that the Company may not be successful with its new products and services, and as a result the Company’s future growth may be slowed and its business, results of operations and financial condition could be materially adversely affected. Also, the Company may not be able to respond effectively to new product or service announcements by competitors by quickly introducing competitive products and services. In addition, the Company may acquire companies and technologies in the future. In these circumstances, the combined company may not be able to successfully manage integration of the new product and service lines with the combined company’s existing suite of products and services. If the Company is unable to effectively and successfully further develop these new product and service lines, the Company may not be able to increase or maintain sales, and the Company’s gross margin may be adversely affected. Furthermore, the success of the Company’s new products will depend on several factors, including, but not limited to, market demand costs, timely completion and introduction of these products, prompt resolution of any defects or bugs in these products, the Company’s ability to support these products, differentiation of new products from those of the Company’s competitors, market acceptance of these products, delays and quality issues in releasing new products and services. The occurrence of one or more of the foregoing factors may result in lower quarterly revenue than expected, and the Company may in the future experience product or service introductions that fall short of its projected rates of market adoption.

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If the Company’s products fail to achieve and sustain sufficient market acceptance, the combined company’s revenue will be adversely affected.

The Company’s success will depend on its ability to develop and market products that are recognized and accepted as reliable, enabling and cost-effective. Some potential customers of the combined company may already use products similar to what Theraplant currently offer and similar to what the Company may offer in the future and may be reluctant to replace those products with what Theraplant currently offers or which the combined company may offer in the future. Market acceptance of the Company’s products will depend on many factors, including the Company’s ability to convince potential customers that the Company’s products are an attractive alternative to existing products.

The future sales of shares by existing stockholders and future exercise of registration rights may adversely affect the market price of the Company’s common stock.

Sales of a substantial number of shares of the Company’s common stock in the public market could occur at any time. If the Company’s stockholders sell, or the market perceives that the Company’s stockholders intend to sell, substantial amounts of the Company’s common stock in the public market, the market price of the Company’s common stock could decline.

We may not be able to timely and effectively implement controls and procedures required by Section 404 of the Sarbanes-Oxley Act of 2002 that will be applicable to us to pay our income or other tax obligations, the proceeds will not be released from the trust account until the earlier ofafter the completion of a business combinationcombination.

Theraplant and True Harvest were not subject to Section 404 of the Sarbanes-Oxley Act of 2002. However, we will be required to provide management’s attestation on internal controls commencing with its annual report for year ending December 31, 2021. The standards required for a public company under Section 404 of the Sarbanes-Oxley Act of 2002 are significantly more stringent than those required as a privately-held company. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the regulatory compliance and reporting requirements that are applicable to us. If Greenrose is not able to implement the additional requirements of Section 404 in a timely manner or with adequate compliance, Greenrose may not be able to assess whether its internal controls over financial reporting are effective, which may subject it to adverse regulatory consequences and could harm investor confidence and the market price of its common stock.

A market for our securities may not continue, which would adversely affect the liquidity and price of our securities.

The price of our securities may fluctuate significantly due to the market’s reaction to the Business Combination, including general market and economic conditions, and being traded on the OTC market which is not a national stock exchange. An active trading market for our securities may never develop or, if developed, may not be sustained. In addition, the price of our securities could vary due to general economic conditions and forecasts, general business conditions and the release of financial reports. You may be unable to sell your securities unless a market can be sustained.

We may be subject to securities litigation, which is expensive and could divert management attention.

The market price of our common stock may be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm our business.

We do not intend to pay cash dividends for the foreseeable future.

We currently intend to retain our future earnings, if any, to finance the further development and expansion of our business and do not intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as our board of directors deems relevant.

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If securities or industry analysts do not publish or cease publishing research or reports about the Company, its business, or its market, or if they change their recommendations regarding our securities adversely, then the price and trading volume of our securities could decline.

The trading market for our securities will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market, or our redemption of 100%competitors. Securities and industry analysts do not currently, and may never, publish research on the Company. If no securities or industry analysts commence coverage of the outstandingCompany, our stock price and trading volume would likely be negatively impacted. If any of the analysts who may cover the Company negatively change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, the price of our securities would likely decline. If any analyst who may cover the Company were to cease coverage of the Company or fail to regularly publish reports on it, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.

Our internal control over financial reporting may not be effective and our independent registered public sharesaccounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation.

As a public company, we are required to comply with the SEC’s rules implementing Sections 302 and 404 of SOX, which require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of internal control over financial reporting. To comply with the requirements of being a public company, the Company will be required to provide the management report on internal controls commencing with the annual report for fiscal year ended December 31, 2021, and we may need to undertake various actions, such as implementing additional internal controls and procedures and hiring additional accounting or internal audit staff. The standards required for a public company under Section 404 of SOX are significantly more stringent than those required of a privately-held company. Further, as an emerging growth company, our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal controls over financial reporting pursuant to Section 404 until the date we are no longer an emerging growth company.

Testing and maintaining these controls can divert our management’s attention from other matters that are important to the operation of our business. If we identify material weaknesses in the internal control over financial reporting of the Company or are unable to comply with the requirements of Section 404 or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal controls over financial reporting when we have not completed ano longer qualify as an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the SEC or other regulatory authorities, which could require additional financial and management resources.

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THE THERAPLANT TRANSACTION

On the Closing Date (November 26, 2021), Greenrose consummated its previously announced business combination with Theraplant. The Theraplant Merger had previously been approved by a majority of Greenrose’s shareholders at a special meeting of shareholders held on October 27, 2021.

The aggregate consideration paid at the Closing to the former unit holders of Theraplant was approximately $150,000,000, comprised of $50,000,000 in Greenrose Common Stock and $100,000,000 in cash and Deferred Cash Payment as defined below, subject to customary purchase price adjustments, less an indemnity escrow in the required time period. The proceeds held in the trust account may be used as consideration to pay the sellersamount of a target business with$13,000,000 (the “Escrow Amount”), which we complete a business combination. Any amounts not paid as consideration to the sellers of the target business mayamount will be used to finance operationssatisfy the difference, if any, between the estimated net working capital at closing and the final working capital at closing (as determined jointly by the buyer and the selling Theraplant security holders’ representative) as well as indemnification obligations of the target business.selling Theraplant security holders with respect to losses arising from breaches of representations, warranties or covenants, inaccuracies or omissions with respect to certain closing statements, or taxes, costs or expenses incurred by the Company. Additionally, $700,000 of such amount was placed into dedicated accounts controlled by the SRS and the Theraplant managing members to provide a source of funds for those parties to use in administering any claims or disputes that arise post-Closing.

The paymentTheraplant Merger Agreement provides for a Deferred Cash Payment Amount in the amount of Ten Million Dollars ($10,000,000) plus simple, non-compounding interest at the rate of nine percent (9%) per annum, payable in equal monthly installments during the first twelve months following the Closing of the Theraplant Merger. The Deferred Cash Payment Amount may, at the election of the Theraplant Steering Committee, be converted (in whole or in part and at any time or from time to time), into shares of Common Stock of Greenrose at a price per share of $10.00, subject to adjustment.

Registration Rights

In connection with the Closing, Greenrose entered into a Registration Rights Agreement (the “Theraplant Registration Rights Agreement”) with the selling stockholders of Theraplant pursuant to which Greenrose agreed that, at the request of the Majority Holders (as defined in the Theraplant Registration Rights Agreement), Greenrose will file a registration statement with the Commission covering the resale of the Registrable Securities (as defined in the Theraplant Registration Rights Agreement) requested to be included in such registration statement (the “Resale Registration Statement”), and Greenrose will use its reasonable best efforts to have the Resale Registration Statement declared effective as soon as reasonably practicable after the filing thereof. Additionally, the Holders (as defined in the Theraplant Registration Rights Agreement) will be entitled to piggyback registration rights.

The foregoing description of the Theraplant Registration Rights Agreement is qualified in its entirety by reference to the full text of the form of Theraplant Registration Rights Agreement, a copy of which is attached as Exhibit 4.1 and incorporated herein by reference.

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THE TRUE HARVEST ACQUISITION

RECENT DEVELOPMENTS

True Harvest Acquisition

On December 31, 2021, the Company, True Harvest Holdings, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“TH Buyer”), and True Harvest, LLC, an Arizona limited liability company (“True Harvest”), entered into an amendment (“Amendment No. 3”) to the Asset Purchase Agreement dated March 12, 2021, as amended by that Amendment No. 1 to the Asset Purchase Agreement dated July 2, 2021, that certain Amendment No. 2 to the Asset Purchase Agreement dated October 28, 2021, and that certain Amendment No. 3 to the Asset Purchase Agreement dated December 31, 2021 (as it may be amended from time to time, the “Asset Purchase Agreement”), which provided for, among other things, the purchase of substantially all of True Harvest’s assets and the assumption of certain of True Harvest’s liabilities by True Harvest Holdings Inc., a Delaware corporation wholly owned subsidiary of Greenrose (“TH Buyer”) (the “TH Acquisition,” and, together with the other transactions contemplated by the Asset Purchase Agreement, the “True Harvest Acquisition”). The Company had previously entered into the original Asset Purchase Agreement on March 12, 2021 to purchase of substantially all of True Harvest’s assets and assume certain of True Harvest’s liabilities by TH Buyer.

Pursuant to the amended Asset Purchase Agreement, the Company has agreed to pay aggregate consideration of $57.6 million at closing, consisting of:

•        $12.5 million in cash;

•        $23.0 million in the form of a convertible note, of which all principal and interest is payable in shares of Common Stock of the Company at a conversion price equal to the average closing price of the Common Stock over the prior thirty (30) consecutive trading days;

•        $4.6 million in assumed debt evidenced by three (3) promissory notes in favor of the Sellers; and

•        $17.5 million in shares of Common Stock of the Company.

Contingent upon True Harvest achieving a certain price point per pound of cannabis flower relative to total flower production within 36 months following the close of the transaction, Greenrose will pay additional consideration of up to $35.0 million in the form of an earnout, payable in shares of common stock of the Company.

The Company financed the True Harvest Acquisition using the proceeds of the Company’s delayed draw commitment from the Company’s existing lenders, DXR-GL HOLDINGS I, LLC, DXR-GL HOLDINGS II, LLC, and DXR-GL HOLDINGS III, LLC (collectively the “Lenders”) of Seventeen Million Dollars ($17,000,000) (the “Delayed Draw Commitment”) to fund the purchase of the True Harvest Acquisition. The loan matures on November 26, 2024 and bears an interest rate of the LIBOR plus the applicable margin of 16% per annum, subject to a LIBOR floor of 1.0%, provided that for the first 12 months after the Closing Date, interest at the rate of 8.5% per annum may be payable-in-kind and thereafter interest at the rate of 5% per annum may be payable in kind. Interest is payable on the last business day of each quarter.

Registration Rights

In connection with the consummation of the True Harvest Acquisition, Greenrose entered into a Registration Rights Agreement (the “True Harvest Registration Rights Agreement”) with the Selling Stockholders of True Harvest pursuant to which Greenrose agreed that it will file a registration statement with the Commission covering the resale of the Registrable Securities (as defined in the True Harvest Registration Rights Agreement) requested to be included in such registration statement (the “Resale Registration Statement”), and Greenrose will use its reasonable best efforts to have the Resale Registration Statement declared effective as soon as reasonably practicable after the filing thereof. Additionally, the Holders (as defined in the True Harvest Registration Rights Agreement) will be entitled to piggyback registration rights.

The foregoing description of the True Harvest Registration Rights Agreement is qualified in its entirety by reference to the full text of the form of True Harvest Registration Rights Agreement, a copy of which is attached as Exhibit 4.3 and incorporated herein by reference.

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THE GREENROSE ASSOCIATES TRANSACTION

Sponsor’s Shares

In August 2019, the Company issued 4,312,500 shares of Common Stock to our Sponsor, Greenrose Associates, LLC, our sponsor, for $25,000 in cash, at a purchase price of a monthly feeapproximately $0.006 per share, in connection with our organization. This registration statement registers for resale one-half of $10,000 is forthe Sponsor’s Common Stock, or 2,156,250 shares of Common Stock.

From the date of initial public offering to November 26, 2021 (the date of the closing of our Business Combination with Theraplant), the Sponsor made to us certain general and administrative services, including office space, utilities and secretarial support. This arrangement is being agreedadministrative support, as we may require from time to bytime. We paid our sponsor $10,000 per month for our benefit and is not intended to provide any officer or director with compensation in lieu of a salary.these services. We believe, based on rents and fees for similar services in the New York metropolitan area, that the fee charged by our sponsor is at least as favorable as we could have obtained from an unaffiliated person. This arrangement will terminate upon completion

Sponsor’s Notes

Greenrose intends to issue shares of our initial business combination orits Common Stock issuable to the distributionSponsor in consideration of the trust accountredemption of certain outstanding promissory notes in the aggregate principal face amount of $1,235,000 (the “Sponsor 2021 Promissory Notes”). Pursuant to our public stockholders. Other than the $10,000 per month fee,Credit Agreement, Greenrose has an obligation to redeem such promissory notes for equity or equity-linked securities. Greenrose and Sponsor have negotiated the paymentissuance to Sponsor of consulting, success or finder fees[up to our sponsor, officers, directors, or their affiliates1,000,000 shares of Greenrose Common Stock] for the redemption in full of the Sponsor 2021 Promissory Notes. The Common Stock issuable to Sponsor for redemption in full of the Sponsor 2021 Promissory Notes is being registered pursuant to this registration statement for resale by Sponsor.

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THE IMPERIAL AND I-BANKERS TRANSACTION

Imperial Capital

In connection with, and simultaneously with the consummation of, our initial business combinationpublic offering, we consummated the private placement of 88,000 units (“private units”) at a price of $10.00 per private unit and 440,000 private warrants at a price of $1.00 per private warrant. The private units and private warrants are identical to the public units and warrants sold in the initial public offering, except that the private warrants and the repaymentwarrants underlying the private units are non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees. The private units have since split into the underlying private shares of common stock and additional private warrants.

In connection with the initial public offering, Greenrose entered into a Registration Rights Agreement (the “Imperial Registration Rights Agreement”) with Imperial pursuant to which Greenrose agreed that, at the request of the $493,515Imperial will file a registration statement with the SEC covering the resale of funds advancedthe Registrable Securities (as defined in the Imperial Registration Rights Agreement) requested to be included in such registration statement (the “Imperial Resale Registration Statement”), and Greenrose will use its reasonable best efforts to have the Imperial Resale Registration Statement declared effective as soon as reasonably practicable after the filing thereof. Additionally, the Holders (as defined in the Imperial Registration Rights Agreement) will be entitled to piggyback registration rights.

The foregoing description of the Imperial Registration Rights Agreement is qualified in its entirety by our sponsor on our behalf (nonereference to the full text of the form of Imperial Registration Rights Agreement, a copy of which payments will be made from the proceedsis attached as Exhibit 4.2 and incorporated herein by reference.

This registration statement registers for resale all of this offeringcommon stock and private warrants held in the trust account prior to the completion of our initial business combination), no compensation of any kind will be paid to our sponsor, officers, directors or any of their respective affiliates, for services rendered to us prior toby Imperial.

I-Bankers

In connection with, and simultaneously with the consummation of, our initial business combination (regardlesspublic offering, we consummated the private placement of 22,000 units (the “private units”) at a price of $10.00 per private unit and 110,000 warrants (the “private warrants”) at a price of $1.00 per private warrant to I-Bankers Securities, Inc. (“I-Bankers”). The private units and private warrants are identical to the public units and warrants sold in the initial public offering, except that the private warrants and the warrants underlying the private units are non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees. The private units have since split into the underlying private shares of common stock and additional private warrants.

On February 11, 2020, in connection with our initial public offering, I-Bankers entered into a joinder agreement to the Imperial Registration Rights Agreement.

This registration statement registers for resale all of common stock and private warrants held by I-Bankers.

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USE OF PROCEEDS

This prospectus relates to shares of our common stock that may be offered and sold from time to time by the Selling Stockholders. All of the typecommon stock offered by the Selling Stockholders pursuant to this prospectus will be sold by the Selling Stockholders for their own accounts. We will not receive any of transactionthe proceeds from these sales.

We expect to use any proceeds that we receive in respect of exercise of any outstanding private warrants for working capital and general corporate purposes. As of the date of this prospectus, we cannot specify with certainty all of the particular uses, and the respective amounts we may allocate to those uses, for any net proceeds we receive. Accordingly, we will retain broad discretion over the use of these proceeds.

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DETERMINATION OF OFFERING PRICE

Our common stock is currently traded on the OTCQX under the symbol “GNRS”. Our public warrants are traded on the OTCQB under the symbol “GNRS.W,”

The actual offering price by the Selling Stockholders covered by this prospectus will be determined by prevailing market prices at the time of sale, by private transactions negotiated by the Selling Stockholders or as otherwise described in the section entitled “Plan of Distribution.”

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MARKET INFORMATION FOR COMMON STOCK
AND DIVIDEND POLICY

Market Information

Our common stock and public warrants are currently traded on the OTCQX and OTCQB Markets under the symbols “GNRS” and “GNRS.W,” respectively.

Holders

As of January 3, 2022, our shares of Common Stock issued and outstanding were held of record by approximately 43 holders, and the Warrants outstanding were held of record by approximately 4 holders.

Dividend Policy

We have not paid any cash dividends on the Common Stock to date. We may retain future earnings, if any, for future operations and expansion and have no current plans to pay cash dividends for the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of the board of directors and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that the board of directors may deem relevant. In addition, our ability to pay dividends may be limited by covenants of any future outstanding indebtedness we or our subsidiaries incur.

Securities Authorized for Issuance under Equity Compensation Plans

The Company’s 2021 Equity Incentive Plan, (the “Incentive Plan”) was approved by our stockholders on October 27, 2021 in connection with the Business Combination and is our only equity compensation plan. No securities under the Incentive Plan or have been issued related to the Equity Compensation Plans and no Warrants have been exercised.

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Capitalized terms used in this section of the prospectus and not defined in this section of the prospectus have the respective meanings given to those terms as defined and included elsewhere in this prospectus. Terms specifically defined in this section have such meanings for purposes of this section of this prospectus. In particular, in this section of the prospectus, the term “Greenrose” refers to The Greenrose Holding Company, Inc. (formerly known as Greenrose Acquisition Corp). The term “Common Stock” refers to the Common Stock of Greenrose.

The unaudited pro forma condensed combined balance sheet as of September 30, 2021 and the unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2021 and the year ended December 31, 2020, combine the financial statements of the acquirer, Greenrose, and the acquirees Theraplant, LLC (“Theraplant”) and True Harvest LLC (“True Harvest”) (collectively, the “Operating Companies”) giving effect to (a) the Business Combination, (b) the Financing and (c) the True Harvest Acquisition, which has been determined to be probable (collectively, the “Transactions”), as if they had occurred on January 1, 2020 in respect of the unaudited pro forma condensed combined statements of operations and on September 30, 2021 in respect of the unaudited pro forma condensed combined balance sheet.

The assumptions and estimates underlying the unaudited adjustments to the unaudited pro forma condensed combined financial statements are described in the accompanying notes, which should be read in conjunction with the following included elsewhere in this prospectus:

•        the historical audited financial statements of Greenrose as of and for the year ended December 31, 2020 and the related notes, included elsewhere in this prospectus;

•        the historical unaudited consolidated financial statements of Greenrose as of and for the nine months ended September 30, 2021 and the related notes, included elsewhere in this prospectus;

•        the historical audited financial statements of the Operating Companies as of and for the year ended December 31, 2020 and the related notes, included elsewhere in this prospectus;

•        the historical unaudited financial statements of the Operating Companies as of and for the nine months ended September 30, 2021 and the related notes, included elsewhere in this prospectus;

•        Theraplant Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this prospectus, as the predecessor of Greenrose;

•        Greenrose Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this prospectus; and

•        Risk Factors.

See the section entitled “Prospectus Summary — Background” elsewhere in this prospectus for further background information of each of the parties in the Business Combination and the True Harvest Acquisition.

The unaudited condensed combined pro forma adjustments reflecting the consummation of the Transactions are based on certain estimates and assumptions. These estimates and assumptions are based on information available as of the dates of these unaudited pro forma condensed combined financial statements and may be revised as additional information becomes available. Therefore, it is). However,is likely that the actual adjustments will differ from the pro forma adjustments, and it is possible the difference may be material. The unaudited pro forma condensed combined financial statements do not give effect to any anticipated synergies, operating efficiencies or cost savings that may be associated with the Transactions.

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Description of the Transactions

The Business Combination/Theraplant Merger

On November 26, 2021, Greenrose consummated the Business Combination with Theraplant. Greenrose has satisfied applicable regulatory, lender and funding requirements to complete the acquisition of certain assets of Arizona-based True Harvest, LLC. Greenrose is continuing to work towards acquiring certain assets of True Harvest, LLC and the acquisition of each of Shango Holdings, Inc. and Futureworks LLC. Each of these acquisitions is subject to, among other things, Greenrose’s compliance with certain debt covenants, appropriate funding, the terms, conditions and rights in each of the applicable agreements and the receipt of applicable state regulatory approvals, if any. On December 31, 2021, Greenrose acquired the assets of True Harvest, LLC. Potential future acquisitions of Shango Holdings, Inc. and Futureworks LLC are not currently determined to be probable given the need for future financing, updated merger agreements and the potential for lengthy regulatory approval. As such, only Theraplant and True Harvest have been included within these pro forma financial statements.

The Theraplant Merger Agreement:

On March 12, 2021, Greenrose entered into the Theraplant Merger Agreement with TPT Merger Sub, Theraplant and SRS as the Selling Stockholders’ representative, pursuant to which, subject to the terms and conditions contained therein, TPT Merger Sub will merge with and into Theraplant, with Theraplant continuing as the surviving entity and individualsa wholly-owned subsidiary of Greenrose. Pursuant to the Theraplant Merger Agreement, at the effective time of the Theraplant Merger, each unit of Theraplant issued and outstanding immediately prior to the effective time will be cancelled and converted into the right to receive a pro rata portion of merger consideration (without interest), as described below. The aggregate merger consideration to be paid at the closing to the unit holders of Theraplant will be $150,000,000, comprised of $50,000,000 Common Stock (5,000,000 shares of Common Stock valued at $10 per share) and $100,000,000 in cash, subject to customary purchase price adjustments, and an indemnity escrow as described more fully in the Theraplant Merger Agreement.

On August 10, 2021, we entered into an amendment (the “Theraplant Amendment No.1”) to the Agreement and Plan of Merger dated as of March 12, 2021, by and among Greenrose Acquisition Corp., GNRS CT Merger Sub, LLC, Theraplant, LLC (“Theraplant”) and Shareholder Representative Services LLC (the “Merger Agreement”). Theraplant Amendment No. 1 extended the drop-dead date of the Merger Agreement to November 30, 2021. Also, the Merger Agreement was amended by restating the “Aggregate Consideration” portion to mean the aggregate amount of consideration to be paid or issued by Parent in respect of all Company Units in the sum of $100,000,000, minus the escrow amount, the expense amount, and the Managing Member Expense amount. Furthermore, aggregate consideration would now include the amount equal to the difference between the Estimated Closing New Working Capital, and the Base Net Capital. Additionally, the Aggregate Consideration would include the amount released from the Escrow and Expense Fund, the amount released from the Managing Member Expense Fund, and the Stock Consideration comprised of unregistered shares of Parent Common Stock valued at $10.00 per share payable in the aggregate amount of $50,000,000.

On November 26, 2021, we entered into an amendment (the “Theraplant Amendment No.2”) to the Agreement and Plan of Merger dated as of March 12, 2021, by and among Greenrose Acquisition Corp., GNRS CT Merger Sub, LLC, Theraplant, LLC (“Theraplant”) and Shareholder Representative Services LLC (the “Merger Agreement”). Theraplant Amendment No. 2 deferred cash payment (“Deferred Cash Payment”) of $10.0 million for up to twelve months following Closing plus simple interest thereon at an annual rate of 9%, payable in equal monthly installments. At the option of the seller, the Deferred Cash Payment may be converted to Greenrose Common Stock at any time at a price per share of $10 per share. Of the Deferred Cash Payment amount, $1.8 million will be reserved in a restricted cash account to reflect two months of payments.

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The Financing

On the Closing Date the Company, TPT Merger Sub and Theraplant (the “Loan Parties”) entered into a senior secured credit agreement (the “Credit Agreement”) with DXR Finance, LLC as Agent (“Agent”) and DXR-GL HOLDINGS I, LLC, DXR-GL HOLDINGS II, LLC, and DXR-GL HOLDINGS III, LLC as lenders (collectively the “Lenders”). Upon entering into the Credit Agreement and the associated loan documents and agreements described below, the Lenders provided the initial term loan (the “Initial Term Loan”) in the amount of Eighty-Eight Million Dollars ($88,000,000). Pursuant to the Credit Agreement, the Company may also draw upon the remaining amount of Seventeen Million Dollars ($17,000,000) (the “Delayed Draw Commitment”) upon providing at least five (5) business days prior notice to the Agent. The loans mature on November 26, 2024 and bear an interest rate of the LIBOR plus the applicable margin of 16% per annum, subject to a LIBOR floor of 1.0%, provided that for the first 12 months after the Closing Date, interest at the rate of 8.5% per annum may be payable-in-kind and thereafter interest at the rate of 5% per annum may be payable in kind. Interest is payable on the last business day of each quarter. The Credit Facility also has a $17 million delayed draw to fund future acquisitions (the “Delayed Draw”). Initial fees associated with the secured loan are 4% of the secured loan and 2% of the Delayed Draw both due at the earlier of (i) December 31, 2022 or (ii) the quarter following a specified triggering event. Further, if the Delayed Draw is made, an additional 2% fee will be payable at the later of (i) the date of funding or the earlier of (i) December 31, 2022 or (ii) the quarter following a specified triggering event. The Credit Facility consists of payment in kind (“PIK”) interest of 8.5% and cash interest of at least 8.5% per annum for the first year. After the first twelve months, PIK interest will be 5% and cash interest will be at least 12% per annum for the remaining two-year term.

The funding of the secured loan will also result in the issuance of 2.0 million warrants to the lender, to be exercisable at $0.01 per warrant.

Credit Agreement Amendment

In connection with the consummation of the True Harvest Acquisition, the Company and DXR Finance, LLC, as agent for the Lenders, and the Lenders entered into an amendment (“Amendment No. 1 to the Credit Agreement”) to the Company’s existing senior secured credit agreement (as amended from time to time, the “Credit Agreement”). The Delayed Draw resulted in .55 million warrants on the same terms and conditions issued to the lender for a total of 2.55 million issued, with a modification to Floor Amount for any Cash Election made, and providing at least one (1) business day prior notice to the Agent to exercise the Delayed Draw Commitment.

Non-Redemption Agreement

In order to help facilitate the closing of the Business Combination, on October 20, 2021, Greenrose and YA II PN, LTD. (the “Investor”), a Cayman Islands exempt limited partnership and an affiliate of Yorkville Advisors Global, LP, entered into a Non-Redemption Agreement (the “Non-Redemption Agreement”), pursuant to which the Investor has agreed to commit to purchase (collectively, the “Purchased Shares”) up to 1,000,000 shares common stock of the Company, $0.0001 par value per share, in open market transactions or in private transactions from the certain selling shareholders who are not affiliated with the Company, at a purchase price not to exceed $10.14 per share, or a combination of the foregoing.

Greenrose shall issue and sell to the Investor, and the Investor shall purchase from Greenrose, for the sum of $500, an aggregate of 500,000 newly issued shares of Greenrose Common Stock (“Investor Shares”). These shares are subject to a lock-up and will be released based on a contractual calculation each month for six months. Any shares not released within that six-month period shall be forfeited.

Standby Equity Purchase Agreement

On October 20, 2021, Greenrose and the Investor, entered into a Standby Equity Purchase Agreement (the “Equity Purchase Agreement” or “SEPA”), whereby the Investor agreed to purchase from the Company up to $100 million of the Company’s shares of common stock, par value $0.0001 per share (the “Common Stock”), for a purchase price per share of 96% multiplied by the lowest daily volume weighted average price of shares during regular trading hours as reported by Bloomberg L.P. of the Company’s common stock during the three (3) consecutive trading days commencing on the advance notice date. As a commitment fee, Greenrose will pay $1.0 million for access to the Equity Purchase Agreement.

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The True Harvest Acquisition

On March 12, 2021, Greenrose entered into the Asset Purchase Agreement with TH Buyer and True Harvest, pursuant to which, subject to the terms and conditions contained therein, TH Buyer will purchase substantially all of the assets of True Harvest and assume certain of its liabilities. The initial consideration to be paid by the Company to True Harvest for the purchased assets will be $50,000,000, payable as follows: (i) $21,750,000 in cash; (ii) an additional $25,000,000 evidenced by a secured promissory note bearing interest at 8% per annum, which matures on the third anniversary of the closing of the asset purchase, and which is secured by the purchased assets pursuant to the terms of a security agreement between TH Buyer and True Harvest; and (iii) the assumption by TH Buyer of $3,250,000 of True Harvest’s debt.

In addition to the initial payment amount, the Company may be required to pay additional consideration to True Harvest of up to a maximum of $35,000,000 in cash contingent on the True Harvest business attaining, within thirty-six (36) months after the closing date of the asset purchase, a certain price per pound of cannabis flower as compared to total flower production, irrespective of the final form in which such flower is sold. The earnout payment, if any, would be evidenced by a promissory note which would bear interest at an annual rate of 8% per annum, would be payable in twenty-four (24) monthly installments after issuance and would be secured by the purchased assets.

On December 31, 2021, the Company, True Harvest Holdings, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“TH Buyer”), and True Harvest, LLC, an Arizona limited liability company (“True Harvest”), entered into an amendment (“Amendment No. 3”) to the Asset Purchase Agreement (as it may be amended from time to time, the “Asset Purchase Agreement”), which provides for, among other things, the purchase of substantially all of True Harvest’s assets and the assumption of certain of True Harvest’s liabilities by TH Buyer (the “TH Acquisition,” and, together with the other transactions contemplated by the Asset Purchase Agreement, the “True Harvest Acquisition”). The Company had previously entered into the original Asset Purchase Agreement on March 12, 2021 to purchase of substantially all of True Harvest’s assets and assume certain of True Harvest’s liabilities by TH Buyer.

Pursuant to the amended Asset Purchase Agreement, the Company has agreed to pay aggregate consideration of $57.6 million at close, consisting of $12.5 million in cash, $23.0 million in the form of a convertible note, $4.6 million in assumed debt, and $17.5 million in shares of common stock of the Company. Contingent upon True Harvest achieving a certain price point per pound of cannabis flower relative to total flower production within 36 months following the close of the transaction, Greenrose will pay additional consideration of up to $35.0 million in the form of an earnout, payable in shares of common stock of the Company.

The Business Combination was financed with Greenrose’s IPO proceeds that were held within a trust account and the Financing. The True Harvest acquisition is expected to be financed by utilizing the Delayed Draw. Upon closing of the Business Combination and the True Harvest Acquisition, Greenrose will own 100% of the Operating Companies acquired.

The Business Combination has been accounted for and the True Harvest Acquisition will be accounted for under the acquisition method of accounting under the scope of the Financial Accounting Standards Board’s Accounting Standards Codification 805, Business Combination (“ASC 805”), in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Under this method of accounting, Greenrose is the accounting acquiror and the purchase price has been allocated to the Operating Companies’ assets acquired and liabilities assumed with identifiable intangible assets and goodwill being recorded at consummation of the Business Combination and the True Harvest Acquisition.

Management determined that Greenrose is the accounting acquirer based on an evaluation of the following facts and circumstances:

•        Greenrose transferred cash to the respective sellers of the Operating Companies from cash on hand and the Financing and in debt financing; none of the Operating Companies transferred cash or incurred incremental liabilities in connection with the Business Combination or the True Harvest Acquisition;

•        Greenrose issued stock to certain of the sellers of the Operating Companies to effectuate the Business Combination and will issue stock to effectuate the True Harvest Acquisition; none of the Operating Companies issued equity;

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•        Greenrose will have a majority voting interest in the combined entity;

•        the current board of directors continues to direct the combined entity with no contemplated changes. As such, Greenrose controls the board;

•        Greenrose will hire or retain executive management of the combined business.

•        the combined entity’s name is The Greenrose Holding Company Inc.; and

•        the corporate headquarters remain that of Greenrose in New York State;

Consideration of $140.0 million was paid out to the sellers of Theraplant upon closing exclusive of any working capital adjustments and consisting of an estimated $90.0 million in cash, $50 million in the form of shares of Greenrose’s Common stock, comprised of 5.0 million shares assuming a per share value of $10.00. Additionally, $10.0 million of Deferred Cash Payment will be payable to sellers and will have a 9% interest rate per annum. The Deferred Cash Payment can be converted to Greenrose’s Common Stock at any time prior to payment at $10 per share.

Consideration of $53.0 million is expected to be paid out to the sellers of True Harvest upon closing of the acquisition consisting of $12.5 million in cash, $17.5 million in shares of Greenrose Common Stock and $23.0 million of seller notes to be issued.

The cash portion of the Business Combination consideration was funded from the cash held in Greenrose’s trust account, which was $20.2 million after redemptions of $154.9 million and $88.0 million raised through the Financing. To the extent not used to pay the cash portion of the Business Combination consideration, the redemption price for any properly redeemed shares of Greenrose’s Common stock, or fees and expenses related to the Business Combination and the other transactions contemplated by the Business Combination Agreements, the proceeds from Greenrose’s trust account and the Financing will be used for general corporate purposes, which may include, but not be limited to, working capital for operations, repayment of indebtedness, capital expenditures, and future acquisitions.

Greenrose is expecting to utilize the Delayed Draw to finance the cash portion of the True Harvest Acquisition. The incremental cash from the Delayed Draw will be used for general corporate purposes, which may include, but not be limited to, working capital for operations, repayment of indebtedness, capital expenditures, and future acquisitions.

Below is a summary of the total consideration of the Business Combination and the True Harvest Acquisition on a gross basis. The GAAP consideration is calculated below in Note 2(g).

Cash Paid to Theraplant(1)

 

 

90,000

Equity Issuance to Theraplant, $10/share(2)

 

 

50,000

Deferred Cash Payment to Theraplant(3)

 

 

10,000

Total Consideration for Theraplant

 

$

150,000

Cash paid to True Harvest

 

$

12,500

Equity issuance to True Harvest

 

 

17,500

Seller note from True Harvest

 

 

23,000

Initial Consideration for True Harvest

 

$

53,000

  

 

 

Earnout shares issuable to sellers of True Harvest(5)

 

 

35,000

Total Potential Consideration for True Harvest

 

$

88,000

____________

(1)      Final cash paid to the sellers of the Operating Company is subject to a final net working capital adjustment pursuant to the Merger Agreement.

(2)      In accordance with Amendment number 1 to the Merger Agreement with Theraplant, Greenrose will issue 5.0 million shares of Common Stock with an estimated value of $50.0 million issuable upon the close of the Transactions.

(3)      In accordance with Amendment number 2 to the Merger Agreement with Theraplant, $10.0 million will be deferred for up to twelve months and will carry an annual interest rate of 9% payable to the sellers.

(4)      True Harvest will issue a $23.0 million Secured Promissory Note bearing interest of 8% per annum and due in December 2024.

(5)      True Harvest sellers may be issued notes by Greenrose of $35.0 million to be issued in 2024 upon achievement of certain earnout hurdles.

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The following table summarizes the expected shares outstanding after giving effect to the Transactions.

 

Shares

 

%

Greenrose Public Shareholders

 

1,988,000

 

12

%

Greenrose Initial Shareholders

 

4,312,500

 

26

%

Private units

 

330,000

 

2

%

Theraplant shareholders

 

5,000,000

 

30

%

Total Shares at Closing

 

11,630,500

 

70

%

     

 

Issuance of Investor shares(2)

 

500,000

 

3

%

Conversion of convertible and promissory notes(3)

 

145,250

 

1

%

True Harvest shareholders(1)

 

4,430,378

 

27

%

Total Shares after Closing and True Harvest Acquisition

 

16,706,128

 

100

%

____________

(1)      On December 31, 2021, True Harvest sellers were issued 4,430,378 shares based upon an agreed upon price of $3.95 per share.

(2)      Greenrose will issue 0.5 million shares to the Investor as part of the non-redemption agreement whereby the Investor agreed to purchase shares of Greenrose Common stock directly from selling shareholders and simultaneously agreed not to redeem the purchased shares. These shares may be forfeited based on certain market conditions but are legally outstanding shares.

(3)      The convertible promissory note and the promissory note — related party will be converted into shares of equity and private warrants. This amount assumes the conversion of the elected amount of notes to be converted into shares of equity at $10 per share.

53

Table of Contents

The Greenrose Holding Company, Inc.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of September 30, 2021
(Amounts in thousands of U.S. dollars, except per share data)

 

Greenrose
Acquisition
Corp
(Historical)

 

Theraplant
(Historical)

 

True
Harvest
(Historical)

 

Pro Forma
Recapitalization
Transaction
Adjustments

   

Pro Forma
Theraplant
Transaction
Adjustments

   

Pro Forma
True Harvest 
Transaction
Adjustments

   

Combined
Pro Forma

Assets

 

 

  

 

  

 

  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

Current Assets:

 

 

  

 

  

 

  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

Cash and Cash Equivalents

 

$

102

 

$

3,678

 

$

1,522

 

$

20,180

 

 

2a

 

$

(94,874

)

 

2d

 

$

(12,500

)

 

2d

 

$

10,654

  

 

  

 

  

 

  

 

88,000

 

 

2b

 

 

(5,147

)

 

2e

 

 

(1,522

)

 

2e

 

 

 
  

 

  

 

  

 

  

 

(3,968

)

 

2c

 

 

(1,817

)

 

2m

 

 

17,000

 

 

2p

 

 

 

Restricted Cash

 

 

 

 

 

 

285

 

 

 

   

 

1,817

 

 

2m

 

 

(285

)

 

2e

 

 

1,817

Accounts Receivable

 

 

 

 

1,381

 

 

423

 

 

 

   

 

 

   

 

(423

)

 

2e

 

 

1,381

Due From Related Parties

 

 

 

 

 

 

 

 

 

   

 

 

   

 

 

   

 

Loans Receivable – Related Parties Current Portion

 

 

 

 

 

 

 

 

 

   

 

 

   

 

 

   

 

Inventories

 

 

 

 

3,231

 

 

2,132

 

 

 

   

 

 

   

 

 

   

 

5,363

Prepaid Expenses and Other Current Assets

 

 

67

 

 

240

 

 

22

 

 

1,000

 

 

2n

 

 

 

   

 

(22

)

 

2e

 

 

1,307

Total Current Assets

 

 

169

 

 

8,530

 

 

4,384

 

 

105,212

 

   

 

(100,021

)

   

 

2,248

 

   

 

20,522

Non-Current Assets:

 

 

  

 

  

 

  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

Property and Equipment, Net

 

 

 

 

12,265

 

 

6,968

 

 

 

   

 

 

   

 

 

   

 

19,233

Loans Receivable – Related Parties

 

 

 

 

 

 

 

 

 

   

 

 

   

 

 

   

 

Intangible Assets, Net

 

 

 

 

 

 

 

 

 

   

 

109,000

 

 

2f

 

 

7,300

 

 

2f

 

 

116,300

Goodwill

 

 

 

 

 

 

 

 

 

   

 

31,779

 

 

2g

 

 

71,117

 

 

2g

 

 

102,896

Deferred Tax Assets

 

 

 

 

 

 

 

 

 

   

 

 

   

 

 

   

 

Marketable Securities Held in Trust Account

 

 

174,507

 

 

 

 

 

 

(174,507

)

 

2a

 

 

 

   

 

 

   

 

Other Non-Current Assets

 

 

50

 

 

 

 

133

 

 

 

   

 

 

   

 

 

   

 

183

Total Assets

 

$

174,726

 

$

20,795

 

$

11,485

 

$

(69,295

)

   

$

40,758

 

   

$

80,665

 

   

$

259,134

Liabilities

 

 

  

 

  

 

  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

Current Liabilities:

 

 

  

 

  

 

  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

Accounts Payable and Accrued Liabilities

 

 

2,015

 

 

1,494

 

 

 

 

10,423

 

 

2c

 

 

 

   

 

340

 

 

2p

 

 

19,132

  

 

  

 

  

 

  

 

3,860

 

 

2b

 

 

 

 

   

 

 

 

   

 

 
  

 

  

 

  

 

  

 

1,000

 

 

2n

 

 

 

 

   

 

 

   

 

 

Accounts Payable

 

 

  

 

  

 

774

 

 

 

   

 

 

   

 

(774

)

 

2e

 

 

Accrued Liabilities

 

 

  

 

  

 

1,581

 

 

 

   

 

 

   

 

(1,581

)

 

2e

 

 

Due to Related Parties

 

 

 

 

 

 

 

 

 

   

 

 

   

 

 

   

 

Deferred Rent, Current Portion

 

 

 

 

 

 

 

 

 

   

 

 

   

 

 

   

 

Current Portion of Equipment Lease

 

 

 

 

 

 

 

 

 

   

 

 

   

 

 

   

 

Lease Liabilities, Current Portion

 

 

 

 

 

 

 

 

 

   

 

 

   

 

 

   

 

Current Portion of Notes Payable

 

 

 

 

217

 

 

5,684

 

 

 

   

 

(217

)

 

2e

 

 

(5,684

)

 

2e

 

 

10,000

  

 

  

 

  

 

  

 

 

 

   

 

10,000

 

 

2h

 

 

 

 

   

 

 

Current Portion of Notes Payable – Related Parties

 

 

 

 

 

 

 

 

 

   

 

 

   

 

 

   

 

Income Tax Payable

 

 

 

 

 

 

 

 

 

   

 

 

   

 

 

   

 

Sales Tax Payable

 

 

 

 

 

 

 

 

 

   

 

 

   

 

 

   

 

Promissory note- related party

 

 

1,095

 

 

 

 

 

 

(1,671

)

 

2l

 

 

 

   

 

 

   

 

  

 

  

 

  

 

  

 

576

 

 

2a

 

 

 

 

   

 

 

 

   

 

 

Distributions Payable to Members

 

 

 

 

 

 

128

 

 

 

   

 

 

   

 

(128

)

 

2e

 

 

Other current liabilities

 

 

 

 

 

 

 

 

2,615

 

 

2r

 

 

 

   

 

 

   

 

2,615

Total Current Liabilities

 

 

3,110

 

 

1,711

 

 

8,167

 

 

16,803

 

   

 

9,783

 

   

 

(7,827

)

   

 

31,747

Long-Term Liabilities:

 

 

  

 

  

 

  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

Lease Liabilities

 

 

 

 

 

 

 

 

 

   

 

 

   

 

 

   

 

Convertible Debt, Net of Debt Discount

 

 

 

 

 

 

 

 

 

   

 

 

   

 

 

   

 

Derivative Liability

 

 

 

 

 

 

 

 

 

   

 

 

   

 

 

   

 

Notes Payable, Net of Current Portion

 

 

 

 

5,147

 

 

7,608

 

 

66,832

 

 

2b,
2h

 

 

(5,147

)

 

2e

 

 

20,042

 

 

2h

 

 

107,266

  

 

  

 

  

 

  

 

 

 

   

 

 

 

   

 

12,784

 

 

2p

 

 

 

Deferred Income Taxes

 

 

 

 

58

 

 

 

 

 

   

 

 

   

 

 

   

 

58

Deferred Rent, Net of Current Portion

 

 

 

 

 

 

558

 

 

 

   

 

 

   

 

(558

)

 

2e

 

 

Contingent Consideration

 

 

 

 

 

 

 

 

 

   

 

 

   

 

30,000

 

 

2o

 

 

30,000

Private warrants liability

 

 

1,168

 

 

 

 

 

 

850

 

 

2i

 

 

 

   

 

 

   

 

2,868

  

 

  

 

  

 

  

 

850

 

 

2l

 

 

 

 

   

 

 

 

   

 

 

Convertible Promissory Note – Related
Parties

 

 

2,752

 

 

 

 

 

 

(2,752

)

 

2i

 

 

 

   

 

 

   

 

Total Liabilities

 

 

7,030

 

 

6,916

 

 

16,333

 

 

82,583

 

   

 

4,636

 

   

 

54,441

 

   

 

171,939

Commitment and Contingencies

 

 

  

 

  

 

  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

Common stock subject to possible redemption 17,250,000 shares at redemption value at September 30, 2021

 

 

174,458

 

 

 

 

 

 

(174,458

)

 

2j

 

 

 

   

 

 

   

 

54

Table of Contents

The Greenrose Holding Company, Inc.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of September 30, 2021 — (Continued)
(Amounts in thousands of U.S. dollars, except per share data)

 

Greenrose
Acquisition
Corp
(Historical)

 

Theraplant
(Historical)

 

True
Harvest
(Historical)

 

Pro Forma
Recapitalization
Transaction
Adjustments

   

Pro Forma
Theraplant
Transaction
Adjustments

   

Pro Forma
True Harvest 
Transaction
Adjustments

   

Combined
Pro Forma

Shareholders’ Equity:

 

 

 

 

 

 

  

 

 

 

 

 

 

 

   

 

 

 

   

 

    

 

 

 

Share Capital

 

 

 

 

 

 

 

 

 

 

 

   

 

 

   

 

   

 

 

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding

 

 

 

 

 

 

 

 

 

 

 

   

 

 

   

 

   

 

 

Common stock, $0.0001 par value; 70,000,000 shares authorized; 4,642,500 shares issued and outstanding (excluding 17,250,000 shares subject to possible redemption) at September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

2j

 

 

1

 

 

2k

 

 

   

 

1

 

Additional paid-in capital

 

 

 

 

 

 

 

 

 

 

19,555

 

 

2j

 

 

50,000

 

 

2k

 

 

17,500

 

2q

 

 

107,434

 

  

 

 

 

 

 

  

 

 

 

 

 

15,122

 

 

2b

 

 

 

 

   

 

3,876

 

2p

 

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

821

 

 

2l

 

 

 

 

   

 

    

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

560

 

 

2i

 

 

 

 

   

 

    

 

 

 

Members’ Equity (Deficit)

 

 

 

 

 

13,879

 

 

(4,848

)

 

 

 

   

 

(13,879

)

 

2e

 

 

4,848

 

2e

 

 

 

Retained Earnings (Accumulated Deficit)

 

 

(6,762

)

 

 

 

 

 

 

 

(3,968

)

 

2c

 

 

 

   

 

   

 

(20,240

)

  

 

 

 

 

 

  

 

 

 

 

 

(7,783

)

 

2c

 

 

 

 

   

 

    

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

(454

)

 

2b

 

 

 

 

   

 

    

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

1,342

 

 

2i

 

 

 

 

   

 

    

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

(2,615

)

 

2r

 

 

 

 

   

 

 

   

 

 

 

Total Shareholders’ Equity (Deficit)

 

 

(6,762

)

 

 

13,879

 

 

(4,848

)

 

 

22,580

 

   

 

36,122

 

   

 

26,224

   

 

87,195

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

   

 

 

 

Total Liabilities and Equity

 

$

174,726

 

 

$

20,795

 

$

11,485

 

 

$

(69,295

)

   

$

40,758

 

   

$

80,665

   

$

259,134

 

55

Table of Contents

The Greenrose Holding Company, Inc.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the nine months ended September 30, 2021
(Amounts in thousands of U.S. dollars, except per share data)

 

Greenrose
Acquisition
Corp
(Historical)

 

Theraplant 
(Historical)

 

True
Harvest
(Historical)

 

Pro Forma
Recapitalization 
Transaction
Adjustments

   

Pro Forma
Theraplant
and True
Harvest
Transaction
Adjustments

   

Combined
Pro Forma

Revenues, net of discounts

 

$

 

 

$

19,956

 

 

$

12,538

 

 

$

 

   

$

 

   

$

32,494

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Cost of goods sold (exclusive of depreciation)

 

 

 

 

 

6,421

 

 

 

5,579

 

 

 

 

   

 

 

   

 

12,000

 

Selling, General, and
Administrative

 

 

 

 

 

 

 

 

1,802

 

 

 

 

   

 

 

   

 

1,802

 

Sales and Marketing

 

 

 

 

 

198

 

 

 

 

 

 

 

   

 

 

   

 

198

 

General and Administrative

 

 

 

 

 

2,851

 

 

 

 

 

 

 

   

 

 

   

 

2,851

 

Depreciation and Amortization

 

 

 

 

 

607

 

 

 

588

 

 

 

 

   

 

11,403

 

 

3a

 

 

12,598

 

Operating and formation costs

 

 

3,578

 

 

 

 

 

 

 

 

 

 

   

 

 

   

 

3,578

 

Total Operating Expenses:

 

 

3,578

 

 

 

10,077

 

 

 

7,969

 

 

 

 

   

 

11,403

 

   

 

33,027

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Income (loss) from Operations:

 

 

(3,578

)

 

 

9,879

 

 

 

4,569

 

 

 

 

   

 

(11,403

)

   

 

(533

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Other Income (Expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Other Income (Expense), Net

 

 

 

 

 

 

 

 

281

 

 

 

 

   

 

 

   

 

281

 

Interest expense

 

 

(1,118

)

 

 

(146

)

 

 

(1,330

)

 

 

(17,585

)

 

3c

 

 

(3,706

)

 

3c

 

 

(22,767

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

1,118

 

 

3e

 

 

 

 

   

 

 

 

Interest earned on marketable
securities held in
Trust Account

 

 

13

 

 

 

 

 

 

 

 

 

 

(13

)

 

3d

 

 

 

 

   

 

 

Change in fair value of private
warrants liability

 

 

812

 

 

 

 

 

 

 

 

 

 

   

 

 

   

 

812

 

Change in fair value of Convertible
promissory note, net – related
party

 

 

959

 

 

 

 

 

 

 

 

 

(959

)

 

3e

 

 

 

 

   

 

 

Total Other Income (Expense):

 

 

666

 

 

 

(146

)

 

 

(1,049

)

 

 

(17,439

)

   

 

(3,706

)

   

 

(21,674

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Income (Loss) Before Provision for Income Taxes:

 

 

(2,912

)

 

 

9,733

 

 

 

3,520

 

 

 

(17,439

)

   

 

(15,109

)

   

 

(22,207

)

Provision For Income Taxes

 

 

 

 

 

812

 

 

 

 

 

 

 

   

 

4,619

 

 

3b

 

 

5,431

 

Net income (loss):

 

$

(2,912

)

 

$

8,921

 

 

$

3,520

 

 

$

(17,439

)

   

$

(19,728

)

   

$

(27,638

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Basic and diluted weighted average
shares outstanding, Common
stock

 

 

21,892,500

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

19,256,000

 

Basic and diluted net loss per share, Common stock

 

$

(0.13

)

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

$

(1.44

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Net Income per share – basic and diluted – attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Angel Founder Units

 

 

 

 

 

 

110,000

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Series A Units

 

 

 

 

 

 

42,761

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Series R Units

 

 

 

 

 

 

54,000

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Weighted average shares – basic and diluted – attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Angel Founder Units

 

 

 

 

 

$

43.15

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Series A Units

 

 

 

 

 

$

43.15

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Series R Units

 

 

 

 

 

$

43.15

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

56

Table of Contents

The Greenrose Holding Company, Inc.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the year ended December 31, 2020
(Amounts in thousands of U.S. dollars, except per share data)

 

Greenrose
Acquisition
Corp
(Historical)

 

Theraplant
(Historical)

 

True
Harvest
(Historical)

 

Pro Forma
Recapitalization
Transaction
Adjustments

   

Pro Forma
Theraplant
and True
Harvest
Transaction
Adjustments

   

Combined
Pro Forma

Revenues, net of discounts

 

$

 

 

$

28,375

 

 

$

8,036

 

 

$

 

   

$

 

   

$

36,411

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Cost of goods sold (exclusive of depreciation)

 

 

 

 

 

8,875

 

 

 

5,817

 

 

 

 

   

 

 

   

 

14,692

 

Selling, General, and
Administrative

 

 

 

 

 

 

 

 

1,022

 

 

 

 

   

 

 

   

 

1,022

 

Transaction costs

 

 

 

 

 

 

 

 

 

 

 

11,751

 

 

3a

 

 

 

   

 

14,366

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

2,615

 

 

3j

 

 

 

 

   

 

 

 

Sales and Marketing

 

 

 

 

 

333

 

 

 

 

 

 

 

   

 

 

   

 

333

 

General and Administrative

 

 

 

 

 

2,505

 

 

 

 

 

 

 

   

 

 

   

 

2,505

 

Depreciation and Amortization

 

 

 

 

 

799

 

 

 

542

 

 

 

 

   

 

15,205

 

 

3b

 

 

16,546

 

Operating and formation costs

 

 

1,599

 

 

 

 

 

 

 

 

 

 

   

 

 

   

 

1,599

 

Total Operating Expenses:

 

 

1,599

 

 

 

12,512

 

 

 

7,381

 

 

 

14,366

 

   

 

15,205

 

   

 

51,063

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Income (loss) from Operations:

 

 

(1,599

)

 

 

15,863

 

 

 

655

 

 

 

(14,366

)

   

 

(15,205

)

   

 

(14,652

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Other Income (Expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Other Income (Expense), Net

 

 

 

 

 

 

 

 

(101

)

 

 

(454

)

 

3i

 

 

8

 

 

3c

 

 

(547

)

Gain on Sale of Property and Equipment

 

 

 

 

 

8

 

 

 

 

 

 

 

   

 

(8

)

 

3c

 

 

 

Change in Fair Value of
Derivatives

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

   

 

 

Interest expense

 

 

(273

)

 

 

(102

)

 

 

(1,556

)

 

 

(21,696

)

 

3d

 

 

(5,811

)

 

3d

 

 

(27,823

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

273

 

 

3g

 

 

 

 

   

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

1,342

 

 

3h

 

 

 

 

   

 

 

 

Interest earned on marketable securities held in Trust Account

 

 

1,157

 

 

 

 

 

 

 

 

 

(1,157

)

 

3e

 

 

 

   

 

 

Change in fair value of private warrants liability

 

 

(574

)

 

 

 

 

 

 

 

 

 

   

 

 

   

 

(574

)

Change in fair value of Convertible promissory note, net – related party

 

 

(321

)

 

 

 

 

 

 

 

 

321

 

 

3g

 

 

 

   

 

 

Total Other Income (Expense):

 

 

(11

)

 

 

(94

)

 

 

(1,657

)

 

 

(21,371

)

   

 

(5,811

)

   

 

(28,944

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Income (Loss) Before Provision for Income Taxes:

 

 

(1,610

)

 

 

15,769

 

 

 

(1,002

)

 

 

(35,737

)

   

 

(21,016

)

   

 

(43,596

)

Provision For Income Taxes

 

 

 

 

 

1,179

 

 

 

 

 

 

 

   

 

4,577

 

 

3f

 

 

5,756

 

Net income (loss):

 

$

(1,610

)

 

$

14,590

 

 

$

(1,002

)

 

$

(35,737

)

   

$

(25,593

)

   

$

(49,352

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Basic and diluted weighted average shares outstanding, Common stock

 

 

19,779,057

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

19,256,000

 

Basic and diluted net loss per share, Common stock

 

$

(0.08

)

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

$

(2.56

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Net Income per share – basic and diluted – attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Angel Founder Units

 

 

 

 

 

 

110,000

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Series A Units

 

 

 

 

 

 

42,761

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Series R Units

 

 

 

 

 

 

54,000

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Weighted average shares – basic and diluted – attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Angel Founder Units

 

 

 

 

 

$

48.65

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Series A Units

 

 

 

 

 

$

158.35

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

Series R Units

 

 

 

 

 

$

45.69

 

 

 

 

 

 

 

 

 

   

 

 

 

   

 

 

 

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1. Basis of Presentation

The historical consolidated financial statements have been adjusted in the unaudited pro forma condensed combined financial information to give effect to pro forma events that are directly attributable to the Transactions and factually supportable.

The unaudited pro forma condensed combined financial statements have been presented for illustrative purposes only and are not necessarily indicative of the operating results and financial position that would have been achieved had the Transactions occurred on the dates indicated, nor do they purport to project the future operating results or financial position of Greenrose following the completion of the Transactions. They should be read in conjunction with the historical financial statements and notes thereto of Greenrose and the Operating Companies.

The Business Combination and the True Harvest Acquisition are being accounted for as an acquisition of the Operating Companies by Greenrose. Under the acquisition method of accounting, the purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed of the Operating Companies based on their respective fair market value, with any excess purchase price allocated to goodwill. The pro forma purchase price allocation was based on estimates of the fair market value of the tangible and intangible assets and liabilities as described in Notes 2(f) and 2(g) of the unaudited condensed combined pro forma balance sheet adjustments in the accompanying notes to the unaudited pro forma condensed combined financial information. As of the date of this prospectus, the valuation studies necessary to determine the fair market value of the assets and liabilities to be acquired and the related allocations of purchase price are preliminary and prepared based on preliminary forecasts, discount rates, and limited publicly available information. A final determination of fair values will be based on the actual net tangible and intangible assets that existed as of the Closing Dates of the Transactions. The final purchase price allocation will be based, in part, on third party appraisals and may differ than that reflected in the pro forma purchase price allocation, and any differences may be material.

The unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings or cost savings that may be associated with the Transactions. The pro forma adjustments reflecting the consummation of the Business Combination and the True Harvest Acquisition are based on certain currently available information and certain assumptions and methodologies that management believes are reasonable under the circumstances. The unaudited condensed pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments, and it is possible the difference may be material. Management believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Business Combination and the True Harvest Acquisition based on information available to management at the time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information.

There were no significant intercompany balances or transactions between Greenrose and the Operating Companies as of the date and for the periods of these unaudited pro forma condensed combined financial statements.

The pro forma combined provision for income taxes does not necessarily reflect the amounts that would have resulted had Greenrose and the Operating Companies filed consolidated income tax returns during the periods presented.

The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statements of operations are based upon the number of Greenrose’s shares outstanding, assuming the Transactions occurred on January 1, 2020.

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2. Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments

Transaction Adjustments

The pro forma adjustments included in the unaudited pro forma condensed combined balance sheet as of September 30, 2021 are as follows:

a)      Reflects the reclassification of cash and cash equivalents held in Greenrose’s trust account that became available for transaction consideration, transaction expenses, and the operating activities following the Business Combination net of actual redemptions and an extension funded through a promissory note — related party directly to the trust account.

b)      Reflects the cash proceeds from the Financing of the issuance of the secured loan for $88.0 million. The debt has been reduced by $3.8 million of original issue discount, which has been recorded as an accrued expense, as it is not due on the closing date. The secured loan was further reduced by $15.1 million allocated to paid in capital for equity classified detachable warrants on a relative fair value basis and $2.2 million of financing costs for net debt of $66.8 million. $0.5 million of financing fees were allocated to the equity classified warrants and were expensed as incurred. See Note 3i.

c)      Reflects transaction costs Greenrose and the Operating Company incurred related to legal, financial advisory, and other professional fees amounting to approximately $14.4 million in order to consummate the Transactions. Included within transaction costs are $7.8 million of deferred underwriter discount and $2.6 million of fees owed to underwriters for the Financing which have both been accrued and will be paid at a later date. Additionally, $4.0 million of professional legal, accounting and consulting fees were incurred and expensed as incurred.

d)      Reflects the cash paid to the sellers of Theraplant and True Harvest on the respective closing dates, including an estimated net working capital adjustment calculated as of September 30, 2021 pursuant to the Merger and the Asset Purchase Agreement. See Note 2(g).

e)      Represents adjustments for assets, liabilities and historical equity not acquired pursuant to the Business Combination Agreement and Asset Purchase Agreement as well as historical debt that was paid down upon Closing of the Business Combination.

f)      As part of the preliminary valuation analysis, Greenrose identified customer relationships, trade names, and licenses as the acquired identifiable intangible assets. The fair value of identifiable intangible assets was mainly determined using the “income approach,” which requires a forecast of all expected future cash flows and the sales comparison approach. The fair value and useful life calculations are preliminary and subject to change after Greenrose finalizes its acquisition accounting of the Business Combination and the True Harvest Acquisition.

Intangible Asset

 

Theraplant
Estimated
Fair Value

 

True Harvest
Estimated 
Fair Value

 

Total

 

Weighted
Average 
Useful Life 
in Years

Customer relationships

 

$

17,200

 

$

5,500

 

$

22,700

 

5

Trade Name

 

 

3,800

 

 

1,800

 

 

5,600

 

3

Licenses

 

 

88,000

 

 

 

 

88,000

 

10

Fair value of intangible assets acquired

 

$

109,000

 

$

7,300

 

$

116,300

  

Remove historical intangible assets

 

 

 

 

 

 

  

Pro forma transaction adjustment to intangible assets

 

$

109,000

 

$

7,300

 

$

116,300

  

g)      As the accounting acquirer, Greenrose has performed a valuation analysis of the fair market value of the assets and liabilities of the Operating Companies. This adjustment reflects the goodwill from the purchase price allocation as of September 30, 2021 resulting from the Business Combination and the True Harvest Acquisition. For purposes of determining the purchase price allocation, the fair market value of all tangible and intangible assets acquired, and liabilities assumed were estimated as of September 30, 2021. Except for the specific fair value adjustments discussed in the notes to the “Unaudited pro forma

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condensed combined financial information,” Greenrose has assumed that the historical carrying value of the assets acquired and liabilities assumed reflects fair value. The preliminary allocation of purchase price for each of the Operating Companies is as follows:

 

Theraplant

 

True
Harvest

 

Total

Estimated GAAP consideration:

 

 

 

 

 

 

 

 

 

 

 

 

Cash, net of cash acquired

 

$

90,000

 

 

$

12,500

 

 

$

102,500

 

Estimated preliminary net working capital adjustment

 

 

1,196

 

 

 

 

 

 

1,196

 

Greenrose stock

 

 

50,000

 

 

 

17,500

 

 

 

67,500

 

Earnout

 

 

 

 

 

30,000

 

 

 

30,000

 

Seller note

 

 

10,000

 

 

 

23,000

 

 

 

33,000

 

Total estimated GAAP consideration

 

 

151,196

 

 

 

83,000

 

 

 

234,196

 

  

 

 

 

 

 

 

 

 

 

 

 

Allocated to:

 

 

 

 

 

 

 

 

 

 

 

 

Net working capital

 

 

3,358

 

 

 

2,132

 

 

 

5,490

 

Property and equipment, net

 

 

12,265

 

 

 

6,968

 

 

 

19,233

 

Intangible assets

 

 

109,000

 

 

 

7,300

 

 

 

116,300

 

Other assets

 

 

 

 

 

133

 

 

 

133

 

Other liabilities

 

 

(5,205

)

 

 

(4,650

)

 

 

(9,855

)

Taxes payable

 

 

 

 

 

 

 

 

 

Preliminary net assets acquired

 

 

119,418

 

 

 

11,883

 

 

 

131,301

 

Preliminary allocation to goodwill

 

$

31,778

 

 

$

71,117

 

 

$

102,895

 

h)      All debt of Theraplant was paid off in connection with the transaction and only the debt below will be assumed from True Harvest. Refer to Note 2(g) for seller notes as consideration and Notes 2b and 2p for discussion of the Financing and Delayed Draw Financing. The following table presents the long-term debt outstanding following the completion of the Transactions on a pro forma basis:

Financing, term loan, net

 

$

67,172

Delayed Draw, net

 

 

12,784

Theraplant seller note

 

 

10,000

True Harvest seller note

 

 

23,000

True Harvest assumed debt

 

 

4,650

Pro forma long-term debt, net

 

$

117,266

i)       Reflects the conversion of the $2 million convertible promissory notes into private placement warrants and equity at $1 and $10 per warrant and share, respectively. The convertible promissory note has a bifurcated derivative which has been included in the carrying amount. The difference in the principal amount and the carrying amount inclusive of the derivative will be recorded as a gain or loss in the statement of operations. Refer to Note 3h.

j)       Represents the reclassification of common stock previously subject to redemption to permanent equity, less amounts actually redeemed.

k)      Pursuant to Theraplant Amendment No.1 to the Merger Agreement, Greenrose will issue 5.0 million shares of Common Stock as consideration.

l)       Reflects the conversion of the promissory notes — related party into private warrants and equity shares at the value of the loan on the transaction date.

m)     Reflects the payment of $1.8 million of cash into a restricted account to reserve for the Deferred Cash Payment.

n)      Reflects an accrual to be paid for the Equity Purchase Agreement entered into as part of the Transactions. The Equity Purchase Agreement allows for up to $100 million of equity to be sold to the Investor over time and the commitment fee is settleable in shares or cash at the option of Greenrose. An asset has been recorded for the commitment fee in accordance with ASC 340-10-S99-1 which allows for fees to be offset against proposed offerings.

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o)      Reflects the estimated fair value of the Earnouts potentially due to the sellers of True Harvest, as further described in the description of the True Harvest Acquisition. See Note 2(g).

p)      Reflects the cash proceeds from the Delayed Draw $17.0 million. The Delayed Draw was reduced by $3.9 million allocated to paid in capital for equity classified detachable warrants on a relative fair value basis and $0.3 for issue discount that has been accrued and is not due on the date the Delayed Draw will be made for net debt of $12.8 million.

q)      Pursuant to the 3rd Amendment to the True Harvest Asset Purchase Agreement, Greenrose will issue $17.5 million of common stock as consideration with an agreed upon value of $3.95 per share.

r)      The Newly issued shares were valued as of the transaction date but are subject to a lock-up and are effectively earned each month based on the Greenrose stock price. The monetary value of the Newly Issued Shares varies inversely from the value of the Greenrose common stock price and are considered a liability and accounted for under ASC 480.

3. Unaudited Pro Forma Condensed Combined Statement of Operations Adjustments

The pro forma adjustments included in the unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2021 are as follows:

a)      Reflects the estimated amortization expense resulting from the recording of intangible assets being recorded in connection with the Business Combination and True Harvest Acquisition.

 

Theraplant Amortization

 

True Harvest Amortization

 

Total Amortization

Pro Forma Amortization

 

$

10,128

 

$

1,275

 

$

11,403

Historical Amortization

 

 

 

 

 

 

Pro Forma Adjustment

 

$

10,128

 

$

1,275

 

$

11,403

b)      Reflects the incremental corporate income tax expense at a blended statutory rate of 26.5% for Theraplant which was historically taxed as a partnership and not as a corporation. Due to limitations on the deductibility of certain expenses pursuant to IRC Section 280E, the blended statutory rate was applied to the gross profit. Further, the incremental pro forma adjustments were not tax effected as they are not deductible for tax purposes subject to IRC Section 280E.

c)      Represents the impact to interest expense as a result of (i) the new long-term debt incurred as part of the Financing and Delayed Draw and (ii) the paydown of Theraplant debt and the expected paydown of True Harvest debt not assumed and the elimination of the corresponding interest expense. See Notes 2(b), 2(h) 2(e) and 2(p) for more information on debt financings. The table below represents the key terms of the new debt incurred in connection with the Transactions:

Debt Instrument

 

Principal

 

Interest
Rate

 

Maturity

Financing – Senior Loan

 

$

88,000

 

17.00

%

 

12/1/2024

Delayed Draw

 

 

17,000

 

17.00

%

 

12/1/2024

Theraplant seller note

 

 

10,000

 

9.00

%

 

12/31/2022

True Harvest seller note

 

 

23,000

 

8.00

%

 

12/31/2024

New Debt

 

$

138,000

  

 

  

The table below reflects the summary of changes to interest expense due to new financings and paydowns.

 

PIPE
Financing
Interest

 

Delayed
Draw
Interest

 

Theraplant
Interest

 

True
Harvest
Interest

 

Total
Interest

Pro forma Interest on assumed debt

 

$

 

$

 

$

 

 

$

419

 

$

419

Pro forma Interest on new debt

 

 

17,585

 

 

3,383

 

 

 

 

 

1,380

 

 

22,348

Historical interest expense

 

 

 

 

 

 

146

 

 

 

1,330

 

 

1,476

Pro forma Interest adjustment

 

$

17,585

 

$

3,383

 

$

(146

)

 

$

469

 

$

21,291

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d)      Represents the elimination of interest income earned on Greenrose’s trust account for the nine months ended September 30, 2021.

e)      Reflects the elimination of interest expense and changes in fair value associated to the Greenrose convertible promissory note as discussed in Note 2i.

The pro forma adjustments included in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 are as follows:

a)      Reflects expensed transaction costs direct and incremental to the Transactions exclusive of $2.6 million of Financing fees which were offset against the debt proceeds.

b)      The following table summarizes the changes in the estimated amortization expense resulting from the changes in intangible assets being recorded in connection with the business Combination:

 

Theraplant Amortization

 

True Harvest Amortization

 

Total Amortization

Pro Forma Amortization

 

$

13,507

 

$

1,700

 

$

15,207

Historical Amortization

 

 

2

 

 

 

 

2

Pro Forma Adjustment

 

$

13,505

 

$

1,700

 

$

15,205

c)      Adjustments reclassify certain expenses to conform to a combined expense presentation.

d)      Represents the impact to interest expense as a result of (i) the new long-term debt incurred as part of the Financing and Delayed Draw (ii) the issuance of the $10.0 million Theraplant seller note (iii) the issuance of the $23.0 million True Harvest seller note and (iv) the paydown of Theraplant debt and True Harvest debt not assumed and the elimination of the corresponding interest expense. See Notes 2(b), 2(h), 2(e) and 2(p) for more information on debt financings. The table below represents the key terms of the new debt incurred in connection with the Transactions:

The table below reflects the summary of changes to interest expense due to new financings and paydowns.

For the year ended December 31, 2020

 

Financing
Interest

 

Delayed
Draw
Interest

 

Theraplant
Interest

 

True
Harvest
Interest

 

Total
Interest

Pro forma Interest on assumed debt

 

 

 

 

 

 

 

$

558

 

$

558

Pro forma Interest on new debt

 

 

21,696

 

 

4,171

 

 

900

 

 

1,840

 

 

28,607

Historical interest expense

 

 

 

 

 

 

102

 

 

1,556

 

 

1,658

Pro forma Interest adjustment

 

$

21,696

 

$

4,171

 

$

798

 

$

842

 

$

27,507

e)      Represents the elimination of $1.2 million of interest income earned on Greenrose’s trust account for the year ended December 31, 2020.

f)      Reflects the incremental corporate income tax expense at a blended statutory rate of 26.5% for Theraplant, which were historically taxed as partnerships and not as corporations. Due to limitations on the deductibility of certain expenses pursuant to IRC Section 280E, the blended statutory rate was applied to the gross profit of these entities. Further, the incremental pro forma adjustments were not tax effected as they are not deductible for tax purposes subject to IRC Section 280E.

g)      Reflects the elimination of interest expense and changes in fair value associated to the Greenrose convertible promissory note as discussed in Note 2i.

h)      Reflects the one-time gain resulting from the conversion of the convertible promissory note through the settlement of the bifurcated derivative as discussed in Note 2i.

i)       Reflects the one-time expense allocated to warrants bifurcated from the issued debt which have been expensed as incurred. Refer to the discussion around the Financing in discussed in Note 2b.

j)       Reflects the issuance of the Newly Issued Shares which are considered an equity transaction cost without proceeds to be offset against and therefore, are being charged to the statement of operations. Refer to the discussion of the Newly Issued Shares in Note 2r.

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4. Earnings Per Share

Pro Forma Weighted Average Shares (Basic and Diluted)

The following pro forma weighted average shares calculations have been performed for the nine months ended September 30, 2021 and for the year ended December 31, 2020. The unaudited condensed combined pro forma earnings per share (“EPS”), basic and diluted, are computed by dividing loss by the weighted-average number of shares of common stock outstanding during the period.

Greenrose has one class of common stock outstanding which will continue to be outstanding upon the close of the Transactions. Greenrose also has 15.0 million outstanding public warrants sold during the initial public offering, 2.2 million sold in connection with the underwriter over-allotment and 2.0 million warrants sold in private placements to purchase an aggregate of 19.2 million Common Stock. The warrants are exercisable at $11.50 per share amounts which exceeds the current market price of Greenrose’s common stock. These warrants are considered anti-dilutive and excluded from the loss per share calculation when the exercise price exceeds the average market value of the common stock price during the applicable period. The Financing also provides the lender with 2.0 million warrants and the Delayed Draw provides the lender with 0.6 million warrants with a notional exercise price and are determined to be issued as Common Stock.

In thousands, except per share data

 

For the
nine months
ended
September 30,
2021

 

For the
year ended
December 31,
2020

Combined
Pro Forma

 

Combined
Pro Forma

Pro forma net loss attributable to common shareholders – basic and diluted

 

$

(27,638

)

 

$

(49,352

)

Basic and diluted weighted average shares outstanding

 

 

19,256

 

 

 

19,256

 

Pro Forma Basic and Diluted Loss Per Share

 

$

(1.44

)

 

$

(2.56

)

  

 

 

 

 

 

 

 

Pro Forma Basic and Diluted Weighted Average Shares

 

 

 

 

 

 

 

 

Greenrose Public Shareholders

 

 

1,988

 

 

 

1,988

 

Greenrose Initial Stockholders

 

 

4,313

 

 

 

4,313

 

Private units

 

 

330

 

 

 

330

 

Lender warrants

 

 

2,550

 

 

 

2,550

 

Theraplant Shareholders

 

 

5,000

 

 

 

5,000

 

Conversion of convertible and promissory notes

 

 

500

 

 

 

500

 

Issuance of Investor shares

 

 

145

 

 

 

145

 

True Harvest shareholders

 

 

4,430

 

 

 

4,430

 

Total Pro Forma Basic and Diluted Weighted Average Shares

 

 

19,256

 

 

 

19,256

 

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Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF GREENROSE FOR THE NINE MONTHS ENDED SEPTEMEBER 30, 2021 AND 2020

References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Greenrose Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Greenrose Associates LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements other than statements of historical fact included in this Form 10-Q including statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s Annual Report on Form 10-K/A for the year ending December 31, 2020 filed with the SEC on May 27, 2021. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations has been amended and restated to give effect to the restatement of our financial statements for the periods from March 31, 2020 through to June 30, 2021. Management identified errors made in its historical financial statements where, at the closing of our Initial Public Offering, we improperly valued our common stock subject to possible redemption. We previously determined the common stock subject to possible redemption to be equal to the redemption value of $10.00 per share of the public common stock while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that the common stock issued during the Initial Public Offering can be redeemed or become redeemable subject to the occurrence of future events considered outside of the Company’s control. Therefore, management concluded that the redemption value should include all common stock subject to possible redemption, resulting in the common stock subject to possible redemption being equal to their redemption value. As a result, management has noted a restatement error related to temporary equity and permanent equity. This resulted in a restatement to the initial carrying value of the common stock subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and common stock subject to possible redemption.

Overview

We are a blank check company incorporated on August 26, 2019 as a Delaware corporation and formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar Business Combination with one or more businesses or entities. We intend to effectuate our initial Business Combination using cash from the proceeds of the Initial Public Offering and the sale of the private units and private warrants, our capital stock, debt or a combination of cash, stock, and debt.

On March 12, 2021, the Company entered into definitive agreements to acquire four cannabis companies. The companies are Shango Holdings Inc. (Shango), Futureworks, LLC (d/b/a The Health Center), Theraplant, LLC, and True Harvest, LLC.

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True Harvest

On July 2, 2021, the Company entered into an amendment (the “True Harvest Amendment No.1”) to the True Harvest Holdings, Inc. Asset Purchase Agreement, dated as of March 12, 2021. Pursuant to True Harvest Amendment No. 1, the table in Section 1.05(c) of the Purchase Agreement was deleted and replaced with the following table:

36 Month Price Point

Percentage of Earnout

Flower Production – average price

0%

<$2,199

20%

$2,200 – $2,199

50%

$2,200 – $2,499

80%

$2,500 – $2,799

100%

$2,800+

In addition, pursuant to the True Harvest Amendment No. 1, a new Section 1.05.1 Hurdle Amount is added to the Purchase Agreement, whereby the purchase price of True Harvest would be adjusted by the addition of (i) up to a maximum of four million seven hundred thousand dollars ($4,700,000) added to the principal amount of the secured note to be issued at closing and (ii) up to a maximum of one million four hundred thousand dollars ($1,400,000) of additional debt to be assumed by the Buyer at closing, in each case, subject to True Harvest achieving certain revenue targets, as well as True Harvest having constructed eight grow rooms in a condition ready to accept plants for grow prior to closing, in each case as set forth in the True Harvest Amendment No. 1. Also, in addition, pursuant to the True Harvest Amendment No. 1, the “drop dead” date for closing was amended to be November 30, 2021.

On October 28, 2021, Company entered into an amendment (“Amendment No. 2”) to the Purchase Agreement. Pursuant to Amendment No. 2, Greenrose and True Harvest agreed that the Purchase Price Adjustment for the year 2021 will be calculated using the cumulative year-to-date revenue of the Business as of September 30, 2021.

Theraplant

On August 10, 2021, the Company entered into an amendment (the “Theraplant Amendment No.1”) to the Agreement and Plan of Merger dated as of March 12, 2021, by and among the Company, GNRS CT Merger Sub, LLC, Theraplant and Shareholder Representative Services LLC (the “Merger Agreement”).

Pursuant to the Theraplant Amendment No. 1, the purchase price of Theraplant would be adjusted by the addition of the issuance registered shares of the Company’s common stock, par value $10.00 per share, in the aggregate amount of Fifty Million Dollars ($50,000,000). Theraplant’s selling shareholders will receive reimbursementcustomary registration rights in connection with the issuance of shares of the Company’s common stock as part of the merger consideration. Also, in addition, pursuant to the Theraplant Amendment No. 1, the “drop dead” date for any out-of-pocketclosing was amended to be November 30, 2021.

The Theraplant Amendment No.1 also provides that the Company shall bear (i) 50% of all documented accounting transaction expenses incurred by themTheraplant in connection with activities on our behalf, such as identifying potentialthe auditor review of the Theraplant’s 2021 first quarter financial statements and (ii) all documented legal, accounting and other transaction expenses of Theraplant incurred in connection with the Merger from and after the date of the Theraplant Amendment No. 1.

Extension of Business Combination

On August 11, 2021, Greenrose notified Continental Stock Transfer & Trust Company that it was exercising its option to extend the time available to consummate a Business Combination with the target businesses performing business due diligence on suitableby an additional month, thereby extending the de-SPAC deadline from August 13, 2021 to September 13, 2021. Furthermore, in accordance with Investment Management Trust Agreement between Greenrose Acquisition Corp and Continental Stock Transfer & Trust Company, dated February 11, 2020, Greenrose authorized the trustees to deposit $569,250 into the trust account. The Sponsor has the right to exercise its right to extend the time available to consummate a Business Combination for up to two additional months.

On September 8, 2021, Greenrose notified Continental Stock Transfer & Trust Company that it was exercising its option to extend the time available to consummate a Business Combination with the target businesses by an additional month, thereby extending the de-SPAC deadline from September 13, 2021 to October 13, 2021.

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Table of Contents

Furthermore, in accordance with Investment Management Trust Agreement between Greenrose and Continental Stock Transfer & Trust Company, dated to February 11, 2020, Greenrose authorized the trustees to deposit $569,250 into the trust account.

On October 8, 2021, Greenrose notified Continental Stock Transfer & Trust Company that it was exercising its option to extend the time available to consummate a Business Combination with the target businesses by an additional month, thereby extending the de-SPAC deadline from October 13, 2021 to November 13, 2021. Furthermore, in accordance with the Investment Management Trust Agreement between Greenrose and Continental Stock Transfer & Trust Company, dated February 11, 2020, Greenrose authorized the trustees to deposit $569,250 into the trust account on October 13, 2021.

On October 27, 2021, the stockholders approved to amend the Company’s amended and restated certificate of incorporation to extend the date by which the Company has to consummate a business combinationscombination from November 13, 2021 to November 30, 2021.

Results of Operations

Our only activities from August 26, 2019 (inception) through September 30, 2021 were organizational activities, those necessary to consummate the Initial Public Offering, described below, and identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We are incurring expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as travelingfor due diligence expenses.

For the three months ended September 30, 2021, we had net loss of $777,743, which consists of interest expense for promissory notes of $78,319, a decrease in the fair value of private warrants liability of $277,200, a decrease in the fair value of the convertible promissory note of $222,000 and interest income on marketable securities held in the Trust Account of $4,378, offset by operating expenses of $1,203,002.

For the nine months ended September 30, 2021, we had net loss of $2,911,072, which consists of interest expense of $1,117,630, a decrease in the fair value of private warrants liability of $811,800, a decrease in the fair value of the convertible promissory note of $959,287 and interest income on marketable securities held in the Trust Account of $12,984, offset by operating expenses of $3,577,513.

For the three months ended September 30, 2020, we had net loss of $513,085, which consists of interest expense related to promissory note of $89,662, change in fair value of private warrant liability of $59,400, a change in fair value of convertible promissory note related party of $22,676 and frominterest income on marketable securities held in the offices, plantsTrust Account of $4,377, offset by operating expenses of $436,062, and a benefit for income taxes of $90,338.

For the nine months ended September 30, 2020, we had net income of $1,178,558, which consists of interest income on marketable securities held in the Trust Account of $1,152,225, an increase in the fair value of private warrants liability of $930,600, an increase in the fair value of the convertible promissory note of $299,794 and interest expense related to promissory note of $183,222 offset by operating costs of $985,093, and a provision for income taxes of $35,746.

The Company exited their position of face value $173,750,000 US T-bills for accreted interest of $1,031,879 on March 9, 2020, for shorter duration US Treasuries, due to the decline in the interest rates at the onset of the COVID-19 Pandemic. The interest rates decline at the onset of the COVID-19 Pandemic, resulted in the assets held in the escrow to increase, and the resulting accretion was recorded as interest income. The interest rates remained low throughout 2020 and 2021, resulting in lower interest earned the remaining part of the year, and the nine months ended September 30, 2021. As required by its formation documents, all income earned by the trust resides with the trust for the benefit of its shareholders should they elect to redeem all or similar locationsa portion of prospective target businessestheir shares prior to examine their operations. Our audit committee will reviewa business combination.

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Table of Contents

Liquidity and approve all reimbursementsCapital Resources

On February 13, 2020, we consummated our Initial Public Offering of 15,000,000 Units at a price of $10.00 per Unit, generating gross proceeds of $150,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 300,000 private units and payments made1,500,000 private warrants to our sponsor, officers, directorsSponsor and Imperial Capital and its designee, generating gross proceeds of $4,500,000.

On February 14, 2020, in connection with the underwriters’ exercise of their over-allotment option in full, we consummated the sale of an additional 2,250,000 Units at a price of $10.00 per Unit, generating total gross proceeds of $22,500,000. In addition, we also consummated the sale of an additional 30,000 private units at $10.00 per private unit and 150,000 private warrants at $1.00 per private warrant, generating total gross proceeds of $450,000.

As of September 30, 2021, we had marketable securities held in the Trust Account of $174,507,917 (including approximately $1,170,000 of interest income) consisting of securities held in a money market fund that invests in U.S Treasury securities with a maturity of 180 days or our or their respective affiliates, with any interested director abstaining from such review and approval. There is no limitless. Interest income on the amount of such expenses reimbursable by us; provided, however, that to the extent such expenses exceed the available proceeds not depositedbalance in the trust account andTrust Account may be used by us to pay taxes. Through September 30, 2021, we withdrew $300,170 of interest earned on the fundsTrust Account to pay our taxes.

For the nine months September 30, 2021, cash used in operating activities was $2,033,688, which was comprised of our net loss of $2,911,072 less interest earned on marketable securities held in the trust account that we are entitled to withdraw, such expenses would not be reimbursedTrust Account of $12,984, a decrease in the fair value of private warrants liability of $811,800, a decrease in the fair value of the convertible promissory note of $959,287, interest expense of $1,117,630, and changes in operating assets and liabilities provided $1,543,825 of cash for operating activities.

For the nine months ended September 30, 2020, cash used in operating activities was $755,404. Net income of $1,178,558 was affected by us unless we consummateinterest earned on marketable securities held in the Trust Account of $1,152,225, interest expense of $183,222, an initial business combination. Sinceincrease in the rolefair value of present management after a business combination is uncertain, we have no ability to determine what remuneration, if any, will be paid to those persons after a business combination.private warrants liability of $930,600 and an increase in the fair value of the convertible promissory note of $299,794. Changes in operating assets and liabilities provided $265,435 of cash for operating activities.

Regardless of whether the over-allotment option is exercised in full, the net proceeds from this offering available to us out of trust for our working capital requirements in searching for a business combination will be approximately $750,000. We intend to use the proceeds for miscellaneous expenses such as paying fees to consultants to assist us with our search for a target business and for director and officer liability insurance premiums, for due diligence, legal, accounting and other expenses of structuring and negotiating business combinations, as well as for reimbursement of any out-of-pocket expenses incurred by our sponsor, officers and directors in connection with activities on our behalf as described below. The allocation of the net proceeds available to us outside of the trust account represents

38

our best estimate of the intended uses of these funds. In the event that our assumptions prove to be inaccurate, we may reallocate some of such proceeds within the above described categories.

We may use substantially all of the net proceeds of this offering, including the funds held in the trust account,Trust Account to acquire a target business and to pay our expenses relating thereto, including a fee payable to Imperial Capital, upon consummation of our initial business combinationBusiness Combination for assisting us in connection with our initial business combination, as described under the section titled “Underwriting — Business Combination Marketing Agreement.”.Combination. To the extent that our capital stock is used in whole or in part as consideration to effect a business combination,Business Combination, the proceeds held in the trust account which are not used to consummate a business combination will be disbursed to the combined company and will, along with any other net proceeds not expended, be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions and for marketing, research and development of existing or new products.

To the extent we are unable to consummate a business combination, we will pay the costs of liquidation from our remaining assets outside of the trust account. If such funds are insufficient, our sponsor has agreed to advance us the funds necessary to complete such liquidation (currently anticipated to be no more than $15,000) and has agreed not to seek repayment of such expenses.

As of the date of this prospectus, our sponsor has advanced on our behalf an aggregate of $493,515, which was used to pay a portion of the expenses of this offering referenced in the line items above for SEC registration fee, FINRA filing fee, the non-refundable portion of the Nasdaq listing fee and a portion of the legal and audit fees and expenses. The advances will be repaid out of the proceeds of this offering not placed in trust that remain available to us for payment of offering expenses.

We believe that, upon consummation of this offering, we will have sufficient available funds to operate for the next 18months (subject to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in this prospectus), assuming that a business combination is not consummated during that time. However, if necessary, in order to meet our working capital needs following the consummation of this offering, our sponsor, officers, directors and their affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of our initial business combination, without interest, or, at holder’s discretion, up to $2,000,000 of the notes may be converted into units at a price of $10.00 per unit and/or warrants at a price of $1.00 per warrant. The units and warrants would be identical to the private units and private warrants, respectively. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust account or interest available to us earned on the funds in the trust account to repay such loaned amounts, but no proceeds from our trust account other than the interest earned thereon would be used for such repayment.

A public stockholder will be entitled to receive funds from the trust account (including interest earned on his, her or its portion of the trust account to the extent not previously released to us) only in the event of (i) our redemption of 100% of the outstanding public shares if we have not completed a business combination in the required time period, (ii) if that public stockholder converts such shares, or sells such shares to us in a tender offer, in connection with a business combination which we consummate or (iii) we seek to amend any provisions of our amended and restated certificate of incorporation that would affect our public stockholders’ ability to convert or sell their shares to us in connection with a business combination as described herein or affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete a business combination within 18months from the closing of this offering (subject to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in this prospectus). This redemption right shall apply in the event of the approval of any such amendment to our amended and restated certificate of incorporation, whether proposed by our sponsor, executive officers, directors or any other person. In no other circumstances will a public stockholder have any right or interest of any kind to or in the trust account.

39

DIVIDEND POLICY

We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of an initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment of any dividends subsequent to a business combination will be within the discretion of our board of directors at such time. It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, our board of directors does not anticipate declaring any dividends in the foreseeable future. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future, except if we increase the size of the offering pursuant to Rule 462(b) under the Securities Act, in which case we will effect a stock dividend immediately prior to the consummation of the offering in such amount as to maintain the ownership of our sponsor at 20.0% of our issued and outstanding shares of our common stock upon the consummation of this offering (not including the private securities and underlying securities and assuming our sponsor does not purchase units in this offering). Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

40

DILUTION

The difference between the public offering price per share, assuming no value is attributed to the warrants included in the units we are offering by this prospectus and the private warrants, and the pro forma net tangible book value per share after this offering constitutes the dilution to investors in this offering. Such calculation does not reflect any dilution associated with the sale and exercise of warrants, including the private warrants. Net tangible book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities (including the value of shares of common stock which may be converted into cash or sold in a tender offer), by the number of outstanding shares of common stock.

At September30, 2019, our net tangible book deficit was $118,165, or approximately $(0.03) per share of common stock. After giving effect to the sale of 15,000,000shares of common stock included in the units we are offering by this prospectus, the sale of the private securities and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at September30, 2019 would have been $5,000,007 or $1.12 per share, representing an immediate increase in net tangible book value (as decreased by the value of the estimated 14,577,337shares of common stock that may be converted to cash and assuming no exercise of the underwriters’ over-allotment option) of $1.15 per share to our sponsor and an immediate dilution of $8.88 per share or 88.8% to our public stockholders not exercising their conversion rights. The decrease attributable to public shares subject to conversion is included in the calculation below at $10.00 per share, as all public stockholders have the right to convert. The dilution to new investors if the underwriters exercise their over-allotment option in full would be an immediate dilution of $9.01 per share or 90.1%.

The following table illustrates the dilution to the new investors on a per-share basis, assuming no value is attributed to the warrants included in the units and the private warrants:

Public offering price

 

 

 

 

 

$

10.00

 

Net tangible book value before this offering(1)

 

$

(0.03

)

 

 

 

 

Increase attributable to public stockholders and private sales

 

 

1.15

 

 

 

 

 

Pro forma net tangible book value after this offering

 

 

 

 

 

 

1.12

 

Dilution to public stockholders

 

 

 

 

 

 

8.88

 

Percentage of dilution to public stockholders

 

 

 

 

 

 

88.8

%

The following table sets forth information with respect to our existing stockholders and the public stockholders:

 

Shares

 

Total Consideration

 

Average Price
per Share

Number

 

Purchased

 

Percentage

 

Amount

 

Percentage

 

Founder’s shares

 

3,750,000

(1)

 

19.7

%

 

$

25,000

 

0.0

%

 

$

0.006

Private units

 

300,000

 

 

1.6

%

 

$

3,000,000

 

2.0

%

 

$

10.00

Public stockholders

 

15,000,000

 

 

78.7

%

 

$

150,000,000

 

98.0

%

 

$

10.00

Total

 

19,050,000

 

 

100.0

%

 

$

153,025,000

 

100.0

%

 

 

 

____________

(1)      Assumes the over-allotment option has not been exercised and an aggregate of 562,500 founder’s shares have been forfeited as a result thereof.

41

The pro forma net tangible book value after the offering is calculated as follows:

Numerator:

 

 

 

 

Net tangible book value before the offering

 

$

(118,165

)

Net proceeds from this offering and private placement

 

 

150,750,000

 

Plus: Offering costs accrued for and paid in advance, excluded from tangible book value before this offering

 

 

141,542

 

Less: Proceeds held in trust subject to conversion/tender

 

 

(145,773,370

)

  

 

5,000,007

 

Denominator:

 

 

 

 

Shares of common stock outstanding prior to this offering, including founder’s shares

 

 

3,750,000

(1)

Shares of common stock included in the units offered

 

 

15,000,000

 

Private Shares

 

 

300,000

 

Less: Shares subject to conversion/tender

 

 

(14,577,337

)

  

 

4,472,663

 

____________

(1)      Assumes the over-allotment option has not been exercised and an aggregate of 562,500 founder’s shares have been forfeited as a result thereof.

42

CAPITALIZATION

The following table sets forth our capitalization at September30, 2019 and as adjusted to give effect to the sale of our units and the private units and the application of the estimated net proceeds derived from the sale of such securities:

 

September 30,
2019

  

Actual

 

As Adjusted(1)

Repayment of funds advanced by related party(2)

 

$

139,665

 

 

$

 

Common stock, $0.0001 par value, -0- and 14,577,337 shares
which are subject to possible conversion/tender(3)

 

 

 

 

 

145,773,370

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value, 1,000,000 shares authorized;
none issued or outstanding

 

 

 

 

 

 

Common stock, $0.0001 par value, 10,000,000 shares authorized, actual; 70,000,000 shares authorized, as adjusted(4); 4,312,000 shares issued and outstanding, actual; 4,472,663 shares(5) issued and outstanding (excluding 14,577,337 shares subject to possible conversion/tender), as adjusted

 

 

431

 

 

 

447

 

Additional paid-in capital

 

 

24,569

 

 

 

5,001,183

 

Accumulated deficit

 

 

(1,623

)

 

 

(1,623

)

Total stockholders’ equity:

 

 

23,377

 

 

 

5,000,007

 

Total capitalization

 

$

23,361

 

 

$

150,773,377

 

____________

(1)      Includes the $4,500,000 we will receive from the sale of the private units and warrants.

(2)      Represents funds advanced by our sponsor on our behalf.

(3)      Upon the consummation of our initial business combination, we will provide our stockholders (but not our sponsor, officers or directors) with the opportunity to convert or sell their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination, including interest not previously released to us (less taxes payable), subject to the limitations described herein whereby our net tangible assets will be maintained at a minimum of $5,000,001.

(4)      Assumes an amendment to our certificate of incorporation to increase our authorized common stock to 70,000,000 and the authorization of 1,000,000shares of preferred stock.

(5)      Assumes the over-allotment option has not been exercised and an aggregate of 562,500 founder’s shares have been forfeited as a result thereof.

43

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

We were formed on August26, 2019 for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more target businesses. Our efforts to identify a prospective target business will not be limited to a particular industry or geographic region, though we intend to focus our search for target businesses ancillary to the cannabis industry. We intend to utilize cash derived from the proceeds of this offering, our securities, debt or a combination of cash, securities and debt, in effecting a business combination. The issuance of additional shares of common stock or preferred stock:

•        may significantly reduce the equity interest of our stockholders;

•        may subordinate the rights of holders of shares of common stock if we issue shares of preferred stock with rights senior to those afforded to our shares of common stock;

•        will likely cause a change in control if a substantial number of our shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and most likely will also result in the resignation or removal of our present officers and directors; and

•        may adversely affect prevailing market prices for our securities.

Similarly, if we issue debt securities, it could result in:

•        default and foreclosure on our assets if our operating revenues after a business combination are insufficient to pay our debt obligations;

•        acceleration of our obligations to repay the indebtedness even if we have made all principal and interest payments when due if the debt security contains covenants that required the maintenance of certain financial ratios or reserves and we breach any such covenant without a waiver or renegotiation of that covenant;

•        our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; and

•        our inability to obtain additional financing, if necessary, if the debt security contains covenants restricting our ability to obtain additional financing while such security is outstanding.

We have neither engaged in any operations nor generated any revenues to date. Our entire activity since inception has been to prepare for our proposed fundraising through an offering of our equity securities.

We are an emerging growth company as defined in the JOBS Act. As an emerging growth company, we have elected to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates.

Liquidity and Capital Resources

As indicated in the accompanying financial statements, at September30, 2019, we had $25,000 in cash and a working capital deficiency of $118,165. Further, we have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. Management’s plans to address this uncertainty through this offering are discussed above. We cannot assure you that our plans to raise capital or to consummate an initial business combination will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern.

Our liquidity needs have been satisfied to date through the payment of certain of our deferred offering costs with the $25,000 purchase price of the founder’s shares and an aggregate amount of $139,665 of funds advanced by our sponsor on our behalf as of September30, 2019 that is more fully described below. We estimate that the net proceeds from(i) the sale of the units in this offering, after deducting offering expenses of approximately $750,000 and underwriting discounts and commissions of $3,000,000 (or $3,450,000 if the over-allotment option is exercised in full) and (ii) the sale of the private securities for a purchase price of $4,500,000 (or $4,950,000 if the over-allotment option is exercised in full) will be $150,750,000 (or $173,250,000 if the over-allotment option is exercised in full). Of this amount, $150,000,000 (or $172,500,000 if the over-allotment option is exercised in full) will be held in the trust account. The remaining $750,000 will not be held in trust.

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We may use substantially all of the net proceeds of this offering, including the funds held in the trust account, to acquire a target business and to pay our expenses relating thereto, including a fee payable to Imperial Capital, upon consummation of our initial business combination for assisting us in connection with our initial business combination, as described under the section titled “Underwriting — Business Combination Marketing Agreement.”. To the extent that our capital stock is used in whole or in part as consideration to effect a business combination, the remaining proceeds held in the trust account as well as any other net proceeds not expendedTrust Account will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating expenses or finders’ fees which we had incurred prior to the completion of our business combinationBusiness Combination if the funds available to us outside of the trust accountTrust Account were insufficient to cover such expenses.

As of September 30, 2021, we had cash of $102,081. We believe that, upon consummation of this offering,intend to use the approximate $750,000 of net proceeds notfunds held inoutside the trust account, together with the interest earned on the trust account that is available to us, will be sufficient to allow us to operate for at least the next 18months (subject to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in this prospectus), assuming that a business combination is not consummated during that time. Over this time period, we will be using these fundsTrust Account for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business combination. We anticipate that we will incur approximately:Business Combination.

•        $100,000 of expenses for the search for target businesses and for the legal, accounting and other third-party expenses attendantIn order to the due diligence investigations, structuring and negotiating of a business combination;

•        $50,000 of expenses for the due diligence and investigation of a target business by our officers, directors and sponsor;

•        $100,000 of expenses in legal and accounting fees relating to our SEC reporting obligations;

•        $180,000 for the payment of the administrative fee to our sponsor ($10,000 per month for up to 18months; provided, however, if we exercise our right to extend the period of time to consummate an initial business combination for an additional 3month we will continue to pay our sponsor the administrative fee until our consummation of the initial business combination); and

•        $320,000 for generalfund working capital that will be used for miscellaneous expenses, including D&O insurance.

If our estimates of the costs of undertaking due diligence and negotiating an initial business combination is less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to consummate our initial business combinationdeficiencies or because we become obligated to redeem a significant number of our public shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. We do not have a maximum debt leverage ratio or a policy with respect to how much debt we may incur. The amount of debt we will be willing to incur will depend on the facts and circumstances of the proposed business combination and market conditions at the time of the potential business combination. At this time, we are not party to any arrangement or understanding with any third party with respect to raising additional funds through the sale of our securities or the incurrence of debt. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of our initial business combination. In the current economic environment, it has become especially difficult to obtain acquisition financing. Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

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Related Party Transactions

As of September30, 2019, our sponsor has advanced $139,665 for payment of offering expenses on our behalf, which will be repaid upon the consummation of this offering out of the proceeds of this offering not being placed in trust.

We are obligated, commencing on the date of this prospectus, to pay our sponsor a monthly fee of $10,000 for general and administrative services.

Our sponsor and Imperial Capital have committed that they and/or their designees will purchase an aggregate of 300,000 private units at $10.00 per private unit and 1,500,000 private warrants at $1.00 per private warrant (for a total purchase price of $4,500,000 from us. This purchase will take place on a private placement basis simultaneously with the consummation of this offering. They have also agreed that if the over-allotment option is exercised by the underwriters in full or in part, they will purchase from us an additional number of private units and private warrants (up to a maximum of 30,000 private units at a price of $10.00 per private unit and 150,000 private warrants at $1.00 per private warrant) necessary to maintain in the trust account $10.00 per unit sold to the public in this offering. These additional private units and private warrants will be purchased in a private placement that will occur simultaneously with the purchase of units resulting from the exercise of the over-allotment option.

We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, in order to finance transaction costs in connection with an intended initial business combination,a Business Combination, the Insiders, or certain of our sponsor, officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we consummate ancomplete our initial business combination,Business Combination, we would repay such loaned amounts. In the event that theour initial business combinationBusiness Combination does not close, we may use a portion of the working capital held outside the trust accountTrust Account to repay such loaned amounts but no proceeds from our trust accountTrust Account would be used for such repayment. Such loansUp to $2,000,000 of notes may be convertible into private units, or warrants of the post business combination entity at a price of $10.00 per private unit, and/or private warrants, at a price of $1.00 per warrant at the option of the lender.private warrant. The units and warrants would be identical to the private units and private warrants respectively.sold in the private placement. On March 26, 2020, we issued an unsecured promissory note (the “2020 Note”) in the principal amount of $1,000,000 to the Sponsor. The 2020 Note is non-interest bearing and payable upon the consummation of a Business Combination. The 2020 Note may be converted into units at a price of $10.00 per unit and/or warrants at a price of $1.00 per warrant. The units would be identical to the private units and the warrants would be identical to the private warrants. On January 29, 2021, we issued an unsecured promissory note

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(the “2021 Note”) in the principal amount of $1,000,000 to the sponsor. The 2021 Note is nonControls-interest bearing and Procedurespayable upon the consummation of a Business Combination. The 2021 Note may be converted into units at a price of $10.00 per unit and/or warrants at a price of $1.00 per warrant. The units would be identical to the private units and the warrants would be identical to the private warrants. On June 22, 2021, the Company issued an unsecured non-interest bearing promissory note in the principal amount of $300,000, on September 9, 2021 the  Company issued an unsecured non-interest bearing promissory note in the principal amount of $180,000, on September 20, 2021 an unsecured non-interest bearing promissory note in the principal amount of $65,000, and on October 1, 2021 an unsecured non-interest bearing promissory note in the principal amount of $100,000, each of which is to Greenrose Associates LLC and is payable upon the consummation of the Business Combination.

We have concluded that the following conditions raise substantial doubt about our ability to meet our financial obligations as they become due. We will need to raise additional capital through loans or additional investments from its sponsor, shareholders, officers, directors, or third parties. Our officers, directors and Sponsor may, but are not currentlyobligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our working capital needs. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to maintain an effective systemtake additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of internal controlsa potential transaction, and reducing overhead expenses. We cannot provide any assurance that new financing will be available on commercially acceptable terms, if at all. These conditions raise substantial doubt about our ability to continue as defined by Section 404 ofa going concern through September 13, 2021, the Sarbanes-Oxley Act. Wedate that we will be required to comply withcease all operations, except for the internal control requirementspurpose of winding up, if a Business Combination is not consummated. These financial statements do not include any adjustments relating to the recovery of the Sarbanes-Oxley Act forrecorded assets or the fiscal year ending December31, 2020. Asclassification of the liabilities that might be necessary should we be unable to continue as a going concern.

Senior Secured Loan

On July 30, 2021, the Company entered into a commitment letter (the “Commitment Letter”) with SunStream Bancorp Inc. (“Sunstream”), pursuant to which Sunstream committed to provide, subject to the satisfaction of customary closing conditions stipulated in the Commitment Letter, a multi-tranche senior secured loan (the “Loan”) to the Company. The proceeds of the Loan are expected to be used (i) to consummate one or more of the Company’s previously announced Business Combinations and (ii) for general working capital purposes.

The Loan consists of $78.1 million of loan principal including an initial tranche of $52.1 million (“Tranche I”) on the closing date of this prospectus, we have not completed an assessment, nor have our auditors tested our systems,the Loan and second tranche of internal controls. We expect to assess the internal controls of our target business or businesses$26.0 million (“Tranche II”) available prior to the completion12-month anniversary of ourthe closing date of the Loan, in each case.

The Loan will be collateralized by a senior secured first-priority lien over all of the assets of the Company and its subsidiaries, subject to to-be-agreed upon carve-outs and exceptions. The Loan matures 48 months following the closing date of the Loan and has an interest rate, payable monthly, of 11.9% per annum on the outstanding principal. The Loan amortizes at a rate of 15.0% of outstanding principal per annum, beginning on the 24-month anniversary of the closing date of the Loan.

Tranche I of the Loan is prepayable, at Greenrose’s option, prior to the 36-month anniversary of the closing of the loan, subject to certain fees. In addition, Tranche II of the Loan is prepayable, at the Company’s option, prior to the 36-month anniversary of the Tranche II drawdown date, subject to certain fees.

The Company has also agreed to pay to Sunstream certain additional fees customary to transactions of this type.

In connection with the Loan commitments, Sunstream will be issued warrants with a five-year term to acquire additional shares of common stock of Greenrose with terms substantially similar to the warrants issued to the Company’s sponsors in connection with the initial business combination and, if necessary,public offering of the Company.

In addition, the Loan will be subject to implement and test additional controls as we may determine are necessary in order to state that we maintain an effective system of internal controls. A target business may not be inthe Company’s compliance with certain on-going financial covenants customary to other senior secured loans of this type, as will be negotiated by Sunstream and the provisionsCompany in the course of ongoing due diligence by Sunstream prior to funding of the Sarbanes-Oxley Act regardingLoan.

In connection with the adequacyCommitment Letter, the Company and Sunstream have agreed to deal exclusively with one another until the earlier of internal controls. Target businesses we may consider for a business combination may have internal controls that need improvement in areas such as:

•        staffing for financial, accounting and external reporting areas, including segregationSeptember 30, 2021 or the closing of duties;

•        reconciliation of accounts;

•        proper recording of expenses and liabilities in the period to which they relate;

•        evidence of internal review and approval of accounting transactions;

•        documentation of processes, assumptions and conclusions underlying significant estimates; and

•        documentation of accounting policies and procedures.

Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expense in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing,one or remediating internal and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting.

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Once our management’s report on internal controls is complete, we will retain our independent auditors to audit and render an opinion on such report when required by Section 404. The independent auditors may identify additional issues concerning a target business’s internal controls while performing their audit of internal control over financial reporting.

Quantitative and Qualitative Disclosures about Market Risk

The net proceeds of this offering, including amounts in the trust account, will be invested in United States “government securities” within the meaning of Section 2(a)(16)more of the Investment Company Act having a maturity of 180 days or less, or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. DueCompany’s previously announced Business Combinations with respect to any financing proposals similar to the short-term naturefinancings contemplated by the Loan commitments.

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Table of these investments, we believe there will be no associated material exposureContents

Tranche I of the Loan is anticipated to interest rate risk.close substantially simultaneously with the consummation of one or more of the Company’s previously announced Business Combinations.

Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly ResultsArrangements

As of the date of this prospectus, we did notWe have anyno obligations, assets or liabilities which would be considered off-balance sheet arrangements as definedof September 30, 2021. We do not participate in Item 303(a) (4)(ii)transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of Regulation Sfacilitating off-K-balance and didsheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

We do not have any commitmentslong-term debt, capital lease obligations, operating lease obligations or contractual obligations. No unaudited quarterly operating datalong-term liabilities other than an agreement to pay our Sponsor a monthly fee of $10,000 for office space, utilities and secretarial and administrative support. We began incurring these fees on February 10, 2020 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation.

The Initial Public Offering underwriting agreement provides that in the event we complete a financing transaction similar to the Initial Public Offering or Business Combination, or enter into a statement or letter of intent that results in such a transaction, within 18 months following its termination, Imperial shall be entitled to receive any expense reimbursement due to it along with payment in full of its applicable fee of either (i) 2% of the gross proceeds of the offering, of which 1% will be in cash and 1% will be in equity of the Company for a financing transaction, or (ii) an amount equal to 5% of the face amount of any equity securities and 3% of the face amount of any debt sold or arranged as part of the Business Combination (exclusive of any applicable finders’ fees which might become payable). Additionally, Imperial has the right to act as a book-runner and managing underwriter for all underwritten follow-on offerings for 18 months following completion of the Initial Public Offering and the right to approve any co-lead managing underwriter or co-book runner.

We have engaged Imperial as an advisor in connection with a Business Combination to assist us in holding meetings with our shareholders to discuss the potential Business Combination and the target business’ attributes, introduce us to potential investors that are interested in purchasing our securities in connection with a Business Combination, assist us in obtaining shareholder approval for the Business Combination and assist us with its press releases and public filings in connection with the Business Combination. We will pay Imperial a cash fee for such services upon the consummation of a Business Combination in an amount equal to 4.5% of the gross proceeds of Initial Public Offering, or $7,762,500 (exclusive of any applicable finders’ fees which might become payable); provided that up to 20% of the fee may be allocated at our sole discretion to other FINRA members that assist us in identifying and consummating a Business Combination.

Additionally, we have agreed to pay Imperial a cash fee for assisting us in obtaining financing for the Business Combination in an amount equal to 5% of the face amount of any equity securities and 3% of the face amount of any debt sold or arranged as part of the Business Combination (exclusive of any applicable finders’ fees which might become payable).

We have engaged a vendor to provide accounting advisory services. The agreement requires that we pay $10,000 per month based on an agreed hourly time and materials rate for work performed with any additional services to be only payable upon the consummation of a Business Combination. As of September 30, 2021, we had paid $65,000 pursuant to this agreement and have incurred an additional $441,790 of which an additional $30,000 is included in this prospectus asaccrued expenses, and would become due upon a successful Business Combination.

We have also entered into an agreement with a vendor to provide investor relations services related to the Company’s Business Combination. The agreement requires that us to pay $15,000 upon commencement of the agreement plus reimbursement for any out-of-pocket expenses. In addition, we have conductedagreed to pay a $100,000 fee only upon the consummation of a Business Combination. The agreement also requires the continuation of investor relations services for a minimum of six months subsequent to the consummation of a Business Combination at the rate of $15,000 per month.

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We also entered into an agreement with a vendor to provide multimedia services related to the Company’s Business Combination and virtual investor event. This agreement requires that the Company pay $32,500 when the current financing closes-the consummation of a Business Combination. The agreement will terminate on August 31, 2022.

Critical Accounting Policies

The preparation of condensed consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

Derivative Instruments

We account for the Derivative Instruments in accordance with the guidance contained in ASC 815-40-15-7D and 7F under which the Derivative Instruments do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the Derivative Instruments as liabilities at their fair value and adjust the Derivative Instruments to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statements of operations. The Private Placement Warrants for periods where no observable traded price was available are valued using a Black-Scholes model. The fair value of the convertible promissory note was estimated using a Black-Scholes model.

Common Stock Subject to Possible Redemption

We account for our common stock subject to possible redemption in accordance with the guidance in ASC Topic 480. Shares of common stock subject to mandatory redemption is classified as a liability instrument and measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of our condensed consolidated balance sheets.

Net Income (loss) Per Common Share

Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Accretion associated with the redeemable shares of common stock is excluded from income (loss) per common share as the redemption value approximates fair value.

Recent Accounting Standards

In August 2020, the FASB issued ASU No. 2020-06, “Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations to date.or cash flows.

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed consolidated financial statements.

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PROPOSED BUSINESSMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF GREENROSE FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included in “Item 8. Financial Statements and Supplementary Data” of this Amendment. Certain information contained in the discussion and analysis set forth below includes forwardIntroduction-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Special Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and elsewhere in this Amendment.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations has been amended and restated to give effect to the restatement and revision of our Original Financial Statements. We are restating our historical financial results to reclassify our temporary equity and permanent equity. The impact of the restatement is reflected in the Management’s Discussion and Analysis of Financial Condition and Results of Operations below. Other than as disclosed in the Explanatory Note and with respect to the impact of the restatement, no other information in this Item 7 has been amended and this Item 7 does not reflect any events occurring after the Original Filing. The impact of the restatement is more fully described in Note 2 to our accompanying financial statements and Item 9A: Controls and Procedures, both contained herein.

Additionally, Analysis of Financial Condition and Results of Operations has been amended and restated to give effect to the restatement of our financial statements as of December 31, 2020. Management identified errors made in its historical financial statements where, at the closing of our Initial Public Offering, we improperly valued our common stock subject to possible redemption. We previously determined the common stock subject to possible redemption to be equal to the redemption value of $10.00 per share of common stock while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that the public shares issued during the Initial Public Offering can be redeemed or become redeemable subject to the occurrence of future events considered outside of the Company’s control. Therefore, management concluded that the redemption value should include all common stock subject to possible redemption, resulting in the common stock subject to possible redemption being equal to its redemption value. As a result, management has noted a classification error related to temporary equity and permanent equity. This resulted in a restatement to the initial carrying value of the common stock subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and common stock.

Overview

We are a Delaware blank check company incorporated on August26,August 26, 2019 as a Delaware corporation and formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combinationBusiness Combination with one or more target businesses. Our initial business combination and value creation strategy will be to identify, acquire and, after our initial business combination, assist in the growth of a business in the cannabis industry. However, we are not limited to this industry and we may pursue a business combination opportunity in any businessbusinesses or industry we choose and we may pursue a company with operations or opportunities outside of the United States.

Although the cannabis industry has experienced rapid, evolutionary growth and continues to mature, we believe the industry is still highly fragmented and undercapitalized and companies operating across multiple verticals consistently have trouble accessing capital from traditional sources. Historically, businesses that operate within the legal cannabis industry in the U.S. have relied largely on private money — friends and family, high net-worth individuals and small-to-medium-sized private investment firms, as institutional investors have shied away from companies in the cannabis industry, in particular those that are directly involved in the production, distribution and sale of cannabis (businesses that “touch the plant”). Even businesses that do not “touch the plant” and instead provide ancillary services to the industry, have found it extremely difficult to access large pools of institutional capital. As a result, we believe we have the opportunity to create a compelling structure that will enable one or more target companies to go public, thereby accessing significant capital for both organic growth and for acquisitions of synergistic and often undercapitalized assets.

Given the rapid and continued growth of the legal cannabis market, management believes that the ability to move quickly to capitalize on new opportunities will be critical to success in creating stakeholder value. Potential areas of interest in the cannabis industry include but are not limited to domestic and international businesses that are involved in the production, distribution and sale of cannabis as well as businesses that legally cultivate, process and/or aid in the retail and direct-to-consumer distribution of cannabis. Management intends to pursue consolidation and integration in mature cannabis markets — e.g. Washington, California, Colorado, Oregon and Nevada — with a focus on production, distribution/processing, and retail sale, which it believes will provide attractive returns to vertical integration throughout the cannabis supply chain as well as scale gains from horizontal consolidation. Additionally, management will consider whether to selectively invest in newly legalized markets such as Massachusetts, Florida and Illinois. Notwithstanding the foregoing, we will not invest in or consummate a business combination with a target business that we determine has been operating in violation of U.S. federal laws, including the Controlled Substances Act.

entities. We intend to seek targets with sound operational performance and profitability, but which will benefit from our operational, financial and investment expertise as well as our extensive networks. Our management team consists of experienced deal makers, operators, and investors who have worked in the agricultural and investment services industries. William F. Harley III, our Chief Executive Officer and Director has more than 30 years of experience as an entrepreneur in the agriculture, real estate and finance industries.

For most of the past decade Mr.Harley has visioned, planned and built-out a vertically integrated branded organic blueberry business called Bhavana Berries LLC (“Bhavanna”). His responsibilities included developing the concept, which employed both branding and vertical integration as new strategies, designing and planting the orchard, developing and creating the packing plant, and creating the sales and distribution strategy. Simultaneously with the creation of Bhavana, Mr.Harley served as the Chief Executive Officer of National Pecan Company (“NPC”) from 2010 through 2012. At NPC Mr.Harley developed the concept of horizontal consolidation and vertical integration in the pecan industry — identifying the initial acquisition targets and raising $200,000,000 to launch the company. NPC became the largest, vertically integrated pecan company in the world, and was later acquired by Diamond Foods Inc. in 2017. In addition to his work in the agriculture industry Mr.Harley has been involved in the acquisition, remediation and redevelopment of a “brownfield” industrial real estate project that he has managed through full environmental remediation and started the commercial redevelopment of the industrial project. Prior to that Mr.Harley had a career in investment management.

Brendan Sheehan, our Executive Vice President, Corporate Strategy and Investor Relations and Director, has over 25 years of experience in business development, sales and operations in the finance, technology and healthcare industries. This has allowed him to build an extensive network of family offices and high net-worth individuals who have invested in the cannabis industry.

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Along with Mr.Harley and Mr.Sheehan, members of our management team have extensive experience in the agriculture, real estate and investment spaces.

In order to consummate an initial business combination, we intend to:

•        Utilize our management team’s deep professional network, which they have cultivated over the course of their respective careers, to identify leading companies and assets in the cannabis industry that we believe are either underperforming or can use assistance in implementing a growth strategy, and leverage our network to streamline the diligence process, and achieve a deep level of understanding of a target’s business. Our management’s expertise in agriculture and finance, as well as our reputation in the industry as active investors has enabled us to build strong relationships with company owners, executives, stakeholders, industry experts, consultants, professionals and financial intermediaries. We believe these relationships will help provide us with attractive acquisition opportunities. We also intend to rely on our management team’s reputation and history of investing and operating in the finance, agriculture and cannabis industries. Understanding the dynamics, competitors, trends, risks, and opportunities of the segment enables us to target selected companies and efficiently pursue a potential transaction.

•        Conduct rigorous research and analysis. Performing disciplined, bottom-up fundamental research and analysis is core to our strategy using both publicly available and non-public information sourced by our management team, and we intend to conduct extensive due diligence to evaluate the impact that a transaction may have on a target business.

•        Create a comprehensive universe of potential targets by identifying all license holders within each vertical on a state by state basis and identify restrictions on public ownership, cultivation quantities and retail license limitations in order to assess the ability to vertically integrate. This will allow us to create a ranking of each company within each vertical to identify a potential transaction.

•        Acquire the target company at an attractive price relative to our view of intrinsic value. By supplementing company comparable analysis with analysis and input from industry and financial experts, we intend to develop our view of the intrinsic value of a potential business combination. In doing so, our management team will evaluate, among others, future cash flow potential, relative industry valuation metrics and precedent transactions to inform its view of intrinsic value, with the intention of creating a business combination at an attractive price relative to such intrinsic value.

•        Implement operational and financial structuring opportunities. We intend to structure and execute a business combination that will provide the combined business with a capital structure that will support the growth in shareholder value and give it the flexibility to grow organically and/or through strategic acquisitions or divestitures. We also intend to develop and implement strategies to improve the business’s operational and financial performance and create a platform for growth. Specifically, our management team intends to evaluate opportunities for industry consolidation in the company’s core lines of business as well as opportunities to vertically or horizontally integrate with other industry participants in order to maximize shareholder value. Moreover, using our management’s recognized expertise in agriculture will provide us a unique perspective in value creation.

Competitive Strengths

We believe our competitive strengths include the following:

•        Our ability to utilize our professional networks to identify opportunities and quickly assess potentially interesting leads;

•        Our successful track record of developing, operating and exiting industrial scale vertically integrated agricultural and branded food businesses;

•        Our significant senior level experience in operations, finance, marketing, business improvement and capital markets; and

•        Our extensive networks of family offices, high net-worth individuals and institutions who are involved in the cannabis industry.

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Status as a public company

We believe our structure will make us an attractive business combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional initial public offering through a merger or other business combination. In this situation, the owners of the target business would exchange their shares of stock in the target business for shares of our stock or for a combination of shares of our stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. We believe target businesses might find this method a more certain and cost-effective method to becoming a public company than the typical initial public offering. In a typical initial public offering, there are significant additional expenses incurred in marketing, roadshow and public reporting efforts that will likely not be present to the same extent in connection with a business combination with us. Furthermore, once the business combination is consummated, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, that could prevent the offering from occurring. Once public, we believe the target business would then have greater access to capital and an additional means of providing management incentives consistent with stockholders’ interests than it would have as a privately-held company. It can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.

While we believe that our status as a public company will make us an attractive business partner, some potential target businesses may view the inherent limitations in our status as a blank check company as a deterrent and may prefer to effect a business combination with a more established entity or with a private company. These inherent limitations include limitations on our available financial resources, which may be inferior to those of other entities pursuing the acquisition of similar target businesses; the requirement that we seek shareholder approval of a business combination, which may delay the consummation of a transaction; and the existence of our outstanding warrants, which may represent a source of future dilution.

Financial position

With funds in the trust account of $150,000,000 (or $172,500,000 if the over-allotment option is exercised in full) available to use for a business combination, we offer a target business a variety of options such as providing the owners of a target business with shares in a public company and a public means to sell such shares, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to consummateeffectuate our initial business combinationBusiness Combination using our cash debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, since we have no specific business combination under consideration, we have not taken any steps to secure third party financing and there can be no assurance that it will be available to us.

Effecting a Business Combination

General

We are not presently engaged in, and we will not engage in, any substantive commercial business for an indefinite period of time following this offering. We intend to utilize cash derived from the proceeds of this offeringthe Initial Public Offering and the sale of the private placement ofunits and private securities,warrants, our capital stock, debt or a combination of these in effecting a business combination which has not yet been identified. Accordingly, investors in this offering are investing without first having an opportunitycash, stock and debt.

Results of Operations

Our only activities from August 26, 2019 (inception) through December 31, 2020 were organizational activities, those necessary to evaluateconsummate the specific merits or risks of any one or more business combinations. A business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital but which desires to establish a public trading market for its shares, while avoiding what it may deem to be adverse consequences of undertaking ainitial public offering, itself. These include time delays, significant expense, loss of voting controldescribed below, and compliance with various federal and state securities laws. Inidentifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the alternative, we may seek to consummate a business combination with a company that may be financially unstable or in its early stages of development or growth. While we may seek to effect simultaneous business combinations with more than one target business, we will probably have the ability, as a resultcompletion of our limited resources, to effect only a single business combination.

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Business Combination. We Have Not Identified a Target Business

To date, we have not selected any target business on which to concentrate our search for a business combination. None of our sponsor, officers, directors, promoters and other affiliates has engaged in any substantive discussions on our behalf with representatives of other companies regarding the possibility of a potential merger, capital stock exchange, asset acquisition or other similar business combination with us. Additionally, we have not engaged or retained any agent or other representative to identify or locate such companies. As a result, we cannot assure you that we will be able to locate a target business or that we will be able to engage in a business combination with a target business on favorable terms or at all.

Subject to our management team’s pregenerate non-existing-operating fiduciary obligations and the fair market value requirement described below, we will have virtually unrestricted flexibility in identifying and selecting a prospective acquisition candidate. We have not established any other specific attributes or criteria (financial or otherwise) for prospective target businesses. Accordingly, there is no basis for investors in this offering to evaluate the possible merits or risks of the target business with which we may ultimately complete a business combination. To the extent we effect a business combination with a financially unstable company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, we may be affected by numerous risks inherentincome in the business and operationsform of financially unstable and early stage or potential emerging growth companies. Although our management will endeavor to evaluateinterest income on marketable securities held in the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

Sources of Target Businesses

While we have not yet identified any merger candidates, we believe based on our management’s business knowledge and past experience that thereTrust Account. We are numerous merger candidates. We expect that our principal means of identifying potential target businesses will be through the extensive contacts and relationships of our sponsor, officers and directors. While our officers and directors are not required to commit any specific amount of time in identifying or performing due diligence on potential target businesses, our officers and directors believe that the relationships they have developed over their careers and their access to our sponsor’s contacts and resources will generate a number of potential business combination opportunities that will warrant further investigation. We also anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment bankers, venture capital funds, private equity funds, leveraged buyout funds, management buyout funds and other members of the financial community. Target businesses may be brought to our attention by such unaffiliated sourcesincurring expenses as a result of being solicited by us through calls or mailings. These sources may also introduce us to target businesses they think we may be interested in on an unsolicited basis, since many of these sources will have read this prospectusa public company (for legal, financial reporting, accounting and know what types of businesses we are targeting. Our sponsor, officers and directors,auditing compliance), as well as their affiliates, may also bring to our attention target business candidates that they become awarefor due diligence expenses.

For the year ended December 31, 2020, we had net loss of through their business contacts as$1,609,783 which consists of operating costs of $1,598,581, a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions. Our officers and directors must present to us all target business opportunities that have adecrease in the fair market value of at least 80%private warrants liability of 574,200, decrease in the fair value of the assetsconvertible promissory note of 320,721, and interest expense of $272,884 offset by interest income on marketable securities held in the trust account (excluding taxes payable onTrust Account of $1,156,603.

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For the nine months ended September 30, 2020, we had net income accruedof $1,178,558, which consists of an increase in the trust account) atfair value of private warrants liability of 930,600, an increase in the timefair value of the agreement to enter intoconvertible promissory note of 299,794, interest income on marketable securities held in the Trust Account of $1,152,225, offset by operating costs of $985,093, a provision for income taxes of $35,746 and interest expense of $183,222.

For the three months ended September 30, 2020, we had net loss of $513,085 which consists of operating costs of $436,062, interest expense of $89,662, a decrease in the fair value of private warrants liability of 59,400, a decrease in the fair value of the convertible promissory note of 22,676, offset by a benefit from income taxes of $90,338 and interest income on marketable securities held in the Trust Account of $4,377.

For the six months ended June 30, 2020, we had net income of $1,691,643, which consists of an increase in the fair value of private warrants liability of 990,000, an increase in the fair value of the convertible promissory note of 322,470, interest income on marketable securities held in the Trust Account of $1,147,848, offset by operating costs of $549,031, a provision for income taxes of $126,084 and interest expense of $93,560.

For the three months ended June 30, 2020, we had net income of $561,389, which consists of an increase in the fair value of private warrants liability of 594,000, an increase in the fair value of the convertible promissory note of 238,079, a benefit from income taxes of $48,373, interest income on marketable securities held in the Trust Account of $43,276, offset by operating costs of $273,652 and interest expense of $88,687.

For the three months ended March 31, 2020, we had net income of $1,130,254, which consists of interest income on marketable securities held in the Trust Account of $1,104,572, an increase in the fair value of private warrants liability of 396,000, an increase in the fair value of the convertible promissory note of 84,391, offset by operating costs of $275,379, a provision for income taxes of $174,457 and interest expense of $4,873.

For the period from August 26, 2019 (inception) through December 31, 2019, we had net loss of $2,199, which consists of formation and operating costs.

Liquidity and Capital Resources

On February 13, 2020, we consummated our initial public offering of 15,000,000 Units, at a price of $10.00 per unit, generating gross proceeds of $150,000,000. Simultaneously with the closing of the initial business combination, subject to any pre-existing fiduciary or contractual obligations. Whilepublic offering, we do not presently anticipate engagingconsummated the servicessale of professional firms or other individuals that specialize in business acquisitions on any formal basis (other than Imperial Capital as described elsewhere in this prospectus), we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. In no event, however, will our sponsor, officers, directors or their respective affiliates be paid any finder’s fee, consulting fee or other compensation prior to the consummation of an initial business combination (regardless of the type of transaction that it is) other than the $10,000 administrative services fee, the repayment of the $493,515 of funds advanced by our sponsor on our behalf300,000 private units and reimbursement of any out-of-pocket expenses. We may, however, pay consulting, success or finder fees1,500,000 private warrants to our sponsor officers, directors, or their affiliatesand Imperial Capital and its designee, generating gross proceeds of $4,500,000.

On February 14, 2020, in connection with the consummationunderwriters’ exercise of their over-allotment option in full, we consummated the sale of an additional 2,250,000 Units at a price of $10.00 per Unit, generating total gross proceeds of $22,500,000. In addition, we also consummated the sale of an additional 30,000 private units at $10.00 per private unit and 150,000 private warrants at $1.00 per private warrant, generating total gross proceeds of $450,000.

For the year ended December 31, 2020, cash used in operating activities was $1,214,806, which was comprised of our initial business combination. Our audit committee will reviewnet loss of $1,609,783, less interest earned on marketable securities held in the Trust Account of $1,156,603, non-cash charges for the changes in the fair value of private warrants liability of 574,200, change in the fair value of the convertible promissory note of 320,721, interest expense of $272,884, and approve all reimbursementschanges in operating assets and payments made toliabilities of $383,775.

For the nine months ended September 30, 2020, cash used in operating activities was $755,404, which was comprised of our sponsor, officers, directors ornet income of $1,178,558, less interest earned on marketable securities held in the Trust Account of $1,152,225, non-cash charges for the changes in the fair value of private warrants liability of 930,600, change in the fair value of the convertible promissory note of 299,794, interest expense of $183,222, and changes in operating assets and liabilities of $265,435.

For the six months ended June 30, 2020, cash used in operating activities was $472,651, which was comprised of our or their respective affiliates, with any interested director abstainingnet income of $1,691,643, less interest earned on marketable securities held in the Trust Account of $1,147,848, non-cash charges for the changes in the fair value of private warrants liability of 990,000, change in the fair value of the convertible promissory note of 322,470, interest expense of $93,560, and changes in operating assets and liabilities of $202,464.

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For the three months ended March 31, 2020, cash used in operating activities was $223,188, which was comprised of our net income of $1,130,254, less interest earned on marketable securities held in the Trust Account of $1,104,572, non-cash charges for the changes in the fair value of private warrants liability of 396,000, change in the fair value of the convertible promissory note of 84,391, interest expense of $4,873, and changes in operating assets and liabilities of $226,648.

For the period from such reviewAugust 26, 2019 (inception) through December 31, 2019, cash used in operating activities was $31,071, which was comprised of our net loss of $2,199 and approval. We have no present intention to enter intochanges in operating assets and liabilities of $28,872.

As of December 31, 2020, we had marketable securities held in the Trust Account of $173,656,603 (including approximately $1,157,000 of interest income) consisting of securities held in a business combinationmoney market fund that invests in U.S Treasury securities with a target business that is affiliated with anymaturity of our officers, directors180 days or sponsor. However, we are not restricted from entering into any such transactions and may do so if (i) such transaction is approved by a majority of our disinterested independent directors and (ii) we obtain an opinion from an independent investment banking firm, or another independent entity that commonly renders valuation opinions, that the business combination is fair to our unaffiliated stockholders from a financial point of view.

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Selection of a Target Business and Structuring of a Business Combination

Subject to the limitations that a target business have a fair market value of at least 80% ofless. Interest income on the balance in the trust account (excluding taxes payable on the incomeTrust Account may be used by us to pay taxes. Through December 31, 2020, we did not withdraw any interest earned on the trust account) at the timeTrust Account to pay our taxes. We intend to use substantially all of the execution of a definitive agreement for our initial business combination, as described below in more detail, and that we must acquire a controlling interestfunds held in the target business, our management will have virtually unrestricted flexibility in identifying and selecting a prospective target business. We have not established any specific attributes or criteria (financial or otherwise) for prospective target businesses. In evaluating a prospective target business, our management may consider a variety of factors, including one or more of the following:

•        financial condition and results of operation;

•        growth potential;

•        brand recognition and potential;

•        experience and skill of management and availability of additional personnel;

•        capital requirements;

•        competitive position;

•        barriersTrust Account, to entry;

•        stage of development of the products, processes or services;

•        existing distribution and potential for expansion;

•        degree of current or potential market acceptance of the products, processes or services;

•        proprietary aspects of products and the extent of intellectual property or other protection for products or formulas;

•        impact of regulation on the business;

•        regulatory environment of the industry;

•        the target business’s compliance with U.S. federal law, including the Controlled Substances Act;

•        costs associated with effecting the business combination;

•        industry leadership, sustainability of market share and attractiveness of market industries in which a target business participates; and

•        macro competitive dynamics in the industry within which the company competes.

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular business combination will be based, to the extent relevant, on the above factors as well as other considerations deemed relevant by our management in effecting a business combination consistent with our business objective. In evaluating a prospective target business, we will conduct an extensive due diligence review which will encompass, among other things, meetings with incumbent management and inspection of facilities, as well as review of financial and other information which is made available to us. This due diligence review will be conducted either by our management or by unaffiliated third parties we may engage, although we have no current intention to engage any such third parties.

The time and costs required to select and evaluateacquire a target business and to structurepay our expenses relating thereto, including a fee payable to Imperial Capital, upon consummation of our initial Business Combination for assisting us in connection with our initial Business Combination. To the extent that our capital stock is used in whole or in part as consideration to effect a Business Combination, the remaining funds held in the Trust Account will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions and complete the business combination cannot presentlyfor marketing, research and development of existing or new products. Such funds could also be ascertained withused to repay any degree of certainty. Any costsoperating expenses or finders’ fees which we had incurred with respectprior to the identificationcompletion of our Business Combination if the funds available to us outside of the Trust Account were insufficient to cover such expenses.

As of December 31, 2020, we had cash of $309,849. We intend to use the funds held outside the Trust Account for identifying and evaluation of aevaluating prospective acquisition candidates, performing business due diligence on prospective target business with which a business combination is not ultimately completed will result in a lossbusinesses, traveling to us and reducefrom the amountoffices, plants or similar locations of capital available to otherwise complete a business combination.

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Fair Market Valueprospective target businesses, reviewing corporate documents and material agreements of Target Business

Nasdaq listing rules require thatprospective target businesses, selecting the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding taxes payable on the income earned on the trust account) at the time of the execution of a definitive agreement for our initial business combination, although we may acquire a target business whose fair market value significantly exceeds 80% of the trust account balance.

We currently anticipate structuring a business combination to acquire 100% ofand structuring, negotiating and consummating the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination where we merge directly with the target business or where we acquire less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we could acquire a 100% controlling interest in the target; however, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of trust account balance test. Notwithstanding the foregoing, if we are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% fair market value test.Business Combination.

In order to consummate such an acquisition, we may issue a significant amount of our debtfund working capital deficiencies or equity securities to the sellers of such businesses and/or seek to raise additional funds through a private offering of debt or equity securities. Since we have no specific business combination under consideration, we have not entered into any such fund-raising arrangement and have no current intention of doing so. The fair market value of the target will be determined by our board of directors based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). The proxy solicitation materials or tender offer documents used by usfinance transaction costs in connection with any proposed transaction will provide public stockholders with our analysis ofa Business Combination, the fair market value of the target business, as well as the basis for our determinations. If our board is not able to independently determine that the target business has a sufficient fair market value, we will obtain an opinion from an unaffiliated, independent investment banking firm,Insiders, or another independent entity that commonly renders valuation opinions, with respect to the satisfaction of such criteria.

We will not be required to obtain an opinion from an investment banking firm as to the fair market value if our board of directors independently determines that the target business complies with the 80% threshold.

Lack of Business Diversification

We may seek to effect a business combination with more than one target business, and there is no required minimum valuation standard for any single target at the time of such acquisition. Although we expect to complete only a single business combination, this process may entail the simultaneous acquisitions of several operating businesses. Therefore, at least initially, the prospects for our success may be entirely dependent upon the future performance of a single business operation. Unlike other entities which may have the resources to complete several business combinations of entities operating in multiple industries or multiple areas of a single industry, it is probable that we will not have the resources to diversify our operations or benefit from the possible spreading of risks or offsetting of losses. By consummating a business combination with only a single entity, our lack of diversification may:

•        subject us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to a business combination, and

•        result in our dependency upon the performance of a single operating business or the development or market acceptance of a single or limited number of products, processes or services.

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If we determine to simultaneously acquire several businesses and such businesses are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other acquisitions, which may make it more difficult for us, and delay our ability, to complete the business combination. With multiple acquisitions, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business.

Limited Ability to Evaluate the Target Business’ Management

Although we intend to scrutinize the management of a prospective target business when evaluating the desirability of effecting a business combination, we cannot assure you that our assessment of the target business’ management will prove to be correct. In addition, we cannot assure you that the future management will have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future rolecertain of our officers and directors if any,or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete our initial Business Combination, we would repay such loaned amounts. In the event that our initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $2,000,000 of notes may be convertible into private units, at a price of $10.00 per private unit, and/or private warrants, at a price of $1.00 per private warrant. The units and warrants would be identical to the private units and private warrants sold in the target business following a business combination cannot presently be stated with any certainty. While itprivate placement. On March 26, 2020, we issued an unsecured promissory note (the “2020 Note”) in the principal amount of $1,000,000 to the Sponsor. The 2020 Note is possible that some of our key personnel will remain associated in senior management or advisory positions with us following a business combination, it is unlikely that they will devote their fullnon-time-interest efforts to our affairs subsequent to a business combination. Moreover, they would only be able to remain with the company afterbearing and payable upon the consummation of a business combination if they are ableBusiness Combination. The 2020 Note may be converted into units at a price of $10.00 per unit and/or warrants at a price of $1.00 per warrant. The units would be identical to negotiate employment or consulting agreements in connection with the business combination. Such negotiationsprivate units and the warrants would take place simultaneously withbe identical to the negotiation of the business combination and could provide for them to receive compensationprivate warrants. On January 29, 2021, we issued an unsecured promissory note (the “2021 Note”) in the formprincipal amount of cash payments and/or our securities for services they would render$1,000,000 to the company after the consummation of the business combination. While the personalsponsor. The 2021 Note is non-interest bearing and financial interests of our key personnel may influence their motivation in identifying and selecting a target business, their ability to remain with the company afterpayable upon the consummation of a business combination will notBusiness Combination. The 2021 Note may be the determining factor in our decision as to whether converted into units at a price of $10.00 per unit and/or not we will proceed with any potential business combination. Additionally, we cannot assure you that our officers and directors will have significant experience or knowledge relatingwarrants at a price of $1.00 per warrant. The units would be identical to the operations ofprivate units and the particular target business.warrants would be identical to the private warrants.

Following a business combination, we may seek to recruit additional managers to supplementWe have concluded that the incumbent management of the target business. We cannot assure you that we will have thefollowing conditions raise substantial doubt about our ability to recruit additional managers, or that any such additional managers we do recruit will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.

Stockholders May Not Have the Ability to Approve an Initial Business Combination

In connection with any proposed business combination, we will either (1) seek stockholder approval ofmeet our initial business combination at a meeting called for such purpose at which stockholders may seek to convert their shares, regardless of whetherfinancial obligations as they vote for or against the proposed business combination or don’t vote at all, into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), or (2) provide our stockholders with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), in each case subject to the limitations described herein. If we determine to engage in a tender offer, such tender offer will be structured so that each stockholder may tender all of his, her or its shares rather than some pro rata portion of his, her or its shares. The decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Unlike other blank check companies which require stockholder votes and conduct proxy solicitations in conjunction with their initial business combinations and related conversions of public shares for cash upon consummation of such initial business combination even when a vote is not required by law, we will have the flexibility to avoid such stockholder vote and allow our stockholders to sell their shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act which regulate issuer tender offers. In that case, we will file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business combination as is required under the SEC’s proxy rules.become due. We will consummateneed to raise additional capital through loans or additional investments from its Sponsor, shareholders, officers, directors, or third parties. Our officers, directors and Sponsor may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and, if we seek stockholder approval, a majority of the outstanding shares of common stock voted are voted in favor of the business combination.

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We chose our net tangible asset threshold of $5,000,001 to ensure that we would avoid being subject to Rule 419 promulgated under the Securities Act. However, if we seek to consummate an initial business combination with a target business that imposes any type of working capital closing condition or requires us to have a minimum amount of funds available from the trust account upon consummation of such initial business combination, we may need to have more than $5,000,001 in net tangible assets upon consummation and this may force us to seek third party financing which may not be available on terms acceptable to us or at all. As a result,needs. Accordingly, we may not be able to consummate such initial business combination andobtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be ablelimited to, locate another suitable target withincurtailing operations, suspending the applicable time period,pursuit of a potential transaction, and reducing overhead expenses. We cannot provide any assurance that new financing will be available on commercially acceptable terms, if at all. Public stockholders may therefore haveThese conditions raise substantial doubt about our ability to wait 18months fromcontinue as a going concern through August 13, 2021, the closing of this offering (subject to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in this prospectus) in order to be able to receive a pro rata share of the trust account.

Our sponsor, officers and directors have agreed (1) to vote any shares of common stock owned by them in favor of any proposed business combination, (2) not to convert any shares of common stock in connection with a stockholder vote to approve a proposed initial business combination and (3) not sell any shares of common stock in any tender in connection with a proposed initial business combination.

None of our officers, directors, sponsor, or their affiliates has indicated any intention to purchase units or shares of common stock in this offering or from persons in the open market or in private transactions. However, if we hold a meeting to approve a proposed business combination and a significant number of stockholders vote, or indicate an intention to vote, against such proposed business combination, our officers, directors, sponsor, or their affiliates could make such purchases in the open market or in private transactions in order to influence the vote. Notwithstanding the foregoing, our officers, directors, sponsor, and their affiliates will not make purchases of shares of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act, which are rules designed to stop potential manipulation of a company’s stock.

Conversion Rights

At any meeting called to approve an initial business combination, public stockholders may seek to convert their shares, regardless of whether they vote for or against the proposed business combination or do not vote at all, into their pro rata share of the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination, less any taxes then due but not yet paid. Alternatively, we may provide our public stockholders with the opportunity to sell their shares of our common stock to us through a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account, less any taxes then due but not yet paid.

Our sponsor, and our officers and directors will not have conversion rights with respect to any shares of common stock owned by them, directly or indirectly, whether acquired prior to this offering or purchased by them in this offering or in the aftermarket.

We may require public stockholders, whether they are a record holder or hold their shares in “street name,” to either (i) tender their certificates to our transfer agent or (ii) deliver their shares to the transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, in each case prior to a date set forth in the proxy materials sent in connection with the proposal to approve the business combination.

There is a nominal cost associated with the above-referenced delivery process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker $45.00 and it would be up to the broker whether or not to pass this cost on to the holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise conversion rights. The need to deliver shares is a requirement of exercising conversion rights regardless of the timing of when such delivery must be effectuated. However, in the event we require stockholders seeking to exercise conversion rights prior to the consummation of the proposed business combination and the proposed business combination is not consummated this may result in an increased cost to stockholders.

Any proxy solicitation materials we furnish to stockholders in connection with a vote for any proposed business combination will indicate whether we are requiring stockholders to satisfy such certification and delivery requirements. Accordingly, a stockholder would have from the time the stockholder received our proxy statement up until the vote on the proposal to approve the business combination to deliver his shares if he wishes to seek to exercise his conversion rights. This time period varies depending on the specific facts of each transaction. However, as the delivery process

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can be accomplished by the stockholder, whether or not he is a record holder or his shares are held in “street name,” in a matter of hours by simply contacting the transfer agent or his broker and requesting delivery of his shares through the DWAC System, we believe this time period is sufficient for an average investor. However, we cannot assure you of this fact. Please see the risk factor titled “In connection with any stockholder meeting called to approve a proposed initial business combination, we may require stockholders who wish to convert their shares in connection with a proposed business combination to comply with specific requirements for conversion that may make it more difficult for them to exercise their conversion rights prior to the deadline for exercising their rights” for further information on the risks of failing to comply with these requirements.

The foregoing is different from the procedures historically used by some blank check companies. Traditionally, in order to perfect conversion rights in connection with a blank check company’s business combination, the company would distribute proxy materials for the stockholders’ vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his conversion rights. After the business combination was approved, the company would contact such stockholder to arrange for him to deliver his certificate to verify ownership. As a result, the stockholder then had an “option window” after the consummation of the business combination during which he could monitor the price of the company’s stock in the market. If the price rose above the conversion price, he could sell his shares in the open market before actually delivering his shares to the company for cancellation. As a result, the conversion rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become a “continuing” right surviving past the consummation of the business combination until the holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a holder’s election to convert his shares is irrevocable once the business combination is approved.

Any request to convert such shares once made, may be withdrawn at any time up to the vote on the proposed business combination or the expiration of the tender offer. Furthermore, if a holder of a public share of common stock delivered his certificate in connection with an election of their conversion and subsequently decides prior to the applicable date not to elect to exercise such rights, he may simply request that the transfer agent return the certificate (physically or electronically).

If the initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their conversion rights would not be entitled to convert their shares for the applicable pro rata share of the trust account as of two business days prior to the consummation of the initial business combination. In such case, we will promptly return any shares delivered by public holders.

Liquidation if No Business Combination

Our amended and restated certificate of incorporation provides that we will have only 18months from the closing of this offering (subjectbe required to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in this prospectus) to complete an initial business combination. If we have not completed an initial business combination by such date, we will (i) cease all operations, except for the purpose of winding up, (ii) as promptly as reasonably possible butif a Business Combination is not more than ten business days thereafter, redeem 100%consummated. These financial statements do not include any adjustments relating to the recovery of the outstanding public shares, atrecorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a pergoing concern.

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-shareOff-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance price, payablesheet arrangements as of December 31, 2020. We do not participate in cash, equaltransactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the aggregate amount thenpurpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities other than an agreement to pay our Sponsor a monthly fee of $10,000 for office space, utilities and secretarial and administrative support. We began incurring these fees on deposit inFebruary 10, 2020 and will continue to incur these fees monthly until the trust account, including any interest not previously released to us but netearlier of taxes payable, divided by the numbercompletion of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholdersBusiness Combination and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.liquidation.

Our sponsor, officers and directors have agreedThe Initial Public Offering underwriting agreement provides that they will not propose any amendment to our amended and restated certificate of incorporation that would affect our public stockholders’ ability to convert or sell their shares to us in connection with a business combination as described herein or affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete a business combination within 18months from the closing of this offering (subject to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in this prospectus) unless we provide our public stockholders with the opportunity to convert their shares of common stock upon such approval at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest not previously released to us but net of franchise and income taxes payable, divided by the number of then outstanding public shares. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our sponsor, executive officers, directors or any other person.

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Under the Delaware General Corporation Law, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of 100% of our outstanding public shares in the event we do not complete our initial business combination within the required time period may be considered a liquidation distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the Delaware General Corporation Law intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limitedfinancing transaction similar to the lesser of such stockholder’s pro rata share of the claimInitial Public Offering or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.

Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of 100% of our public shares in the event we do not complete our initial business combination within the required time period is not considered a liquidation distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the Delaware General Corporation Law, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidation distribution. If we are unable to complete a business combination within the prescribed time frame, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest but net of franchise and income taxes payable, divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our 18th month, and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.

Because we will not be complying with Section 280 of the Delaware General Corporation Law, Section 281(b) of the Delaware General Corporation Law requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claimsBusiness Combination, or claims that may be potentially brought against us within the subsequent ten years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses.

We are required to seek to have all third parties (including any vendors or other entities we engage after this offering) and any prospective target businesses enter into agreements with us waiving any right, title, interesta statement or claimletter of any kind they may haveintent that results in or to any monies held in the trust account. Assuch a result, the claims that could be made against us will be limited, thereby lessening the likelihood that any claim would result in any liability extending to the trust. We therefore believe that any necessary provision for creditors will be reduced and should not have a significant impact on our ability to distribute the funds in the trust account to our public stockholders. Nevertheless, Marcum LLP, our independent registered public accounting firm, and the underwriters of the offering, will not execute agreements with us waiving such claims to the monies held in the trust account. Furthermore, there is no guarantee that other vendors, service providers and prospective target businesses will execute such agreements. Nor is there any guarantee that, even if they execute such agreements with us, they will not seek recourse against the trust account. Our sponsor has agreed that it will be liable to ensure that the proceeds in the trust account are not reduced below $10.00 per share by the claims of target businesses or claims of vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us, but we cannot assure you that it will be able to satisfytransaction, within 18 months following its indemnification obligations if it is required to do so. We have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Therefore, we believe it is unlikely that our sponsor will be able to satisfy its indemnification obligations if it is required to do so. Additionally, the agreement our sponsor entered into specifically provides for two exceptions to the indemnity it has given: it will have no liability (1) as to any claimed amounts owed to a target business or vendor or other entity who has executed an agreement with us waiving

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any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, or (2) as to any claims for indemnification by the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. As a result, if we liquidate, the per-share distribution from the trust account could be less than $10.00 due to claims or potential claims of creditors. We will distribute to all of our public stockholders, in proportion to their respective equity interests, an aggregate sum equal to the amount in the trust account, inclusive of any interest (subject to our obligations under Delaware law to provide for claims of creditors as described below).

We anticipate notifying the trustee of the trust account to begin liquidating such assets promptly after such date and anticipate it will take no more than 10 business days to effectuate such distribution. The holders of the founder’s shares and private shares have waived their rights to participate in any liquidation distribution from the trust account with respect to such shares. There will be no distribution from the trust account with respect to our warrants, which will expire worthless. We will pay the costs of any subsequent liquidation from our remaining assets outside of the trust account. If such funds are insufficient, our sponsor has contractually agreed to advance us the funds necessary to complete such liquidation (currently anticipated to be no more than approximately $15,000) and has contractually agreed not to seek repayment for such expenses.

If we are unable to complete an initial business combination and expend all of the net proceeds of this offering, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the initial per-share redemption price would be $10.00. The proceeds deposited in the trust account could, however, become subject to claims of our creditors that are in preference to the claims of public stockholders.

Our public stockholderstermination, Imperial shall be entitled to receive funds fromany expense reimbursement due to it along with payment in full of its applicable fee of either (i) 2% of the trust account onlygross proceeds of the offering, of which 1% will be in cash and 1% will be in equity of the eventCompany for a financing transaction, or (ii) an amount equal to 5% of our failure to complete a business combination within the required time period, if the stockholders seek to have us convert or purchase their respective shares upon a business combination which is actually completed by us or upon certain amendments to our amended and restated certificate of incorporation prior to consummating an initial business combination. In no other circumstances shall a stockholder have any right or interestface amount of any kind toequity securities and 3% of the face amount of any debt sold or inarranged as part of the trust account.

If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against usBusiness Combination (exclusive of any applicable finders’ fees which is not dismissed,might become payable). Additionally, Imperial has the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return to our public stockholders at least $10.00 per share.

If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. Furthermore, because we intend to distribute the proceeds held in the trust account to our public stockholders promptly after 18months from the closing of this offering (subject to our right to extendact as a book-runner and managing underwriter for all underwritten follow-on offerings for 18 months following completion of the period of timeInitial Public Offering and the right to consummateapprove any co-lead managing underwriter or co-book runner.

We have engaged Imperial as an initial business combination for up to an additional 3months as described in more detail in this prospectus), this may be viewed or interpreted as giving preference to our public stockholders over any potential creditors with respect to access to or distributions from our assets. Furthermore, our board may be viewed as having breached their fiduciary duties to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

Amended and Restated Certificate of Incorporation

Our amended and restated certificate of incorporation contains certain requirements and restrictions relating to this offering that will apply to us until the consummation of our initial business combination. These provisions cannot be amended without the approval of a majority of our stockholders. If we seek to amend any provisions of our amended and restated certificate of incorporation that would affect our public stockholders’ ability to convert or sell their shares to usadvisor in connection with a business combination as described herein or affectBusiness Combination to assist us in holding meetings with our shareholders to discuss the substance or timing ofpotential Business Combination and the target business’ attributes, introduce us to potential investors that are interested in purchasing our obligation to redeem 100% of our public shares if we do not complete a business combination within 18months from the closing of this offering (subject to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in this prospectus), we will provide dissenting public stockholders with the opportunity to convert their public sharessecurities in connection with any such vote. This conversion right shall applya Business Combination, assist us in obtaining shareholder approval for the event of the approval of any such amendment, whether proposed by our sponsor, any executive officer, director

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or director nominee, or any other person. Our sponsor, officersBusiness Combination and directors have agreed to waive any conversion rightsassist us with respect to any founder’s shares, private sharesits press releases and any public shares they may holdfilings in connection with any vote to amend our amended and restated certificate of incorporation. Specifically, our amended and restated certificate of incorporation provides, among other things, that:

•        we shall either (1) seek stockholder approval of our initial business combination atthe Business Combination. We will pay Imperial a meeting calledcash fee for such purpose at which stockholders may seek to convert their shares, regardless of whether they vote for or againstservices upon the proposed business combination or don’t vote at all, into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), or (2) provide our stockholders with the opportunity to sell their shares to us by meansconsummation of a tender offer (and thereby avoid the need for a stockholder vote) forBusiness Combination in an amount equal to their pro rata share4.5% of the aggregategross proceeds of Initial Public Offering, or $7,762,500 (exclusive of any applicable finders’ fees which might become payable); provided that up to 20% of the fee may be allocated at our sole discretion to other FINRA members that assist us in identifying and consummating a Business Combination.

Additionally, we have agreed to pay Imperial a cash fee for assisting us in obtaining financing for the Business Combination in an amount then on depositequal to 5% of the face amount of any equity securities and 3% of the face amount of any debt sold or arranged as part of the Business Combination (exclusive of any applicable finders’ fees which might become payable).

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the trustUnited States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

Derivative Instruments

We account (net of taxes payable),for the Derivative Instruments in accordance with the guidance contained in ASC 815-40-15-7D and 7F under which the Derivative Instruments do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the Derivative Instruments as liabilities at their fair value and adjust the Derivative Instruments to fair value at each casereporting period. This liability is subject to the limitations described herein;re-measurement at each balance sheet

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•        we will consummateTable of Contents

date until exercised, and any change in fair value is recognized in our initial business combination only if we have net tangible assetsstatement of at least $5,000,001 upon such consummation and, if we seek stockholder approval,operations. The private warrants are valued using a majorityBlack-Scholes model. The fair value of the convertible component of the convertible promissory note was estimated using a Black-Scholes model.

For issued or modified instruments that meet all of the criteria for equity classification, the instruments are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified instruments that do not meet all the criteria for equity classification, the instruments are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the instruments are recognized as a non-cash gain or loss on the statements of operations. The fair value of the instruments was estimated using a Black-Scholes model.

Common Stock Subject to Possible Redemption

We account for our common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of our balance sheets.

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stocks to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable common stocks resulted in charges against additional paid-in capital and accumulated deficit.

Net Income (Loss) per Common Share

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common share outstanding for the period. The Company applies the two-class method in calculating income (loss) per share. Accretion associated with the redeemable shares of common stock voted are voted in favoris excluded from income (loss) per share as the redemption value approximates fair value.

The calculation of diluted income (loss) per common share does not consider the effect of the business combination;warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 19,230,000 shares of common stock in the aggregate. As of December 31, 2020 and 2019, the Company did not have any other dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net income (loss) per common share is the same as basic net income (loss) per common share for the periods presented.

•        Recent accounting standards

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our initial business combination is not consummated within 18months fromfinancial statements.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THERAPLANT

The following discussion and analysis should be read in conjunction with the closingconsolidated financial statements and related notes of this offering (subject to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detailTheraplant included elsewhere in this prospectus), then we will redeem allprospectus. This discussion contains forward-looking statements reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the outstanding public sharessections entitled “Risk Factors” and thereafter liquidate and dissolve our company;“Forward-Looking Statements” appearing elsewhere in this prospectus.

•        uponUnless otherwise indicated by the consummationcontext, references to “Theraplant” refer to Theraplant solely, and references to the “Company,” “our,” “we,” “us” and similar terms refer to Greenrose Acquisition Corp. after giving effect to the Business Combinations.

Business Combinations

Greenrose Acquisition Corp. is a special purpose acquisition company formed on August 26, 2019 for the purpose of this offering, $150.0million, or $172.5million if the over-allotment option is exercised in full, shall be placed into the trust account;

•        we may not consummate any other business combination,effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar transaction priorbusiness combination with one or more businesses. Prior to our entering into the Business Combinations Agreements, our acquisition and value creation strategy were to identify, acquire and, after an initial business combination;combination, to build a company in an industry or sector that complements the experience of our management team and can benefit from our operational expertise.

Subsequent to the closing of the Business Combinations, our operations will include (i) breeding & cultivating cannabis plants, (ii) manufacturing branded consumer products, and (iii) distributing cannabis flower and manufactured products. We appeal to medical and adult recreational use (“adult-use”) customers through brand strategies intended to build trust, loyalty and repeat purchase.

Pursuant with the guidance set forth in ASC 805, we have determined that Greenrose Acquisition Corp. is the accounting acquirer and accordingly, the Business Combination will be treated as a forward acquisition.

As a result of the Business Combination and the application of acquisition accounting, the assets and liabilities of Theraplant will be adjusted to their estimated fair market values as of the Closing. We anticipate these adjusted valuations will result in an increase in our future operating expenses due to the increased depreciation and amortization expense related to the increased carrying value of our fixed assets and identifiable definite-lived intangible assets. Additionally, the excess value of the total purchase price over the estimated fair value of our identifiable assets and liabilities, inclusive of identifiable intangible assets and contingent consideration, on the Closing will be allocated to goodwill. Any identifiable indefinite-lived assets, including goodwill, will be subject to annual impairment testing. See “Unaudited Pro Forma Condensed Combined Financial Information” and “Risk Factors — Risks related to the Acquisition” “If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings.” Additionally, we expect to finance the Business Combinations through a PIPE financing comprised of a series of debt instruments, which is expected to increase interest expense on the consolidated financial statements.

In arriving at the estimated fair values presented in the unaudited pro forma condensed combined financial statements, we have considered the preliminary appraisals of independent consultants, which were based on a preliminary and limited review of forecasts and discount rates. We expect to complete the purchase price allocation after considering the fair market value of Theraplant and each Target Businesses, assets and liabilities at the level of detail necessary to finalize the purchase price allocation. The preliminary estimated purchase price allocation is subject to change for a number of reasons, including:

•        finalization of the fair value of working capital and other assets and liabilities on the opening balance sheet;

•        the final identification and valuation of intangible assets; and

•        priorcompletion of appraisals of assets acquired and liabilities assumed.

The final purchase price allocation will be adjusted based on the factors above and may differ materially from the estimated allocation. See “Unaudited Pro Forma Condensed Combined Financial Information.”

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Predecessor

After careful review, we have determined that Theraplant is the predecessor entity (as defined in Regulation C, Rule 405) because Theraplant is bringing what we believe to be best practices and operational procedures that we will implement throughout our Company on a going forward basis.

Overview

Theraplant is a cannabis producer licensed by the State of Connecticut, dedicated to providing patients options to improve their wellbeing. Theraplant was Connecticut’s first state-licensed medical cannabis producer, receiving its license on February 7, 2014, and in October 2014 became the first producer to distribute medical cannabis in the Connecticut market. Theraplant designs premium cannabis genetics to offer a wide variety of compositions to meet needs of the state’s medical cannabis cardholders for all approved treatment conditions. Theraplant continually leads the market in making quality medical cannabis affordable to the greatest range of patients. Theraplant hand selects premium cannabis genetics grown in a controlled, clean environment, under the watch of an award-winning cultivation team, and tested by a third-party laboratory for pesticides and microbiologics. Theraplant operates out of a cultivation facility with 68,000 square feet of capacity, with an additional 30,000 square feet of capacity under construction that is expected to be completed in the fourth quarter of fiscal 2021.

Regulation Overview and Balance Sheet Exposure

Subsequent to the Business Combinations, 100% of our balance sheet will be exposed to U.S. cannabis-related activities. We believe our operations are in material compliance with all applicable state and local laws, regulations, and licensing requirements in the states and locals in which we operate. However, cannabis remains illegal under U.S. federal law and substantially all our revenue is derived from U.S. cannabis operations.

Key Performance Indicators and Non-GAAP Measures

Our management uses a variety of financial and operating metrics to evaluate our business, analyze our performance, and make strategic decisions. We believe these metrics and non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as management. However, these measures are not financial measures calculated in accordance with GAAP and should not be considered as substitutes for financial measures that have been calculated in accordance with GAAP. We primarily review the following key performance indicators and non-GAAP measures when assessing our performance: (i) revenue; (ii) EBITDA; (iii) adjusted EBITDA; (iv) working capital; (v) cash flow; and (vi) return on capital employed. We believe these indicators provide us with useful data with which to measure our performance.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measures that represents earnings before interest expense, income taxes, depreciations, and amortization, or EBITDA, and further adjustments to EBITDA to exclude certain non-cash items and other non-recurring items that management believes are not indicative of ongoing operations.

Theraplant discloses EBITDA and Adjusted EBITDA because these non-GAAP measures are key measures used by its management to evaluate our business, measure its operating performance, and make strategic decisions. We believe EBITDA and Adjusted EBITDA are useful for investors and others in understanding and evaluating our operations results in the same manner as its management. However, EBITDA and Adjusted EBITDA are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for net income, income before income taxes, or any other operating performance measure calculated in accordance with GAAP. Using these non-GAAP financial measures to analyze our business would have material limitations because the calculations are based on the subjective determination of management regarding the nature and classification of events and circumstances that investors may find significant. In addition, although other companies in our industry may report measures titled EBITDA and Adjusted EBITDA or similar measures, such non-GAAP financial measures may be calculated differently from how we calculate non-GAAP financial measures, which reduces their overall usefulness as

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comparative measures. Because of these limitations, you should consider EBITDA and Adjusted EBITDA alongside other financial performance measures, including net income and our other financial results presented in accordance with GAAP. The following table presents a reconciliation of net income to EBITDA and Adjusted EBITDA for each of the periods indicated:

Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020

 

For the three months ended
September 30,

  

2021

 

2020

Net Income (Loss)

 

2,839,636

 

3,736,339

Income tax expense

 

262,625

 

286,125

Interest (income) expense, net

 

62,491

 

25,987

Depreciation & amortization

 

204,805

 

199,105

EBITDA

 

3,369,557

 

4,247,556

Transaction related fees(1)

 

127,312

 

56,181

Infrequent events(2)

 

54,027

 

19,143

Management fees(3)

 

 

Litigation(4)

 

11,100

 

Adjusted EBITDA

 

3,561,996

 

4,322,880

____________

(1)      Transaction fees relate to consulting, legal, and accounting fees in preparation for the Business Combinations.

(2)      Infrequent events consist of $0.05 million for consulting fees related to Connecticut cannabis regulation proposals for the three months ended September 30, 2021.

(3)      Represents management fees associated with management consulting services that will not be required to be paid after the closing of the Business Combinations.

(4)      Represents fees related to consultation of attorneys regarding the recovery of insurance proceeds, related to the fire in 2020.

Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020

 

For the nine months ended
September 30,

  

2021

 

2020

Net Income (Loss)

 

8,921,314

 

10,668,544

Income tax expense

 

812,475

 

889,500

Interest (income) expense, net

 

145,652

 

78,263

Depreciation & amortization

 

606,780

 

597,314

EBITDA

 

10,486,221

 

12,233,621

Transaction related fees(1)

 

538,919

 

100,861

Infrequent events(2)

 

198,471

 

238,086

Management fees(3)

 

400,000

 

450,000

Litigation(4)

 

11,100

 

Adjusted EBITDA

 

11,634,711

 

13,022,568

____________

(1)      Transaction fees relate to consulting, legal, and accounting fees in preparation for the Business Combinations.

(2)      Infrequent events consist of $0.2 million for consulting fees related to Connecticut cannabis regulation proposals for the nine months ended September 30, 2021 and 2020, respectively, as well as costs related to a fire in a grow room causing repair expenses that have not been recovered by insurance for the nine months ended September 30, 2020.

(3)      Represents management fees associated with management consulting services that will not be required to be paid after the closing of the Business Combinations.

(4)      Represents fees related to consultation of attorneys regarding the recovery of insurance proceeds, related to the fire in 2020.

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Year Ended December 31, 2020 Compared to the Year Ended December 31, 2019

 

For the year ended
December 30,

  

2020

 

2019

Net Income (Loss)

 

$

14,589,928

 

$

7,937,294

Provision for income taxes

 

 

1,178,500

 

 

747,527

Interest expense, net

 

 

101,560

 

 

112,017

Depreciation & amortization

 

 

798,538

 

 

976,702

EBITDA

 

 

16,668,526

 

 

9,773,540

Transaction related fees(a)

 

 

152,588

 

 

62,000

Infrequent events(b)

 

 

246,594

 

 

415,664

Management fees(c)

 

 

500,000

 

 

550,000

Adjusted EBITDA

 

$

17,567,708

 

$

10,801,204

____________

(a)      Transaction fees relate to consulting, legal, and accounting fees in preparation for the Business Combinations.

(b)      Infrequent events include $0.05 million for a fire in a grow room causing repair expenses that that have not been recovered by insurance for fiscal 2020 and $0.2 million for consulting fees related to Connecticut cannabis regulation proposals during fiscal 2020 and 2019 as well as $0.2 million for legal costs incurred for legal consultations and execution of internal agreements in 2019.

(c)      Represents management fees associated with management consulting services that will not be required to be paid after the closing of the Business Combinations.

Key Components of Results of Operations

The period-to-period comparisons of Theraplant’s results of operations have been prepared using the historical periods included in Theraplant’s consolidated financial statements. The following discussion should be read in conjunction with Theraplant’s consolidated financial statements and related notes included elsewhere in this prospectus.

Revenues, net of discounts

Theraplant is a seed-to-wholesale cultivator, extractor, and processor that produces high quality cannabis products and sells wholesale product to dispensaries in the State of Connecticut. Revenues are recorded net of any applicable sales discounts.

Cost of goods sold, net (excludes depreciation and amortization)

Cost of goods sold, net is derived from costs related to the cultivation and production of cannabis and cannabis products. Cost of goods sold, net includes the costs directly attributable to the production of inventory and includes amounts incurred in the cultivation and manufacturing of finished goods, such as flower, concentrates, and ingestibles. Direct and indirect costs include, but are not limited to, material, labor, supplies, utilities, and facility costs associated with cultivation, not including depreciation and amortization.

Selling and marketing

Selling and marketing expenses consist of marketing expenses related to marketing programs for Theraplant products. As Theraplant continues to expand its facility, sales and marketing expenses will continue to increase.

General and administrative

General and administrative expenses represent costs incurred at Theraplant’s corporate offices, primarily related to personnel costs, including salaries, incentive compensation, benefits, and other professional service costs, including legal and accounting. Theraplant expects to continue to invest considerably in this area to support expansion plans and to support the increasing complexity of the cannabis business. Theraplant anticipates an increase in compensation expenses related to recruiting and hiring talent, accounting, legal and professional fees associated with becoming compliant with the Sarbanes-Oxley Act, and other public company corporate expenses.

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Depreciation and amortization

Depreciation and amortization expenses represent a write-down to reduce the carrying value of Theraplant’s property and equipment and intangible assets. As Theraplant continues to grow and expand their property and equipment, we expect to see continued growth to the depreciation expense.

Other income (expense), net

Other income (expense), net consist primarily of interest expense and other non-operating activities.

Provision for income taxes

Theraplant’s members have elected to have Theraplant treated as a partnership for income tax purposes. The State of Connecticut imposes a corporate flow through tax of 6.99% on partnership earnings, resulting in taxable liabilities for Theraplant. Except for the corporate flow through tax, Theraplant’s items of income, loss, deduction, and credit are passed through to, and taken into account by Theraplant’s members in computing their own taxable income.

As Theraplant operates in the cannabis industry, it is subject to the limits of IRC Section 280E under which Theraplant is only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E.

Results of Operations

Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020

 

For the three months ended September 30,

 

Change
Increase/(Decrease)

  

2021

 

2020

 

$

 

%

Revenues, net of discounts

 

$

6,235,744

 

 

$

7,366,062

 

 

$

(1,130,318

)

 

(15

)%

Cost of revenues (excludes depreciation and amortization)

 

 

2,001,181

 

 

 

2,469,397

 

 

 

(468,216

)

 

(19

)%

Selling and marketing

 

 

12,044

 

 

 

116,148

 

 

 

(104,144

)

 

(90

)%

General and administrative

 

 

853,002

 

 

 

532,961

 

 

 

320,041

 

 

60

%

Depreciation and amortization

 

 

204,805

 

 

 

199,105

 

 

 

5,700

 

 

3

%

Other income (expense), net

 

 

(62,491

)

 

 

(25,987

)

 

 

(36,504

)

 

140

%

Provision for income taxes

 

 

(262,625

)

 

 

(286,125

)

 

 

23,500

 

 

(8

)%

Net income

 

$

2,839,636

 

 

$

3,736,339

 

 

$

(896,703

)

 

(19

)%

Revenues, net of discounts, for the three months ended September 30, 2021 was $6.2 million, compared to $7.4 million for the three months ended September 30, 2020, a decrease of $1.1 million, or 15%. The decrease in revenue is a temporary result of the new legislation for adult-use cannabis in Connecticut. With the law, “An Act Concerning Responsible and Equitable Regulation of Adult-Use Cannabis”, recently passed in June 2021, we believe that prospective consumers who previously obtained a medical card or considered obtaining a medical card in Q3 decided to purchase cannabis outside of the medical market. This was the result of the decriminalization of cannabis as of July 1, 2021, thus forgoing the cost of a doctor’s visit and a state license registration. Further, the availability of black-market products for the larger new adult (non-medical) market has increased due to illegal events and delivery services, negatively impacting revenues. The new law now allows for an adult use of the product in Connecticut.

Cost of goods sold, net (excluding depreciation and amortization), for the three months ended September 30, 2021 was $2.0 million, compared to $2.4 million for the three months ended September 30, 2021, a decrease of $0.5 million or 19%. The decrease in cost of goods sold is primarily a result of less sales revenue in the quarter.

Selling and marketing expenses for the three months ended September 30, 2021 was $0.01 million, compared to $0.1 million for the three months ended September 30, 2020, a decrease of $0.1 million, or 90%. The decrease is primarily due to smaller purchases in marketing material.

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General and administrative expenses for the three months ended September 30, 2021 was $0.9 million, compared to $0.5 million for the three months ended September 30, 2020, an increase of $0.3 million, or 60%. The increase is primarily driven by an increase in professional services, legal fees and accounting fees related to the sale. There also has been a large increase in the cost of insurance due to the expansion of facility and consulting fees related to Connecticut cannabis regulation proposals.

Other income (expense), net, comprised of interest expense, for the three months ended September 30, 2021 was $(0.1) million, compared to $(0.03) million for the three months ended September 30, 2020, an increase of $0.04 million, or 140%. The increase is primarily due to an added additional Letter of Credit of $550,000, and the construction loan for $3.3 million which increased related interest and fees.

Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

 

For the nine months ended
September 30,

 

Change
Increase/(Decrease)

  

2021

 

2020

 

$

 

%

Revenues, net of discounts

 

$

19,955,892

 

 

$

21,344,457

 

 

(1,388,565

)

 

(7

)%

Cost of goods sold (excludes depreciation and amortization)

 

 

6,420,529

 

 

 

6,881,485

 

 

(460,956

)

 

(7

)%

Selling and Marketing

 

 

198,159

 

 

 

256,353

 

 

(58,194

)

 

(23

)%

General, and Administrative

 

 

2,850,983

 

 

 

1,972,998

 

 

877,985

 

 

45

%

Depreciation and Amortization

 

 

606,780

 

 

 

597,314

 

 

9,466

 

 

2

%

Other Income (Expense), net

 

 

(145,652

)

 

 

(78,263

)

 

(67,389

)

 

86

%

Provision for income taxes

 

 

(812,475

)

 

 

(889,500

)

 

77,025

 

 

(9

)%

Net income (loss)

 

$

8,921,314

 

 

$

10,668,544

 

 

(1,747,230

)

 

(16

)%

Revenues, net of discounts, for the nine months ended September 30, 2021 was $20.0 million, compared to $21.3 million for the nine months ended September 30, 2020, a decrease of $1.4 million, or 7%. The decrease in revenue is a result of pending legislation of recreational adult use of marijuana in Connecticut discussed in the three months ended results of operations above.

Cost of goods sold, net (excluding depreciation and amortization), for the nine months ended September 30, 2021 was $6.4 million, compared to $6.9 million for the nine months ended September 30, 2020, a decrease of $0.5 million, or 7%. Cost of goods sold decreased is primarily due to the decrease in revenues for the period.

Selling and marketing expenses for the nine months ended September 30, 2021 was $0.2 million, compared to $0.3 million for the nine months ended September 30, 2020, a decrease of $0.1 million, or 23%. The decrease is primarily due to smaller purchases in marketing materials.

General and administrative expenses for the nine months ended September 30, 2021 was $2.9 million, compared to $2.0 million for the nine months ended September 30, 2020, an increase of $0.9 million, or 45%. The increase is primarily driven by an increase in legal and professional fees for the 2020 audit and 2021 quarter reviews, insurance cost, payroll, and benefits.

Other income (expense), net, comprised of interest expense, for the nine months ended September 30, 2021 was $(0.15) million, compared to $(0.08) million for the nine months ended September 30, 2020, an increase of $0.07 million, or 86%. The increase is primarily due to an added additional Letter of Credit of $550,000, and the construction loan for $3.3 million which increased related interest and fees.

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Year Ended December 31, 2020 Compared to Year Ended December 31, 2019

 

For the year ended December 31,

 

Change
Increase/(Decrease)

  

2020

 

2019

 

$

 

%

Revenues, net of discounts

 

$

28,375,477

 

 

$

17,773,900

 

 

$

10,601,577

 

 

60

%

Cost of revenues (excludes depreciation and amortization)

 

 

8,874,978

 

 

 

5,166,916

 

 

 

3,708,062

 

 

72

%

Selling and marketing

 

 

333,114

 

 

 

330,627

 

 

 

2,487

 

 

1

%

General and administrative

 

 

2,504,877

 

 

 

2,504,874

 

 

 

3

 

 

0

%

Depreciation and amortization

 

 

798,538

 

 

 

976,702

 

 

 

(178,164

)

 

(18

)%

Other income (expense), net

 

 

(95,542

)

 

 

(109,960

)

 

 

(14,418

)

 

(13

)%

Provision for income taxes

 

 

(1,178,500

)

 

 

(747,527

)

 

 

430,973

 

 

58

%

Net income

 

$

14,589,928

 

 

$

7,937,294

 

 

$

6,652,634

 

 

84

%

Revenues, net of discounts for fiscal 2020 was $28.4 million, compared to $17.8 million for fiscal 2019, an increase of $10.6 million, or 60%. The increase in revenue is a result of an increase in the number of medical card holders in the state of Connecticut which grew from approximately thirty-seven thousand customers in 2019 to approximately fifty thousand in 2020, and an increase in the number of dispensaries supplied by Theraplant which accounted for $1.8 million of the total increase in revenue. The organic growth experienced at dispensaries supplied by Theraplant, resulted in an additional $8.8 million in increased sales from fiscal 2019 to fiscal 2020.

Cost of goods sold, net (excluding depreciation and amortization) for fiscal 2020 was $8.9 million, compared to $5.2 million for fiscal 2019, an increase of $3.7 million, or 72%. The increase is primarily due to the growth in sales and production as well as Theraplant is continuing to increase employee headcount and infrastructure to support future growth.

Selling and marketing expenses remained consistent period over period at $0.3 million for fiscal 2020 and fiscal 2019.

General and administrative expenses remained consistent period over period at $2.5 million for fiscal 2020 and fiscal 2019. Theraplant experienced a reduction in consulting fees of approximately $0.1 million that were offset by an increase in repairs and maintenance of approximately $0.1 million

Depreciation and amortization for fiscal 2020 was $0.8 million, compared to $1.0 million for fiscal 2019, a decrease of $0.2 million, or 18%. This decrease is based on our depreciable base remaining relatively constant period over period.

Other income (expense), net, which consists of interest expenses, net, remained consistent period over period at $(0.1) million for fiscal 2020 and fiscal 2019.

Provision for income taxes in fiscal 2020 was $1.2 million, compared to $0.7 million in fiscal 2019, an increase of $0.4 million, or 58%. This increase is primarily a result of the $6.9 million increase in gross profit for the same periods. Under IRC Section 280E, cannabis companies are only allowed to deduct expenses that are directly related to production of the products. Due to the significant increase in gross profit as a result of the increase in sales and the efficiencies gained in automation of production, income tax expense increased significantly.

Liquidity and Capital Resources

Sources of Liquidity

Since Theraplant’s inception, it has funded its operations and capital spending primarily through cash flows from product sales, as well as third-party debt, and equity contributions, respectively. Theraplant is generating cash from sales and is deploying its capital reserves to acquire and develop assets capable of producing additional revenues and earnings over both the immediate and near term to support its business growth and expansion. Theraplant’s current principal sources of liquidity are cash and cash equivalents provided by operations. Cash and cash equivalents consist primarily of cash deposits with financial institutions. Cash and cash equivalents were $3.7 and $2.3 million as of September 30, 2021 and December 31, 2020, respectively.

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Theraplant’s primary uses of cash are for working capital requirements, capital expenditures, and debt service payments. Additionally, from time to time, Theraplant may use capital for acquisitions and other investing and financing activities. Working capital is used primarily for personnel as well as costs related to the growth, manufacture, and production of products. Theraplant’s capital expenditures consist primarily of improvements in existing facilities, product development, and equipment purchases due to expansion.

As of September 30, 2021, Theraplant has a third-party promissory note payable with a principal balance outstanding of $1.7 million, due in April 2027, of which $0.2 is due in one year and bears interest of 5.5% per annum. Theraplant also has as a third-party commercial term loan with a principal balance outstanding of $0.5 million, due in March 2026, and bears interest of 6.875% per annum. Theraplant has a construction loan that provides for borrowing up to $4.4 million with a balance outstanding of $3.3 million, due February 2032, and bears interest through January 2027 of 6.875% per annum, adjusting to 3% above the Federal Home Loan Bank of Boston “Classic Advance Rate” on February 1, 2027 for the duration of the loan, with a “floor interest rate” of 5.5%. Theraplant plans to fund the current amounts due within one year with cash from operations. Theraplant believes that cash from operations in fiscal 2021 will be sufficient to cover current debt obligations. To the extent additional funds are necessary to meet long-term liquidity needs as Theraplant continues to execute its business strategy, Theraplant anticipates that additional funds will be obtained through the incurrence of indebtedness, additional equity financings or a combination of these potential sources of funds. There can be no assurance that Theraplant will be able to obtain additional funds on acceptable terms, on a timely basis, or at all. The failure to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the results of operations, and financial condition.

The following table presents Theraplant’s cash and outstanding debt as of the dates indicated:

 

September 30, 2021

 

December 31, 2020

Cash and Cash Equivalents

 

$

3,678,125

 

$

2,263,061

Outstanding Debt:

 

 

  

 

 

Notes Payable

 

 

5,518,893

 

 

1,778,725

Total Debt

 

 

5,518,893

 

 

1,778,725

Less: deferred loan finance cost

 

 

155,190

 

 

23,869

Less: current portion of debt

 

 

216,676

 

 

68,674

Total long-term debt

 

$

5,147,027

 

$

1,686,182

Cash Flows

Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

The table below highlights Theraplant’s cash flows for the periods indicated.

 

For the nine months ended
September 30,

  

2021

 

2020

Net Cash Provided By Operating Activities

 

$

9,774,362

 

 

$

12,408,334

 

Net Cash Used In Investing Activities

 

 

(4,798,363

)

 

 

(480,370

)

Net Cash Used In Financing Activities

 

 

(3,560,935

)

 

 

(12,923,702

)

Net Increase / (Decrease) In Cash and Cash Equivalents

 

$

1,415,064

 

 

$

(995,738

)

Cash Flow from Operating Activities

Net cash provided by operating activities was $9.8 million for the nine months ended September 30, 2021, a decrease of $2.6 million, compared to net cash provided by operating activities of $12.4 million during the nine months ended September 30, 2020. This decrease is primarily due to lower net income partially offset by a lower increase in accounts payables and inventories when comparing the nine months ended September 30, 2021 and the nine months ended September 30, 2020.

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Cash Flow from Investing Activities

Net cash used in investing activities was $4.8 million for the nine months ended September 30, 2021, an increase of $4.3 million, compared to net cash used in investing activities of $0.5 million during the nine months ended September 30, 2020. The increase is due to the acquisition of additional fixed assets and for building an additional 30,000 square feet of capacity that is expected to be completed in the fourth quarter of fiscal 2021.

Cash Flow from Financing Activities

Net cash used in financing activities was $3.6 million for the nine months ended September 30, 2021, a decrease of $9.3 million, compared to net cash used in financing activities of $12.9 million during the nine months ended September 30, 2020. The decrease in cash in financing activities is primarily due to $5.8 million less of distributions to members during the nine months ended September 30, 2021 than during the nine months ended September 30, 2020 as well as $3.7 million of proceeds from notes payable during the nine months ended September 30, 2021 compared to none for the nine months ended September 30, 2020.

Year Ended December 31, 2020 Compared to Year Ended December 31, 2019

The table below highlights Theraplant’s cash flows for the periods indicated.

 

For the year ended
December 31,

  

2020

 

2019

Net cash provided by (used in) operating activities

 

$

15,998,524

 

 

$

6,181,753

 

Net cash used in investing activities

 

 

(926,318

)

 

 

(693,519

)

Net cash provided by financing activities

 

 

(19,994,395

)

 

 

(1,540,462

)

Net increase in cash and cash equivalents

 

$

(4,922,189

)

 

$

3,947,772

 

Cash Flow from Operating Activities

Net cash provided by operating activities was $16.0 million for fiscal 2020, an increase of $9.8 million, compared to net cash provided by operating activities of $6.2 million during fiscal 2019. This increase is primarily due to (1) increase in net income from fiscal 2019 to fiscal 2020; and (2) management’s focus on operational improvements all resulting in improved cash flows from operations.

Cash Flow from Investing Activities

Net cash used in investing activities was $0.9 million for fiscal 2020, an increase of $0.2 million, compared to net cash used in investing activities of $0.7 million during fiscal 2019. The increase is due to the cash spent as part of Theraplant’s property and equipment expansion.

Cash Flow from Financing Activities

Net cash used in financing activities was $20.0 million for fiscal 2020, an increase of $18.5 million, compared to net cash used in financing activities of $1.5 million during fiscal 2019. The increase in cash used was primarily related to the $20.0 million of distributions to members during fiscal 2020 compared to the $2.0 million distributions to members in fiscal 2019.

Funding Sources

Liquidity following the Transactions

Following the consummation of the Business Combinations, we anticipate that cash flows from operations, cash on hand, along with the net cash expected to be funded at the Closing of the Business Combinations after considering the PIPE, Greenrose trust account, transaction costs, payment of any convertible promissory notes and consideration paid for each of the target companies, will be sufficient to fund the liquidity requirements after the Closing Date. From time to time, we may establish new local lines of credit or utilize existing local lines of credit. We will manage our cash

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balances by utilizing available cash management strategies, which may include intercompany agreements, opening lines of credit, or other banking relationships. However, our ability to service our indebtedness and to fund our other liquidity requirements will depend on our ability to generate and access cash in the future. This is subject to general economic, financial, contractual, competitive, legislative, regulatory, and other factors, some of which are beyond our control, as well as the factors described in “Risk Factors” included elsewhere in this prospectus.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements or other financing activities with special-purpose entities.

Commitments and Contingencies

Theraplant follows the provisions of U.S. GAAP when recording litigation related contingencies. A liability is recorded when a loss is probable and can be reasonably estimated. On March 14, 2021, Theraplant received a letter from counsel for four members of the Company (i) requesting information regarding the 2018 issuance of warrants to certain members of management and a consultant of Theraplant, and (ii) alleging potential claims against Theraplant, including for breach of fiduciary duty, fraudulent misrepresentation, omissions, and potentially breach of the Theraplant’s operating agreement. Theraplant, through its legal counsel has responded to two separate information requests and no claims have been filed. Theraplant has not concluded that the likelihood of an unfavorable outcome is either “probable” or “remote,” and expresses no opinion as to the likely outcome of such matter. Furthermore, Theraplant is unable to provide an estimate of the amount or range of potential loss if the outcome of pending or overtly threatened litigation, claims or assessments should be unfavorable.

Critical Accounting Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make judgments, estimates, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are reviewed on an ongoing basis. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates, and revisions to accounting estimates are recognized in the period in which the estimate is revised.

Significant judgments, estimates, and assumptions that have the most significant effect on the amounts recognized in the consolidated financial statements of Theraplant are described below.

Estimated Useful Lives and Depreciation of Property and Equipment and Intangible Assets

Depreciation and amortization of property and equipment and intangible assets are dependent upon estimates of useful lives, which are determined through the exercise of judgment. The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that take into account factors such as economic and market conditions and the useful lives of assets.

Inventories

The net realizable value of inventories represents the estimated selling price for inventories in the ordinary course of business, less all estimated costs of completion and costs necessary to make the sale. The determination of net realizable value requires significant judgment, including consideration of factors such as shrinkage, the aging of and future demand for inventory, expected future selling price, what we expect to realize by selling the inventory and the contractual arrangements with customers. Reserves for excess and obsolete inventory are based upon quantities on hand, projected volumes from demand forecasts and net realizable value. The estimates are judgmental in nature and are made at a point in time, using available information, expected business plans and expected market conditions. As a result, the actual amount received on sale could differ from the estimated value of inventory. Periodic reviews are performed on the inventory balance. The impact of changes in inventory reserves is reflected in cost of goods sold.

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Allowance for Uncollectible Accounts

Allowances for doubtful accounts reflect Theraplant’s estimate of amounts in its existing accounts receivable that may not be collected due to customer claims or customer inability or unwillingness to pay. The allowance is determined based on a combination of factors, including Theraplant’s risk assessment regarding the credit worthiness of its customers, historical collection experience and length of time the receivables are past due. Though infrequent, if ever, account balances are charged off against the allowance when Theraplant believes it is probable the receivable will not be recovered. No allowance for doubtful accounts was required as of June 30, 2021 and December 31, 2020.

Provision for Income Taxes

Theraplant is classified as partnership for income tax purposes and an LLC, thus does not pay state and federal income taxes. As such, all the income, loss, deductions, and credits are passed through to, and taken into account by the members of Theraplant.

Theraplant is subject to the limits of IRC Section 280E under which Theraplant is only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E.

The state of Connecticut imposes a corporate flow through tax on partnership earnings, resulting in an accrued tax liability. Theraplant recognizes deferred tax amounts arising from timing differences between federal and state depreciation regulations.

Recently Issued Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04 (ASU), Reference Rate Reform (Topic 848) (“ASC 848”), this standard provides optional guidance for a limited period of time to ease the potential burden in accounting for the effects of reference rate reform on financial reporting. Reference rates are widely used in a broad range of financial instruments and other agreements. In response to concerns about structural risks of interbank offered rates, regulators in several jurisdictions around the world have undertaken efforts generally referred to as reference rate reform, to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. As a result of the reference rate reform initiative, certain widely used reference rates are expected to be discontinued. The ASU can be adopted no later than December 31, 2022 with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance.

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DESCRIPTION OF THE BUSINESS

GREENROSE

General

We were incorporated as a blank check company on August 26, 2019 as a Delaware corporation formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar Business Combinations with one or more businesses or entities. We intend to effectuate our initial business combination, we may not issue additional stock that participates in any manner inBusiness Combinations using cash from the proceeds of the trust account, or that votes as a classIPO and the sale of the private units and private warrants issued in the private placement simultaneously with the commonIPO, our capital stock, solddebt or a combination of cash, stock and debt.

Our Sponsor was established by Greenrose Associates LLC, a New York limited liability company founded by William “Mickey” Harley, Daniel Harley and Brendan Sheehan in this2018 to investigate and assess the US cannabis marketplace and potential acquisition opportunities for investment. The team recognized the opportunity for building a platform with vertically integrated businesses that also possessed differentiated cultivation talent. Mickey’s background in agriculture, namely pecans and blueberries, offered a window into the importance of critical cultivation skills that not only understood how to grow the best quality plants, but also how to maximize yields and manage operating costs to deliver the best price, to cost, to output. Given the many acquisition possibilities that the team identified in the market, the next step was to raise investment capital, with the most direct path being via a SPAC. In August 2019, other elements of the executive team were recruited, and a banker selected and engaged to raise funds.

On February 13, 2020, Greenrose closed its initial public offering of 17,250,000 units, including 2,250,000 units issued upon the exercise in full of the underwriters’ overallotment option on February 14, 2020, with each unit consisting of one share of Common Stock and one redeemable warrant, with each warrant entitling the holder to purchase one share of Common Stock at a price of $11.50 commencing on the later of the one-year anniversary of the initial public offering or 30 days after the consummation of an initial business combination.

The units from the Company’s initial public offering (including the units issued upon the exercise in full of the underwriters’ overCompetition-allotment

In identifying, evaluating option) were sold at an offering price of $10.00 per unit, generating total gross proceeds of $172,500,000. Simultaneously with the consummation of its initial public offering and selectingthe issuance of units upon the full exercise of the underwriters’ over-allotment option, the Company consummated a targetprivate placement of 330,000 units at price of $10.00 per unit and 1,650,000 warrants at a price of $1.00 per warrant, generating gross proceeds of an additional $4,950,000. A total of $172,500,000 was deposited into the Trust Account and the remaining proceeds, net of underwriting discounts and commissions and other costs and expenses, became available to be used as working capital to provide for business, we may encounter intense competition from other entities having a business objective similar to ours. Many of these entities are well establishedlegal and have extensive experience identifying and effectingaccounting due diligence on prospective business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than us and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there may be numerous potential target businesses that we could acquire with the net proceeds of this offering, our ability to compete in acquiring certain sizable target businesses may be limited by our available financial resources.

The following also may not be viewed favorably by certain target businesses:

•        our obligation to seek stockholder approval of a business combination or engage in a tender offer may delay the completion of a transaction;

•        our obligation to convert or repurchase shares of common stock held by our public stockholders may reduce the resources available to us for a business combination; and

•        our outstanding warrants, and the potential future dilution they represent.

Any of these factors may place us at a competitive disadvantage in successfully negotiating a business combination. Our management believes, however, that our status as a public entity and potential access to the United States public equity markets may give us a competitive advantage over privately held entities having a similar business objective as ours in acquiring a target business with significant growth potential on favorable terms.

If we succeed in effecting a business combination, there will be, in all likelihood, intense competition from competitors of the target business. We cannot assure you that, subsequent to a business combination, we will have the resources or ability to compete effectively.

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Facilities

We currently maintain our principal executive offices at 1000 Woodbury Road, Suite #212, Woodbury, NY 11797. The cost for this space is included in the $10,000 per-month fee our sponsor will charge us forcontinuing general and administrative services commencingexpenses.

Following the IPO, the Greenrose team immersed itself in the US market, focusing both on targeted opportunities in the limited medical marijuana licensed states as well as the more mature medical and recreational markets west of the Mississippi. The team spoke with 100’s of operators across the value chain, some with a single market focus, and others with multi-state operations.

Upon consummation of the IPO, the Company’s common stock began listing for trading on the NASDAQ Capital Market® under the symbol “GNRS”. On June 18, 2021, the OTC Markets Group, Inc. approved the Company’s application to list its common stock for trading on the OTCQX over-the-counter market. Trading of the Company’s Common Stock on the OTCQX began on at the open of business on June 22, 2021. The Company’s Common Stock continue to be traded under the symbol “GNRS”. Upon effectiveness of the listing of the Company’s Common Stock for trading on the OTCQX, the Company’s common stock was no longer be quoted on the NASDAQ Capital Market®.

Strategy and the Greenrose Operations Footprint

As of the date of this prospectus pursuantProspectus, Greenrose has completed the Theraplant Merger and has signed a definitive agreement to complete the True Harvest Acquisition. Through these companies, Greenrose expects to be engaged in, or hold a letter agreement between us and our sponsor. We believe, based on rents and fees for similarlicense to engage in, or have management or consulting services agreements in place with license holders to assist in the New York metropolitan areamanufacture and processing of cannabis in the recreation adult-use and medical cannabis marketplace in Connecticut and Arizona. In addition, Theraplant expects to acquire a dispensary in Connecticut to begin vertical integration in that market.

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Greenrose is focused on providing access to the fee charged by our sponsor isquality cannabis and cannabinoid-based products at least as favorable as we could have obtained from an unaffiliated person. We consider our current office space, combined with the other office space otherwise availablecompetitive pricing through state-of-the-art customer engagement channels, in store, online and at home. The Greenrose team believes that a “cultivation led” vertically integrated approach will bring enhanced operating performance to our executive officers, adequateshareholders while also bringing the best value to consumers. Our initial operational strategy revolves around five primary areas of focus: (1) cultivation & genetics; (2) retail & distribution; (3) manufacturing & processing; (4) wholesale; and (5) proprietary data and insights. While we focus on these five areas, we have determined that we have just one reportable business segment: the production and sale of cannabis products.

Greenrose has developed an operating model that will govern its businesses with oversight of two operating regions with a team of functional experts at the corporate level that support local operators in execution of their vertically integrated businesses. This will include cultivation expertise to leverage best practices in phenotyping and strain development. The focus will be on indoor, growth methodology and technology deployment, with state-of-the-art control and monitoring systems. Additionally, Greenrose will continue to elevate retail knowledge and customer experience to reinforce brand and product adoption.

Cultivation & Genetics:

Consistently selecting & growing high-quality cannabis is one of the most important aspects of our business. The business needs to start with high quality, high yielding inputs to drive the best end results. In general, cannabis cultivation takes place in three settings: indoor, outdoor and in greenhouses. While it is cost effective to grow cannabis outdoors, it is also hard to control pest infestations without the use of significant amounts of pesticides, and it is subject to other risks such as severe weather, diseases and mold. As a result, cannabis grown outdoors is significantly lower in quality than cannabis grown indoors or in greenhouses. Our focus is growing the highest quality medicinal and adult-use cannabis. We therefore currently grow all of our cannabis in indoor facilities, which allows us to grow under ideal climate controls and manage key variables to deliver optimal yielding plants. New strain development and phenotyping operations are in place across our platform, enabling Greenrose companies to identify the differentiated offerings to drive downstream production and consumer offerings. Our cultivation teams will leverage retail and market data to identify future trends that need to be supported back up the value chain. We will invest regularly to maintain, and where possible, to expand our high performing facilities, leveraging growth techniques and technology across our platform.

As of September 30, 2021, Greenrose has 142,000 square feet of canopy for ourcannabis cultivation, with current operations.expansion projects underway to add an additional 104,000 sf of canopy for cannabis cultivation.

Employees

We currently have 5five executive officers. These individualsMembers of our management team are not obligated to devote any specific number of hours to our matters, andbut they intend to devote only as much of their time as they deem necessary to our affairs. The amount of time theyGreenrose anticipates that additional titles, responsibilities, and compensation arrangements will devote in any time period will vary based on whether a target business has been selected for the business combination and the stage of the business combination process the company is in. Accordingly, once a suitable target business to acquire has been located, management will spend more time investigating such target business and negotiating and processing the business combination (and consequently spend more time on our affairs) than had been spent prior to locating a suitable target business. We presently expect our executive officers to devote such amount of time as they reasonably believe is necessary to our business. We do not intend to have any full-time employees prior to the consummation of a business combination.

Periodic Reporting and Audited Financial Statements

We have registered our units, common stock and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual report will contain financial statements audited and reported on by our independent registered public accountants.

We will provide stockholders with audited financial statements of the prospective target business as part of any proxy solicitation materials or tender offer documents sent to stockholders to assist them in assessing the target business. These financial statements will need to be prepared in accordance with or reconciled to United States generally accepted accounting principles or international financial reporting standards. We cannot assure you that any particular target business identified by us as a potential acquisition candidate will have the necessary financial statements. To the extent that this requirement cannot be met, we may not be able to acquire the proposed target business.

We may be required to have our internal control procedures audited for the fiscal year ending December31, 2020 as requireddetermined by the Sarbanes-Oxley Act. A target company may not be in complianceboard with input from the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.Compensation Committee.

Legal Proceedings

There is no material litigation, arbitration or governmental proceeding currently pending or to the Company’s knowledge, threatened against usthe Company or any members of our management team in their capacity as such,such.

THERAPLANT

General

Theraplant is a well-established seed-to-wholesale cultivator, extractor, and processor that produces high quality cannabis products. Located in the limited license state of Connecticut, Theraplant has captured a significant portion of Connecticut’s medical cannabis market and is poised to capitalize on the projected $250 million adult-use cannabis market in year 1 projected to increase to $725 million in year 4. The adult use legislation was recently signed into law. Led by cannabis industry veterans, Theraplant maintains profitability while complying with Connecticut’s rigorous medical program regulations.

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Theraplant, the largest independently owned and operated medical marijuana producer in Connecticut, has been cultivating, processing and packaging medical cannabis and derivative products since 2014. Theraplant was recognized by the Connecticut Department of Consumer Protection as the highest scoring license applicant, and in February 2014, was awarded the first of only four cultivation licenses in the state.

In September 2014, Theraplant was the first cultivator/producer to supply state-licensed dispensaries with medical cannabis products and the sole source of supply in Connecticut for the first five months after medical legalization.

Theraplant is run by a team of business and cannabis experts. Dan Emmans has designed and/or built over 1 million square feet of cultivation, processing and retail facilities. He has 11+ years’ experience in the legal cannabis market around the country. Jennifer Mandzuk has implemented many of the company’s growth generating platforms. Collectively the team has demonstrated significant annual cultivation yield increases, from 350 pounds in 2015, to 1,000 pounds in 2016, to 4,000 pounds in 2017, to 6,000 pounds in 2018, to 14,000 pounds in 2019, and 12,000 pounds in 2020, due to a fire in the first quarter of 2020. These gains came from careful optimization of cannabis strain production, facility expansions, enhanced cultivation technologies, efficient manufacturing operations and business positioning.

Connecticut Cannabis Market

Connecticut has fostered a successful medical marijuana program that now includes over 54,000 registered patients (estimated increase of 700 new patients per month) and over 1,200 registered physicians with, according to a July 22, 2021 article in Forbes Magazine, sales of $143 million in 2020. There are currently 39 qualifying conditions for adults and 11 for patients under 18. The state currently has 18 licensed medical marijuana dispensaries and four licensed medical cultivation and processing facilities (three MSO’s: Curaleaf (60,000 square feet) in Simsbury, CTPharma/Tuatara (200,000 square feet shell being built out in stages) in Rocky Hill, Advanced Grow Labs/Green Thumb Industries (50,000 square feet) in West Haven, and Theraplant (98,000 square feet) in Watertown).

On June 22, 2021, Governor Ned Lamont signed Connecticut Senate Bill 1201, An Act Concerning Responsible And Equitable Regulation Of Adult-Use Cannabis, thereby legalizing adult-use recreational cannabis use in Connecticut. Anticipated revenues from combined medical and recreational adult sales have been projected to top $285 million in 2022.

Cultivation & Genetics

Theraplant has been a leader in Connecticut cultivation since its initial opening. Its operations span 68,000 square feet with a current production capacity of 20,000 pounds, which may be less based upon the number and type of strains in production. Situated on 10 acres, there is ample opportunity for expansion to 500,000 square feet to meet future demand. Theraplant is nearing completion of its fourth cultivation expansion to provide an additional 30,000 square feet, bringing the currently facility to 98,000 square feet. The additional square footage increases Theraplant’s total capacity to nearly 40,000 lbs. per year. Theraplant currently maintains a genetics library of over 300 in-house variants, with 30 strains in regular production and 15 strains in seasonal rotation. The company employs an experienced R&D team, where Theraplant’s breeding program is constantly developing new strains to meet evolving customer tastes and preferences, and to improve production efficiencies. New equipment is tested and built to support research and development initiatives. The team has demonstrated key competencies in marrying strains with high yield, high THC, and short growth cycles, and optimizing strain production to ensure high-yield, resilient genetics.

Manufacturing & Processing

Cutting-edge processing operations have propelled Theraplant to meet all USP111/Pharmacopoeia quality standards and passing all finished product tests since inception. Rebranding in 2019 and 2020 demonstrates Theraplant’s commitment to providing elevated customer experiences and evolving to meet customers’ shifting demands. Such initiatives have helped increase brand awareness in Connecticut. In 2020, Theraplant processed over 19,000 pounds of cannabis flower with a mix of 60% flower and 40% extracts, which had included flower produced from the prior year. At any given time, the production operations have over 100 SKUs on the Theraplant production menu, with about one

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week testing turnaround for flower, and about two weeks turnaround for extracts. Theraplant’s size and streamlined operations have historically allowed, and we expect it to continue to, to remain below competitor’s pricing, while still maintaining profitability:

•        Wholesale flower price: $1,800 to $2,200 per pound; and

•        Wholesale concentrate price: $3,500 to $4,500 per pound of flower (product cost per pound is under $500).

Theraplant’s state-of-the-art facilities are housed in Watertown, Connecticut. Theraplant employs quality equipment sourced from known suppliers in the cannabis equipment industry. Carbon dioxide or ethanol extraction is followed by a series of proprietary refining processes yielding oils & concentrates ranging from soft-and-buttery, to sap-likeand brittle. Highly refined concentrates test between 75% to 90% THC. There are dedicated functional spaces for each processing and postprocessing stage: extraction, filtration/distillation/formulation, in-process storage, packaging, and finished goods vaults. Reclamation and distillation processes are utilized to minimize waste and maximize return.

Our quality control process helps to make sure that our products meet applicable standards. We believe we have a best-in-class compliance department with nine full-time employees dedicated to ensuring regulatory and quality compliance. The quality control process is compliant with state and local regulations. Quality and safety of products are tested at third-party labs in Connecticut, which have found no deficiencies since Theraplant’s inception. Our products consistently exceed state testing and certification requirements. As part of Theraplant’s quality control process, it is able to sterilize products safely, without altering the membersplants or their chemical profiles.

We believe Theraplant operates a safe and secure facility. Physical operations are secured and monitored continuously by third party licensed security guards and state-of-the-art video monitoring systems. Only authorized personnel with appropriate clearances have access to Theraplant’s facilities using card and bio-metric controls. Theraplant engages third party legal, environmental health and safety advisors to assist in maintaining appropriate procedural, educational and training programs for its employees.

Wholesale & Distribution

Theraplant sells and delivers products directly to multiple dispensaries throughout all regions across Connecticut. We believe its operational efficiencies have yielded wholesale price competitiveness and profitability. Supported by upstream efficiencies in the supply chain including manufacturing optimization and automation, Theraplant helps dispensary customers and client’s potential profitability by providing what we believe to be premium, high-quality products at a lower price point than competitors. We believe attractive price points retain customers and grow shelf space. Theraplant’s purpose-built infrastructure ensures Theraplant manages production processes from start to finish, maintaining and tracking inventory from seed to distribution using its own proprietary system.

Theraplant has established relationships with all third-party Connecticut dispensaries, enabling dispensaries to place orders online 24/7. Theraplant’s focus on inventory management and distribution are syncopated: Theraplant’s proprietary inventory management system provides real-time menu updates and advanced analytics capabilities that assist the provision of data-driven data to better predict demand.

Theraplant owns four delivery vehicles, which allow substantial control over distribution, timing and compliance with state regulations with an average of two to three deliveries per dispensary per week, inventory is often 100% sold through at the dispensaries before next delivery, with average order size steadily growing. Delivery vehicles are driven by what we believe to be reputable, licensed, third-party security providers.

Cash management practices are approved and audited by Theraplant’s current banking institutions.

Operational Systems

Theraplant has well established proprietary operating systems. The company has developed systems that enable it to provide high quality products and services at a lower cost. In its cultivation facilities, these systems include irrigation, rolling tables, specific nutrient schedules, efficient manicuring, and trellising for plant support. All of these systems include efficient facility design, seed to sale tracking software, and RFID tagging. Detailed systems

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for receiving and sending products through our inventory management operating systems and specific documentation regarding policies, procedures, consumer education, employee education, compliance regulations, and security, is provided by extensive training and manuals onsite.

Intellectual Property (IP)

Theraplant has intellectual property that gives it an advantage over our competitors. Intellectual property includes production facility design, proprietarily designed HVAC systems, environmental conditioning including but not limited to nutrient/ feeding schedules, extensive knowledge of strains for breeding, and specific manicuring techniques to increase yield and potency.

Human Capital

Theraplant is a leader of an industry in its infancy. Theraplant prides itself on providing quality and professionalism at all levels of its business while producing the highest quality products at competitive prices. Theraplant’s human capital includes highly trained employees with extensive experience in this industry and a wide knowledge of our management team have not been subjectproducts and strains.

Theraplant has over 100 personnel licensed to any such proceedingwork in the 12months precedingfacility, comprised of employees, security, and regular contractors. There are 85 full time employees, with an average tenure of 1.5 years, and an average supervisor tenure of 5 years. The workforce is 44% female and 25% minority. A detailed employee handbook and training program ensures smooth onboarding for all new hires. All full-time employees are eligible for health benefits after a 90-day waiting period. These benefits include medical, vision, and accidental coverage.

Theraplant is dedicated to the dateprinciples of this prospectus.

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Comparison to Offeringsequal employment opportunity in any term, condition, or privilege of Blank Check Companies Subject to Rule 419

The following table comparesemployment. They hire, promote, and contrastsmake assignments on the termsbasis of our offeringemployee qualifications and we do not discriminate against applicants or employees on the termsbasis of an offering of blank check companies under Rule 419 promulgatedage 40 or over, race, sex, color, national origin, sexual orientation, disability, genetic information, veteran status, or any other status protected by the SEC assumingstate of Connecticut, and US Federal Law.

Competition

Theraplant is one of only four legal cannabis cultivators in Connecticut. Although we have a strong operating history in the state’s medical cannabis market, and we believe we are well positioned to compete effectively in Connecticut’s newly established recreational cannabis market, we will face significant competition from Theraplant’s competitors in Connecticut. We cannot assure you that, subsequent to the gross proceeds, underwriting discounts and underwriting expenses for the Rule 419 offering are the same as this offering and that the underwriters will not exercise their over-allotment option. None of the terms of a Rule 419 offering will apply to this offering becauseBusiness Combinations, we will have net tangible assetsthe resources or ability to compete effectively in excessConnecticut’s cannabis market.

Legal Proceedings

There is no material litigation, arbitration or governmental proceeding currently pending or to Greenrose’s knowledge, threatened against Theraplant or any members of $5,000,000its management team in their capacity as such.

TRUE HARVEST

General

True Harvest is a cultivation services business operating under license to Oasis, an Arizona medical cannabis operator. In this role, True Harvest grows, processes and packages cannabis under the Shango Fine Cannabis brand and is sold through a wholesale network to 60% of the owner groups in Arizona’s medical and recreational marijuana marketplace.

True Harvest was initially established in May 2015, completing construction on its initial grow facility in October 2015. Over the past six years, True Harvest has operated under license to several Arizona dispensary brands, having moved most recently to medical license holder, Oasis, in late 2019.

True Harvest operates within 74,000 square feet of the former Revlon manufacturing facility at 4301 West Buckeye Road, Phoenix, Arizona. This facility was built in the late 1960s with more than 800,000 square feet footprint. True Harvest is one of the largest indoor grow operators in the state. The space occupied by True Harvest includes

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industrial sized water treatment, power and cooling infrastructure with four flower rooms, three vegetation rooms, one mother room and one clone room, with the remaining space under construction to double the facility’s cultivation capacity. Operating with one of lowest energy prices at $0.047/kw hour (SRPe63 plan) allows True Harvest to be able to deliver one of the market’s optimal costs per pound. Cooling capacity allows for substantial growth and reduction of risk during the summer season. True Harvest has the potential to substantially expand its cultivation footprint within the existing 4301 West Buckeye Road footprint.

The business operates with 50 strains in its library and with more than 20 in current rotation. The operations are managed through an agreement with RMC AZ, LLC, which is founded and owned by the principals of Shango as manager of their cultivation, which has deep cannabis cultivation operations experience. That contract was initiated concurrently with the leasing of the Oasis offsite cultivation license in late 2019. The relationship brings market leading expertise to the True Harvest team and its customer base as well as industry recognized branding. Shango manages all aspects of operations at the True Harvest site, from genetic selection to planting, harvesting, production, packaging and distribution.

True Harvest’s largest customers are public multi-state cannabis operators (“MSO’s): Curaleaf, Cresco Labs and Harvest Health. Being one of the first wholesale operations in Arizona has allowed True Harvest to develop deep seated relationships with dispensaries throughout the state. Same day delivery allows True Harvest to capitalize on market opportunities across the state. True Harvest utilizes bulk and jar-based packaging to meet dispensary requirements and to better communicate the Shango brand.

True Harvest managed through a period of regulatory scrutiny, with a positive inspection report in 2020, demonstrating the enhancements and improvements that the operation has made to meet state and local regulatory requirements.

Current Market

The State of Arizona legalized medical marijuana in 2010, and Arizona has since issued 130 vertically integrated licenses across the state; each license includes one dispensary, one onsite grow and one off-site grow with no cap on production. The market is populated with a number of public and private MSOs as well as local operators, including Copperstate Farms, the largest in the state with 44 acres of greenhouse grow. Adult recreational cannabis was approved in the November 2020 elections and was implemented as of January 2021. This created an additional 130 licenses being made available to current medical license holders with certain financial considerations. The market has expanded significantly since the legalization of medical marijuana, with 2021 revenues state-wide anticipated at $1.25 billion – $1.5 billion, based on a registered medical patient count of 299,054 (Q1 2021 AZDH) representing approximately 4.03% of the state’s adult population.

Operational Systems

True Harvest owners understood the market positioning of their product and the ongoing importance of producing high quality indoor cannabis, and the importance of their relationship with RMC AZ, LLC, which is founded and owned by the principals of Shango as manager of their cultivation. True Harvest utilizes the Shango proprietary operating procedures, process and systems to manage the employees and overall facility, through its affiliation with RMC AZ, LLC. Shango has developed systems that enable True Harvest to provide high quality products and services at a lower cost. In the cultivation facilities these systems include programmed irrigation, HVAC, rolling tables, floor drains, specific nutrient schedules, efficient manicuring, and trellising for plant support, and further rely on efficient facility design and seed to sale tracking software. True Harvest also employs systems for receiving and sending products through its inventory management operating systems. Specific documentation regarding policies, procedures, consumer education, employee education, compliance regulations, and security is provided by extensive training and manuals onsite.

Intellectual Property

True Harvest has intellectual property that gives it an advantage over its competitors. True Harvest’s intellectual property includes production facility design, and environmental conditioning including but not limited to nutrient/feeding schedules, extensive knowledge of strains for breeding, and specific manicuring techniques to increase yield and potency. The cultivation team includes highly trained employees with extensive experience in the

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cannabis industry and a wide knowledge of True Harvest’s products and strains. The True Harvest team has gained the skills necessary to enable it to create a professional environment based on providing a legitimate foundation for the cannabis industry.

Human Capital

True Harvest has 69 personnel licensed to work in the facility. True Harvest is dedicated to the principles of equal employment opportunity in any term, condition, or privilege of employment. True Harvest hires, promotes, and makes assignments on the basis of employee qualifications and does not discriminate against applicants or employees on the basis of age 40 or over, race, sex, color, national origin, sexual orientation, disability, genetic information, veteran status, or any other status protected by the State of Arizona and U.S. federal law.

Legal Proceedings

From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. As of June 30, 2020, there are no proceedings in which any of the Company’s directors, officers or affiliates is an adverse party or has a material interest adverse to the Company’s interest. In addition, as of June 30, 2020, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s operations, except for the following:

Copper State Herbal Center, Inc. vs. True Harvest, LLC

The Company maintained a business relationship with Copper State Herbal Center, Inc. (“Copper State”) under an amended consulting services agreement entered into on April 1, 2017. Copper State and the Company have competing claims for breach of the amended consulting services agreement. In addition, the Company sued Copper State for breach of fiduciary duties arising out of Copper State’s failure, as an entity licensed by Arizona Department of Health Services, to protect the medical cannabis products and flowering plants in the Facility leading directly to the Company’s loss of several million dollars in revenue. The Company believes its damages outstrip Copper State’s alleged damages by at least 5:1. Currently, the parties are going through a discovery phase, which is nearing an end. A trial date has not been set. Any gain or loss in connection with this litigation is currently not estimable.

In 2019, in connection with the litigation, the Company suspended its payment on the promissory notes dated May 16, 2018 issued to Copper State. Certain member of the Company provided guarantee and all the membership interests of the guarantor member at the time of the issuance was provided as collateral. The promissory note bears no interest. However, upon default, the successful consummationCompany should pay penalty interest at 12% per year, compounded annually, and the lender may demand the repayment of the entire remaining notes payable. The

Non Profit Patient Center, Inc. vs. True Harvest, LLC

The Company maintained a business relationship with Non-Profit Patient Center, Inc. (“NPPC”) since the Company entered into a cultivation service agreement with NPPC on November 5, 2018. In 2019, the Company sued NPPC for breach of contract, breach of the covenant of good faith and fair dealing, fraudulent inducement, negligent misrepresentation, and tortious interference with a business expectancy. These causes of action arose out of NPPC’s failure to abide by the cultivation services agreement with the Company.

On January 9, 2020, a trial court ordered settlement agreement and dismissed all matters. The Company deposited $200,000 in an escrow account for the settlement, included in Restricted Cash in the condensed balance sheets as of December 31, 2020. In addition, the Company had a payable of $200,000 for the settlement, included in Accounts Payable in the condensed balance sheets as of December 31, 2020.

On February 10, 2020, NPPC appealed the settlement order. The Court of Appeals dismissed the appeal because the settlement order was not a final order from which an appeal lies. On February 5, 2021, the Company and its investors have filed a motion to dismiss this offeringaction in accordance with the settlement agreement. NPPC suggested that NPPC may appeal an order dismissing the case.

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On or about April 16, 2021, the lawsuit was resolved by the entry of a consensual order dismissing the case, with prejudice. The dismissal fulfilled the final terms of the settlement that was reached between the litigants. Since the dismissal was with prejudice, all litigation between the Company and will fileNPPC arising out of their prior contractual relationship should be concluded. Based on this, the Company made the payment of $200,000 and NPPC accepted the settlement payment in April 2021, which reduced the Company’s restricted cash and accounts payable.

Rocinante Construction, LLC and PinderNation Electric, LLC vs. True Harvest, LLC

In 2020, True Harvest sued Rocinante Construction, LLC (“Rocinante”) and PinderNation Electric, LLC (“PinderNation”) for construction defects in relation to the electrical and lighting works at certain sections of the Facility, which resulted in losing the use of approximately 25% of the planned lighting in the sections. Rocinante has asserted a Current Report on Form 8-K, including an audited balance sheet demonstratingcounterclaim against the Company for construction fees related to certain phase of construction work. Currently, the parties are going through a discovery phase, but the parties are committed to participate in alternative dispute resolution in 2021. A trial date has not been set. Any gain or loss in connection with this fact.litigation is currently not estimable.

Terms of the Offering

Terms Under a Rule 419 Offering

Escrow of offering proceeds

$150,000,000 of the net proceeds of this offering including $4,500,000 from the sale of the private placement warrants will be deposited into a U.S.-based trust account at with Continental Stock Transfer & Trust Company acting as trustee.

Approximately $132,300,000 of the offering proceeds, representing the gross proceeds of this offering less allowable underwriting commissions, expenses and company deductions under Rule 419, would be required to be deposited into either an escrow account with an insured depositary institution or in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests in the account.

Investment of net proceeds

The $150,000,000 net offering proceeds including the $4,500,000 from the sale of the private placement warrants held in trust will only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations.

Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States.

Receipt of interest on escrowed funds

Interest on proceeds from the trust account to be paid to shareholders is reduced by any taxes paid or payable.

Interest on funds in escrow account would be held for the sole benefit of investors, unless and only after the funds held in escrow were released to us in connection with our completion of a business combination.

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Terms of the Offering

Terms Under a Rule 419 Offering

Limitation on fair value or net assets of target business

Our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the trust account (excluding taxes payable on the income earned on the trust account) at the time of the agreement to enter into the initial business combination. Notwithstanding the foregoing, if we are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% fair market value test.

The fair value or net assets of a target business must represent at least 80% of the maximum offering proceeds.

Trading of securities issued

The units will begin trading on or promptly after the date of this prospectus. The shares of common stock and warrants constituting the units will begin separate trading on the 90th day following the date of this prospectus Imperial Capital informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. We will file the Current Report on Form 8-K promptly after the closing of this offering. If the underwriter’s over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriter’s over-allotment option.

No trading of the units or the underlying shares of common stock and warrants would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account.

Exercise of the warrants

The warrants cannot be exercised until the later of 30 days after the completion of our initial business combination or 12months from the closing of this offering.

The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the escrow or trust account.

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Terms of the Offering

Terms Under a Rule 419 Offering

Election to remain an investor

We will either (1) give our stockholders the opportunity to vote on the business combination or (2) provide our public stockholders with the opportunity to sell their shares of our common stock to us in a tender offer for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, less taxes. If we hold a meeting to approve a proposed business combination, we will send each stockholder a proxy statement containing information required by the SEC. Alternatively, if we do not hold a meeting and instead conduct a tender offer, we will conduct such tender offer in accordance with the tender offer rules of the SEC and file tender offer documents with the SEC which will contain substantially the same information about the business combination as we would have included in a proxy statement.

A prospectus containing information required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company, in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of the post-effective amendment, to decide whether he or she elects to remain a stockholder of the company or require the return of his or her investment. If the company has not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account would automatically be returned to the stockholder. Unless a sufficient number of the investors elect to remain investors, all of the deposited funds in the escrow account must be returned to investors and none of the securities will be issued.

Business combination deadline

If we are unable to complete an initial business combination within 18months from the closing of this offering (subject to our right to extend the period of time to consummate an initial business combination for up to an additional 3months as described in more detail in this prospectus), we will (1) cease all operations except for the purpose of winding up, (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less taxes payable on interest), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any) and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations Delaware law to provide for claims of creditors and the requirements of other applicable law.

If an acquisition has not been completed within 18months after the effective date of the company’s registration statement, funds held in the trust or escrow account are returned to investors.

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Terms of the Offering

Terms Under a Rule 419 Offering

Interest earned on the funds in the trust account

There can be released to us, from time to time, any interest earned on the funds in the trust account that we may need to pay our tax obligations. The remaining interest earned on the funds in the trust account will not be released until the earlier of the completion of a business combination and our liquidation upon failure to effect a business combination within the allotted time.

All interest earned on the funds in the trust account will be held in trust for the benefit of public stockholders until the earlier of the completion of a business combination and our liquidation upon failure to effect a business combination within the allotted time.

Release of funds

Except for any interest earned on the funds in the trust account that we may need to pay our tax obligations, the proceeds held in the trust account will not be released to us until the earlier of the completion of a business combination and our liquidation upon failure to effect a business combination within the allotted time.

The proceeds held in the escrow account would not be released to the company until the earlier of the completion of a business combination or the failure to effect a business combination within the allotted time.

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MANAGEMENT

Directors and Executive Officers

Our current directors and executive officers are as follows:

Name

 

Age

 

Position

William Harley III

 

5657

 

Chief Executive Officer, Director

Paul Wimer

 

5556

 

President and Chief OperatingBusiness Officer

Jeffrey StegnerScott Cohen

 

6343

 

Chief Financial Officer

Daniel Harley

 

5556

 

Executive Vice President, Business Development, Director

Nicole Conboy

56

Chief Administrative Officer

Brendan Sheehan

 

4950

 

Executive Vice President, Corporate Strategy and Investor Relations, Director

Steven Cummings

 

5657

 

Director

John Falcon

 

7172

 

Chairman

Thomas Megale

 

6061

 

Director

John Torrance, III

 

4445

 

Director

William (Mickey)(“Mickey”) Harley IIIhas served as our Chief Executive Officer and Director since our inception. Mr.HarleyMr. Harley has over 30 years of experience in agriculture, real estate and finance. Mr.HarleyMr. Harley currently serves as a managing member of our sponsor. From 2012 through 2018 Mr.HarleyMr. Harley served as President of Bhavanna Berries LLC, a vertically integrated branded organic blueberry business located on the North Fork of Long Island. From 2010 to 2012, Mr.HarleyMr. Harley was the Chief Executive Officer of National Pecan Company, which became the largest, vertically integrated pecan company in the world, and was later acquired by Diamond Foods, Inc. in 2017. Since 2011, Mr.HarleyMr. Harley has been the Managing Member and majority owner of The Arsenal Group, which is involved in the acquisition, remediation and redevelopment of a “brownfield” industrial real estate project. In 2012, HRK Holdings, LLC and HRK Industries, LLC, entities partially owned by The Arsenal Group, both filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Middle District of Florida and emerged from bankruptcy protection in 2017. Prior to these endeavors Mr.HarleyMr. Harley spent nearly twenty years in asset management. Mr.HarleyMr. Harley holds a Master’s Degree in Public and Private Management from Yale University’s School of Management and received a BS degree in Chemical Engineering and a BA in Economics from Yale University.

We believe Mr.HarleyMr. Harley is well-qualified to serve as a member of the board due to his agriculture and business experience, as well as his contacts and relationships.

Paul Wimer has served as our President and Chief OperatingBusiness Officer since our inception. Since 2017 Mr.WimerMr. Wimer has served as the Chief Experience & Strategy Officer of Tivity Health, Inc., a publicly traded health and wellness company, where he is responsible for the company’s innovation, product management, digital marketing, business development, corporate development and call center operations. From 2010 through 2017 he served as a Senior Principal of Clareo Inc., a management consulting firm where he was responsible for business development, client management and project delivery. From 2010 to present he serves as the founder of Aspen Lane LLC, a strategic grow advisory firm. Mr.WimerMr. Wimer holds a BS in Chemical Engineering from Yale University and a Master of Business Administration from Harvard University.

Jeffrey StegnerScott Cohen, has served as our Chief Financial Officer since December 2021 and had previously served as our inception. Mr.StegnerChief Accounting Officer since 2020, and he has over 30previously worked in both private accounting and accounting consulting for public companies. Prior to Greenrose, Mr. Cohen spent eleven years of experienceat PwC LLP focusing on client transactions across sectors including: consumer products, healthcare, telecommunications, and aerospace and defense. Mr. Cohen is a Certified Public Accountant, licensed in the finance industry. From July 1988 through August 2019, Mr.Stegner worked as a banker at Citigroup Inc., most recently as a DirectorNew York, and Senior Credit Officer, where he was tasked with oversight of commercial loans and determining their risks. From January 1986 through July 1988, Mr.Stegner was a Banker, Account Executive for the Bank of Nova Scotia and between June 1978 and January 1986 he worked as a licensed engineer. Mr.Stegner holds a Master of Business Administration in Banking, Finance and Investments from Hofstra University and a BS in Civil/Structural Engineeringfinance from New York University.University’s Stern School of Business and a Bachelors of Arts in economics from the University of Pennsylvania. Mr. Cohen does not have any family relationships with any current or prospective director or executive officer of the Company.

Daniel Harley has served as our Executive Vice President, Business Development and a Director since our inception. Mr.HarleyMr. Harley has over 25 years of investment experience, having invested in private and public companies both domestically and internationally. He currently serves as a managing member of our sponsor. From 2016 through 2018 he served as a Portfolio Manager at Narmo Capital Management, a Saudi family office based out of Bahrain, where he was responsible for the concept, formation and launch of a global event driven fund. From 2010 through 2016 he was the Founder, Principal and Portfolio Manager of Unqua Capital Management (and its predecessor Bannon

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Alternative Strategies). Mr.HarleyMr. Harley began his career as an associate investment banker at Ryan Beck & Associates from 1991 through 1993 where he participated in a full range of investment banking and corporate services. From 1993 through

65

1998 he worked at Allen & Company Inc.Incorporated as an OTC Market Maker trading in post-bankruptcy equities and warrants, and then managed the company’s special situations fund. In 1999 he joined his brother, Mickey Harley, our Chief Executive Officer to form HBV Alternative Strategies and its successor companies, where he helped grow assets from $5million$5 million to a peak of over $1.3billion. Mr.Harley$1.3 billion. Mr. Harley received a Master of Business Administration in Finance from St. Joseph’s University and a BS in Biology from the University of Delaware.

We believe Mr.HarleyMr. Harley is well-qualified to serve as a member of the board due to his business experience, as well as his contacts and relationships.

Nicole Conboy has served as our Chief Administrative Officer since December 2020. Ms. Conboy has over 30 years of experience within the field of Human Resources with expertise in the areas of employee relations, organizational culture and change, performance management, compensation, legal compliance, training, succession planning, talent acquisition, and benefits. From 2014 through 2020 Ms. Conboy served as a Business Manager/Director of Human Resources for HRK Holdings, LLC. Prior to HRK, Ms. Conboy held the title of Director of Human Resources for Bannon Hospitability from 2009-2013. Ms. Conboy began her career at Saks Fifth Avenue as a Benefits Associate then held various human resource management positions with firms such as Publishers Clearing House, Precision Pharma Services, Partminer, and Career Moves, an executive recruitment firm servicing the financial services industry.

Brendan Sheehan has served as our Executive Vice President, Corporate Strategy and Investor Relations until November 2021 and has served a Director since our inception. Mr.SheehanMr. Sheehan has over 25 years of experience in business development, sales and operations in the finance, technology and healthcare industries. He currently serves as a managing member of our sponsor. Mr.SheehanMr. Sheehan has an extensive network of family offices and high net-worth individuals with whom he has raised funds for the cannabis industry. Since 2015 he has served as the founder of Greenrose Associates, an executive recruiter for hedge funds and fintech firms as well as for companies in the cannabis industry. Between 2010 and 2014 he served as a bond broker at Tullet Prebon (now part of TP ICAP plc) and prior to that served in similar positions with leading firms such as Tradition Securities and Futures and GFI Group. Mr.SheehanMr. Sheehan began his finance career as a hedge fund analyst at Mellon HBV, specializing in distressed asset evaluations. Mr.SheehanMr. Sheehan received a Master of Business Administration from New York University and a BA from Yale University.

We believe Mr.SheehanMr. Sheehan is well-qualified to serve as a member of the board due to his business experience, as well as his contacts and relationships.

Steven Cummingshas served as a member of our Board of Directors since October 2019. Since 2017 Mr.CummingsMr. Cummings has served as the Vice President of Business Development Munitions and Government of Day & Zimmermann, a privately held company in the fields of construction, engineering, staffing and ammunition manufacture, operating out of 150 locations worldwide. From 2016 through 2017, Mr.CummingsMr. Cummings was the President of Chemring Group US, and a member of its United States board of directors, and Chemring Sensors and Electronic Systems. In this capacity, Mr.CummingsMr. Cummings had profit and loss responsibility for Chemring’s wide range of critical and lifesaving chemical, biological, and improvised explosive device (IED) detection systems. Beginning in 2015, Mr.CummingsMr. Cummings was the Chemring Group Vice President of Global Business Development and prior to that, Vice President of Business Development for North America responsible for customer relations and growing the business. Prior to entering private industry, Mr.CummingsMr. Cummings had a distinguished 28-year career in the US Army retiring at the rank of Colonel. Mr.CummingsMr. Cummings served in a number of significant Army leadership positions including Project Manager Close Combat Systems at PEO Ammunition, where he was responsible for procurement and management of more than 200 ammunition items and counter-IED equipment. He also personally led the training teams that were fielding that equipment in Afghanistan in 2011. Mr.CummingsMr. Cummings holds multiple educational degrees, including a BS from the US Military Academy at West Point, a Master of Business Administration from Clemson University and a Master’s Degree in Strategic Studies from the US Army War College. Mr.Cummings’Mr. Cummings’ military awards include the Defense Superior Service Medal, two awards of the Legion of Merit, the Bronze Star for service in Afghanistan, the Army Staff Identification Badge and Airborne wings.

We believe Mr.CummingsMr. Cummings is well-qualified to serve as a member of the board due to his business experience serving in prominent leadership roles in both the private and public sectors as well as his business contacts.

John (Jack) Falcon has served as our Chairman since October 2019. He has over 40 years of experience working with manufacturing and automotive industries and has helped turn around numerous underperforming companies. From 2014 to 2017 Mr.FalconMr. Falcon served as the President & Chief Executive Officer of U.S. Manufacturing Corporation, a provider of critical axle components with approximately $400M of revenue and 1,500 employees. During his time at U.S. Manufacturing, Mr.FalconMr. Falcon oversaw the reorganization of the company and prepared it for a sale. From 2011

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through 2017, Mr.FalconMr. Falcon has also served as the Chairman, President and Chief Executive Officer of JAC Products Inc., a global leader of roof racking systems with approximately $400M of revenue and 1,250 employees. At JAC Products Mr.FalconMr. Falcon took the company’s business from a deficit to achieving record margins and assisted in the sale of the company in 2016. From 2009 through 2010, he served as the Chairman, President, Chief Operating Officer and Co-Founder of Bannon Automotive, one of the world’s premiere sellers of electric cars. Mr.FalconMr. Falcon was instrumental in all aspects of technical and operational activities, including the sale of the company to a large Indian multinational corporation. Mr.FalconMr. Falcon has served on the board of directors of several public and private companies, including Huntingdon International Holdings and Shiloh Industries, both of which are traded on Nasdaq and currently serves on the board of directors of Beacon and Bridges, a private company

66

and is a member of the operations group of Center Rock Capital Partners, LP, a private equity firm. Mr.FalconMr. Falcon earned his BA from Muskingum College, where he majored in Communications and minored in Economics.

We believe Mr.FalconMr. Falcon is well-qualified to serve as a member of our board of directors due to his business experience as well as business contacts and relationships.

Thomas Megale has served as a member of our Board of Directors since October 2019. He has over 30 years of experience as a Certified Public Accountant. Since 1996, Mr.MegaleMr. Megale has been the owner and managing member of TJ Megale CPA PLLC, where he has advised both individuals and private companies on tax planning and compliance. From 1986 through 2006, Mr.MegaleMr. Megale was a partner at the accounting firm of Abbate + Megale, Certified Public Accountants, LLP. Mr.MegaleMr. Megale received his BS from the School of Management of Boston College and has been a Certified Public Accountant licensed in the State of New York since 1985.

We believe Mr.MegaleMr. Megale is well-qualified to serve as a member of the board due to his accounting experience as well as his business contacts.

John Torrance, III has served as a member of our Board of Directors since October 2019. He has over 20 years of experience in the specialty chemical and alternative energy sectors. Since 2016, Mr.TorranceMr. Torrance has been working for Element Solutions (formerly Platform Specialty Products) a publicly held corporation serving the consumer electronics, automotive, graphic solutions & offshore drilling industries with proprietary specialty chemicals and application expertise. Mr.TorranceMr. Torrance is currently the Vice President of Supply Chain of North & South America leading the integration of 5 legacy businesses with 12 plants in the US, Canada, Mexico & Brazil. Prior to his role at Element Solutions, Mr.TorranceMr. Torrance spent 15 years with increasing levels of responsibility in Operations and Manufacturing for an alternative energy start-up Proton Onsite. He spent time designing, building and outfitting the company’s turnkey global headquarters in Wallingford, CT while also developing the business processes and software systems to support late stage-stage commercialization of their patented Polymer Exchange Membrane (PEM) based technology. The company was founded in 1996 and grew to the global leader in onsite hydrogen generation for commercial & industrial markets and oxygen generation for military & aerospace applications. Mr.TorranceMr. Torrance has a B.S. in Chemical Engineering from Bucknell University while also studying abroad at the University of Nottingham.

We believe Mr.TorranceMr. Torrance is well-qualified to serve as a member of our board of directors due to his business experience as well as business contacts and relationships.

Our board of directors is divided into three classes with only one class of directors being elected in each year and each class serving a three-year term; provided, however, that the term of office of the first class of directors, consisting of Steven Cummings and John Falcon, will expire at our first annual meeting of stockholders. The term of office of the second class of directors, consisting of Thomas Megale and John Torrance, will expire at the second annual meeting. The term of office of the third class of directors, consisting of William Harley, Daniel Harley and Brendan Sheehan, will expire at the third annual meeting.

Executive Compensation

No executive officer has received any cash compensation for services rendered to us. Commencing on the date of this prospectus through the acquisition of a target business, we will pay our sponsor an aggregate fee of $10,000 per month for providing us with office space and certain office and secretarial services. However, this arrangement is solely for our benefit and is not intended to provide any officer or director compensation in lieu of a salary.

Other than the $10,000 per month administrative fee, the payment of consulting, success or finder fees to our sponsor, officers, directors, or their affiliates in connection with the consummation of our initial business combination and the repayment of the $493,515 of funds advanced by our sponsor on our behalf, no compensation or fees of any kind, including finder’s, consulting fees and other similar fees, will be paid to our sponsor, members of our management team or their respective affiliates, for services rendered prior to the consummation of our initial business combination. However, they will receive reimbursement for any out-of-pocket expenses incurred by them in connection with activities on our behalf, such as identifying potential target businesses, performing business due diligence on suitable target businesses and business combinations as well as traveling to and from the offices, plants or similar locations of prospective target businesses to examine their operations. There is no limit on the amount of out-of-pocket expenses reimbursable by us.

67

After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to stockholders, to the extent then known, in the proxy solicitation materials furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of a stockholder meeting held to consider an initial business combination, as it will be up to the directors of the post-combination business to determine executive and director compensation. In this event, such compensation will be publicly disclosed at the time of its determination in a Current Report on Form 8-K, as required by the SEC.

Director Independence

CurrentlyOur board has determined that each of Steven Cummings, John Falcon, Thomas Megale and John Torrance would each be consideredis an “independent director” under the Nasdaq listing rules, which is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship, which, in the opinion of the company’s board of directors would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director.

applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present.

Any affiliated transactions will be on terms no less favorable to us than could be obtained from independent parties. Our board of directors will review and approve all affiliated transactions with any interested director abstaining from such review and approval.

Audit Committee

Effective upon the date of this prospectus,February 13, 2020, we will establishestablished an audit committee of the board of directors, in accordance with Section 3(a)(58)(A) of the Exchange Act, which will consistconsists of Steven Cummings, John Falcon and John Torrance, each of whom iswould qualify as an independent director under Nasdaq’s listing standards. The audit committee’s duties, which are specified in our Audit Committee Charter, include, but are not limited to:

•        reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should be included in our Form 10-K;

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•        discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements;

•        discussing with management major risk assessment and risk management policies;

•        monitoring the independence of the independent auditor;

•        verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;

•        reviewing and approving all related-party transactions;

•        inquiring and discussing with management our compliance with applicable laws and regulations;

•        pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed;

•        appointing or replacing the independent auditor;

•        determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;

•        establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; and

68

•        approving reimbursement of expenses incurred by our management team in identifying potential target businesses.

Financial Experts on Audit Committee

The audit committee will at all times be composed exclusively of “independent directors” who are “financially literate” as defined under Nasdaq’s listing standards. Nasdaq’s standards define “financially literate” as being able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement.

In addition, we must certify to Nasdaq that the committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual’s financial sophistication. The board of directors has determined that John Falcon qualifies as an “audit committee financial expert,” as defined under rules and regulations of the SEC.

Nominating Committee

Effective upon the date of this prospectus,February 13, 2020, we will establishestablished a nominating committee of the board of directors, which will consistconsists of Steven Cummings, John Falcon and John Torrance, each of whom iswould qualify as an independent director under Nasdaq’s listing standards. The nominating committee is responsible for overseeing the selection of persons to be nominated to serve on our board of directors. The nominating committee considers persons identified by its members, management, stockholders,shareholders, investment bankers and others.

Guidelines for Selecting Director Nominees

The guidelines for selecting nominees, which are specified in the Nominating Committee Charter, generally provide thatthose persons to be nominated:

•        should have demonstrated notable or significant achievements in business, education or public service;

•        should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and

•        should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the stockholders.shareholders.

The Nominating Committee will consider a number of qualifications relating to management and leadership experience, background, and integrity and professionalism in evaluating a person’s candidacy for membership on the board of directors. The nominating committee may require certain skills or attributes, such as financial or accounting

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experience, to meet specific board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The nominating committee does not distinguish among nominees recommended by stockholdersshareholders and other persons.

There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.

Compensation Committee

Effective upon the date of this prospectus,February 13, 2020, we will establishestablished a compensation committee of the board of directors, which will consistconsists of John Falcon, John Torrance and Thomas Megale, each of whom iswould qualify as an independent director under Nasdaq’s listing standards. The compensation committee’s duties, which are specified in our Compensation Committee Charter, include, but are not limited to:

•        reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;

•        reviewing and approving the compensation of all of our other executive officers;

•        reviewing our executive compensation policies and plans;

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•        implementing and administering our incentive compensation equity-based remuneration plans;

•        assisting management in complying with our proxy statement and annual report disclosure requirements;

•        approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees;

•        if required, producing a report on executive compensation to be included in our annual proxy statement; and

•        reviewing, evaluating, and recommending changes, if appropriate, to the remuneration for directors.

Code of Ethics.Ethics

Effective upon consummation of this offering,February 13, 2020, we will adoptadopted a code of ethics that applies to all of our executive officers, directors, and employees. The code of ethics codifies the business and ethical principles that govern all aspects of our business.

Insider Trading Policy

Effective December 22, 2021, we adopted an insider trading policy that applies to all our executive officers, directors and employees. The insider trading policy codifies the legal and ethical principles that govern trading in our securities by persons associated with the Company that may possess material nonpublic information relating to Greenrose.

Conflicts of InterestSection 16(a) Beneficial Ownership Reporting Compliance

In general, officers and directors of a corporation incorporated under the lawsSection 16(a) of the State of Delaware are required to present business opportunities to a corporation if:

•        the corporation could financially undertake the opportunity;

•        the opportunity is within the corporation’s line of business; and

•        it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation.

Our amended and restated certificate of incorporation provides that:

•        we renounce any interest or expectancy in, or being offered an opportunity to participate in, any business opportunities that are presented to us orExchange Act requires our officers, directors, and persons who own more than ten percent of a registered class of our equity securities to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors, and ten percent stockholders are required by regulation to furnish us with copies of all Section 16(a) forms they file. Based solely on copies of such forms received or stockholderswritten representations from certain reporting persons that no Forms 5 were required for those persons, we believe that, during the fiscal year ended December 31, 2020, all filing requirements applicable to our officers, directors, and greater than ten percent beneficial owners were complied with.

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EXECUTIVE COMPENSATION

Executive Summary

In the 2019 and 2020 fiscal years, no executive officer received any cash compensation for services rendered to us.

In the 2021 fiscal year, our principal executive officer and two most highly compensated executive officers have received the cash compensation for services rendered to us the 2021 fiscal year as reflected in the Summary Compensation Table presented below.

Since our formation, we have not granted any post-employment benefits nor any stock options or affiliates thereof,stock appreciation rights or any other awards under long-term incentive plans to any of our executive officers or directors. However, our Compensation Committee may recommend, and our Board of Directors may approve, such benefits or options, rights or awards. n this event, such compensation will be publicly disclosed at the time of its determination in a Current Report on Form 8-K, as required by the SEC.

For the fiscal year 2022, our Compensation Committee has recommended, and our Board of Directors has approved, the following executive compensation for its principal executive officer and its two most highly compensated executive officers:

SUMMARY COMPENSATION TABLE

Name and principal position

 

Year

 

Salary
($)

 

Bonus
($)

 

Stock
awards
($)

 

Options
awards
($)

 

Non-equity
incentive plan
compensation
($)

 

Change in
pension value
and
nonqualified
deferred
compensation
earnings
($)

 

All other
compensation

($)

 

Total
($)

William F. Harley III,
Chief Executive Officer, Director

 

2022*

 

508,000

 

 

 

 

 

 

 

 

508,000

2021

 

39,077

 

 

 

 

 

 

 

 

39,077

2020

 

 

 

 

 

 

 

 

 

2019

 

 

 

 

 

 

 

 

 

                 

 

  

Paul Otto Wimer,
President and Chief Operating Officer

 

2022*

 

408,000

 

 

 

 

 

 

 

 

408,000

2021

 

31,385

 

 

 

 

 

 

**

 

31,385

2020

 

 

 

 

 

 

 

 

 

2019

 

 

 

 

 

 

 

 

 

                 

 

  

Daniel Harley,
Executive Vice President, Business Development, Director

 

2022*

 

350,000

 

 

 

 

 

 

 

 

350,000

2021

 

26,923

 

 

 

 

 

 

 

 

26,923

2020

 

 

 

 

 

 

 

 

 

2019

 

 

 

 

 

 

 

 

 

____________

*        No fiscal year 2022 amounts have not been paid to date; reflects amounts recommended by our Compensation Committee and approved our Board of Directors for the fiscal year 2022 and are anticipated to be paid to the named executive officers in fiscal year 2022. See the disclosure presented under the caption “Cautionary Note Regarding Forward-Looking Statements” in this registration statement regarding forward-looking statements.

**      Other compensation consisted of reimbursement for medical insurance premiums in the amount of approximately $10,000 per month in the fiscal year 2021.

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, reduced disclosure obligations regarding executive compensation in our sponsorperiodic reports and its affiliates, except as may be prescribed by any written agreementproxy and registration statements. Accordingly, an emerging growth company:

•        does not have to provide a Compensation Discussion and Analysis (CD&A);

•        does not have to provide a disclosure of the relationship of compensation policies and practices to risk management;

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•        only has to provide a Summary Compensation Table and an Outstanding Equity Awards at Fiscal Year-End Table with us;accompanying narrative text; and

•        ourcan limit its Summary Compensation Table to only its principal executive officer and its two most highly compensated officers (rather than also including the principal financial officer and directors will not be liableits three most highly compensated officers) and to our company or our stockholders for monetary damages for breachtwo (rather than three) fiscal years of any fiduciary duty by reason of anycompensation information.

Compensation Committee Interlocks and Insider Participation

During the last completed fiscal year, no member of our activities or any of our sponsor or its affiliates to the fullest extent permitted by Delaware law.

Our officers and directors are, and may in the future become, affiliated with other companies. In order to minimize potential conflicts of interest which may arise from such other corporate affiliations, each of our officers and directors has contractually agreed, pursuant to a written agreement with us, until the earliest of our execution of a definitive agreement for a business combination, our liquidation or such time as he ceases to beCompensation Committee was an officer or director,employee of the Company, or was formerly an officer or employee of the Company. In addition, during the last completed fiscal year, no member of our Compensation Committee was a participant in any transaction with the Company, other than in their respective non-compensated roles as members of our Board of Directors, Compensation Committee, and, with respect to presentMessrs. Falcon and Torrance, our Audit Committee and Nominating Committee.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

On August 2019, we issued 4,312,500 shares of common stock to our companySponsor for $25,000 in cash, at a purchase price of approximately $0.006 per share, in connection with our consideration, priororganization.

On March 26, 2020, we issued an unsecured promissory note (the “2020 Note”) in the principal amount of $1,000,000 to presentationthe Sponsor. The 2020 Note is non-interest bearing and payable upon the consummation of a Business Combination. The 2020 Note may be converted into units at a price of $10.00 per unit and/or warrants at a price of $1.00 per warrant. The units would be identical to any other entity, any suitable business opportunity whichthe private units and the warrants would be identical to the private warrants.

On January 29, 2021, we issued an unsecured promissory note (the “2021 Note”) in the principal amount of $1,000,000 to the Sponsor. The 2021 Note is non-interest bearing and payable upon the consummation of a Business Combination. The 2021 Note may reasonably be requiredconverted into units at a price of $10.00 per unit and/or warrants at a price of $1.00 per warrant. The units would be identical to the Private Units and the warrants would be presentedidentical to us, subject to any pre-existing fiduciary or contractual obligations he might have.the private warrants.

In addition, our amended and restated certificateOn June 18, 2021, the Company issued an unsecured promissory note (the “June 2021 Note”), in the principal amount of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.

Investors should also be aware of the following additional potential conflicts of interest:

•        none of our officers and directors is required to commit their full time$300,000 to our affairs and, accordingly, they may have conflicts of interestsponsor evidencing a loan in allocating their time among various business activities.

•        unless we consummate our initial business combination, our officers, directors and sponsor will not receive reimbursement or repayment for any out-of-pocket expenses incurred by them, or loans made

70

to us, to the extent that such expenses exceed the amount of available proceeds not deposited in the trust account or interest earned on the trust account funds that are available to us.

•        the founder’s shares beneficially owned by our sponsor will be released from escrow only if a business combination$300,000. The June 2021 Note is successfully completed,non-interest bearing and the private securities purchased by it, and any warrants which our officers or directors may purchase in the aftermarket will expire worthless if a business combination is not consummated. Additionally, our officers and directors and affiliates will not receive liquidation distributions from the trust account with respect to any of the founder’s shares or private shares. Furthermore, our sponsor has agreed that the private securities will not be sold or transferred by it until after we have completed a business combination. For the foregoing reasons, our board may have a conflict of interest in determining whether a particular target business is appropriate to effect a business combination with.

To further minimize conflicts of interest, we have agreed not to consummate an initial business combination with an entity that is affiliated with any of our officers, directors or sponsor including (i) an entity that is either a portfolio company of, or has otherwise received a material financial investment from, any private equity fund or investment company (or an affiliate thereof) that is affiliated with any of the foregoing, (ii) an entity in which any of the foregoing or their affiliates are currently passive investors, (iii) an entity in which any of the foregoing or their affiliates are currently officers or directors, or (iv) an entity in which any of the foregoing or their affiliates are currently invested through an investment vehicle controlled by them, unless we have obtained an opinion from an independent investment banking firm, or another independent entity that commonly renders valuation opinions, and the approval of a majority of our disinterested independent directors that the business combination is fair to our unaffiliated stockholders from a financial point of view. Furthermore, in no event will any of our sponsor, members of our management team or their respective affiliates be paid any finder’s fee, consulting fee or other similar compensation prior topayable upon the consummation of a business combination.

On August 26, 2021, the Company issued an initial business combination (regardlessunsecured promissory note (the “August 2021 Note”), in the principal amount of the type of transaction that it is) other than the $10,000 administrative services fee, the repayment of the $493,515 of funds advanced by our sponsor on our behalf and reimbursement of any out-of-pocket expenses. We may, however, pay consulting, success or finder fees$450,000 to our sponsor officers, directors, or their affiliatesevidencing a loan in connection withthe amount of $450,000. The August 2021 Note is non-interest bearing and payable upon the consummation of our initiala business combination.

On September 9, 2021, the Company issued an unsecured promissory note (the “September 2021 Note”), in the principal amount of $180,000 to our Sponsor evidencing a loan in the amount of $180,000. The September 2021 Note is non-interest bearing and payable upon the consummation of a business combination.

On September 20, 2021, the Company issued an unsecured promissory note (the “Second September 2021 Note”), in the principal amount of $65,000 to our Sponsor evidencing a loan in the amount of $65,000. The Second September 2021 Note is non-interest bearing and payable upon the consummation of a business combination.

On October 1, 2021, the Company issued an unsecured promissory note (the “October 2021 Note”) in the principal amount of $100,000 to our Sponsor evidencing a loan in the amount of $100,000. The October 2021 Note is non-interest bearing and payable upon the consummation of a business combination.

On November 1, 2021, the Company issued an unsecured promissory note (the “November 2021 Note”) in the principal amount of $140,000 to our Sponsor evidencing a loan in the amount of $140,000. The November 2021 Note is non-interest bearing and payable upon the consummation of a business combination.

The June 2021 Note, the August 2021 Note, the September 2021 Note, the Second September 2021 Note, the October 2021 Note and the November 2021 Note are collectively referred to in this prospectus as the Sponsor’s Notes in the amount of $1,235,000, which does not include the convertible 2020 Note and 2021 Note.

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PRINCIPAL STOCKHOLDERS

The following table sets forth information known to Greenrose regarding the beneficial ownership of ourthe Company’s shares of common stockCommon Stock as of the date of this prospectus and as adjusted to reflect the sale of our shares of common stock included in the units offered by this prospectus (assuming none of the individuals listed purchase units in this offering),December 31, 2021 by:

•        each person known by usto the Company to be the beneficial owner of more than 5% of our outstanding Greenrose shares of common stock;Common Stock;

•        each of ourthe Company’s executive officers and directors; and

•        all of ourexecutive officers and directors of the Company as a group.

Beneficial ownership is determined according to the rules of the Commission, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options, warrants, or other securities that are currently exercisable or exercisable within 60 days. The Company’s Shares of Common Stock issuable upon exercise of options, warrants, or other securities currently exercisable within 60 days are deemed outstanding solely for purposes of calculating the percentage of total ownership and total voting power of the beneficial owner thereof.

The beneficial ownership of the shares of Common Stock of the Company is based on approximately 16,061,190 shares of Common Stock issued and outstanding as of the Closing Date.

Unless otherwise indicated, we believethe Company believes that all personseach person named in the table havebelow has sole voting and investment power with respect to all shares of common stockthe Company’s Shares of Common Stock beneficially owned by them. Unless otherwise indicated, the business address of each of the following entities or individuals is c/o The following table does not reflect record of beneficialGreenrose Holding Company Inc., 111 Broadway, Amityville, NY 11701.

Name and Address of Beneficial Owner(1)

 

Amount and
Nature of
Beneficial
Ownership

 

Approximate
Percentage of
Outstanding
Shares

William F. Harley III

 

0

(2)

 

0

 

Daniel Harley

 

0

(2)

 

0

 

Brendan Sheehan

 

0

(2)

 

0

 

Paul Otto Wimer

 

0

(3)

 

0

 

Scott Cohen(8)

 

0

(3)

 

0

 

Jeffrey Stegner(9)

 

0

(3)

 

0

 

Steven Cummings

 

0

(3)

 

0

 

Thomas Megale

 

0

 

 

0

 

John Falcon

 

0

(3)

 

0

 

John Torrance III

 

0

(3)

 

0

 

Greenrose Associates LLC

 

4,532,500

(4)

 

28.22

%

All Greenrose directors and executive officers as a group (nine individuals)

 

4,532,500

 

 

28.22

%

True Harvest, LLC

 

6,730,378

(5)

 

41.90

%

Ethan Ruby

 

1,562,287(6)

 

 

9.73

%

YA II PN, Ltd.

 

914,900

(7)

 

5.70

%

Daniel Emmans

 

829,654

(6)

 

5.17

%

DeMatteo Industries LLC*

 

794,395

(6)

 

4.95

%

____________

*        Represents ownership of the warrants included in the units offered by this prospectus or the private warrants as these warrants are not exercisable within 60 days of the date of this prospectus.

 

Prior to Offering

 

After Offering(2)

Name and Address of Beneficial Owner(1)

 

Amount and
Nature of
Beneficial
Ownership

 

Approximate
Percentage of
Outstanding
Shares of
Common Stock

 

Amount and
Nature of
Beneficial
Ownership

 

Approximate
Percentage of
Outstanding
Shares of
Common Stock

William Harley III

 

0

(3)

 

0

%

 

0

(3)

 

0

%

Daniel Harley

 

0

(3)

 

0

 

 

0

(3)

 

0

 

Brendan Sheehan

 

0

(3)

 

0

 

 

0

(3)

 

0

 

Paul Wimer

 

0

(4)

 

0

 

 

0

(4)

 

0

 

Jeffrey Stegner

 

0

(4)

 

0

 

 

0

(4)

 

0

 

Steven Cummings

 

0

(4)

 

0

 

 

0

(4)

 

0

 

Thomas Megale

 

0

 

 

0

 

 

0

 

 

0

 

John Falcon

 

0

(4)

 

0

 

 

0

 

 

0

 

John Torrance, III

 

0

(4)

 

0

 

 

0

 

 

0

 

Greenrose Associates LLC

 

4,312,500

(5)

 

100

%

 

3,950,000

 

 

20.7

%

All directors and executive officers as a group (9 individuals)

 

0

(3)

 

0

%

 

0

(3)

 

0

%

____________less than 5%.

(1)      Unless otherwise indicated, the business address of each of the individuals is 1000 Woodbury Road, Suite #212, Woodbury,111 Broadway, Amityville, NY 11797.11701.

(2)      Assumes no exercise of the over-allotment option and, therefore, the forfeiture of an aggregate of 562,500shares of common stock. Does not include units to be purchased by the sponsor in the private placement.

(3)      Does not include any securities held by Greenrose Associates LLC, of which each person is a managingmanager and member. Under the so-called “rule of three”, if voting and dispositive decisions regarding an entity’s securities are made by three or more individuals, and a voting or dispositive decision requires the approval of a majority of those individuals, then none of the individuals is deemed a beneficial owner of the entity’s securities. Based on the foregoing, no individual of the committee exercises voting or dipositive control over any of the securities held by such entity, even those in which he directly owns a pecuniary interest. Accordingly, none of them will be deemed to have or share beneficial ownership of such shares. Each such person disclaims beneficial ownership of the reported shares other than to the extent of his ultimate pecuniary interest therein.

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(3)      Does not include any securities held by Greenrose Associates LLC, of which each person is directly or indirectly a member. Each such person disclaims beneficial ownership of the reported shares other than to the extent of his ultimate pecuniary interest therein.

(5)      Represents securities held by Greenrose Associates LLC, our sponsor, of which William Harley III, Daniel Harley and Brendan Sheehan are managing members.

Immediately after this offering, our sponsor will beneficially own approximately 21% of(4)      Based on a Schedule 13-G filed with the then issued and outstandingCommission on February 12, 2021. This amount reflects 4,312,500 shares of common stock (assuming they do not purchase any units offeredowned by this prospectus).

72

If the underwriters do not exercise all or a portion of the over-allotment option, an aggregate of 562,500 founder’s shares will be forfeited. Only a number of shares necessary to maintain the 20% ownership interest in ourReporting Person and 220,000 shares of common stock after giving effectunderlying units of the Issuer purchased by the Reporting Person in private placements conducted in connection with the Issuer’s initial public offering. This amount does not include 220,000 shares of common stock issuable upon the exercise of warrants underlying units of the Issuer held by the Reporting Person, or 1,100,000 shares of common stock issuable upon the exercise of warrants held by the Reporting Person, none of which are exercisable and will not be exercisable within 60 days of this filing. See the description under “Private Placements” in the Issuer’s registration statement on Form S-1 (File No. 333-235724) (the “Registration Statement”) filed with the SEC on December 27, 2019, as amended. This amount does not include securities issuable upon conversion of $3,250,000 in Sponsor’s Notes issued by the Issuer to the offering andReporting Person, evidencing loans in the exercise, ifsame aggregate amount. The Sponsor’s Notes allow the Reporting Person, at its sole option, to convert any of the underwriters’ over-allotment option (not includingprincipal amount due under the Notes into units at a price of $10.00 per unit (“Working Capital Units”) and/or warrants at a price of $1.00 per warrant (“Working Capital Warrants”). The Working Capital Units and/or Working Capital Warrants, if any, would be identical to the private securitiesunits and/or private warrants, as described in the Registration Statement. As of the date of this filing, the Reporting Person has not determined whether it will convert the Sponsor’s Notes into Working Capital Units and/or Working Capital Warrants, or have the Sponsor’s Notes repaid without interest.

(5)      This includes 4,430,378 shares at $3.95 issued on December 31, 2021 to the owners of True Harvest, LLC, as part of the consideration for acquisition of the assets of True Harvest, LLC, and assuming they do2,300,000 shares of common stock underlying the convertible note issued as part of the True Harvest Acquisition. The Convertible Note allows True Harvest, LLC, to convert any of the principal amount due under the Convertible Notes into common stock at a price of $10.00 per unit. Michael Macchiaroli may be deemed to beneficially own such shares by virtue of his status as the sole manager of True Harvest, LLC. The address of True Harvest, LLC is 10768 E. Acoma Drive, Scottadale, Arizona 85255.

(6)      This does not purchase any units in this offering) will be necessary.include up to 500,000 shares of common stock subject to certain terms and conditions of the Theraplant Merger Agreement.

(7)      Based on a Schedule 13-D filed with the Commission on December 23, 2021.

(8)      On December 22, 2021, the board of directors of the Company appointed Scott Cohen as Chief Financial Officer of the Company.

(9)      On December 22, 2021, Mr. Stegner resigned as Chief Financial Officer of the Company. Mr. Stegner’s resignation did not result from a disagreement with the Company or the board of directors.

All of the founder’s sharesFounder’s Shares outstanding prior to the date of this prospectus will beIPO were placed in escrow with Continental Stock Transfer & Trust Company, as escrow agent, until (i) with respect to 50% of such shares, the earlier of one year after the date of the consummation of our initial business combination and the date on which the closing price of our common stock equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after our initial business combination and (ii) with respect to the remaining 50% of such shares, one year after the date of the consummation of our initial business combination, or earlier if, subsequent to our initial business combination, we consummate a liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property. Up to 562,500 of the founder’s shares may also be released from escrow earlier than this date for cancellation if the over-allotment option is not exercised in full as described above.

During the escrow period, the holders of these shares will not be able to sell or transfer their securities except for transfers, assignments or sales (i) among our sponsorinitial stockholders or to our sponsor’sinitial stockholders’ members, officers, directors, consultants or their affiliates, (ii) to a holder’s stockholders or members upon its liquidation, (iii) by bona fide gift to a member of the holder’s immediate family or to a trust, the beneficiary of which is the holder or a member of the holder’s immediate family, for estate planning purposes, (iv) by virtue of the laws of descent and distribution upon death, (v) pursuant to a qualified domestic relations order, (vi) to us for no value for cancellation in connection with the consummation of our initial business combination, or (vii) in connection with the consummation of a business combination at prices no greater than the price at which the shares were originally purchased, in each case (except for clause (vi) or with our prior consent) where the transferee agrees to the terms of the escrow agreement and to be bound by these transfer restrictions, but will retain all other rights as our stockholders, including, without limitation, the right to vote their shares of common stock and the right to receive cash dividends, if declared. If dividends are declared and payable in shares of common stock, such dividends will also be placed in escrow. If we are unable to effectaffect a business combination and liquidate, there will be no liquidation distribution with respect to the founder’s shares.Founder’s Shares.

Our sponsorWilliam F. Harley III, Chief Executive Officer and Imperial Capital have committed that they and/or their designees will purchase the 300,000 private units and 1,500,000 private warrants (for a total purchase price of $4,500,000) from us. These purchases will take place on a private placement basis simultaneously with the consummation of this offering. They have also agreed that if the over-allotment option is exercised by the underwriters in full or in part, they will purchase from us an additional number of private units and private warrants (up to a maximum of 30,000 private units and 150,000 private warrants) necessary to maintain in the trust account $10.00 per unit sold to the public in this offering. These additional private units and private warrants will be purchased in a private placement that will occur simultaneously with the purchase of units resulting from the exerciseDirector of the over-allotment option. The private unitsCompany, and private warrants are identical to the unitsDaniel Harley, Executive Vice President, Business Development and warrants sold in this offering except that the private warrants: (i) will not be redeemable by us and (ii) may be exercised for cash or on a cashless basis, as described in this prospectus, so long as they are held by the initial purchasers or any of their permitted transferees. If the private warrants are held by holders other than the initial purchasers or any of their permitted transferees, the private warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering. The initial purchaser has agreed not to transfer, assign or sell anyDirector of the private securitiesCompany, are brothers.

Messrs. W. Harley, D. Harley, Sheehan, Cummings, Falcon, Megale and underlying securities (except in connection with the same limited exceptions that the founder’s shares may be transferred as described above) until after the completion of our initial business combination. Furthermore, they have agreed (A) to vote the private shares in favor of any proposed business combination, (B) not to convert any private shares in connection with a stockholder vote to approve a proposed initial business combination or sell any private shares to us in a tender offer in connection with a proposed initial business combination and (C) that the private shares shall not participate in any liquidating distribution from our trust account upon winding up if a business combination is not consummated. In the event of a liquidation prior to our initial business combination, the private securities will likely be worthless.

73

In order to meet our working capital needs following the consummation of this offering, our sponsor, officers, directors and their affiliates may, butTorrance are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of our initial business combination, without interest, or, at holder’s discretion, up to $2,000,000Directors of the notes may be converted into units at a price of $10.00 per unit and/or warrants at a price of $1.00 per warrant. Company.

The units and warrants would be identical to the private units and private warrants, respectively. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust account, or interest earned on the trust account that is available to us, to repay such loaned amounts, but no proceeds from our trust account other than the interest earned thereon would be used for such repayment.

OurCompany’s executive officers, and our sponsorSponsor are our “promoters,” as that term is defined under the federal securities laws.

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CERTAIN TRANSACTIONSSELLING STOCKHOLDERS

In August 2019, we issued 4,312,500sharesThe table below presents information regarding the Selling Stockholders and the shares of common stock to our sponsor for $25,000 in cash, at a purchase price of approximately $0.006 per share, in connection with our organization.

If the underwriters do not exercise all or a portion of their over-allotment option, our sponsor will forfeit up to an aggregate of 562,500shares of common stock in proportion to the portion of the over-allotment optionCommon Stock that was not exercised.

If the underwriters determine the size of the offering should be increased (including pursuant to Rule 462(b) under the Securities Act) or decreased, a share dividend or a contribution back to capital, as applicable, would be effectuated in order to maintain our sponsor’s ownership at a percentage of the number of shares to be sold in this offering.

Our sponsor and Imperial Capital have committed that they and/or their designees will purchase, pursuant to written subscription agreements with us, the 300,000 private units and 1,500,000 additional private warrants (for a total purchase price of $4,500,000) from us. This purchase will take place on a private placement basis simultaneously with the consummation of this offering. They have also agreed that if the over-allotment option is exercised by the underwriters in full or in part, they will purchase from us an additional number of private units and private warrants (up to a maximum of 30,000 private units and an additional 150,000 private warrants) necessary to maintain in the trust account $10.00 per unit sold to the public in this offering. These additional private units and private warrants will be purchased in a private placement that will occur simultaneously with the purchase of units resulting from the exercise of the over-allotment option. The purchase price for the private securities will be delivered to an escrow account at least 24 hours prior to the closing of this offering and will be deposited into the trust account simultaneously with the consummation of the offering. The private units and private warrants are identical to the units and warrants sold in this offering except that the private warrants (including those included in the private units): (i) will not be redeemable by us and (ii)it may be exercised for cash or on a cashless basis, as described in this prospectus, so long as they are held by the initial purchaser or any of their permitted transferees, the private warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering. Our sponsor has agreed not to transfer, assign or sell any of the private securities and underlying securities (except to certain permitted transferees) until after the completion of our initial business combination. Furthermore, they have agreed (A) to vote the private shares in favor of any proposed business combination, (B) not to convert any private shares in connection with a stockholder vote to approve a proposed initial business combination or sell any private shares to us in a tender offer in connection with a proposed initial business combination and (C) that the private shares shall not participate in any liquidating distribution from our trust account upon winding up if a business combination is not consummated. In the event of a liquidation prior to our initial business combination, the private securities will likely be worthless.

In order to meet our working capital needs following the consummation of this offering, our sponsor, officers and directors or their affiliates may, but are not obligated to, loan us funds, from time to time or at any time,under this prospectus. This table is prepared based on information supplied to us by the Selling Stockholder. The number of shares in whatever amount they deem reasonable in their sole discretion. Each loan wouldthe column “Maximum Number of Shares of Common Stock to be evidenced by a promissory note. The notes would either be paid upon consummation of our initial business combination, without interest, or, at holder’s discretion, upOffered Pursuant to $2,000,000this Prospectus” represents all of the notes may be converted into units at a priceshares of $10.00 per unit and/or warrants at a price of $1.00 per warrant. The units and warrants would be identical to the private units and private warrants, respectively. In the eventCommon Stock that the initial business combination doesSelling Stockholders may offer under this prospectus. The Selling Stockholders may sell some, all or none of its shares in this offering. We do not close,know how long the Selling Stockholders will hold the shares before selling them, and we may use a portioncurrently have no agreements, arrangements or understandings with the Selling Stockholders regarding the sale of any of the working capital held outsideshares.

Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated by the trust account, or interest earned onSEC under the trust account that is availableExchange Act and includes shares of Common Stock with respect to us, to repay such loaned amounts, but no proceeds from our trust account other thanwhich the interest earned thereon would be used for such repayment.

Selling Stockholders have voting and investment power. The holderpercentage of our founder’s shares issued and outstanding onof Common Stock beneficially owned by the date of this prospectus, as well as the holders of the private securities and any units and warrants our sponsor, officers, directors or their affiliates may be issued in payment of working capital loans made to us (and all underlying securities), will be entitled to registration rights pursuant to an agreement to be signed prior to or on the effective date of this offering. The holders of a majority of these securities are entitled to make up to two demands that we register such securities. The holders of the majority of the founder’s shares can elect to exercise these registration rights at any time commencing three monthsSelling Stockholders prior to the dateoffering shown in the table below is based on which these shares of common stock are to be released from escrow. The holders of a majority of the private securities and units and warrants issued in payment of working capital loans made to us (or underlying securities) can elect to exercise these registration rights at any time after we consummate a business combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our consummation of a business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.

75

As of the date of this prospectus, our sponsor has advanced an aggregate of $493,515 to cover expenses related16,061,190 shares of our Common Stock outstanding on January 4, 2022. The fourth column assumes the sale of all of the shares offered by the Selling Stockholders pursuant to this offering. We intend to repay the loan from the proceedsprospectus.

Name of Selling Stockholders

 


Number of Shares of
Common Stock
Owned Prior to Offering

 

Maximum Number of
Shares of
Common Stock to be
Offered Pursuant to
this Prospectus

 


Number of Shares of
Common Stock Owned
After Offering

Number

 

Percent

 

Number(1)

 

Percent

Selling Stockholders of Theraplant LLC

 

5,000,000

 

31.13

%

 

5,000,000

 

0

 

0

%

True Harvest, LLC

 

4,430,378

 

27.58

%

 

4,430,378

 

0

 

0

%

Greenrose Associates LLC

 

4,532,500

 

28.22

%

 

2,266,350

 

2,266,150

 

14.11

%

Imperial Capital, LLC

 

88,000

 

0.55

%

 

88,000

 

0

 

0

%

I-Bankers Securities, LLC

 

22,000

 

0.14

%

 

22,000

 

0

 

0

%

____________

*        Represents ownership of this offering not being placed in trust upon consummation of this offering.

Our sponsor has agreed that, commencing on the effective date of this prospectus through the earlier of our consummation of our initial business combination or our liquidation, it will make available to us certain general and administrative services, including office space, utilities and administrative support, as we may require from time to time. We have agreed to pay our sponsor $10,000 per month for these services. We believe, based on rents and fees for similar services in the New York metropolitan area, that the fee charged by our sponsor is at least as favorable as we could have obtained from an unaffiliated person.

In no event will any of our sponsor, members of our management team or their respective affiliates be paid any finder’s fee, consulting fee or other similar compensation prior to the consummation of an initial business combination (regardless of the type of transaction that it is) other than the $10,000 administrative services fee and the repayment of the $493,515 of funds advanced by our sponsor on our behalf. We may, however, pay consulting, success or finder fees to our sponsor, officers, directors, or their affiliates in connection with the consummation of our initial business combination. Additionally, such individuals will receive reimbursement for any out-of-pocket expenses incurred by them in connection with activities on our behalf, such as identifying potential target businesses, performing business due diligence on suitable target businesses and business combinations as well as traveling to and from the offices, plants or similar locations of prospective target businesses to examine their operations. There is no limit on the amount of out-of-pocket expenses reimbursable by us.

After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to stockholders, to the extent then known, in the proxy solicitation materials furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of a stockholder meeting held to consider an initial business combination, as it will be up to the directors of the post-combination business to determine executive and director compensation. In this event, such compensation will be publicly disclosed at the time of its determination in a Current Report on Form 8-K, as required by the SEC.

All ongoing and future transactions between us and any of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable to us than are available from unaffiliated third parties. Such transactions will require prior approval by a majority of our uninterested “independent” directors or the members of our board who do not have an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction unless our disinterested “independent” directors determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated third parties.

Related Party Policy

Our Code of Ethics requires us to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interests, except under guidelines approved by the board of directors (or the audit committee). Related-party transactions are defined as transactions in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) we or any of our subsidiaries is a participant, and (3) any (a) executive officer, director or nominee for election as a director, (b) greater than 5% beneficial owner of our shares of common stock, or (c) immediate family member, of the persons referred to in clauses (a) and (b), has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner1%.

(1)      Assumes the sale of another entity). A conflict of interest situation can arise when a person takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest may also arise if a person, or a member of his or her family, receives improper personal benefits as a result of his or her position.

Our audit committee,all shares being offered pursuant to its written charter, will be responsible for reviewing and approving related-party transactions to the extent we enter into such transactions. The audit committee will consider all relevant factors when determining whether to approve a related party transaction, including whether the related party transaction is on terms no less favorable to us than terms generally available from an unaffiliated third-party under the same or similar circumstances and the extentthis prospectus.

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Table of the related party’s interest in the transaction. No director may participate in the approval of any transaction in which he is a related party, but that director is required to provide the audit committee

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with all material information concerning the transaction. We also require each of our directors and executive officers to complete a directors’ and officers’ questionnaire that elicits information about related party transactions.

These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.

To further minimize conflicts of interest, we have agreed not to consummate an initial business combination with an entity that is affiliated with any of our sponsor, officers or directors including (i) an entity that is either a portfolio company of, or has otherwise received a material financial investment from, any private equity fund or investment company (or an affiliate thereof) that is affiliated with any of the foregoing, (ii) an entity in which any of the foregoing or their affiliates are currently passive investors, (iii) an entity in which any of the foregoing or their affiliates are currently officers or directors, or (iv) an entity in which any of the foregoing or their affiliates are currently invested through an investment vehicle controlled by them, unless we have obtained an opinion from an independent investment banking firm, or another independent entity that commonly renders valuation opinions, and the approval of a majority of our disinterested independent directors that the business combination is fair to our unaffiliated stockholders from a financial point of view.

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DESCRIPTION OF SECURITIES

GeneralUnless otherwise indicated, references in this section to the “Company,” “we,” “us,” and “our” are to Greenrose.

AsAuthorized and Outstanding Stock

The Company’s authorized capital stock consists of the date150,000,000 shares of this prospectus, we will be authorized to issue 70,000,000shares of common stock,Common Stock, par value $0.0001 per share; and 1,000,000shares1,000,000 shares of preferred stock,Preferred Stock, par value $0.0001. As$0.0001 per share.

Voting Rights

The Charter provides that, subject to applicable law and the rights, if any, of the dateholders of this prospectus, 4,312,500sharesany outstanding series of common stock are outstanding. No shares of preferred stock are currently outstanding. The following description summarizesPreferred Stock, the material terms of our securities. Because it is only a summary, it may not contain all the information that is important to you. For a complete description you should refer to our amended and restated certificate of incorporation, bylaws and the form of warrant agreement, which are filed as exhibits to the registration statement of which this prospectus is a part, and to the applicable provisions of Delaware law.

Units

Each unit consists of one share of common stock and one warrant. Each whole warrant entitles the holder to purchase one share of common stock. Pursuant to the warrant agreement, a warrantholder may exercise its warrants only for a whole number of shares of common stock. This means that only a whole warrant may be exercised at any given time by a warrantholder. No fractional warrants will be issued upon separation of the units and only whole warrants will trade.

The shares of common stock and warrants will begin to trade separately on the 90th day after the date of this prospectus unless Imperial Capital, Inc. informs us of its decision to allow earlier separate trading, provided that in no event may the shares of common stock and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K which includes an audited balance sheet reflecting our receipt of the gross proceeds of this offering. Once the shares of common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component pieces.

We will file a Current Report on Form 8-K which includes an audited balance sheet promptly upon the consummation of this offering. The audited balance sheet will reflect proceeds we receive from the exercise of the over-allotment option, if the over-allotment option is exercised on the date of this prospectus. If the over-allotment option is exercised after the date of this prospectus, we will file an amendment to the Form 8-K to provide updated financial information to reflect the exercise of the over-allotment option. We will also include in this Form 8-K, an amendment thereto, or in a subsequent Form 8-K information indicating if Imperial Capital, Inc. has allowed separate trading of the shares of common stock and warrants prior to the 90th day after the date of this prospectus.

Common Stock

Our stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. In connection with any vote held to approve our initial business combination, our sponsor, as well as all of our officers and directors, have agreed to vote their respective shares of common stock owned by them immediately prior to this offering and any shares purchased in this offering or following this offering in the open market in favor of the proposed business combination.

We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and, solely if a vote is held to approve a business combination, a majority of the outstanding shares of common stock voted are voted in favorCommon Stock of the business combination.

Our board of directors is divided into three classes, each of whichCompany will generally serve forvote together as a term of three years with only onesingle class of directors being elected in each year. There is no cumulative votingon all matters with respect to which stockholders of the electionCompany are entitled to vote under applicable law, the Charter or the Amended and Restated Bylaws or upon which a vote of directors, withstockholders generally entitled to vote is otherwise called for by the resultCompany, except that, except as may otherwise be required by applicable law, each holder of Common Stock will not be entitled to vote on any amendment to the Proposed Charter that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of more than 50%such affected series are entitled, either voting separately as a single class or together as a class with the holders of the shares eligibleany other outstanding series of Preferred Stock, to vote forthereon pursuant to the electionProposed Charter or the DGCL.

No Preemptive Rights

The Charter does not provide the holders of directors can elect allCommon Stock with preemptive rights.

Preferred Stock

Our Charter provides that shares of the directors.

Pursuant to our amended and restated certificate of incorporation, if we do not consummate an initial business combination by 18monthsPreferred Stock may be issued from the closing of this offering (subject to our right to extend the period of time to consummate an initial business combination for uptime in one or more series. Our Board is authorized to an additional 3months as described in more detail in this prospectus), our corporate existence will cease except forfix the purposes of winding up our affairsvoting rights, if any, designations, powers, preferences and liquidating. If we are forced to liquidate prior to an initial business combination, our public stockholders are entitled to share ratably in

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the trust account, based on the amount then held in the trust account. Our sponsor, officersrelative, participating, optional, special and directors have agreed to waive theirother rights, to participate inif any, liquidation distribution from the trust account occurring upon our failure to consummate an initial business combination with respect to the founder’s common stock and private shares. Our sponsor, officersany qualifications, limitations and directors will therefore not participate in any liquidation distribution from the trust account with respect to such shares. They will, however, participate in any liquidation distribution from the trust account with respect to any shares of common stock acquired in, or following, this offering.

Our stockholders have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisionsrestrictions thereof, applicable to the shares of common stock, except that public stockholders have the right to sell their shares to us in a tender offer or have their shares of common stock converted to cash equal to their pro rata share of the trust account if they vote on the proposed business combination in connection with such business combination and the business combinationeach series. Our Board is completed. Public stockholders who sell or convert their stock into their share of the trust account still have the right to exercise the warrants that they received as part of the units.

Preferred Stock

There are no shares of preferred stock outstanding. Our amended and restated certificate of incorporation authorizes the issuance of 1,000,000shares of preferred stock with such designation, rights and preferences as may be determined from time to time by our board of directors. No shares of preferred stock are being issued or registered in this offering. Accordingly, our board of directors is empowered,able, without stockholder approval, to issue preferred stockPreferred Stock with dividend, liquidation, conversion, voting orand other rights whichthat could adversely affect the voting power orand other rights of the holders of common stock. However, the underwriting agreement prohibits us, priorCommon Stock and could have anti-takeover effects. The ability of our Board to a business combination, from issuing preferred stock which participates in any manner inissue Preferred Stock without stockholder approval could have the proceedseffect of the trust account, or which votes as a class with the common stock on a business combination. We may issue some or all of the preferred stock to effect a business combination. In addition, the preferred stock could be utilized as a method of discouraging, delaying, deferring or preventing a change inof control of us.us or the removal of existing management. We have no Preferred Stock outstanding at the date hereof. Although we do not currently intend to issue any shares of preferred stock,Preferred Stock, we cannot assure you that we will not do so in the future.

WarrantsLiquidation, Dissolution or Winding Up

No warrants are currently outstanding. Each whole warrant entitlesThe Charter will provide that upon the registered holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on the later of 30 days after the completion of an initial business combinationliquidation, dissolution or 12months from the closing of this offering. However, no warrants will be exercisable for cash unless we have an effective and current registration statement covering the shares of common stock issuable upon exercisewinding up of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the public warrants is not effective within a specified period following the consummation of our initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption,Post-Combinations Company (either voluntary or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value”(defined below) by (y) the fair market value. The “fair market value” for this purpose will mean the average reported last sale price of the shares of common stock for the 5 trading days ending on the trading day prior to the date of exercise. The warrants will expire on the fifth anniversary of our completion of an initial business combination, at 5:00 p.m.involuntary), New York City time, or earlier upon redemption or liquidation.

The private warrants, as well as any warrants underlying additional units we issue to our sponsor, officers, directors or their affiliates in payment of working capital loans made to us, will be identical to the warrants underlying the units being offered by this prospectus except that such warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and will not be redeemable by us, in each case so long as they are still held by our sponsor or its permitted transferees.

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We may call the warrants for redemption (excluding the private warrants and any warrants underlying additional units issued to our sponsor, officers, directors or their affiliates in payment of working capital loans made to us), in whole and not in part, at a price of $0.01 per warrant,

•        at any time after the warrants become exercisable,

•        upon not less than 30 days’ prior written notice of redemption to each warrant holder, if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period ending on the third business day prior to the notice of redemption to warrant holders; and

•        if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants.

The right to exercise will be forfeited unless the warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record holder of a warrant will have no further rights except to receive the redemption price for such holder’s warrant upon surrender of such warrant.

The redemption criteria for our warrants have been established at a price which is intended to provide warrant holders a reasonable premium to the initial exercise price and provide a sufficient differential between the then-prevailing share price and the warrant exercise price so that if the share price declines as a result of our redemption call, the redemption will not cause the share price to drop below the exercise price of the warrants.

If we call the warrants for redemption as described above, our management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the shares of common stock for the 5 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.

The warrants will be issued in registered form under a warrant agreement between ContinentalCommon Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval, by written consent or vote, of the holders of at least 50% of the then outstanding public warrants in order to make any change that adversely affects the interests of the registered holders.

The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices.

In addition, if (x) we issue additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.50 per share of common stock (with such issue price or effective issue price to be determined in good faith by our board of directors, and in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder’s shares held by them prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (z) the Market Value is below $9.50 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the price at which we issue the additional shares of common stock or equity-linked securities.

The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified or official bank check payable to us, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of shares of common stock and any voting rights until they exercise their warrants and receive shares of common stock. After the

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issuance of shares of common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.

Underratably in the termsassets and funds of the warrant agreement, we have agreedCompany that are available for distribution to use our best efforts to have declared effective a prospectus relating to the shares of common stock issuable upon exercisestockholders of the warrants and keep such prospectus current until the expiration of the warrants. However, we cannot assure you that we will be able to do so and, if we do not maintain a current prospectus relating to the shares of common stock issuable upon exercise of the warrants, holders will be unable to exercise their warrants for cash and we will not be required to net cash settle or cash settle the warrant exercise.

Warrant holders may elect to be subject to a restriction on the exercise of their warrants such that an electing warrant holder would not be able to exercise their warrants to the extent that, after giving effect to such exercise, such holder would beneficially own in excess of 9.8% of the shares of common stock outstanding.

No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round up to the nearest whole number the number of shares of common stock to be issued to the warrant holder.Company.

Dividends

We have not paid any cash dividends on our shares of common stockCommon Stock to date and do not intend to pay cash dividends prior to the completion of a business combination.the Business Combinations. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment of any cash dividends subsequent to a business combinationthe Business Combinations will be within the discretion of our then board of directors. ItBoard at such time. In addition, our Board is the present intention of our board of directors to retain all earnings, if any, for use in our business operationsnot currently contemplating and accordingly, our board does not anticipate declaring any stock dividends in the foreseeable future. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

Our Transfer Agent and Warrant Agent

The transfer agent for our securities and warrant agent for our warrants is Continental Stock Transfer & Trust Company, 1 State Street, New York, New York 10004.LLC.

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Listing of ourOur Securities

We intendOur Common Stock is traded on the OTCQX under the symbol “GNRS.”

Registration Rights

In connection with the Closing, Greenrose entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Selling Stockholders of Theraplant pursuant to applywhich Greenrose agreed that, at the request of the Majority Holders (as defined in the Registration Rights Agreement), Greenrose will file a registration statement with the Commission covering the resale of the Registrable Securities (as defined in the Registration Rights Agreement) requested to be included in such registration statement (the “Resale Registration Statement”), and Greenrose will use its reasonable best efforts to have our units, common stock and warrants listed on Nasdaq under the symbols “GNRSU,” “GNRS,” and “GNRSW,” respectively. If approved for listing, we anticipate that our unitsResale Registration Statement declared effective as soon as reasonably practicable after the filing thereof. Additionally, the Holders (as defined in the Registration Rights Agreement) will be listed on Nasdaq on or promptly after the effective dateentitled to piggyback registration rights.

The foregoing description of the registration statement. FollowingRegistration Rights Agreement is qualified in its entirety by reference to the datefull text of the common stockform of Registration Rights Agreement, a copy of which is attached as Exhibit 4.1 and warrants are eligible to trade separately, we anticipate that the common stock and warrants will be listed separately and as a unit on Nasdaq.incorporated herein by reference.

Certain Anti-Takeover Provisions of Delaware Law and our Amended and Restated Certificate of Incorporation and By-Laws

Staggered BoardSpecial Meeting of Directors

Our amended and restated certificate of incorporation provides that our board of directors will be classified into three classes of directors of approximately equal size. As a result, in most circumstances, a person can gain control of our board only by successfully engaging in a proxy contest at two or more annual meetings.

Special meeting of stockholdersStockholders

Our bylaws provide that special meetings of our stockholders may be called only by a majority vote of our board of directors,Board, by our presidentChief Executive Officer or by our chairman or by our secretary at the request in writing of stockholders owning a majority of our issued and outstanding capital stock entitled to vote.Chairman.

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Advance notice requirementsNotice Requirements for stockholder proposalsStockholder Proposals and director nominationsDirector Nominations

Our bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders, must provide timely notice of their intent in writing. To

Section 203 of the Delaware General Corporation Law

We will be timely, a stockholder’s notice will need to be delivered to our principal executive offices not later than the close of business on the 60th day nor earlier than the close of business on the 90th day priorsubject to the scheduled dateprovisions of Section 203 of the annual meetingDGCL regulating corporate takeovers.

This statute prevents certain Delaware corporations, under certain circumstances, from engaging in a “business combination” with:

•        a stockholder who owns 15% or more of stockholders. Inour outstanding voting stock (otherwise known as an “interested stockholder”);

•        an affiliate of an interested stockholder; or

•        an associate of an interested stockholder, for three years following the eventdate that lessthe stockholder became an interested stockholder.

A “business combination” includes a merger or sale of more than 70 days’ notice or10% of our assets. However, the above provisions of Section 203 do not apply if:

•        our Board approves the transaction that made the stockholder an “interested stockholder,” prior public disclosure ofto the date of the annual meetingtransaction;

•        after the completion of stockholders is given, a stockholder’s notice shall be timely if deliveredthe transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or

•        on or subsequent to our principal executive offices not later than the 10th day following the day on which public announcement of the date of the transaction, the business combination is approved by our annualBoard and authorized at a meeting of stockholders is first made or sent by us. Our bylaws also specify certain requirements as to the form and content of a stockholders’ meeting. These provisions may preclude our stockholders, from bringing matters before our annual meetingand not by written consent, by an affirmative vote of stockholders or from making nominations for directors at our annual meeting of stockholders.

least twoAuthorized but unissued shares-thirds

Our authorized but unissued common stock and preferred stock are available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

Exclusive Forum Selection

Our amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors, officers and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. Although we believe this provision benefits our company by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.

Our amended and restated certificate of incorporation provides that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability createdoutstanding voting stock not owned by the Exchange Act or the rules and regulations thereunder and Section 22interested stockholder.

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Table of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act, the Securities Act or any other claim for which the federal courts have exclusive jurisdiction.Contents

Limitation on Liability and Indemnification of Directors and Officers

Our amended and restated certificate of incorporation provides that our directors and officers will be indemnified by us to the fullest extent authorized by Delaware law as it now exists or may in the future be amended. In addition, our amended and restated certificate of incorporation provides that our directors will not be personally liable for monetary damages to us for breaches of their fiduciary duty as directors, unless they violated their duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived an improper personal benefit from their actions as directors.

Our bylaws also will permit us to secure insurance on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit indemnification. We will purchasehave purchased a policy of directors’ and officers’ liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify the directors and officers.

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These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced directors and officers.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

This summary description of the material terms of the Certificate of Incorporation does not purport to be complete and is qualified in its entirety by reference to the full text of the Certificate of Incorporation, a copy of which is attached as Exhibit 3.1 and is incorporated herein by reference.

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SHARES ELIGIBLE FOR FUTURE SALEPLAN OF DISTRIBUTION

Immediately after this offering, we will have 19,050,000sharesWe are registering the resale from time to time of (i) 5,000,000 shares of our common stock, outstanding, or 21,892,500shares if$0.0001 par value per share (our “Common Stock”), held by the over-allotment option is exercised in full. Of theseformer equity holders of Theraplant, LLC (“Theraplant”); (ii) 2,266,350 shares the 15,000,000shares sold in this offering, or 17,250,000shares if the over-allotment option is exercised in full, will be freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by one of our affiliatesCommon Stock held by our sponsor, Greenrose Associates LLC (our “Sponsor”); (iii) 22,000 shares of our Common Stock and 132,000 private warrants (the “private warrants”) held by Imperial Capital, LLC, the representative of the underwriters in our initial public offering (“Imperial”); and 88,000 shares of our Common Stock and 528,000 private warrants held by I-Bankers Securities, Inc, an underwriter in our initial public offering (“I-Bankers” and, together with Theraplant, our Sponsor and Imperial, the “Selling Stockholders”).

The shares of Common Stock offered by this prospectus are being offered by the Selling Stockholders. Each Selling Stockholder is an “underwriter” within the meaning of Rule 144 underSection 2(a)(11) of the Securities Act. All

We will not receive any of the remaining shares are restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering. All of those shares have been placed in escrow and will not be transferable until they are released except in limited circumstances described elsewhere in this prospectus.

Rule 144

A person who has beneficially owned restricted shares of common stock or warrants for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates atproceeds from the time of, or at any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale. Persons who have beneficially owned restricted shares of common stock for at least six months but who are our affiliates at the time of, or any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period a number of shares that does not exceed the greater of either of the following:

•        1% of the number of shares of common stock then outstanding, which will equal 190,500shares immediately after this offering (or 218,925 if the over-allotment option is exercised in full); and

•        the average weekly trading volume of the shares of common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

Sales under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.

Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies

Historically, the SEC staff had taken the position that Rule 144 is not available for the resale of securities initially issued by companies that are, or previously were, blank check companies, like us. The SEC has codified and expanded this position in the amendments discussed above by prohibiting the use of Rule 144 for resale of securities issued by any shell companies (other than business combination related shell companies) or any issuer that has been at any time previously a shell company. The SEC has provided an important exception to this prohibition, however, if the following conditions are met:

•        the issuer of the securities by the Selling Stockholders. We will receive proceeds from Private warrants and the Selling Securityholder Warrants exercised in the event that was formerly a shell company has ceased to be a shell company;such warrants are exercised for cash.

•        the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;

•        the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and

•        at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.

As a result, it is likely that pursuant to Rule 144, our sponsor will be able to sell its founder’s shares freely without registration one year after we have completed our initial business combination assuming it is not an affiliate of ours at that time.

Registration Rights

The holders of the founder’s sharesOnce issued and outstanding on the date of this prospectus, as well as the holders of the private securities and any units and warrants our sponsor, officers, directors or their affiliates may be issued in payment of working capital loans made to us (and all underlying securities), will be entitled to registration rights pursuant to an agreement to be signed prior to or on the effective date of this offering. The holders of a majority of these securities

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are entitled to make up to two demands that we register such securities. The holders of the majority of the founder’s shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the private securities and units and warrants issued to our sponsor, officers, directors or their affiliates in payment of working capital loans made to us (or underlying securities) can elect to exercise these registration rights at any time after we consummate a business combination. Notwithstanding anything to the contrary, Imperial Capital may only make a demand on one occasion and only during the five-year period beginning on the effective dateupon effectiveness of the registration statement of which this prospectus forms a part. In addition,part, the holders have certain “piggy-back” registration rightssecurities beneficially owned by the Selling Stockholders covered by this prospectus may be offered and sold from time to time by the Selling Stockholders. The term “Selling Stockholders” includes the pledgees, donees, transferees or other successors in interest selling securities received after the date of this prospectus from the Selling Stockholders as a gift, pledge, partnership distribution or other transfer. The Selling Stockholders will act independently of us in making decisions with respect to the timing, manner and size of each sale. Such sales may be made on one or more exchanges or in the over-the-counter market or otherwise, at prices and under terms then prevailing or at prices related to the then current market price or in negotiated transactions. The Selling Stockholders reserve the right to accept and, together with their respective agents, to reject, any proposed purchase of securities to be made directly or through agents. The Selling Stockholders and any permitted transferees may sell their securities offered by this prospectus on any stock exchange, market or trading facility on which the securities are traded or in private transactions.

Subject to the limitations set forth in any applicable registration statements filed subsequentrights agreement or other agreement with us, the Selling Stockholders may use any one or more of the following methods when selling the securities offered by this prospectus:

•        purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to our consummationthis prospectus;

•        ordinary brokerage transactions and transactions in which the broker solicits purchasers;

•        block trades in which the broker-dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of a business combination; provided, however, that Imperial Capital may participatethe block as principal to facilitate the transaction;

•        an over-the-counter distribution in a “piggy-back” registration only duringaccordance with the seven-year period beginning onrules of the effectiveapplicable exchange;

•        settlement of short sales entered into after the date of this prospectus;

•        agreements with broker-dealers to sell a specified number of the securities at a stipulated price per share;

•        in “at the market” offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices related to such prevailing market prices, including sales made directly on a national securities exchange or sales made through a market maker other than on an exchange or other similar offerings through sales agents;

•        directly to purchasers, including through a specific bidding, auction or other process or in privately negotiated transactions;

•        through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

•        through a combination of any of the above methods of sale; or

•        any other method permitted pursuant to applicable law.

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In addition, a Selling Securityholder that is an entity may elect to make an in-kind distribution of securities to its members, partners or stockholders pursuant to the registration statement of which this prospectus formsis a part. part by delivering a prospectus with a plan of distribution. Such members, partners or stockholders would thereby receive freely tradeable securities pursuant to the distribution through a registration statement. To the extent a distributee is an affiliate of ours (or to the extent otherwise required by law), we may file a prospectus supplement in order to permit the distributees to use the prospectus to resell the securities acquired in the distribution.

The Selling Stockholders also may transfer the securities in other circumstances, in which case the transferees, pledgees or other successors-in-interest will be the selling beneficial owners for purposes of this prospectus. Upon being notified by the Selling Stockholders that a donee, pledgee, transferee, other successor-in-interest intends to sell our securities, we will, to the extent required, promptly file a supplement to this prospectus to name specifically such person as a Selling Securityholder.

To the extent required, the shares of our common stock to be sold, the name of the Selling Stockholders, the respective purchase prices and public offering prices, the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes this prospectus.

In connection with the sale of shares of our common stock, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the shares of our common stock in the course of hedging the positions they assume. The Selling Stockholders may also sell shares of our common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these shares. The Selling Stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

In offering the securities covered by this prospectus, the Selling Stockholders and any underwriters, broker-dealers or agents who execute sales for the Selling Stockholders may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. Any discounts, commissions, concessions or profit they earn on any resale of those securities may be underwriting discounts and commissions under the Securities Act.

In order to comply with the securities laws of certain states, if applicable, the securities must be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain states the securities may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

We have advised the Selling Stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the Selling Stockholders and their respective affiliates. In addition, to the extent applicable we will bearmake copies of this prospectus (as it may be supplemented or amended from time to time) available to the expenses incurredSelling Stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The Selling Stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.

A holder of Warrants may exercise its Warrants in accordance with the applicable warrant agreement on or before the expiration date set forth therein by surrendering, at the office of the warrant agent, Continental Stock Transfer & Trust Company, the certificate evidencing such Warrant, with the form of election to purchase set forth thereon, properly completed and duly executed, accompanied by full payment of the exercise price and any and all applicable taxes due in connection with the filingexercise of the Warrant, subject to any such registration statements.applicable provisions relating to cashless exercises in accordance with the Warrant Agreement.

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MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following are the material U.S. federal income and estate tax considerations with respect to your ownership and disposition of our units or components thereof, which we refer to collectively as our securities, assuming you purchase the securities in this offering and will hold them as capital assets within the meaning of the Internal Revenue Code of 1986, as amended (the “Code”).

This discussion does not address all of the U.S. federal income and estate tax considerations that may be relevant to you in light of your particular circumstances, and it does not describe all of the tax consequences that may be relevant to persons subject to special rules, such as:

•        certain financial institutions;

•        insurance companies;

•        dealers and traders in securities or foreign currencies;

•        persons holding our securities as part of a hedge, straddle, conversion transaction or other integrated transaction;

•        former citizens or residents of the United States;

•        U.S. persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;

•        partnerships or other entities classified as partnerships for U.S. federal income tax purposes;

•        persons liable for the alternative minimum tax; and

•        tax-exempt organizations.

The following does not discuss any aspect of state, local or non-U.S. taxation. This discussion is based on current provisions of the Code, Treasury regulations, judicial opinions, published positions of the U.S. Internal Revenue Service (“IRS”) and all other applicable authorities, all of which are subject to change, possibly with retroactive effect.

If an entity that is treated as a partnership for U.S. federal income tax purposes holds our securities, the tax treatment of a partner will generally depend on the status of the partner and the activities of the entity. If you are a partner in such an entity, you should consult your tax advisor.

WE URGE PROSPECTIVE INVESTORS TO CONSULT THEIR TAX ADVISORS REGARDING THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S.NON-U.S. INCOME, ESTATE AND OTHER TAX CONSIDERATIONS WITH RESPECT TO ACQUIRING, HOLDING AND DISPOSING OF OUR SECURITIES.

Each unit will be treated for U.S. federal income tax purposes as an investment unit consisting of one share of our common stock and one warrant, each whole warrant to acquire one share of our common stock, subject to adjustment. In determining your basis for the common stock and half warrant composing a unit, you should allocate your purchase price for the unit between the components on the basis of their relative fair market values at the time of issuance.

Personal Holding Company Status

We could be subject to United States federal income tax at rates in excess of those generally applicable to corporations on a portion of our income if we are determined to be a personal holding company, or PHC, for United States federal income tax purposes. A U.S. corporation will generally be classified as a PHC for United States federal income tax purposes in a given taxable year if (i) at any time during the last half of such taxable year, five or fewer individuals (without regard to their citizenship or residency and including as individuals for this purpose certain entities such as certain tax-exempt organizations, pension funds, and charitable trusts) own or are deemed to own (pursuant to certain constructive ownership rules) more than 50% of the stock of the corporation by value and (ii) at least 60% of the corporation’s adjusted ordinary gross income, as determined for United States federal income tax purposes, for such taxable year consists of PHC income (which includes, among other things, dividends, interest, certain royalties, annuities and, under certain circumstances, rents).

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Depending on the date and size of our initial business combination, it is possible that at least 60% of our adjusted ordinary gross income may consist of PHC income as discussed above. In addition, depending on the concentration of our stock in the hands of individuals, including the members of our sponsor and certain tax-exempt organizations, pension funds, and charitable trusts, it is possible that more than 50% of our stock will be owned or deemed owned (pursuant to the constructive ownership rules) by such persons during the last half of a taxable year. Thus, no assurance can be given that we will not become a PHC following this offering or in the future. If we are or were to become a PHC in a given taxable year, we would be subject to an additional PHC tax, currently 20%, on our undistributed taxable income, subject to certain adjustments.

U.S. Holders

This section is addressed to U.S. holders of our securities. For purposes of this discussion, you are a “U.S. holder” if you are a beneficial owner of a security that is:

•        an individual citizen or resident of the United States for U.S. federal income tax purposes;

•        a corporation, or other entity taxable as a corporation, created or organized in, or under the laws of, the United States or any state thereof or the District of Columbia; or

•        an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.

Dividends and Distributions

As discussed under “Dividend Policy” above, we do not anticipate that any dividends will be paid in the foreseeable future. If we do make distributions on our common stock, such distributions generally will be treated as dividends for U.S. federal income tax purposes to the extent of our current or accumulated earnings and profits. Distributions in excess of our current or accumulated earnings and profits generally will first reduce your basis in the common stock (but not below zero) and then will be treated as gain realized on the sale or other disposition of the common stock (as described in the first paragraph under “— Sale or Other Disposition or Conversion of Common Stock” below).

The conversion feature of the common stock described under “Proposed Business — Effecting a Business Combination — Conversion Rights” may be viewed as a position with respect to substantially similar or related property which diminishes your risk of loss and thereby affects your ability to satisfy the holding period requirements for the dividends received deduction or the preferential tax rate on qualified dividend income with respect to the time period prior to the approval of an initial business combination.

Sale or Other Disposition or Conversion of Common Stock

Gain or loss you realize on the sale or other disposition of our common stock (other than conversion into cash but including a liquidation in the event we do not consummate a business combination within the required time) will be capital gain or loss. The amount of your gain or loss will be equal to the difference between your tax basis in the common stock disposed of and the amount realized on the disposition. The deductibility of capital losses is subject to limitations. Any capital gain or loss you realize on a sale or other disposition of our common stock will generally be long-term capital gain or loss if your holding period for the common stock is more than one year. However, the conversion feature of the common stock described under “Proposed Business — Effecting a Business Combination — Conversion Rights” could affect your ability to satisfy the holding period requirements for the long-term capital gain tax rate with respect to the time period prior to the approval of an initial business combination.

If you convert your common stock into a right to receive cash as described in “Proposed Business — Effecting a Business Combination — Conversion Rights,” the conversion generally will be treated as a sale of common stock described in the preceding paragraph (rather than as a dividend or distribution). The conversion will, however, be treated as a dividend or distribution and taxed as described in “— Dividends and Distributions” above if your percentage ownership in us (including shares that you are deemed to own under certain attribution rules, such as the shares into which the warrants are exercisable) after the conversion is not meaningfully reduced from what your percentage ownership was prior to the conversion. If you have a relatively minimal stock interest and, taking into account the effect of conversion by other stockholders, your percentage ownership in us is reduced as a result of the conversion, you may be regarded as having suffered a meaningful reduction in interest. For example, the IRS has ruled that any reduction

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in the stockholder’s proportionate interest will constitute a “meaningful reduction” in a transaction in which

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a holder held less than 1% of the shares of a corporation and did not have management control over the corporation. You should consult your own tax advisor as to whether conversion of your common stock will be treated as a sale or as a dividend under the Code and, if you actually or constructively own 5% (or, if our stock is not then publicly traded, 1%) or more of our common stock before conversion, whether you are subject to special reporting requirements with respect to such conversion.

Sale or Other Disposition, Exercise or Expiration of Warrants

Upon the sale or other disposition of a warrant (other than by exercise), you will generally recognize capital gain or loss equal to the difference between the amount realized on the sale or other disposition and your tax basis in the warrant. This capital gain or loss will be long-term capital gain or loss if, at the time of the sale or other disposition, the warrant has been held by you for more than one year. The deductibility of capital losses is subject to limitations.

In general, you will not be required to recognize income, gain or loss upon exercise of a warrant for its exercise price. Your basis in a share of common stock received upon exercise will be equal to the sum of (1) your basis in the warrant and (2) the exercise price of the warrant. Your holding period in the shares received upon exercise will commence on the day after you exercise the warrants. Although there is no direct legal authority as to the U.S. federal income tax treatment of an exercise of a warrant on a cashless basis, we intend to take the position that such exercise will not be taxable, either because the exercise is not a gain realization event or because it qualifies as a tax-free recapitalization. In the former case, the holding period of the common stock should commence on the day after the warrant is exercised. In the latter case, the holding period of the common stock would include the holding period of the exercised warrants. However, our position is not binding on the IRS and the IRS may treat a cashless exercise of a warrant as a taxable exchange. You are urged to consult your own tax advisor as to the consequences of an exercise of a warrant on a cashless basis.

If a warrant expires without being exercised, you will recognize a capital loss in an amount equal to your basis in the warrant. Such loss will be long-term capital loss if, at the time of the expiration, the warrant has been held by you for more than one year. The deductibility of capital losses is subject to limitations.

Constructive Dividends on Warrants

As discussed under “Dividend Policy” above, we do not anticipate that any dividends will be paid in the foreseeable future. If at any time during the period you hold warrants, however, we were to pay a taxable dividend to our stockholders and, in accordance with the anti-dilution provisions of the warrants, the conversion rate of the warrants werewas increased, that increase would be deemed to be the payment of a taxable dividend to you to the extent of our earnings and profits, notwithstanding the fact that you will not receive a cash payment. If the conversion rate is adjusted in certain other circumstances (or in certain circumstances, there is a failure to make adjustments), such adjustments may also result in the deemed payment of a taxable dividend to you. You should consult your tax advisor regarding the proper treatment of any adjustments to the warrants.

Unearned Income Medicare Tax

A 3.8% Medicare contribution tax will generally apply to all or some portion of the net investment income of a U.S. holder that is an individual with adjusted gross income that exceeds a threshold amount ($250,000 if married filing jointly or if considered a “surviving spouse” for federal income tax purposes, $125,000 if married filing separately, and $200,000 in other cases). This 3.8% tax will also apply to all or some portion of the undistributed net investment income of certain U.S. holders that are estates and trusts. For these purposes, dividends and gains from the taxable dispositions of the common stock and warrants will generally be taken into account in computing such a U.S. holder’s net investment income.

Information Reporting and Backup Withholding

Information returns may be filed with the IRS with respect to dividends or other distributions we may pay to you and proceeds from the sale of your shares of common stock or warrants. You will be subject to backup withholding on these payments if you fail to provide your taxpayer identification number to the paying agent and comply with certain certification procedures or otherwise establish an exemption from backup withholding. Backup withholding is not

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an additional tax. Any amounts withheld with respect to your shares of common stock or warrants under the backup

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withholding rules will be refunded to you or credited against your United States federal income tax liability, if any, by the IRS provided that certain required information is furnished to the IRS in a timely manner.

Non-U.S. Holders

This section is addressed to non-U.S. holders of the securities. For purposes of this discussion, a “non-U.S. holder” is a beneficial owner of a security (other than an entity treated as a partnership for U.S. federal income tax purposes) that is not a U.S. holder.

Dividends and Distributions

As discussed under “Dividend Policy” above, we do not anticipate that any dividends will be paid in the foreseeable future. If, however, we were to pay taxable dividends to you with respect to your shares of common stock (including any deemed distributions treated as a dividend on the warrants, as described in “— Constructive Dividends on Warrants” below), those dividends would generally be subject to United States withholding tax at a rate of 30% of the gross amount, unless you are eligible for a reduced rate of withholding tax under an applicable income tax treaty and you provide proper certification of your eligibility for such reduced rate (usually on an IRS Form W-8BEN or Form W-8BEN-E). A distribution generally will constitute a dividend for U.S. federal income tax purposes to the extent of our current or accumulated earnings and profits as determined under the Code. Any distribution not constituting a dividend generally will be treated first as reducing your basis in your shares of common stock and, to the extent it exceeds your basis, as gain from the disposition of your shares of common stock treated as described under “Sale or Other Disposition of Common Stock or Warrants” below. The full amount of any distributions to you may, however, be subject to United States withholding tax unless the applicable withholding agent elects to withhold a lesser amount based on a reasonable estimate of the amount of the distribution that would be treated as a dividend. In addition, if we determine that we are likely to be classified as a “United States real property holding corporation”(see “Sale or Other Disposition of Common Stock or Warrants” below), we will withhold at least 10% of any distribution that exceeds our current and accumulated earnings and profits as provided by the Code.

Dividends we pay to you that are effectively connected with your conduct of a trade or business within the United States (and, if certain income tax treaties apply, are attributable to a United States permanent establishment maintained by you) generally will not be subject to United States withholding tax if you comply with applicable certification and disclosure requirements (usually by providing an IRS Form W-8ECI). Instead, such dividends generally will be subject to United States federal income tax, net of certain deductions, at the same graduated individual or corporate rates applicable to United States persons. If you are a corporation, effectively connected income may also be subject to a “branch profits tax” at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty).

Exercise of Warrants

You generally will not be subject to U.S. federal income tax on the exercise of the warrants into shares of common stock. However, if a cashless exercise of warrants results in a taxable exchange, as described in “— U.S. Holders — Sale or Other Disposition, Exercise or Expiration of Warrants,” the rules described below under “Sale or Other Disposition of Common Stock or Warrants” would apply.

Sale or Other Disposition of Common Stock or Warrants

You generally will not be subject to United States federal income tax on any gain realized upon the sale, exchange or other disposition of our common stock (which would include a dissolution and liquidation in the event we do not consummate an initial business combination within the required timeframe) or warrants (including an expiration or redemption of our warrants), unless:

•        the gain is effectively connected with your conduct of a trade or business within the United States (and, under certain income tax treaties, is attributable to a United States permanent establishment you maintain);

•        you are an individual, you hold your shares of common stock or warrants as capital assets, you are present in the United States for 183 days or more in the taxable year of disposition and you meet other conditions, and you are not eligible for relief under an applicable income tax treaty; or

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•        we are or have been a “United States real property holding corporation” for United States federal income tax purposes and, in the case where the shares of our common stock are regularly traded on an established securities market, you hold or have held, directly or indirectly, at any time within the shorter of the five-year period preceding disposition or your holding period for your shares of common stock or warrants, more than 5% of our common stock. Special rules may apply to the determination of the 5% threshold in the case of a holder of a warrant. You are urged to consult your own tax advisors regarding the effect of holding the warrants on the calculation of such 5% threshold. We will be classified as a United States real property holding corporation if the fair market value of our “United States real property interests” equals or exceeds 50% of the sum of (1) the fair market value of our United States real property interests, (2) the fair market value of our non-United States real property interests and (3) the fair market value of any other of our assets which are used or held for use in our trade or business. Although we currently are not a United States real property holding corporation, we cannot determine whether we will be a United States real property holding corporation in the future until we consummate an initial business combination.

Gain that is effectively connected with your conduct of a trade or business within the United States generally will be subject to United States federal income tax, net of certain deductions, at the same rates applicable to United States persons. If you are a corporation, the branch profits tax also may apply to such effectively connected gain. If the gain from the sale or disposition of your shares of common stock or warrants is effectively connected with your conduct of a trade or business in the United States but under an applicable income tax treaty is not attributable to a permanent establishment you maintain in the United States, your gain may be exempt from United States tax under the treaty. If you are described in the second bullet point above, you generally will be subject to United States federal income tax at a rate of 30% on the gain realized, although the gain may be offset by some United States source capital losses realized during the same taxable year. If you are described in the third bullet point above, gain recognized by you on the sale, exchange or other disposition of shares of common stock or warrants will be subject to U.S. federal income tax on a net income basis at normal graduated U.S. federal income tax rates. In addition, a buyer of your shares of common stock or warrants may be required to withhold United States income tax at a rate of 10% of the amount realized upon such disposition.

If you convert your common stock into a right to receive cash as described in “Proposed Business — Effecting a Business Combination — Conversion Rights,” the conversion generally will be treated as a sale of common stock rather than as a dividend or distribution. The conversion will, however, be treated as a dividend or distribution and taxed as described in “Dividends and Distributions” if your percentage ownership in us (including shares that you are deemed to own under certain attribution rules, such as the shares into which the warrants are exercisable) after the conversion is not meaningfully reduced from what your percentage ownership was prior to the conversion. See the discussion in “— U.S. Holders — Sale or Other Disposition or Conversion of Common Stock.” You should consult your own tax advisor as to whether conversion of your common stock will be treated as a sale or as a dividend under the Code.

Constructive Dividends on Warrants

As discussed under “Dividend Policy” above, we do not anticipate that any dividends will be paid in the foreseeable future. If at any time during the period you hold warrants, however, we were to pay a taxable dividend to our stockholders and, in accordance with the anti-dilution provisions of the warrants, the conversion rate of the warrants werewas increased, that increase would be deemed to be the payment of a taxable dividend to you to the extent of our earnings and profits, notwithstanding the fact that you will not receive a cash payment. If the conversion rate is adjusted in certain other circumstances (or in certain circumstances, there is a failure to make adjustments), such adjustments may also result in the deemed payment of a taxable dividend to you. Any resulting withholding tax attributable to deemed dividends would be collected from other amounts payable or distributable to you. You should consult your tax advisor regarding the proper treatment of any adjustments to the warrants.

Information Reporting and Backup Withholding

We must report annually to the IRS the amount of dividends or other distributions we may pay to you on your shares of common stock and the amount of tax we withhold on any such distributions regardless of whether withholding is required. The IRS may make copies of the information returns reporting those dividends and amounts withheld available to the tax authorities in the country in which you reside pursuant to the provisions of an applicable income tax treaty or exchange of information treaty.

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The United States imposes backup withholding on dividends and certain other types of payments to United States persons. You will not be subject to backup withholding on dividends you receive on your shares of common stock if you provide proper certification (usually on an IRS Form W-8BEN or Form W-8BEN-E) of your status as a non-United States person or you are a corporation or one of several types of entities and organizations that qualify for exemption (an “exempt recipient”).

Information reporting and backup withholding generally are not required with respect to the amount of any proceeds from the sale of your shares of common stock or warrants outside the United States through a foreign office of a foreign broker that does not have certain specified connections to the United States. However, if you sell your shares of common stock or warrants through a United States broker or the United States office of a foreign broker, the broker will be required to report to the IRS the amount of proceeds paid to you unless you provide appropriate certification (usually on an IRS Form W-8BEN or Form W-8BEN-E) to the broker of your status as a non-United States person or you are an exempt recipient. Information reporting also would apply if you sell your shares of common stock or warrants through a foreign broker deriving more than a specified percentage of its income from United States sources or having certain other connections to the United States.

Backup withholding is not an additional tax. Any amounts withheld with respect to your shares of common stock or warrants under the backup withholding rules will be refunded to you or credited against your United States federal income tax liability, if any, by the IRS provided that certain required information is furnished to the IRS in a timely manner.

Estate Tax

Common stock owned or treated as owned by an individual who is not a citizen or resident (as defined for United States federal estate tax purposes) of the United States at the time of his or her death, or by an entity the property of which is potentially includible in such an individual’s gross estate, will be included in the individual’s gross estate for United States federal estate tax purposes and therefore may be subject to United States federal estate tax unless an applicable estate tax treaty provides otherwise. The foregoing may also apply to warrants.

Unearned Income Medicare Tax

If you are a foreign estate or trust, you may be subject to the Medicare contribution tax described under “U.S. Holders �� Unearned Income Medicare Tax” above. Non-U.S. holders should consult their tax advisors regarding the possible implications of the Medicare contribution tax on their investments in the units.

FATCA

A 30% withholding tax will be imposed on payments to certain foreign entities of U.S.-source dividends and the gross proceeds of dispositions of stock (including our securities) that can produce U.S.-source dividends, unless various U.S. information reporting and due diligence requirements (generally relating to ownership by U.S. persons of interests in or accounts with those entities) have been satisfied or an exemption has otherwise been established. This withholding tax will not apply, however, to payments of gross proceeds from dispositions of stock before January1,January 1, 2019. Potential investors should consult their tax advisors regarding the possible implications of this withholding tax on their investment in the units.

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UNDERWRITINGLEGAL MATTERS

We are offeringTarter Krinsky & Drogin LLP, New York, New York, is acting as our counsel in connection with the unitsregistration of our securities under the Securities Act, and as such, will pass upon the validity of the securities offered in this offering.

EXPERTS

The balance sheet of Greenrose Acquisition Corp. as of December 31, 2020 and 2019, and for the period from August 26, 2019 (inception) through December 31, 2019 appearing in this Prospectus have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report, thereon (which contains an explanatory paragraph relating to substantial doubt about the ability of Greenrose Acquisition Corp. to continue as a going concern as described in Note 1 to the financial statements), appearing elsewhere in this prospectus, and are included herein in reliance on the report of such firm given their authority as experts in auditing and accounting.

The consolidated financial statements of Theraplant LLC as of December 31, 2020 and 2019 and for the years then ended have been included herein in reliance upon the reports of Macias Gini & O’Connell LLP, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

The financial statements of True Harvest LLC as of December 31, 2020 and 2019 and for the years then ended have been included herein in reliance upon the reports of Macias Gini & O’Connell LLP, independent auditor, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the securities we are offering by this prospectus. This prospectus does not contain all of the information included in the registration statement. For further information about us and our securities, you should refer to the registration statement and the exhibits and schedules filed with the registration statement. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are materially complete but may not include a description of all aspects of such contracts, agreements or other documents, and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.

Upon completion of this offering, we will be subject to the information requirements of the Exchange Act and will file annual, quarterly and current event reports, proxy statements and other information with the SEC. You can read our SEC filings, including the registration statement, over the Internet at the SEC’s website at www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facility at 100 F Street, N.E., Washington, D.C. 20549.

You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.

117

Table of Contents

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page

Financial Statements of Greenrose Acquisition Corp

Report of Independent Registered Public Accounting Firm

F-2

Balance Sheet

F-3

Statement of Operations

F-4

Statement of Changes in Stockholders’ Equity

F-5

Statement of Cash Flows

F-6

Notes to Financial Statements

F-7

Condensed Consolidated Balance Sheets

F-48

Condensed Consolidated Statements of Operations (Unaudited)

F-49

Statements of Changes in Permanent Deficit for the Three and Nine Months Ended September 30, 2021 (Unaudited)

F-50

Condensed Consolidated Statements of Cash Flows (Unaudited)

F-51

Notes to Condensed Consolidated Financial Statements

F-52

Financial Statements of Theraplant, LLC

Report of Independent Registered Public Accounting Firm

F-79

Consolidated Balance Sheets December 31, 2020 and 2019

F-80

Consolidated Statements of Operations Years Ended December 31, 2020 and 2019

F-81

Consolidated Statements of Changes in Members’ Equity Years Ended December 31, 2020 and 2019

F-82

Consolidated Statements of Cash Flows Years Ended December 31, 2020 and 2019

F-83

Notes to the Consolidated Financial Statements

F-84

Consolidated Balance Sheets September 30, 2021 and December 31, 2020

F-94

Unaudited Consolidated Statements of Operations Three and Nine Months Ended September 30, 2021 and 2020 Unaudited Consolidated Statements of Changes in Members’ Equity Nine Months Ended September 30, 2021 and 2020

F-95

Unaudited Consolidated Statements of Changes in Members’ Equity Nine Months Ended
September 30, 2021 and 2020

F-96

Unaudited Consolidated Statements of Cash Flows Nine Months Ended September 30, 2021
and 2020

F-97

Notes to Consolidated Financial Statements

F-98

Financial Statements of True Harvest, LLC

Independent Auditor’s Report

F-105

Balance Sheets As of December 31, 2020 and 2019

F-106

Statements of Operations Years Ended December 31, 2020 and 2019

F-107

Statements of Changes in Members’ Deficit Years Ended December 31, 2020 and 2019

F-108

Statements of Cash Flows Years Ended December 31, 2020 and 2019

F-109

Notes to the Financial Statements

F-110

Condensed Financial Statements (Unaudited):

Condensed Balance Sheets

F-124

Condensed Statements of Operations

F-125

Condensed Statements of Changes in Members’ Deficit

F-126

Condensed Statements of Cash Flows

F-127

Notes to the Condensed Financial Statements

F-128

F-1

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of

Greenrose Acquisition Corp.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Greenrose Acquisition Corp. (the “Company”) as of December 31, 2020 and 2019, the related statements of operations, changes in permanent (deficit) equity and cash flows for the year ended December 31, 2020 and for the period from August 26, 2019 (inception) through December 31, 2019, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the year ended December 31, 2020 and for the period from August 26, 2019 (inception) through December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph — Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s cash and working capital as of December 31, 2020 are not sufficient to complete its planned activities. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Restatement of Previously Issued Financial Statement

As discussed in Note 2, the accompanying balance sheet as of December 31, 2020 and the related statements of operations, changes in permanent (deficit) equity and cash flows for the year ended December 31, 2020, have been restated.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Marcum llp

Marcum LLP

We have served as the Company’s auditor since 2019.

New York, NY

March 10, 2021, except for the effects of the restatement disclosed in Note 2, — Amendment 1, and the subsequent events discussed in Note 11 as to which the date is May 27, 2021, and except for the effects of the restatement disclosed in Note 2 — Amendment 2, as to which the date is December 2, 2021.

F-2

Table of Contents

GREENROSE ACQUISITION CORP.
BALANCE SHEETS

 

December 31,

  

2020

 

2019

  

(As Restated)

  

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash

 

$

309,849

 

 

$

24,970

 

Prepaid expenses

 

 

45,096

 

 

 

28,872

 

Total Current Assets

 

 

354,945

 

 

 

53,842

 

  

 

 

 

 

 

 

 

Deferred offering costs

 

 

 

 

 

603,833

 

Marketable securities held in Trust Account

 

 

173,656,603

 

 

 

 

TOTAL ASSETS

 

$

174,011,548

 

 

$

657,675

 

  

 

 

 

 

 

 

 

LIABILITIES, TEMPORARY AND PERMANENT (DEFICIT) EQUITY

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accrued expenses

 

$

399,999

 

 

$

 

Accrued offering costs

 

 

 

 

 

3,508

 

Advances from related party

 

 

 

 

 

631,366

 

Total Current Liabilities

 

 

399,999

 

 

 

634,874

 

  

 

 

 

 

 

 

 

Private warrants liability

 

 

1,980,000

 

 

 

 

Convertible promissory note, net – related party

 

 

1,593,605

 

 

 

 

TOTAL LIABILITIES

 

 

3,973,604

 

 

 

634,874

 

  

 

 

 

 

 

 

 

Commitments

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

Common stock subject to possible redemption; 17,250,000 and no shares at redemption value at December 31, 2020 and 2019, respectively

 

 

173,439,148

 

 

 

 

  

 

 

 

 

 

 

 

Permanent (Deficit) Equity

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding

 

 

 

 

 

 

Common stock, $0.0001 par value; 70,000,000 shares authorized; 4,642,500 and 4,312,500 shares issued and outstanding (excluding 17,250,000 and no shares subject to possible redemption) at December 31, 2020 and 2019(1), respectively

 

 

464

 

 

 

431

 

Additional paid-in capital

 

 

 

 

 

24,569

 

Accumulated deficit

 

 

(3,401,668

)

 

 

(2,199

)

Total Permanent (Deficit) Equity

 

 

(3,401,204

)

 

 

22,801

 

TOTAL LIABILITIES, TEMPORARY AND PERMANENT (DEFICIT) EQUITY

 

$

174,011,548

 

 

$

657,675

 

____________

(1)      Share count at December 31, 2019 included up to 562,500 shares subject to forfeiture if the over-allotment was not exercised in full or in part by the underwriters named below.(see Note 5).

The accompanying notes are an integral part of the financial statements.

F-3

Table of Contents

GREENROSE ACQUISITION CORP.
STATEMENTS OF OPERATIONS

 

Year Ended
December 31,
2020

 

For the
Period from
August 26,
2019
(inception) Through
December 31,
2019

  

(As Restated)

  

Operating and formation costs

 

$

1,598,581

 

 

$

2,199

 

Loss from operations

 

 

(1,598,581

)

 

 

(2,199

)

  

 

 

 

 

 

 

 

Other income:

 

 

 

 

 

 

 

 

Interest earned on marketable securities held in Trust Account

 

 

1,156,603

 

 

 

 

Interest Expense

 

 

(272,884

)

 

 

 

 

Change in fair value of private warrants liability

 

 

(574,200

)

 

 

 

 

Change in fair value of Convertible promissory note, net – related party

 

 

(320,721

)

 

 

 

Net loss

 

$

(1,609,783

)

 

$

(2,199

)

  

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common stock(1)

 

 

19,779,057

 

 

 

3,750,000

 

  

 

 

 

 

 

 

 

Basic and diluted net loss per share, Common stock

 

$

(0.08

)

 

$

(0.00

)

____________

(1)      Excludes an aggregate of 562,500 shares that were subject to forfeiture at December 31, 2019.

The accompanying notes are an integral part of the financial statements.

F-4

Table of Contents

GREENROSE ACQUISITION CORP.
STATEMENTS OF CHANGES IN PERMANENT DEFICIT EQUITY

YEAR ENDED DECEMBER 31, 2020
(As Restated)

 



Common Stock

 

Additional Paid-in
Capital

 

Accumulated
Deficit

 

Total
Permanent
(
Deficit)
Equity

Shares

 

Amount

 

Balance – January 1, 2020

 

4,312,500

 

$

431

 

$

24,569

 

 

$

(2,199

)

 

$

22,801

 

Sale of 330,000 private units, net of warrant liability

 

330,000

 

 

33

 

 

3,065,667

 

 

 

 

 

 

3,065,700

 

Contribution in excess of fair value of sale of 1,650,000 private warrants

 

 

 

 

 

478,500

 

 

 

 

 

 

478,500

 

Interest income, net of withdrawals
for Delaware franchise taxes paid

   

 

  

 

 

 

 

 

(1,031,906

)

 

 

(1,031,906

)

Accretion of carrying value to redemption value

 

 

 

 

 

(3,568,736

)

 

 

(757,780

)

 

 

(4,326,516

)

Net loss

 

 

 

 

 

 

 

 

(1,609,783

)

 

 

(1,609,783

)

Balance – December 31, 2020

 

4,642,500

 

$

464

 

$

 

 

$

(3,401,668

)

 

$

(3,401,204

)

FOR THE PERIOD FROM AUGUST26, 2019 (INCEPTION) THROUGH DECEMBER31, 2019

 


Common Stock

 

Additional Paid-in
Capital

 

Accumulated
Deficit

 

Total Permanent
Equity

  

Shares

 

Amount

 

Balance – August 26, 2019
(inception)

 

 

$

 

$

 

$

 

 

$

 

Issuance of common stock to
Sponsor(1)

 

4,312,500

 

 

431

 

 

24,569

 

 

 

 

 

25,000

 

Net loss

 

 

 

 

 

 

 

(2,199

)

 

 

(2,199

)

Balance – December 31, 2019

 

4,312,500

 

$

431

 

$

24,569

 

$

(2,199

)

 

$

22,801

 

____________

(1)      Included 562,500 shares subject to forfeiture if the over-allotment was not exercised in full or in part by the underwriters (see Note 5).

The accompanying notes are an integral part of the financial statements.

F-5

Table of Contents

GREENROSE ACQUISITION CORP.
STATEMENTS OF CASH FLOWS

 

Year Ended
December 31,
2020

 

For the 
Period from 
August 26, 
2019 
(inception)
Through 
December 31,
2019

  

(As Restated)

  

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(1,609,783

)

 

$

(2,199

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Interest earned on marketable securities held in Trust Account

 

 

(1,156,603

)

 

 

 

Interest expense

 

 

272,884

 

 

 

 

Change in fair value of private warrants liability

 

 

574,200

 

 

 

 

 

Change in fair value of Convertible promissory note, net – related party

 

 

320,721

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses

 

 

(16,224

)

 

 

(28,872

)

Accrued expenses

 

 

399,999

 

 

 

 

Net cash used in operating activities

 

 

(1,214,806

)

 

 

(31,071

)

  

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

Investment of cash in Trust Account

 

 

(172,500,000

)

 

 

 

Net cash used in investing activities

 

 

(172,500,000

)

 

 

 

  

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock to Sponsor

 

 

 

 

 

25,000

 

Proceeds from sale of Units, net of underwriting discounts paid

 

 

169,050,000

 

 

 

 

Proceeds from sale of private units

 

 

3,300,000

 

 

 

 

Proceeds from sale of private warrants

 

 

1,650,000

 

 

 

 

Advances from related party

 

 

164,753

 

 

 

631,366

 

Repayment of advances from related party

 

 

(796,119

)

 

 

 

Proceeds from Convertible promissory note – related party

 

 

1,000,000

 

 

 

 

Payment of offering costs

 

 

(368,949

)

 

 

(600,325

)

Net cash provided by financing activities

 

 

173,999,685

 

 

 

56,041

 

  

 

 

 

 

 

 

 

Net Change in Cash

 

 

284,879

 

 

 

24,970

 

Cash – Beginning of period

 

 

24,970

 

 

 

 

Cash – End of period

 

$

309,849

 

 

$

24,970

 

  

 

 

 

 

 

 

 

Non-Cash investing and financing activities:

 

 

 

 

 

 

 

 

Initial classification of private warrants liability

 

$

1,405,800

 

 

$

 

 

Initial classification of Convertible promissory note, net – related party

 

$

492,165

 

 

$

 

Offering costs included in accrued offering costs

 

$

 

 

$

3,508

 

The accompanying notes are an integral part of the financial statements.

F-6

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Greenrose Acquisition Corp. (the “Company”) was incorporated in Delaware on August 26, 2019. The Company was formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities (the “Business Combination”).

Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends to focus its search on companies in the cannabis industry. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

As of December 31, 2020, the Company had not commenced any operations. All activity through December 31, 2020 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below, and identifying a target company or companies for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income (loss) in the form of interest income from the proceeds derived from assets held in the Trust Account, interest expense from the amortization of the debt discount on our promissory note and recognizes changes in the fair value of derivative liabilities as other income (expense).

The registration statement for the Company’s Initial Public Offering was declared effective on February 10, 2020. On February 13, 2020, the Company consummated the Initial Public Offering of 15,000,000 units (the “Units” and, with respect to the shares of common stock included in the Units sold, the “Public Shares”), generating gross proceeds of $150,000,000, which is described in Note 4.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 300,000 units (the “Private Units”) and 1,500,000 warrants (the “Private Warrants” and, together with the private units, the “Private Securities”) at a price of $10.00 per private unit and $1.00 per Private Warrant in a private placement to Greenrose Associates LLC (the “Sponsor”) and Imperial Capital, LLC (“Imperial”), generating gross proceeds of $4,500,000, which is acting as representativedescribed in Note 5.

Following the closing of the underwriters. We have enteredInitial Public Offering on February 13, 2020, an amount of $150,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Securities was placed in a trust account (the “Trust Account”) located in the United States, which will be only invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below.

On February 14, 2020, the underwriters notified the Company of their intention to exercise their over-allotment option in full. As such, on February 14, 2020, the Company consummated the sale of an additional 2,250,000 Units, at $10.00 per Unit, and the sale of an additional 30,000 Private Units, at $10.00 per Private Unit, and 150,000 private warrants, at $1.00 per Private Warrant, generating total gross proceeds of $22,950,000. A total of $22,500,000 of the net proceeds was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $172,500,000.

Transaction costs amounted to $4,419,274 consisting of $3,450,000 of underwriting fees and $969,274 of other offering costs.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Securities, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business

F-7

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (cont.)

Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding taxes payable on income earned on the Trust Account) at the time of the agreement to enter into an underwritinginitial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.

The Company will provide its holders of the outstanding Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account ($10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its franchise and income tax obligations. There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.

The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Company’s Sponsor and Imperial have agreed to vote their Founder’s Shares (as defined in Note 6), Private Shares (as defined in Note 5), and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination and not to convert any shares in connection with a stockholder vote to approve a Business Combination or sell any shares to the Company in a tender offer in connection with a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or don’t vote at all.

The Sponsor and Imperial have agreed (a) to waive their redemption rights with respect to their Founder’s Shares, Private Shares and Public Shares held by it in connection with the completion of a Business Combination, (b) to waive their rights to liquidating distributions from the Trust Account with respect to the Founder’s Shares and Private Shares if the Company fails to consummate a Business Combination, and (c) not to propose an amendment to the Amended and Restated Certificate of Incorporation that would affect a public stockholders’ ability to convert or sell their shares to the Company in connection with a Business Combination or affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.

The Company will have until August 13, 2021 (subject to its right to extend the period of time to consummate a Business Combination for up to an additional three months if the Sponsor agrees to deposit $569,250 in the Trust Account for each one-month extension) to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more

F-8

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (cont.)

than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay franchise and income taxes, divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject (in each case of (ii) and (iii) above) to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.

In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below $10.00 per Public Share, except as to any claims by a third party who executed a valid and enforceable agreement with the representative.Company waiving any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, none of the Company’s officers or directors, the Sponsor, Imperial or their respective officers, directors, shareholder or members (collectively, the “Insiders”) will be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Insiders will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Risks and Uncertainties

Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Liquidity and Going Concern

As of December 31, 2020, the Company had cash of $309,849 held outside of the Trust Account, total current liabilities of $182,544 which excludes franchise taxes payable of $187,500, of which such amount will be paid from interest earned on the Trust Account and $29,955 of franchise taxes paid and not yet reimbursed from the trust and working capital of $172,401. For the year ended December 31, 2020, we incurred a net loss of $1,609,783 and used $1,214,806 cash from operating activities.

Until the consummation of a Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination.

F-9

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (cont.)

The Company will need to raise additional capital through loans or additional investments from its Sponsor, shareholders, officers, directors, or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern through November 30, 2021, the date that the Company will be required to cease all operations, except for the purpose of winding up, if a Business Combination is not consummated. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

The accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of the uncertainty related to our ability to continue as a going concern.

NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Amendment 1

The Company previously accounted for its outstanding private warrants issued in connection with its Initial Public Offering as components of equity instead of as derivative liabilities. In addition, the Company did not account for its convertible promissory note as a derivative liability (the convertible component of the convertible promissory note, together with the private warrants, the “Derivative Instruments”). The warrant agreement governing the warrants includes a provision that provides for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant.

In connection with the audit of the Company’s financial statements for the period ended December 31, 2020, the Company’s management further evaluated the private warrants under Accounting Standards Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity. ASC Section 815-40-15 addresses equity versus liability treatment and classification of equity-linked financial instruments, including warrants, and states that a warrant may be classified as a component of equity only if, among other things, the warrant is indexed to the issuer’s common stock. Under ASC Section 815-40-15, a warrant is not indexed to the issuer’s common stock if the terms of the warrant require an adjustment to the exercise price upon a specified event and that event is not an input to the fair value of the warrant. Based on management’s evaluation, the Company’s audit committee, in consultation with management and after discussion with the Company’s independent registered public accounting firm, concluded that the Company’s private warrants are not indexed to the Company’s Common Stock in the manner contemplated by ASC Section 815-40-15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. As a result of the above, the Company should have classified the Derivative Instruments as derivative liabilities in its previously issued financial statements. Under this accounting treatment, the Company is required to measure the fair value of the Derivative Instruments at the end of each reporting period and recognize changes in the fair value from the prior period in the Company’s operating results for the current period.

The Company’s accounting for the Derivative Instruments as components of equity instead of as derivative liabilities did not have any effect on the Company’s previously reported operating expenses, cash flows or cash.

F-10

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (cont.)

The table below summarizes the effects of the restatement on the financial statements for all periods being restated:

BALANCE SHEETS

   

February 13,
2020

 

March 31,
2020

 

June 30,
2020

 

September 30,
2020

 

December 31,
2020

Private warrants liability

 

As Previously Reported

 

 

 

 

 

 

 

 

 

 

  

Adjustments

 

1,405,800

 

 

1,009,800

 

 

415,800

 

 

475,200

 

 

1,980,000

 

  

As Restated

 

1,405,800

 

 

1,009,800

 

 

415,800

 

 

475,200

 

 

1,980,000

 

     

 

  

 

  

 

  

 

  

 

Convertible promissory note, net – related party

 

As Previously Reported

 

 

 

1,000,000

 

 

1,000,000

 

 

1,000,000

 

 

1,000,000

 

  

Adjustments

 

 

 

(79,518

)

 

(228,910

)

 

(116,572

)

 

593,605

 

  

As Restated

 

 

 

920,482

 

 

771,090

 

 

883,428

 

 

1,593,605

 

     

 

  

 

  

 

  

 

  

 

Total Liabilities

 

As Previously Reported

 

865,008

 

 

1,283,698

 

 

1,237,423

 

 

1,271,744

 

 

1,399,999

 

  

Adjustments

 

1,405,800

 

 

930,282

 

 

186,890

 

 

358,618

 

 

2,573,605

 

  

As Restated

 

2,270,808

 

 

2,213,980

 

 

1,424,313

 

 

1,630,362

 

 

3,973,604

 

     

 

  

 

  

 

  

 

  

 

Common stock subject to possible redemption

 

As Previously Reported

 

145,552,990

 

 

168,708,256

 

 

168,526,257

 

 

168,184,912

 

 

167,611,542

 

  

Adjustments

 

(1,405,796

)

 

(930,282

)

 

(186,894

)

 

(358,634

)

 

(2,573,605

)

  

As Restated

 

144,147,194

 

 

167,777,974

 

 

168,339,363

 

 

167,826,278

 

 

165,037,937

 

     

 

  

 

  

 

  

 

  

 

Common stock

 

As Previously Reported

 

506

 

 

511

 

 

513

 

 

517

 

 

522

 

  

Adjustments

 

15

 

 

9

 

 

1

 

 

3

 

 

26

 

  

As Restated

 

521

 

 

520

 

 

514

 

 

520

 

 

548

 

     

 

  

 

  

 

  

 

  

 

Additional Paid-in Capital

 

As Previously Reported

 

5,002,230

 

 

4,346,959

 

 

4,528,956

 

 

4,870,297

 

 

5,443,662

 

  

Adjustments

 

(19

)

 

(475,527

)

 

(1,218,907

)

 

(1,047,169

)

 

1,167,779

 

  

As Restated

 

5,002,211

 

 

3,871,432

 

 

3,310,049

 

 

3,823,128

 

 

6,611,441

 

     

 

  

 

  

 

  

 

  

 

Accumulated Deficit

 

As Previously Reported

 

(2,731

)

 

652,537

 

 

470,534

 

 

129,187

 

 

(444,177

)

  

Adjustments

 

 

 

475,518

 

 

1,218,910

 

 

1,047,172

 

 

(1,167,805

)

  

As Restated

 

(2,731

)

 

1,128,055

 

 

1,689,444

 

 

1,176,359

 

 

(1,611,982

)

     

 

  

 

  

 

  

 

  

 

Total Permanent Equity

 

As Previously Reported

 

5,000,005

 

 

5,000,007

 

 

5,000,003

 

 

5,000,001

 

 

5,000,007

 

  

Adjustments

 

(4

)

 

 

 

4

 

 

6

 

 

 

  

As Restated

 

5,000,001

 

 

5,000,007

 

 

5,000,007

 

 

5,000,007

 

 

5,000,007

 

F-11

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (cont.)

STATEMENTS OF OPERATIONS — YTD

   

Three Months
Ended
March 31,
2020

 

Six Months
Ended
June 30,
2020

 

Nine Months Ended
September 30,
2020

 

Year Ended
December 31,
2020

Change in fair value of private warrants liability

 

As Previously Reported

 

 

 

 

 

 

 

 

  

Adjustments

 

396,000

 

 

990,000

 

 

930,600

 

 

(574,200

)

  

As Restated

 

396,000

 

 

990,000

 

 

930,600

 

 

(574,200

)

     

 

  

 

  

 

  

 

Change in fair value of Convertible promissory note, net – related party

 

As Previously Reported

 

 

 

 

 

 

 

 

  

Adjustments

 

84,391

 

 

322,470

 

 

299,794

 

 

(320,721

)

  

As Restated

 

84,391

 

 

322,470

 

 

299,794

 

 

(320,721

)

     

 

  

 

  

 

  

 

Interest Expense

 

As Previously Reported

 

 

 

 

 

 

 

 

  

Adjustments

 

(4,873

)

 

(93,560

)

 

(183,222

)

 

(272,884

)

  

As Restated

 

(4,873

)

 

(93,560

)

 

(183,222

)

 

(272,884

)

     

 

  

 

  

 

  

 

Total Other Income (Expense), net

 

As Previously Reported

 

1,104,572

 

 

1,147,848

 

 

1,152,225

 

 

1,156,603

 

  

Adjustments

 

475,518

 

 

1,218,910

 

 

1,047,172

 

 

(1,167,805

)

  

As Restated

 

1,580,090

 

 

2,366,758

 

 

2,199,397

 

 

(11,202

)

     

 

  

 

  

 

  

 

Net income (loss)

 

As Previously Reported

 

654,736

 

 

472,733

 

 

131,386

 

 

(441,978

)

  

Adjustments

 

475,518

 

 

1,218,910

 

 

1,047,172

 

 

(1,167,805

)

  

As Restated

 

1,130,254

 

 

1,691,643

 

 

1,178,558

 

 

(1,609,783

)

     

 

  

 

  

 

  

 

Basic and diluted net income (loss) per share, Common Stock

 

As Previously Reported

 

(0.04

)

 

(0.08

)

 

(0.16

)

 

(0.27

)

  

Adjustments

 

0.10

 

 

0.24

 

 

0.21

 

 

(0.22

)

  

As Restated

 

0.06

 

 

0.16

 

 

0.05

 

 

(0.49

)

F-12

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (cont.)

STATEMENTS OF OPERATIONS — THREE MONTHS ENDED

   

Three Months
Ended
March 31,
2020

 

Three Months
Ended
June 30,
2020

 

Three Months
Ended September 30,
2020

 

Three Months
Ended December 31,
2020

Change in fair value of private warrants liability

 

As Previously Reported

 

 

 

 

 

 

 

 

  

Adjustments

 

396,000

 

 

594,000

 

 

(59,400

)

 

(1,504,800

)

  

As Restated

 

396,000

 

 

594,000

 

 

(59,400

)

 

(1,504,800

)

     

 

  

 

  

 

  

 

Change in fair value of Convertible promissory note, net – related party

 

As Previously Reported

 

 

 

 

 

 

 

 

  

Adjustments

 

84,391

 

 

238,079

 

 

(22,676

)

 

(620,515

)

  

As Restated

 

84,391

 

 

238,079

 

 

(22,676

)

 

(620,515

)

     

 

  

 

  

 

  

 

Interest Expense

 

As Previously Reported

 

 

 

 

 

 

 

 

  

Adjustments

 

(4,873

)

 

(88,687

)

 

(89,662

)

 

(89,662

)

  

As Restated

 

(4,873

)

 

(88,687

)

 

(89,662

)

 

(89,662

)

     

 

  

 

  

 

  

 

Total Other Income (Expense), net

 

As Previously Reported

 

1,104,572

 

 

43,276

 

 

4,377

 

 

4,378

 

  

Adjustments

 

475,518

 

 

743,392

 

 

(171,738

)

 

(2,214,977

)

  

As Restated

 

1,580,090

 

 

786,668

 

 

(167,361

)

 

(2,210,599

)

     

 

  

 

  

 

  

 

Net income (loss)

 

As Previously Reported

 

654,736

 

 

(182,003

)

 

(341,347

)

 

(573,364

)

  

Adjustments

 

475,518

 

 

743,392

 

 

(171,738

)

 

(2,214,977

)

  

As Restated

 

1,130,254

 

 

561,389

 

 

(513,085

)

 

(2,788,341

)

     

 

  

 

  

 

  

 

Basic and diluted net income (loss) per share, Common Stock

 

As Previously Reported

 

(0.04

)

 

(0.04

)

 

(0.07

)

 

(0.11

)

  

Adjustments

 

0.10

 

 

0.14

 

 

(0.03

)

 

(0.43

)

  

As Restated

 

0.06

 

 

0.10

 

 

(0.10

)

 

(0.54

)

F-13

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (cont.)

STATEMENTS OF CHANGES IN PERMANENT (DEFICIT) EQUITY

   

March 31,
2020

 

June 30,
2020

 

September 30,
2020

 

December 31,
2020

Common stock

 

As Previously Reported

 

511

 

 

513

 

 

517

 

 

522

 

  

Adjustments

 

9

 

 

1

 

 

3

 

 

26

 

  

As Restated

 

520

 

 

514

 

 

520

 

 

548

 

     

 

  

 

  

 

  

 

Additional Paid-in Capital

 

As Previously Reported

 

4,346,959

 

 

4,528,956

 

 

4,870,297

 

 

5,443,662

 

  

Adjustments

 

(475,527

)

 

(1,218,907

)

 

(1,047,169

)

 

1,167,779

 

  

As Restated

 

3,871,432

 

 

3,310,049

 

 

3,823,128

 

 

6,611,441

 

     

 

  

 

  

 

  

 

Accumulated Deficit

 

As Previously Reported

 

652,537

 

 

470,534

 

 

129,187

 

 

(444,177

)

  

Adjustments

 

475,518

 

 

1,218,910

 

 

1,047,172

 

 

(1,167,805

)

  

As Restated

 

1,128,055

 

 

1,689,444

 

 

1,176,359

 

 

(1,611,982

)

     

 

  

 

  

 

  

 

Total Permanent Equity

 

As Previously Reported

 

5,000,007

 

 

5,000,003

 

 

5,000,001

 

 

5,000,007

 

  

Adjustments

 

 

 

4

 

 

6

 

 

 

  

As Restated

 

5,000,007

 

 

5,000,007

 

 

5,000,007

 

 

5,000,007

 

STATEMENTS OF CASH FLOWS

   

Three Months
Ended
March 31,
2020

 

Six Months
Ended
June 30,
2020

 

Nine Months
Ended
September 30,
2020

 

Year Ended
December 31,
2020

Net income (loss)

 

As Previously Reported

 

654,736

 

 

472,733

 

 

131,386

 

 

(441,978

)

  

Adjustments

 

475,518

 

 

1,218,910

 

 

1,047,172

 

 

(1,167,805

)

  

As Restated

 

1,130,254

 

 

1,691,643

 

 

1,178,558

 

 

(1,609,783

)

     

 

  

 

  

 

  

 

Change in fair value of private warrants liability

 

As Previously Reported

 

 

 

 

 

 

 

 

  

Adjustments

 

(396,000

)

 

(990,000

)

 

(930,600

)

 

574,200

 

  

As Restated

 

(396,000

)

 

(990,000

)

 

(930,600

)

 

574,200

 

     

 

  

 

  

 

  

 

Change in fair value of Convertible promissory note, net – related party

 

As Previously Reported

 

 

 

 

 

 

 

 

  

Adjustments

 

(84,391

)

 

(322,470

)

 

(299,794

)

 

320,721

 

  

As Restated

 

(84,391

)

 

(322,470

)

 

(299,794

)

 

320,721

 

     

 

  

 

  

 

  

 

Interest Expense

 

As Previously Reported

 

 

 

 

 

 

 

 

  

Adjustments

 

4,873

 

 

93,560

 

 

183,222

 

 

272,884

 

  

As Restated

 

4,873

 

 

93,560

 

 

183,222

 

 

272,884

 

Amendment 2

In connection with the preparation of the Company’s financial statements as of September 30, 2021, management identified errors made in its historical financial statements where, at the closing of the Company’s Initial Public Offering, the Company improperly valued its common stock subject to possible redemption. The Company previously determined the common stock subject to possible redemption to be equal to the redemption value, while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that the Public Shares underlying the Units issued during the Initial Public Offering can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company’s control. Therefore, management concluded that the redemption value should include all shares of common stock subject to possible redemption, resulting in the common stock subject to possible redemption being equal to their redemption value. As a result, management has noted a reclassification error related to temporary equity and permanent equity. This resulted in a restatement to the initial carrying value of the common stock subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and common stock.

F-14

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (cont.)

In connection with the change in presentation for the common stock subject to redemption, the Company also restated its income (loss) per common share calculation to allocate net income (loss) evenly to all common stock. This presentation contemplates a Business Combination as the most likely outcome, in which case, all common stock share pro rata in the income (loss) of the Company.

The impact of the revision on the Company’s financial statements is reflected in the following table.

Balance Sheet as of February 13, 2020 (restated)

 

As Previously
Reported

 

Restatement
Adjustment

 

As Restated

Common stock subject to possible redemption

 

$

144,147,194

 

 

$

5,852,806

 

 

$

150,000,000

 

Common stock

 

$

521

 

 

$

(59

)

 

$

462

 

Additional paid-in capital

 

$

5,002,212

 

 

$

(5,002,212

)

 

$

 

Accumulated deficit

 

$

(2,731

)

 

$

(850,535

)

 

$

(853,266

)

Total Permanent (Deficit) Equity

 

$

5,000,001

 

 

$

(5,852,806

)

 

$

(852,805

)

Number of shares subject to possible redemption

 

 

14,414,719

 

 

 

581,281

 

 

 

15,000,000

 

  

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet as of March 31, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Common stock subject to possible redemption

 

$

167,777,974

 

 

$

5,611,341

 

 

$

173,389,315

 

Common stock

 

$

520

 

 

$

(56

)

 

$

464

 

Additional paid-in capital

 

$

3,871,432

 

 

$

(3,871,432

)

 

$

 

Accumulated deficit

 

$

1,128,055

 

 

$

(1,739,853

)

 

$

(611,798

)

Total Permanent (Deficit) Equity

 

$

5,000,007

 

 

$

(5,611,341

)

 

$

(611,334

)

Number of shares subject to possible redemption

 

 

16,691,744

 

 

 

558,256

 

 

 

17,250,000

 

  

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet as of June 30, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Common stock subject to possible redemption

 

$

168,339,363

 

 

$

5,100,801

 

 

$

173,440,164

 

Common stock

 

$

514

 

 

$

(50

)

 

$

464

 

Additional paid-in capital

 

$

3,310,049

 

 

$

(3,310,049

)

 

$

 

Accumulated deficit

 

$

1,689,444

 

 

$

(1,790,702

)

 

$

(101,258

)

Total Permanent (Deficit) Equity

 

$

5,000,007

 

 

$

(5,100,801

)

 

$

(100,794

)

Number of shares subject to possible redemption

 

 

16,745,577

 

 

 

504,423

 

 

 

17,250,000

 

  

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet as of September 31, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Common stock subject to possible redemption

 

$

167,826,278

 

 

$

5,640,201

 

 

$

173,466,479

 

Common stock

 

$

520

 

 

$

(56

)

 

$

464

 

Additional paid-in capital

 

$

3,823,128

 

 

$

(3,823,128

)

 

$

 

Accumulated deficit

 

$

1,176,359

 

 

$

(1,817,017

)

 

$

(640,658

)

Total Permanent (Deficit) Equity

 

$

5,000,007

 

 

$

(5,640,201

)

 

$

(640,194

)

Number of shares subject to possible redemption

 

 

16,692,005

 

 

 

557,995

 

 

 

17,250,000

 

  

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet as of December 31, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Common stock subject to possible redemption

 

$

165,037,937

 

 

$

8,401,211

 

 

$

173,439,148

 

Common stock

 

$

548

 

 

$

(84

)

 

$

464

 

Additional paid-in capital

 

$

6,611,441

 

 

$

(6,611,441

)

 

$

 

Accumulated deficit

 

$

(1,611,982

)

 

$

(1,789,686

)

 

$

(3,401,668

)

Total Permanent (Deficit) Equity

 

$

5,000,007

 

 

$

(8,401,211

)

 

$

(3,401,204

)

Number of shares subject to possible redemption

 

 

16,414,428

 

 

 

835,572

 

 

 

17,250,000

 

F-15

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (cont.)

 

As Previously Reported: Redeemable and Non-Redeemable

 

Restatement Adjustment

 

As
Restated: Common
Stock

Statement of Operations for the Three Month Period Ended March 31, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

 

 

16,664,719

 

 

 

(16,664,719

)

 

 

 

Basic and diluted net income per share, Common stock subject to possible redemption

 

$

0.05

 

 

$

(0.05

)

 

$

 

Basic and diluted weighted average shares outstanding, Non-redeemable common stock, Common Stock

 

 

4,785,228

 

 

 

8,607,052

 

 

 

13,392,280

 

Basic and diluted net loss per share, Non-redeemable common stock, Common Stock

 

$

0.06

 

 

$

0.02

 

 

$

0.08

 

  

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations for the Three Month Period Ended June 30, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

 

 

16,694,628

 

 

 

(16,694,628

)

 

 

 

Basic and diluted net income per share, Common stock subject to possible redemption

 

$

 

 

$

 

 

$

 

Basic and diluted weighted average shares outstanding, Non-redeemable common stock, Common Stock

 

 

5,197,872

 

 

 

16,694,628

 

 

 

21,892,500

 

Basic and diluted net loss per share, Non-redeemable common stock, Common Stock

 

$

0.10

 

 

$

(0.07

)

 

$

0.03

 

  

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations for the Six Month Period Ended June 30, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

 

 

16,684,442

 

 

 

(16,684,442

)

 

 

 

Basic and diluted net income per share, Common stock subject to possible redemption

 

$

0.05

 

 

$

(0.05

)

 

$

 

Basic and diluted weighted average shares outstanding, Non-redeemable common stock, Common Stock

 

 

4,991,550

 

 

 

12,650,840

 

 

 

17,642,390

 

Basic and diluted net loss per share, Non-redeemable common stock, Common Stock

 

$

0.16

 

 

$

(0.06

)

 

$

0.10

 

  

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations for the Three Month Period Ended September 30, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

 

 

16,745,577

 

 

 

(16,745,577

)

 

 

 

Basic and diluted net income per share, Common stock subject to possible redemption

 

$

 

 

$

 

 

$

 

Basic and diluted weighted average shares outstanding, Non-redeemable common stock, Common Stock

 

 

5,146,923

 

 

 

16,745,577

 

 

 

21,892,500

 

Basic and diluted net loss per share, Non-redeemable common stock, Common Stock

 

$

(0.10

)

 

$

0.08

 

 

$

(0.02

)

  

 

 

 

 

 

 

 

 

 

 

 

F-16

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (cont.)

 

As Previously Reported: Redeemable and Non-Redeemable

 

Restatement Adjustment

 

As
Restated: Common
Stock

Statement of Operations for the Nine Period Ended September 30, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

 

 

16,708,896

 

 

 

(16,708,896

)

 

 

 

Basic and diluted net income per share, Common stock subject to possible redemption

 

$

0.05

 

 

$

(0.05

)

 

$

 

Basic and diluted weighted average shares outstanding, Non-redeemable common stock, Common Stock

 

 

5,043,719

 

 

 

14,025,715

 

 

 

19,069,434

 

Basic and diluted net loss per share, Non-redeemable common stock, Common Stock

 

$

0.05

 

 

$

0.01

 

 

$

0.06

 

  

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations for the Year Ended December 31, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

 

 

16,704,070

 

 

 

(16,704,070

)

 

 

 

Basic and diluted net income per share, Common stock subject to possible redemption

 

$

0.05

 

 

$

(0.05

)

 

 

 

Basic and diluted weighted average shares outstanding, Non-redeemable common stock, Common Stock

 

 

5,083,127

 

 

 

14,695,930

 

 

 

19,779,057

 

Basic and diluted net loss per share, Non-redeemable common stock, Common Stock

 

$

(0.49

)

 

$

0.41

 

 

$

(0.08

)

  

 

 

 

 

 

 

 

 

 

 

 

Statement of Changes in Permanent (Deficit) Equity for the Three Months Ended March 31, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Sale of 17,250,000 Units, net of underwriting discounts, offering costs and warrant liability

 

$

168,080,726

 

 

$

(168,080,726

)

 

$

 

Common stock subject to possible redemption

 

$

(167,777,974

)

 

$

167,777,974

 

 

$

 

Change in value of common stock subject to redemption

 

$

302,752

 

 

$

(302,752

)

 

$

 

Interest income, net of withdrawals for Delaware franchise taxes paid

 

$

 

 

$

(1,031,894

)

 

$

(1,031,894

)

Accretion for common stock subject to
redemption amount

 

$

 

 

$

(4,276,695

)

 

$

(4,276,695

)

Statement of Changes in Permanent (Deficit) Equity for the Three Months Ended June 30, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Change in value of common stock subject to redemption

 

$

(561,389

)

 

$

561,389

 

 

$

 

Interest income, net of withdrawals for Delaware franchise taxes paid

 

$

 

 

$

(12

)

 

$

(12

)

Accretion for common stock subject to
redemption amount

 

$

 

 

$

(50,837

)

 

$

(50,837

)

  

 

 

 

 

 

 

 

 

 

 

 

F-17

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (cont.)

 

As Previously Reported: Redeemable and Non-Redeemable

 

Restatement Adjustment

 

As
Restated: Common
Stock

Statement of Changes in Permanent (Deficit) Equity for the Three Months Ended September 30, 2020 (restated)

 

 

  

 

 

 

 

 

 

 

Change in value of common stock subject to redemption

 

$

513,085

 

$

(513,085

)

 

$

 

Accretion for common stock subject to
redemption amount

 

$

 

$

(26,315

)

 

$

(26,315

)

  

 

  

 

 

 

 

 

 

 

Statement of Changes in Permanent (Deficit) Equity for the Three Months Ended December 31, 2020 (restated)

 

 

  

 

 

 

 

 

 

 

Change in value of common stock subject to redemption

 

$

2,788,341

 

$

(2,788,341

)

 

$

 

Decretion for common stock subject to redemption amount

 

$

 

$

27,331

 

 

$

27,331

 

Non-Cash investing and financing activities:

 

As Previously Reported

 

Restatement Adjustments

 

As Restated

Statement of Cash Flows for the Period Ended March 31, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

Initial classification of common stock subject to possible redemption

 

$

166,647,190

 

 

$

(166,647,190

)

 

$

Change in value of common stock subject to possible redemption

 

$

1,130,784

 

 

$

(1,130,784

)

 

$

  

 

 

 

 

 

 

 

 

 

 

Statement of Cash Flows for the Period Ended June 30, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

Initial classification of common stock subject to possible redemption

 

$

166,647,190

 

 

$

(166,647,190

)

 

$

Change in value of common stock subject to possible redemption

 

$

(1,609,253

)

 

$

1,609,253

 

 

$

  

 

 

 

 

 

 

 

 

 

 

Statement of Cash Flows for the Period Ended September 30, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

Initial classification of common stock subject to possible redemption

 

$

166,647,190

 

 

$

(166,647,190

)

 

$

Change in value of common stock subject to possible redemption

 

$

1,179,088

 

 

$

(1,179,088

)

 

$

  

 

 

 

 

 

 

 

 

 

 

Statement of Cash Flows for the Year Ended December 31, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

Initial classification of common stock subject to possible redemption

 

$

166,647,190

 

 

$

(166,647,190

)

 

$

Change in value of common stock subject to possible redemption

 

$

(1,609,253

)

 

$

1,609,253

 

 

$

F-18

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(l) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020 and 2019.

Marketable Securities Held in Trust Account

At December 31, 2020, substantially all of the assets held in the Trust Account were held in money market funds which invest U.S. Treasury securities.

F-19

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Derivative Liabilities

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company’s own Common Stock and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the instruments are outstanding.

For issued or modified instruments that meet all of the criteria for equity classification, the instruments are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified instruments that do not meet all the criteria for equity classification, the instruments are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the instruments are recognized as a non-cash gain or loss on the statements of operations. The fair value of the instruments was estimated using a Black-Scholes model (see Note 10).

Convertible Instruments

The Company accounts for its promissory notes that feature conversion options in accordance with ASC No. 815, Derivatives and Hedging Activities (“ASC No. 815”). ASC No. 815 requires companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) a promissory note that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The derivative component of the obligation is initially valued and classified as a derivative liability with an offset to a discount on the promissory note. The discount will be amortized over the life of the note.

Common Stock Subject to Possible Redemption (Restated, see Note 2 — Amendment 2)

The Company accounts for its common stock subject to possible redemption in accordance with the termsguidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and conditionsis measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that is either within the control of the underwriting agreement,holder or subject to redemption upon the underwriters have agreedoccurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to purchase,be outside of the Company’s control and we have agreedsubject to selloccurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the underwriters,stockholders’ equity section of the numberCompany’s balance sheets.

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of units listed nextredeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of its nameredeemable common stock are affected by charges against additional paid in capital and accumulated deficit.

F-20

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

At December 31, 2020, the common stock reflected in the consolidated balance sheet are reconciled in the following table:

Underwriter

Gross proceeds

 

$

172,500,000

 

Less:

 

 

 

 

Common stock offering costs

 

 

(4,419,274

)

Proceeds net of underwriting discounts, offering costs and warrant liability

 

 

168,080,726

 

Plus:

 

 

 

 

Interest income, net of withdrawals for Delaware franchise taxes paid

 

 

1,031,906

 

Accretion of carrying value to redemption value

 

 

4,326,516

 

  

 

 

 

Common stock subject to possible redemption at December 31, 2020

 

$

173,439,148

 

Income Taxes

Number of
Units

Imperial Capital, LLC

[•]

I-Bankers Securities Inc.

[•]

Total

15,000,000

The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020 and 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security “CARES” Act into law. The CARES Act includes several significant business tax provisions that, among other things, would eliminate the taxable income limit for certain net operating losses (“NOL) and allow businesses to carry back NOLs arising in 2018, 2019 and 2020 to the five prior years, suspend the excess business loss rules, accelerate refunds of previously generated corporate alternative minimum tax credits, generally loosen the business interest limitation under IRC section 163(j) from 30 percent to 50 percent among other technical corrections included in the Tax Cuts and JOBS Act tax provisions. The enactment of the CARES Act did not have a material impact on the Company’s income tax accounts or profile.

Net Income (Loss) per Common Share (Restated, see Note 2 — Amendment 1)

Net income (loss) per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period, excluding shares of common stock subject to forfeiture. At December 31, 2019, weighted average shares were reduced for the effect of an aggregate of 562,500 shares of common stock that were subject to forfeiture if the over-allotment option was not exercised by the underwriters (see Note 6). The Company has not considered the effect of the warrants sold in the Initial Public Offering and private placement to purchase an aggregate of 19,230,000 shares in the calculation of diluted loss per share, since the exercise of the warrants are

F-21

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. There were no dilutive securities for the period ended December 31, 2020 or December 31, 2019. These amounts are not included in the computation of dilutive loss per share because their impact is antidilutive.

The Company’s statement of operations includes a presentation of income (loss) per share for Common Stock subject to possible redemption. Net income (loss) per common share, basic and diluted, for Common stock subject to possible redemption is calculated by dividing the proportionate share of income or loss on marketable securities held by the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Common stock subject to possible redemption outstanding since original issuance.

Net loss per share, basic and diluted, for non-redeemable common stock is calculated by dividing the net income (loss), adjusted for income or loss on marketable securities attributable to Common stock subject to possible redemption, by the weighted average number of non-redeemable common stock outstanding for the period.

Non-redeemable common stock includes Founder Shares and non-redeemable shares of common stock as these shares do not have any redemption features. Non-redeemable common stock participates in the income or loss on marketable securities based on non-redeemable shares’ proportionate interest.

The following table reflects the calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts):

 

Year Ended
December 31,
2020

 

For the
Period from
August 26, 2019
(Inception)
Through
December 31,
2019

Common stock subject to possible redemption

 

 

 

 

 

 

 

 

Numerator: Earnings allocable to Common stock subject to possible
redemption

 

 

 

 

 

 

 

 

Interest earned on marketable securities held in Trust Account

 

$

1,100,578

 

 

$

 

Less: interest available to be withdrawn for payment of taxes

 

 

(206,921

)

 

 

 

Net income

 

$

893,657

 

 

$

 

Denominator: Weighted Average Common stock subject to possible
redemption

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

 

 

16,704,070

 

 

 

 

Basic and diluted net income per share, Common stock subject to possible redemption

 

$

0.05

 

 

$

 

  

 

 

 

 

 

 

 

Non-Redeemable Common Stock

 

 

 

 

 

 

 

 

Numerator: Net Loss minus Net Earnings

 

 

 

 

 

 

 

 

Net loss

 

$

(1,609,783

)

 

$

(2,199

)

Less: Income attributable to Common stock subject to possible redemption

 

 

(893,657

)

 

 

 

Non-redeemable net loss

 

$

(2,503,440

)

 

$

(2,199

)

Denominator: Weighted Average Non-Redeemable Common Stock

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common Stock

 

 

5,083,127

 

 

 

3,750,000

 

  

 

 

 

 

 

 

 

Basic and diluted net loss per share, Common Stock

 

$

(0.49

)

 

$

(0.00

)

F-22

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Net Income (Loss) Per Common Share (Restated, see Note 2 — Amendment 2)

The Company applies the accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of Common Stock outstanding for the period. Accretion associated with the redeemable shares of common stock is excluded from income (loss) per share as the redemption value approximates fair value.

The calculation of diluted income (loss) per common share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 19,230,000 shares of common stock in the aggregate. As of December 31, 2020, the Company did not have any other dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net income (loss) per common share is the same as basic net income (loss) per common share for the periods presented.

The following table reflects the calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts):

 

Year Ended 
December 31, 
2020

 

For The
Period From August 26, 
2019
(Inception)
Through
December 31,
2019

  

Common Stock

 

Common Stock

Basic and diluted net loss per common share

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

Allocation of net loss

 

$

(1,609,783

)

 

$

(2,199

)

Denominator:

 

 

 

 

 

 

 

 

Basic and diluted weighted average stock outstanding

 

 

19,779,057

 

 

 

3,750,000

 

Basic and diluted net loss per common share

 

$

(0.08

)

 

$

 

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage limit of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

Fair Value of Financial Instruments

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. (see Note 10)

Recent Accounting Standards

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

F-23

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 4 — PUBLIC OFFERING

Pursuant to the Initial Public Offering, the Company sold 17,250,000 Units, which includes a full exercise by the underwriters of their over-allotment option in the amount of 2,250,000 Units, at a price of $10.00 per Unit. Each Unit consists of one share of common stock and one warrant (“Public Warrant”). Each Public Warrant entitles the holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment (see Note 8).

NOTE 5 — PRIVATE PLACEMENT

Simultaneously with the closing of the Initial Public Offering, the sponsor and Imperial purchased an aggregate of 300,000 private units at a price of $10.00 per private unit and 1,500,000 private warrants at a price of $1.00 per private warrant, for an aggregate purchase price of $4,500,000. The sponsor purchased 200,000 private units and 1,000,000 private warrants and Imperial purchased 100,000 private units and 500,000 private warrants. As a result of the underwriters’ election to fully exercise their over-allotment option on February 14, 2020, the Sponsor and Imperial purchased an additional 30,000 private units, at a purchase price of $10.00 per Private Unit, and 150,000 private warrants, at a purchase price of $1.00 per private warrant, for an aggregate purchase price of $450,000. Each private unit consists of one share of common stock (“private share”) and one warrant. Each private warrant is exercisable to purchase one share of common stock at an exercise price of $11.50 per share, subject to adjustment (see Note 8). The proceeds from the private securities were added to the proceeds from the initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Securities will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the private shares will expire worthless.

NOTE 6 — RELATED PARTY TRANSACTIONS

Founder’s Shares

In August 2019, the Sponsor purchased 4,312,500 shares (the “Founder’s Shares”) of the Company’s common stock for an aggregate price of $25,000. The Founder’s Shares included an aggregate of up to 562,500 shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the Sponsor would collectively own 20% of the Company’s issued and outstanding shares after the Initial Public Offering (excluding the Private Shares underlying the Private Securities). On February 14, 2020, as a result of the underwriters’ election to fully exercise their over-allotment option, 562,500 Founder’s Shares are no longer subject to forfeiture.

The Sponsor has agreed that, subject to certain limited exceptions, it will not transfer, assign or sell any of the Founder’s Shares until (i) with respect to 50% of the Founder’s Shares, for a period ending on the earlier of the one-year anniversary of the date of the consummation of the Business Combination and the date on which the closing price of the Company’s common stock equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within a 30-trading day period following the consummation of the Business Combination and (ii) with respect to the remaining 50% of the Founder’s Shares, for a period ending on the one-year anniversary of the date of the consummation of the Business Combination, or earlier if, subsequent to the Business Combination, the Company consummates a liquidation, merger, stock exchange or other similar transaction which results in all of its stockholders having the right to exchange their shares of common stock for cash, securities or other property. The limited exceptions include transfers, assignments or sales (i) to the Company’s or Sponsor’s officers, directors, consultants or their affiliates, (ii) to an entity’s members upon its liquidation, (iii) to relatives and trusts for estate planning purposes, (iv) by virtue of the laws of descent and distribution upon death, (v) pursuant to a qualified domestic relations order, (vi) to the Company for no value for cancellation in connection with the consummation of a Business Combination, or (vii) in connection with the consummation of a Business Combination at prices no greater than the price at which the shares were originally purchased, in each case (except for clause (vi) or with the Company’s prior consent) where the transferee agrees to the terms of the escrow agreement and to be bound by these transfer restrictions.

F-24

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 6 — RELATED PARTY TRANSACTIONS (cont.)

In addition, the Sponsor has agreed not to sell, transfer, pledge, hypothecate or otherwise dispose of all or any part of the Founder’s Shares unless, prior to (a) a registration statement on the appropriate form under the Securities Act and applicable state securities laws with respect to the Founder’s Shares proposed to be transferred shall then be effective or (b) the Company has received an opinion from counsel reasonably satisfactory to the Company, that such registration is not required because such transaction is exempt from registration under the Securities Act and the rules promulgated by the SEC thereunder and with all applicable state securities laws.

Advances — Related Party

During the year ended December 31, 2019, the Sponsor advanced an aggregate of $631,366 on the Company’s behalf to cover certain expenses (the “Advances”). An additional $164,753 was advanced as of February 2020. The Advances were non-interest bearing and due on demand. Total advances of $796,119 were repaid on March 9, 2020.

Related Party Loans

In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor, or certain of the Company’s officers and directors or their affiliates may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $2,000,000 of the Working Capital Loans may be convertible into units at a price of $10.00 per unit and/or warrants at a price of $1.00 per warrant. The units would be identical to the Private Units and the warrants would be identical to the private warrants.

On March 26, 2020, the Company issued an unsecured promissory note (the “Note”) in the principal amount of $1,000,000 to the Sponsor. The Note is non-interest bearing and payable upon the consummation of a Business Combination. Up to $1,000,000 of such loans may be convertible into units at a price of $10.00 per unit and/or warrants at a price of $1.00 per warrant. The units would be identical to the Private Units and the warrants would be identical to the private warrants.

The Company assessed the provisions of the convertible promissory note under ASC 815-15. The derivative component of the obligation is initially valued and classified as a derivative liability with an offset to a discount on the promissory note. The discount will be amortized over the life of the Note. For the year ended December 31, 2020 $272,884 was included within interest expense. To calculate the value of the embedded derivative we utilized a “with” and “without” approach. In the “with” scenario we valued the convertible promissory notes using a Black-Scholes model as it was determined that on a business combination, a holder would likely convert into private warrants, which were themselves valued using a Black-Scholes model and are considered to be a Level 3 fair value measurement (see Note 10). In the “without” scenario, we valued the repayment of the notional value of the convertible promissory note using a risk-adjusted discounted cash flow model. The primary unobservable inputs utilized in determining the fair value of the conversion option are volatility and credit spread.

As of December 31, 2020, the Company owed $1,593,605 in principal before a debt discount of $780,719 comprised of $272,884 in accrued interest (included in interest expense) and $691,057 of discount on its outstanding convertible promissory notes. The fair value of the conversion feature was $812,886. As of December 31, 2019, the Company did not have any outstanding convertible promissory notes.

F-25

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 6 — RELATED PARTY TRANSACTIONS (cont.)

The assumptions used to value the conversion option were consistent with those utilized in the Company’s Black-Scholes valuation for stock options are detailed below:

 

March 26,
2020

 

December 31,
2020

Expected volatility (%)

 

 

15.0

%

 

 

15.0

%

Risk-free interest rate (%)

 

 

0.60

%

 

 

0.43

%

Discount Rate (%)

 

 

25.0

%

 

 

25.0

%

Expected dividend yield (%)

 

 

0.0

%

 

 

0.0

%

Contractual term (years)

 

 

0.88

 

 

 

0.5

 

Conversion price

 

 

(*)

 

 

 

(*)

 

Underlying share price

 

 

8.97

 

 

 

10.13

 

Convertible notes amount

 

$

1,000,000

 

 

$

1,000,000

 

Fair value of the conversion feature

 

$

492,165

 

 

$

812,886

 

____________

(*)      the conversion price is $10.00 per unit and/or $1.00 per warrant

The following table presents the change in the fair value of conversion option:

Fair value as of January 1, 2020

 

$

Initial measurement on March 26, 2020

 

 

492,165

Change in valuation inputs and other assumptions

 

 

320,721

Fair value as of December 31, 2020

 

$

812,886

Administrative Support Agreement

The Company entered into an agreement whereby, commencing on the February 10, 2020, through the earlier of the Company’s consummation of a Business Combination and its liquidation, the Company will pay the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. For the year ended December 31, 2020, the Company incurred and paid $110,000 in fees for these services.

NOTE 7 — COMMITMENTS

Registration Rights

Pursuant to a registration rights agreement entered into on February 11, 2020, the holders of the Founder’s Shares, private units, private warrants, and any units or warrants that may be issued upon conversion of Working Capital Loans (and all underlying securities) are entitled to registration rights. The holders of the majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the Founder’s Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which the Founder’s Shares are to be released from escrow. The holders of a majority of the private units or units issued in payment of Working Capital Loans made to the Company (or underlying securities) can elect to exercise these registration rights at any time commencing after the Company consummates a Business Combination. Notwithstanding anything to the contrary, Imperial may only make a demand on one occasion and only during the five-year period beginning on the effective date of the Initial Public Offering. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination; provided, however, that Imperial may participate in a “piggy-back” registration only during the seven-year period beginning on the effective date of the initial public offering. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

F-26

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 7 — COMMITMENTS (cont.)

Underwriting Agreement

The initial public offering underwriting agreement provides that the underwriters must buy all of the units if they buy any of them. However, the underwriters are not required to purchase the units covered by the option to purchase additional units as described below.

Our units are offered subject to a number of conditions, including:

•        receipt and acceptance of our units by the underwriters; and

•        the underwriters’ right to reject orders in whole or in part.

In connection with this offering, the underwriters or securities dealers may distribute prospectuses electronically.

Option To Purchase Additional Units

We have granted the underwriters an option to buy up to an aggregate of 2,250,000 additional units. The underwriters have 30 days from the date of this prospectus to exercise this option. If the underwriters exercise this option, they will purchase additional units approximately in proportion to the amounts specified in the table above.

Underwriting Discount

Units sold byevent the underwritersCompany completes a financing transaction similar to the public will initially be offered at the initial offering price set forth on the cover of this prospectus. Any units sold by the underwriters to securities dealers may be sold at a discount of up to $[•] per unit from the initial public offering price and the dealers may reallowor Business Combination, or enters into a concession notstatement or letter of intent that results in excesssuch a transaction, within 18 months following its termination, Imperial shall be entitled to receive any expense reimbursement due to it along with payment in full of $[•] per unit to other dealers. Salesits applicable fee of units made outsideeither (i) 2% of the United States may be made by affiliates of the underwriters. After completion of this offering, if the underwriters still hold any units sold by us to them in this offering, the representative may change the offering price and the other selling terms. Upon execution of the underwriting agreement, the underwriters will be obligated to purchase the units at the prices and upon the terms stated therein.

The following table shows the per unit and total underwriting discount we will pay to the underwriters assuming both no exercise and full exercise of the underwriters’ option to purchase up to 2,250,000 additional units.

 

No Exercise

 

Full Exercise

Per Unit

 

$

0.20

 

$

0.20

Total

 

$

3,000,000

 

$

3,450,000

We estimate that the total expensesgross proceeds of the offering, payable by us, not including the underwriting discount,of which 1% will be approximately $750,000.

We have agreedin cash and 1% will be in equity of the Company for a financing transaction, or (ii) an amount equal to pay for5% of the underwriters’ outface amount of pocket expenses upany equity securities and 3% of the face amount of any debt sold or arranged as part of the Business Combination (exclusive of any applicable finders’ fees which might become payable). Additionally, Imperial has the right to a maximum of $50,000 for this offering and through the target acquisition and for underwriters’ legal fees on FINRA related matters up to a maximum of $25,000, as wellact as a maximumbook-runner and managing underwriter for all underwritten follow-on offerings for 18 months following completion of $300,000 for underwriters’ legal expenses in reviewing thisthe initial public offering and the underwriters’ legal expenses in connection with the target acquisition.right to approve any co-lead managing underwriter or co-book runner.

Business Combination Marketing Agreement

We haveThe Company has engaged Imperial Capital as an advisor in connection with our business combinationa Business Combination to assist usthe Company in holding meetings with ourits shareholders to discuss the potential business combinationBusiness Combination and the target business’ attributes, introduce usthe Company to potential investors that are interested in purchasing ourthe Company’s securities in connection with our initial business

92

combination,a Business Combination, assist usthe Company in obtaining shareholder approval for the business combinationBusiness Combination and assist usthe Company with ourits press releases and public filings in connection with the business combination. WeBusiness Combination. The Company will pay Imperial Capital a cash fee for such services upon the consummation of our initial business combinationa Business Combination in an amount equal to 4.5% of the gross proceeds of this offeringInitial Public Offering, or $7,762,500 (exclusive of any applicable finders’ fees which might become payable); provided that up to 20% of the fee may be allocated at ourthe Company’s sole discretion to other FINRA members that assist usthe Company in identifying and consummating an initial business combination.a Business Combination.

Additionally, we havethe Company has agreed to pay Imperial Capital a cash fee for assisting usit in obtaining financing for our initial business combinationthe Business Combination in an amount equal to 5% of the face amount of any equity securities and 3% of the face amount of any debt sold or arranged as part of the business combinationBusiness Combination (exclusive of any applicable finders’ fees which might become payable).

Private SecuritiesNOTE 8 — PERMANENT (DEFICIT) EQUITY (Restated, see Note 2 — Amendment 2)

Imperial CapitalPreferred Stock — On February 10, 2020, the Company amended its certificate of incorporation such that the Company is authorized to issue up to 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors. At December 31, 2020 and 2019, there were no shares of preferred stock issued or outstanding.

Common Stock — On February 10, 2020, the Company amended its certificate of incorporation such that the Company is authorized to issue up to 70,000,000 shares of common stock with a par value of $0.0001 per share. Holders of the common stock are entitled to one vote for each share. At December 31, 2020 and 2019, there were 4,642,500 and 4,312,500 shares of common stock issued and outstanding, excluding 17,250,000 and no shares of common stock subject to possible redemption which are presented as temporary equity, respectively.

Warrants — The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering. No warrants will be exercisable for cash unless the Company has committed that it and/or its designees will purchase from us 100,000 private unitsan effective and an additional 500,000 privatecurrent registration statement covering the shares of common stock issuable upon exercise of the warrants forand a total purchase pricecurrent prospectus relating to such shares of $1,500,000. This purchase will take place oncommon stock. Notwithstanding the foregoing, if a private placement basis simultaneously withregistration statement covering the shares of common stock issuable upon exercise of the public warrants is not effective within a specified period following the consummation of this offering. Imperial Capital has also agreeda Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless

F-27

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 8 — PERMANENT (DEFICIT) EQUITY(Restated, see Note 2 — Amendment 2) (cont.)

basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.

Once the warrants become exercisable, the Company may redeem the Public Warrants:

•        in whole and not in part;

•        at a price of $0.01 per warrant;

•        upon not less than 30 days’ prior written notice of redemption;

•        if, and only if, the overreported last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-allotment-trading day period ending on the third business day prior to the notice of redemption to the warrant holders; and

•        if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is exercisedunable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

In addition, if (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of an initial Business Combination at an issue price or effective issue price of less than $9.50 per share of common stock (with such issue price or effective issue price to be determined in good faith by the underwriters in full or in part, they will purchase from us an additional numberCompany’s board of private unitsdirectors, and private warrants (up to a maximum of 10,000 private units and an additional 50,000 private warrants) necessary to maintain in the trust account $10.00 per unit soldcase of any such issuance to the publicSponsor, initial stockholders or their affiliates, without taking into account any Founder Shares held by them prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of an initial Business Combination on the date of the consummation of an initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates an initial Business Combination (such price, the “Market Value”) is below $9.50 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the price at which the Company issues the additional shares of common stock or equity-linked securities.

F-28

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 9 — INCOME TAX

The Company’s net deferred tax assets at December 31, 2020 and 2019 as follows:

 

December 31,
2020

 

December 31,
2019

Deferred tax assets

 

 

 

 

 

 

 

 

Net operating loss carryforward

 

$

92,417

 

 

$

462

 

Total deferred tax assets

 

 

92,417

 

 

 

462

 

Valuation allowance

 

 

(92,417

)

 

 

(462

)

Deferred tax assets

 

$

 

 

$

 

The income tax provision for the year ended December 31, 2020 and for the period from August 26, 2019 (inception) through December 31, 2019 consists of the following:

 

December 31,
2020

 

December 31,
2019

Federal

 

 

 

 

 

 

 

 

Current

 

$

 

 

$

 

Deferred

 

 

(91,955

)

 

 

(462

)

  

 

 

 

 

 

 

 

State and Local

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

 

Deferred

 

 

 

 

 

 

  

 

 

 

 

 

 

 

Change in valuation allowance

 

 

91,955

 

 

 

462

 

Income tax provision

 

$

 

 

$

 

As of December 31, 2020, and 2019, the Company had $440,083 and $2,199, respectively of U.S. federal net operating loss carryovers available to offset future taxable income. The net operating loss carryovers are subject to an indefinite period of utilization.

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this offering. assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the year ended December 31, 2020, the change in the valuation allowance was $92,417.

A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2020 and 2019 is as follows:

 

December 31,
2020

 

December 31,
2019

Statutory federal income tax rate

 

21.0

%

 

21.0

%

State taxes, net of federal tax benefit

 

0.0

%

 

0.0

%

Interest expense

 

(3.6

)%

 

0.0

%

Change in fair value of private warrants liability

 

(7.5

)%

 

0.0

%

Change in fair value of Convertible promissory note, net – related party

 

(4.2

)%

 

0.0

%

Meals

 

(0.1

)%

 

0.0

%

Valuation allowance

 

(5.6

)%

 

(21.0

)%

Income tax provision

 

0.0

%

 

21.0

%

F-29

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 9 — INCOME TAX (cont.)

The private unitsCompany files income tax returns in the U.S. federal jurisdiction and is subject to examination by the various taxing authorities. The Company’s tax returns for the year ended December 31, 2020 and 2019 remain open and subject to examination. The Company considers New York to be a significant state tax jurisdiction.

NOTE 10 — FAIR VALUE MEASUREMENTS

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1:

Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2:

Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3:

Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at December 31, 2020, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Description

 

Level

 

December 31,
2020

Assets:

   

 

 

Marketable securities held in Trust Account

 

1

 

$

173,656,603

    

 

 

Liabilities:

   

 

 

Private warrants liability

 

2

 

$

1,980,000

Convertible component of convertible promissory note

 

3

 

$

812,886

The private warrants are identical to the units and warrantsPublic Warrants underlying the Units sold in the Initial Public Offering, except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

The Derivative Instruments were accounted for as liabilities in accordance with ASC 815-40 and are presented within the private warrant liabilities and convertible promissory note, net — related party on our consolidated balance sheet. The instruments are measured at fair value at inception and on a recurring basis, with changes in fair value presented within Change in fair value of private warrant liabilities and Change in fair value of Convertible promissory note, net — related party in the consolidated statement of operations.

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Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 10 — FAIR VALUE MEASUREMENTS (cont.)

Initial Measurement

The Company established the initial fair value for the warrants on February 13, 2020, the date of the Company’s Initial Public Offering, using a Black-Scholes model for the private warrants. The Company allocated the proceeds received from the sale of private warrants first to the warrants based on their fair values as determined at initial measurement, with the remaining proceeds allocated to common stock subject to possible redemption and common stock based on their relative fair values at the initial measurement date. The warrants were classified as Level 3 at the initial measurement date due to the use of unobservable inputs, and they move to a Level 2 when the public warrants begin trading separately on May 11, 2020.

The key inputs into the Black-Scholes model for the private warrants were as follows at initial measurement:

Input

 

February 13,
2020 (Initial
Measurement)

Risk-free interest rate (%)

 

 

1.45

%

Expected term (years)

 

 

6

 

Expected volatility (%)

 

 

12.5

%

Exercise price

 

$

11.50

 

Fair value of Units

 

$

10.07

 

On February 13, 2020, the private warrants were determined to be $0.71 per warrant for an aggregate value of $1,405,800.

Subsequent Measurement

The private warrants are measured at fair value on a recurring basis. As of March 31, 2020, the private warrants are classified as Level 2 due to the use of an observable market quote in an active market.

As of December 31, 2020, the aggregate values of the private warrants and the convertible component of convertible promissory note were $1,980,000 and $812,886, respectively.

The following table presents the changes in the fair value of derivative liabilities:

 

Private
Warrants

 

Convertible
Component

Fair value as of January 1, 2020

 

$

 

$

Initial measurement on February 13, 2020

 

 

1,405,800

 

 

 

Initial measurement on March 26, 2020

 

 

  

 

492,165

Changes in fair value

 

 

574,200

 

 

320,721

Fair value as of December 31, 2020

 

$

1,980,000

 

$

812,886

NOTE 11 — SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this offering exceptreview, the Company identified the following subsequent events that would have required adjustment or disclosure in the financial statements.

On January 29, 2021, the Company issued an unsecured promissory note (the “2021 Note”) in the principal amount of $1,000,000 to the Sponsor. The Note is non-interest bearing and payable upon the consummation of a Business Combination. Up to $1,000,000 of such loans may be convertible into units at a price of $10.00 per unit and/or warrants at a price of $1.00 per warrant. The units would be identical to the Private Units and the warrants would be identical to the -private warrants.

F-31

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 11 — SUBSEQUENT EVENTS (cont.)

Initial Business Combinations

On March 12, 2021 the Company entered into definitive agreements to acquire the following four cannabis companies:

•        the Agreement and Plan of Merger by and among Greenrose, GNRS NV Merger Sub, Inc., Shango Holdings, Inc. and Gary Rexroad as the Selling Stockholders’ Representative dated as of March 12, 2021 (the “Shango Merger Agreement”);

•        the Agreement and Plan of Merger by and among Greenrose, GNRS CT Merger Sub, LLC, Theraplant, LLC acting by and through its Steering Committee and Shareholder Representative Services LLC as the Selling Stockholders’ Representative dated as of March 12, 2021 (the “Theraplant Merger Agreement”);

•        the Asset Purchase Agreement by and among Greenrose, True Harvest Holdings, Inc. and True Harvest, LLC dated as of March 12, 2021 (the “Asset Purchase Agreement”); and

•        the Agreement and Plan of Merger by and among Greenrose, Futureworks Holdings, Inc., and Futureworks LLC dated as of March 12, 2021 (“Futureworks Merger Agreement”).

Agreements for Business Combinations

Shango Holdings Inc. Merger Agreement

The Company , GNRS NV Merger Sub, Inc., a Nevada corporation and a wholly owned subsidiary of the Company formed on March 10, 2021 (“GS Merger Sub”), Shango Holdings Inc., a Nevada corporation (“Shango”) and Gary Rexroad, in his capacity as the representative for the Sellers thereunder (the “Shango Sellers’ Representative”), entered into an Agreement and Plan of Merger (the “Shango Merger Agreement”), pursuant to which GS Merger Sub will be merged with and into Shango (the “Shango Merger”), with Shango surviving as a wholly owned subsidiary of Greenrose. Capitalized but undefined terms used in this section shall have the meanings set forth in the Shango Merger Agreement.

Conversion of Securities

Subject to the terms and conditions set forth in the Shango Merger Agreement, at the effective time of the Shango Merger (the “Shango Effective Time”), other than Dissenting Shares, each share of Shango’s common stock issued and outstanding immediately prior to the Shango Effective Time will be canceled and converted into the right to receive a pro rata portion of cash (without interest) and the number of shares of the common stock of Greenrose (the “Greenrose Common Stock”) issued as part of the Additional Consideration (as defined below), if any, in an amount equal to the sum of (i) the applicable Per Share Initial Consideration plus (ii) any applicable Per Share Additional Consideration, as described elsewherebelow.

Merger Consideration

Initial Consideration

The aggregate consideration to be paid at Closing to Shango’s stockholders, other than for Dissenting Shares, will be: (i) $31,000,000 in cash, (ii) the assumption of up to $9,000,000 of Shango’s liabilities and (iii) any shortfall between $9,000,000 and the amount of Shango liabilities actually assumed by Greenrose at Closing. Additionally, Greenrose agreed to commit up to $10,000,000 for use for certain capital expenditures, as described more fully in the Shango Merger Agreement.

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Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 11 — SUBSEQUENT EVENTS (cont.)

Earnout Payments

In addition to the Initial Consideration, and subject to Shango meeting certain target revenues in each of Greenrose’s 2021, 2022 and 2023 fiscal years, and having cash flow from operations of no less than $0, then, subject to Shango’s stockholders having delivered an Accredited Investor Certification, Greenrose may be required to issue to Shango’s stockholders up to such number of shares of Greenrose Common Stock equal to $65,000,000 in value, consisting of up to $20,000,000 in value of shares of Greenrose Common Stock for the 2021 fiscal year, up to $25,000,000 in value of shares of Greenrose Common Stock for the 2022 fiscal year and up to $20,000,000 in value of shares of Greenrose Common Stock for the 2023 fiscal year (collectively, the “Additional Consideration”), divided by the Parent Common Stock Price, which is calculated based upon the volume weighted average price per share of Greenrose Common Stock (rounded down to the nearest cent) on the OTCQX, or such other exchange on which Greenrose Common Stock is then listed or quoted on, for the ten (10) consecutive trading days ending on (and including) the last full trading day immediately prior to, as applicable, (1) the 2021 Milestone Payment Date, (2) the 2022 Milestone Payment Date, or (3) the 2023 Milestone Payment Date, as reported by the Wall Street Journal for each such trading day, or, if not reported by the Wall Street Journal, any other authoritative source mutually agreed by Greenrose and the Company. The Shango Merger Agreement provides that if any portion of the Additional Consideration is not fully earned in either 2021 or 2022, such portion of the Additional Consideration may be earned in subsequent years through 2023. Additionally, the Additional Consideration may be subject to acceleration as further set forth in the Shango Merger Agreement.

Closing

The Closing will occur as promptly as reasonably practicable, but in no event later than two (2) business days following the satisfaction or waiver of all of the closing conditions in the Shango Merger Agreement.

Representations and Warranties

The Shango Merger Agreement contains customary representations and warranties by each of Shango, Greenrose and GS Merger Sub. Many of the representations and warranties are qualified by knowledge of a party, materiality or Material Adverse Effect. At the Closing, Greenrose will also enter into an eighteen (18) month escrow arrangement in a customary form with the Shango Sellers’ Representative and an escrow agent and will deposit $3,000,000 in cash into an escrow fund for the recovery of indemnification claims and working capital adjustments. The Shango stockholders’ aggregate liability for Representation Breach Claims shall not exceed $11,500,000, subject to certain exceptions, and the aggregate liability for all claims shall not exceed the lesser of (i) $25,000,000 or (ii) the Aggregate Consideration actually received by the Shango stockholders.

Covenants of the Parties

Each Party agreed to use its commercially reasonable efforts to effect the Closing. The Shango Merger Agreement also contains certain customary covenants by each of the Parties during the period between the signing of the Shango Merger Agreement and the earlier of the Closing or the termination of the Shango Merger Agreement in accordance with its terms, as well as certain customary covenants, such as confidentiality and publicity that will continue after the termination of the Shango Merger Agreement.

Shango agreed to (and to cause each of its subsidiaries to), use commercially reasonable efforts to, during the period between the signing of the Merger Agreement and until the earlier of the Closing or the termination of the Shango Merger Agreement, carry on its business in the ordinary course consistent with past practice. Shango also agreed not to, during the period between the signing of the Shango Merger Agreement and until the earlier of the Closing or the termination of the Shango Merger Agreement, without the prior written consent of Greenrose, to take certain actions as more fully set forth in the Shango Merger Agreement.

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Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 11 — SUBSEQUENT EVENTS (cont.)

Conditions to Consummation of the Shango Merger

Under the Shango Merger Agreement, the obligations of the parties (or, in some cases, some of the parties) to consummate the Shango Merger are subject to the satisfaction or waiver of certain customary closing conditions of the respective parties, including, without limitation: (i) the approval and adoption of the Shango Merger Agreement and transactions contemplated thereby and certain other matters by the requisite vote of the stockholders of Greenrose (the “Greenrose Stockholders”); (ii) if required, the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; (iii) the absence of a Material Adverse Effect since the date of the Shango Merger Agreement; and (iv) material compliance by the parties with their respective pre-Closing and Closing obligations and the accuracy of each party’s representations and warranties in the Shango Merger Agreement, in each case subject to the certain materiality standards contained in the Shango Merger Agreement.

Termination

The Shango Merger Agreement may be terminated under the following customary and limited circumstances at any time prior to the Closing: (i) upon the mutual written consent of Greenrose and Shango; (ii) by Greenrose or Shango if any Law or Order is enacted, promulgated or issued or deemed applicable to the Shango Merger by any Governmental Authority that would make consummation of the Shango Merger illegal, other than Federal Cannabis Laws; (iii) by Greenrose or Shango if the Closing has not occurred by August 31, 2021; or (iv) by Greenrose, on the one hand, or Shango, on the other hand, as a result of certain breaches by the counterparties to the Shango Merger Agreement that remain uncured after any applicable cure period; provided, in each case of (i)-(iv), that such termination right is not available to any party if such party is in breach of its representations, warranties, covenants, agreements or other obligations under the Shango Merger Agreement.

The foregoing description of the Shango Merger Agreement is qualified in its entirety by reference to the full text of the form of the Shango Merger Agreement, a copy of which is included as Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on March 18, 2021 and incorporated herein by reference.

Lock-Up Agreements

In connection with the Closing, each of Shango’s stockholders will be required to enter into a Lock-Up Agreement (the “Shango Lock-Up Agreement”) pursuant to which they will agree, subject to certain exceptions, for a period of 6 months after the applicable Milestone Payment Date, (i) not to lend, offer, pledge, hypothecate, encumber, donate, assign, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Greenrose Common Stock, (ii) enter into any swap or other arrangement that transfers to another party, in whole or in part, any of the economic consequences of ownership of the Greenrose Common Stock, or (iii) publicly disclose the intention to do any of the foregoing, with respect to any shares of Greenrose Common Stock received by such Shango stockholder as part of the Additional Consideration.

The foregoing description of the Shango Lock-Up Agreement is qualified in its entirety by reference to the full text of the form of Lock-Up Agreement, a copy of which is included as Exhibit I to the Shango Merger Agreement, filed as Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on March 18, 2021, and incorporated herein by reference.

Registration Rights Agreement

In connection with the Closing, Greenrose will enter into a Registration Rights Agreement with each of Shango’s stockholders (the “Shango Registration Rights Agreement”) pursuant to which Greenrose agrees that, after the expiration of the applicable lock-up period set forth in the Shango Lock-Up Agreement, at the request of the Majority Holders (as defined in the Shango Registration Rights Agreement), Greenrose will file a registration statement with the SEC covering the resale of the Registrable Securities (as defined in the Shango Registration Rights Agreement)

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Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 11 — SUBSEQUENT EVENTS (cont.)

requested to be included in such registration statement (the “Resale Registration Statement”), and Greenrose shall use its reasonable best efforts to have the Resale Registration Statement declared effective as soon as reasonably practicable after the filing thereof. Additionally, the Holders (as defined in the Shango Registration Rights Agreement) will be entitled to piggyback registration rights.

The foregoing description of the Shango Registration Rights Agreement is qualified in its entirety by reference to the full text of the form of Registration Rights Agreement, a copy of which is included as Exhibit H to the Shango Merger Agreement, filed as Exhibit 2.1 to the Current Report on Form 8-K filed on March 18, 2021, and incorporated herein by reference.

Theraplant Merger Agreement

On March 12, 2021, the Company, GNRS CT Merger Sub, LLC, a Connecticut limited liability company and a wholly-owned subsidiary of the Company formed on March 5,2021 (“TPT Merger Sub”), Theraplant, LLC, a Connecticut limited liability company (“Theraplant”) and Shareholder Representative Services LLC, solely in its capacity as the representative for the Selling Stockholders thereunder (the “Theraplant Seller Representative”), entered into an Agreement and Plan of Merger (the “Theraplant Merger Agreement”), pursuant to which TPT Merger Sub will be merged with and into Theraplant (the “Theraplant Merger”), with Theraplant surviving the Merger as a wholly owned subsidiary of Greenrose. Capitalized but undefined terms used in this prospectus. section “Theraplant Merger Agreement” the meanings set forth in the Theraplant Merger Agreement.

Conversion of Securities

Subject to the terms and conditions set forth in the Theraplant Merger Agreement, at the effective time of the Theraplant Merger (the “Theraplant Effective Time”), each unit of Theraplant issued and outstanding immediately prior to the Theraplant Effective Time will be canceled and converted into the right to receive a pro rata portion of cash (without interest), as described below.

Merger Consideration

The aggregate merger consideration (the “Theraplant Merger Consideration”) to be paid at Closing to the unit holders of Theraplant pursuant to the Theraplant Merger Agreement for all Company Units will be $100,000,000 in cash, subject to customary purchase price adjustments, and an indemnity escrow as described more fully in the Theraplant Merger Agreement. Additionally, $700,000 of the Theraplant Merger Consideration will be placed into dedicated accounts controlled by the Theraplant Seller Representative and the Theraplant Managing Members immediately prior to Closing, to provide a source of funds for those parties to use in administering any claims or disputes that arise post-Closing.

Closing

The Closing will occur as promptly as reasonably practicable, but in no event later than two (2) business days following the satisfaction or waiver of all of the closing conditions in the Theraplant Merger Agreement.

Representations and Warranties

The Theraplant Merger Agreement contains customary representations and warranties by each of Theraplant, Greenrose and TPT Merger Sub. Many of the representations and warranties are qualified by materiality or Material Adverse Effect. Other than Fundamental Representations, the representations and warranties made by the Parties survive the Closing for a period of 18 months.

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Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 11 — SUBSEQUENT EVENTS (cont.)

Covenants of the Parties

Each private warrantParty agreed to use its commercially reasonable efforts to effect the Closing. The Theraplant Merger Agreement also contains certain customary covenants by each of the Parties during the period between the signing of the Merger Agreement and the earlier of the Closing or the termination of the Theraplant Merger Agreement in accordance with its terms, as well as certain customary covenants, such as confidentiality and publicity that will continue after the termination of the Theraplant Merger Agreement.

Pursuant to the Theraplant Merger Agreement, Theraplant agreed to (and agreed to cause each Subsidiary to), use commercially reasonable efforts to, during the period between the signing of the Theraplant Merger Agreement and until the earlier of the Closing or the termination of the Theraplant Merger Agreement, carry on its business in the ordinary course consistent with past practice. Pursuant to the Theraplant Merger Agreement, Theraplant also agrees not to, during the period between the signing of the Theraplant Merger Agreement and until the earlier of the Closing or the termination of the Theraplant Merger Agreement, without the prior written consent of Greenrose, to take certain actions as more fully described in the Theraplant Merger Agreement.

Conditions to Consummation of the Theraplant Merger

Under the Theraplant Merger Agreement, the obligations of the parties (or, in some cases, some of the parties) to consummate the Theraplant Merger are subject to the satisfaction or waiver of certain customary closing conditions of the respective parties, including, without limitation: (i) the approval and adoption of the Theraplant Merger Agreement and transactions contemplated thereby and certain other matters by the requisite vote of the Greenrose Stockholders; (ii) the approval and adoption of the Theraplant Merger Agreement and transactions contemplated thereby by Theraplant’s members owning no less than 70% of Theraplant’s units entitled to vote; (iii) the absence of a Material Adverse Effect since the date of the Theraplant Merger Agreement; and (iv) material compliance by the parties with their respective pre-Closing and Closing obligations and the accuracy of each party’s representations and warranties in the Theraplant Merger Agreement, in each case subject to the certain materiality standards contained in the Theraplant Merger Agreement.

Termination

The Theraplant Merger Agreement may be terminated under the following customary and limited circumstances at any time prior to the Closing: (i) upon the mutual written consent of the Company and Theraplant; (ii) by the Company or Theraplant if any Law or Order is exercisableenacted, promulgated or issued or deemed applicable to the Theraplant Merger by any Governmental Authority that would make consummation of the Theraplant Merger illegal, other than Federal Cannabis Laws; (iii) by the Company or Theraplant if the Closing has not occurred by August 13, 2021; (iv) by the Company or Theraplant if, after giving effect to the completion of the Redemption and any financings undertaken by the Company in connection with the Closing, the Company shall have net tangible assets of less than $120,000,000; or (v) by the Company, on the one hand, or Theraplant, on the other hand, as a result of certain breaches by the counterparties to the Theraplant Merger Agreement that remain uncured after any applicable cure period; provided, in each case of (i)-(v), that such termination right is not available to any party if such party is in breach of its representations, warranties, covenants, agreements or other obligations under the Theraplant Merger Agreement.

The foregoing description of the Theraplant Merger Agreement is qualified in its entirety by reference to the full text of the form of the Theraplant Merger Agreement, a copy of which is included as Exhibit 2.2 to the Current Report on Form 8-K filed with the SEC on March 18, 2021, and incorporated herein by reference.

True Harvest Holdings Asset Purchase Agreement

On March 12, 2021, the Company , True Harvest Holdings, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company formed on March 10, 2021 (“Buyer”), and True Harvest, LLC, an Arizona limited liability company (the “Seller” or “True Harvest”), entered into an Asset Purchase Agreement (the “Asset Purchase

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Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 11 — SUBSEQUENT EVENTS (cont.)

Agreement,”), pursuant to which Buyer agreed to acquire substantially all of Seller’s assets in connection with its indoor cannabis cultivation facility (the “Business”). Capitalized but undefined terms used in this section shall have the meanings set forth in the Asset Purchase Agreement.

Purchase Consideration

Initial Consideration

The initial consideration to be paid by the Buyer to Seller for the Purchased Assets (the “Initial Payment Amount”), will consist of: (i) $21,750,000 in cash; (ii) an additional $25,000,000 evidenced by a secured promissory note bearing interest at 8% per annum, issued by Buyer to Seller which matures on the third anniversary of the Closing, and which is secured by the Purchased Assets pursuant to the terms of a Security Agreement; and (iii) the assumption by Buyer of $3,250,000 of Seller’s debt.

Earnout Payment

In addition to the Initial Payment Amount, Buyer may be required to pay additional consideration to Seller (the “Earnout Payment”) of up to a maximum of $35,000,000 in cash (the “Maximum Earnout Amount”) contingent on the Business attaining, within thirty-six (36) months after the Closing Date, a certain price per pound (the “36 Month Price Point”) of cannabis flower (“flower”) as compared to total flower production, irrespective of the final form in which such flower is sold. The Earnout Payment, if any, shall be evidenced by a promissory note (the “Earnout Note”). The Earnout Note, which shall bear interest at an annual rate of 8% per annum, is payable in twenty-four (24) monthly installments after issuance and will be secured by the Purchased Assets. The 36 Month Price Point will be equal to the average of the Weighted Average Annual Price Points for the three (3) years following the Closing Date. The “Weighted Average Annual Price Point” equals revenue of the Business for the three (3) year period following the Closing Date divided by total weight of flower product produced and sold by Buyer (as listed in Biotrack or equivalent tracking system) during the three (3) year period following the Closing Date, provided, that in the event any flower product is lost or otherwise destroyed, then such lost or destroyed products shall not be included in the calculation of Weighted Average Annual Price Point.

The percentage of the Maximum Earnout Amount payable by Buyer to Seller will be determined in accordance with the following table:

36 Month Price Point

Percentage of Earnout

Flower Production of <17,500
pounds
/yr.

Flower Production of >17,500
pounds
/yr.

0%

<$2,199

<$2,199

20%

$2,200-$2,399

$2,200-$2,199

50%

$2,400-$2,699

$2,200-$2,499

80%

$2,700-$2,999

$2,500-$2,799

100%

$3,000+

$2,800+

Closing

The Closing will occur as promptly as reasonably practicable, but in no event later than two (2) business days following the satisfaction or waiver of all of the closing conditions in the Asset Purchase Agreement.

Representations and Warranties

The Asset Purchase Agreement contains customary representations and warranties by each of Seller, the Company and Buyer. Many of the representations and warranties are qualified by materiality or Material Adverse Effect. Other than certain fundamental representations, the representations and warranties made by the Parties survive the Closing for a period of 18 months.

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Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 11 — SUBSEQUENT EVENTS (cont.)

Covenants of the Parties

Each party agrees to use its commercially reasonable efforts to effect the Closing. The Asset Purchase Agreement also contains certain customary covenants by each of the Parties during the period between the signing of the Asset Purchase Agreement and prior to the Closing, as well as certain customary covenants, such as confidentiality and publicity that will continue after the termination of the Asset Purchase Agreement. Each party will also use its reasonable best efforts to obtain all consents, authorizations, orders and approvals from all governmental authorities that may be necessary for execution of the Asset Purchase Agreement.

The Seller agrees that, during the period between the signing of the Asset Purchase Agreement and until the Closing, it will use its best efforts to operate its business in good faith in the ordinary course, using reasonable efforts to maintain and preserve intact the current Business and operations and to preserve the rights, goodwill and relationships of its employees, customers, lenders, vendors, and others having relationships with the Business.

After the Closing, Seller agrees to cooperate with Buyer in Buyer’s efforts to continue and maintain those business relationships of Seller existing prior to the Closing and relating to the Business for a period of time.

Conditions to Consummation of the Asset Purchase Agreement

Under the Asset Purchase Agreement, the obligations of the parties (or, in some cases, some of the parties) to consummate the Asset Purchase Merger are subject to the satisfaction or waiver of certain customary closing conditions of the respective parties, including, without limitation: (i) the approval and adoption of the Asset Purchase Agreement and transactions contemplated thereby and certain other matters by the requisite vote of the Greenrose Stockholders; (ii) the absence of a Material Adverse Effect (as defined in the Asset Purchase Agreement) since the date of the Asset Purchase Agreement; (iii) after giving effect to the completion of the Redemption and any financings undertaken by the Company in connection with the Closing, the Company shall have net tangible assets of no less than $70,000,000; and (iv) material compliance by the parties with their respective pre-Closing and Closing obligations and the accuracy of each party’s representations and warranties in the Asset Purchase Agreement, in each case subject to the certain materiality standards contained in the Asset Purchase Agreement.

Termination

The Asset Purchase Agreement may be terminated under the following customary and limited circumstances at any time prior to the Closing: (i) upon the mutual written consent of Greenrose and True Harvest; (ii) by the Company or True Harvest if there shall be any law or order enacted that makes consummation of the transactions contemplated by the Asset Purchase Agreement illegal or otherwise prohibited, other than Federal Cannabis Laws; (iii) by the Company or True Harvest if the Closing has not occurred by the Drop Dead Date; or (v) by Greenrose, on the one hand, or True Harvest, on the other hand, as a result of certain breaches by the counterparties to the Asset Purchase Agreement that remain uncured after any applicable cure period; provided, in each case of (i)-(iv), that such termination right is not available to any party if such party is in breach of its representations, warranties, covenants, agreements or other obligations under the Asset Purchase Agreement.

The foregoing description of the Asset Purchase Agreement is qualified in its entirety by reference to the full text of the form of the Asset Purchase Agreement, including the exhibits attached thereto, a copy of which is included as Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on March 18, 2021, and incorporated herein by reference.

Futureworks Merger Agreement

On March 12, 2021, the Company, Futureworks Holdings, Inc. a Delaware corporation and a wholly owned subsidiary of the Company formed on March 11, 2021 (“FW Merger Sub”), and Futureworks LLC, a Colorado limited liability company (“Futureworks”), entered into an Agreement and Plan of Merger (the “Futureworks Merger

F-38

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 11 — SUBSEQUENT EVENTS (cont.)

Agreement”), pursuant to which Futureworks will be merged with and into FW Merger Sub (the “Futureworks Merger”), with FW Merger Sub surviving the Merger as a wholly owned subsidiary of the Company (the “Surviving Corporation”). Capitalized but undefined terms used in this section shall have the meanings set forth in the Futureworks Merger Agreement.

Conversion of Securities

Subject to the terms and conditions set forth in the Futureworks Merger Agreement, at the effective time of the Futureworks Merger (the “Futureworks Effective Time”) each ownership interest in Futureworks issued and outstanding immediately prior to the Futureworks Effective Time will be canceled and extinguished and converted into the right to receive a pro rata portion of the Aggregate Consideration (without interest), as described below.

Merger Consideration

Initial Consideration

The value of the aggregate merger consideration (the “Initial Consideration”) to be paid at closing to the holders of Futureworks ownership interests pursuant to the Futureworks Merger Agreement for all Company Interests will be: (i) $17,500,000 in cash, plus (ii) such number of shares of Greenrose Common Stock equal to $15,000,000 in value (the “Parent Common Stock”), calculated based upon the volume weighted average price per share of Parent Common Stock (rounded down to the nearest cent) on the OTCQX for the twenty (20) consecutive trading days ending on (and including) the last full trading day immediately prior to, (i) the Closing Date, (ii) March 31, 2022, or (iii) such date as Parent Common Stock Price is required to be paid or issued, as appliable (the “Parent Common Stock Price”), as reported by the Wall Street Journal for each such trading day, or, if not reported by the Wall Street Journal, any other authoritative source mutually agreed by Greenrose and the Company, provided that the Parent Common Stock Price for the shares of Parent Common Stock to be issued on the Closing Date shall be subject to a minimum price of $12.00 per share of Parent Common Stock and a maximum price of $15.00 per share of Parent Common Stock, subject to customary purchase price adjustments, and indemnity escrow, as described more fully in the Futureworks Merger Agreement.

Earnout Payment

In addition to the Initial Consideration, and subject to the Surviving Corporation meeting the Earnout Threshold then, subject to Futureworks’ members having delivered an executed Accredited Investor Certification to the Company the Company may be required to issue to Futureworks’ members up to such number of shares of Parent Common Stock equal to $10,000,000 in value, calculated based on the Parent Common Stock Price (the “Futureworks Additional Consideration”).

Closing

The Closing will occur as promptly as reasonably practicable, but in no event later than two (2) business days following the satisfaction or waiver of all of the closing conditions in the Futureworks Merger Agreement.

Representations and Warranties

The Futureworks Merger Agreement contains customary representations and warranties by each of Futureworks, the Company and FW Merger Sub. Many of the representations and warranties are qualified by materiality or Material Adverse Effect. The representations and warranties made by the Parties survive the Closing until the Expiration Date.

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GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 11 — SUBSEQUENT EVENTS (cont.)

Covenants of the Parties

Each Party agreed to use its commercially reasonable efforts to effect the Closing. The Futureworks Merger Agreement also contains certain customary covenants by each of the Parties during the period between the signing of the Futureworks Merger Agreement and the earlier of the Closing or the termination of the Futureworks Merger Agreement in accordance with its terms, as well as certain customary covenants, such as confidentiality and publicity that will continue after the termination of the Futureworks Merger Agreement.

Futureworks agreed to (and to cause each Futureworks subsidiary to), use commercially reasonable efforts to, during the period between the signing of the Futureworks Merger Agreement and until the earlier of the Closing or the termination of the Futureworks Merger Agreement, carry on its business in the ordinary course consistent with past practice. Futureworks also agreed not to, during the period between the signing of the Futureworks Merger Agreement and until the earlier of the Closing or the termination of the Futureworks Merger Agreement, without the prior written consent of the Company, to take certain actions as further set forth in the Futureworks Merger Agreement.

Conditions to Consummation of the Futureworks Merger

Under the Futureworks Merger Agreement, the obligations of the parties (or, in some cases, some of the parties) to consummate the Futureworks Merger are subject to the satisfaction or waiver of certain customary closing conditions of the respective parties, including, without limitation: (i) the approval and adoption of the Futureworks Merger Agreement and transactions contemplated thereby and certain other matters by the requisite vote of the Greenrose Stockholders; (ii) the absence of a Material Adverse Effect since the date of the Futureworks Merger Agreement; and (iii) material compliance by the parties with their respective pre-Closing and Closing obligations and the accuracy of each party’s representations and warranties in the Futureworks Merger Agreement, in each case subject to the certain materiality standards contained in the Futureworks Merger Agreement.

Termination

The Futureworks Merger Agreement may be terminated under the following customary and limited circumstances at any time prior to the Closing: (i) upon the mutual written consent of Greenrose and Futureworks; (ii) by Greenrose or Futureworks if any Applicable Law or Order is enacted, promulgated or issued or deemed applicable to the Futureworks Merger by any Governmental Authority that would make consummation of the Futureworks Merger illegal; provided, however, that the violation of any Federal Cannabis Laws shall not be deemed to make consummation of the Futureworks Merger illegal; (iii) by Greenrose or Futureworks if the Effective Time has not occurred within 12 months from the date of the Futureworks Merger Agreement; or (iv) by Greenrose, on the one hand, or Futureworks, on the other hand, as a result of certain breaches by the counterparties to the Futureworks Merger Agreement that remain uncured after any applicable cure period; provided, in each case of (i)-(iv), that such termination right is not available to any party if such party is in breach of its representations, warranties, covenants, agreements or other obligations under the Futureworks Merger Agreement.

Lock-Up Agreements

In connection with the Closing, each of Futureworks’ members will be required to enter into a Lock-Up Agreement (the “Futureworks Lock-Up Agreement”) pursuant to which they will agree, subject to certain exceptions, for a period of 6 months after the Closing Date, (i) not to lend, offer, pledge, hypothecate, encumber, donate, assign, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Parent Common Stock, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Parent Common Stock, or (iii) publicly disclose the intention to do any of the foregoing, with respect to any shares of Parent Common Stock received by such Futureworks’ member as part of the Initial Consideration or the Futureworks Additional Consideration.

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GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 11 — SUBSEQUENT EVENTS (cont.)

The foregoing description of the Futureworks Lock-Up Agreement is qualified in its entirety by reference to the full text of the form of Lock-Up Agreement, a copy of which is included as Exhibit G to the Futureworks Merger Agreement, filed as Exhibit 2.3 to the Current Report on Form 8-K filed with the SEC on March 18, 2021, and incorporated herein by reference.

Registration Rights Agreement

In connection with the Closing, the Company will enter into a Registration Rights Agreement with each of Futureworks’ members (the “Futureworks Registration Rights Agreement”) pursuant to which Greenrose agrees that, after the expiration of the lock-up period set forth in the Futureworks Lock-Up Agreement, at the request of the Majority Holders (as defined in the Futureworks Registration Rights Agreement), the Company will file a registration statement with the SEC covering the resale of the Registrable Securities (as defined in the Futureworks Registration Rights Agreement) requested to be included in such registration statement (the “Futureworks Resale Registration Statement”), and the Company shall use its reasonable best efforts to have the Futureworks Resale Registration Statement declared effective as soon as reasonably practicable after the filing thereof. Additionally, the Holders (as defined in the Futureworks Registration Rights Agreement) will be entitled to piggyback registration rights.

The foregoing description of the Futureworks Registration Rights Agreement is qualified in its entirety by reference to the full text of the form of Registration Rights Agreement, a copy of which is included as Exhibit H to the Futureworks Merger Agreement, filed as Exhibit 2.3 to the Current Report on Form 8-K filed with the SEC on March 18, 2021, and incorporated herein by reference.

Delisting and Relisting

Unless a change in applicable law has occurred prior to the closing of each of the applicable agreements that would allow for shares of Greenrose Common Stock and other equity of the Company to remain listed on Nasdaq, the Company will use its reasonable best efforts to delist all such equity from Nasdaq and have such equity listed or quoted for trading on another securities exchange or trading platform.

Extension of Business Combination

On August 11, 2021, Greenrose notified Continental Stock Transfer & Trust Company that it was exercising its option to extend the time available to consummate a Business Combination with the target businesses by an additional month, thereby extending the de-SPAC deadline from August 13, 2021 to September 13, 2021. Furthermore, in accordance with Investment Management Trust Agreement between Greenrose Acquisition Corp and Continental Stock Transfer & Trust Company, February 11, 2020, Greenrose authorized the trustees to deposit $569,250 into the trust account. The Sponsor has the right to exercise its right to extend the time available to consummate a Business Combination for up to two additional months.

On September 8, 2021, Greenrose notified Continental Stock Transfer & Trust Company that it was exercising its option to extend the time available to consummate a Business Combination with the target businesses by an additional month, thereby extending the de-SPAC deadline from September 13, 2021 to October 13, 2021. Furthermore, in accordance with Investment Management Trust Agreement between Greenrose and Continental Stock Transfer & Trust Company, dated to February 11, 2020, Greenrose authorized the trustees to deposit $569,250 into the trust account.

On October 8, 2021 and October 27, 2021, the Company extended the dates by which the Company has to consummate a business combination from October 13, 2021 to November 13, 2021 and then to November 30, 2021.

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GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 11 — SUBSEQUENT EVENTS (cont.)

Senior Secured Loan

On July 30, 2021, the Company entered into a commitment letter (the “Commitment Letter”) with SunStream Bancorp Inc. (“Sunstream”), pursuant to which Sunstream committed to provide, subject to the satisfaction of customary closing conditions stipulated in the Commitment Letter, a multi-tranche senior secured loan (the “Loan”) to the Company. The proceeds of the Loan are expected to be used (i) to consummate one or more of the Company’s previously announced Business Combinations and (ii) for general working capital purposes.

The Loan consists of $78.1 million of loan principal including an initial tranche of $52.1 million (“Tranche I”) on the closing date of the Loan and second tranche of $26.0 million (“Tranche II”) available prior to the 12-month anniversary of the closing date of the Loan, in each case.

The Loan will be collateralized by a senior secured first-priority lien over all of the assets of the Company and its subsidiaries, subject to to-be-agreed upon carve-outs and exceptions. The Loan matures 48 months following the closing date of the Loan and has an interest rate, payable monthly, of 11.9% per annum on the outstanding principal. The Loan amortizes at a rate of 15.0% of outstanding principal per annum, beginning on the 24-month anniversary of the closing date of the Loan.

Tranche I of the Loan is prepayable, at Greenrose’s option, prior to the 36-month anniversary of the closing of the loan, subject to certain fees. In addition, Tranche II of the Loan is prepayable, at the Company’s option, prior to the 36-month anniversary of the Tranche II drawdown date, subject to certain fees.

The Company has also agreed to pay to Sunstream certain additional fees customary to transactions of this type.

In connection with the Loan commitments, Sunstream will be issued warrants with a five-year term to acquire additional shares of common stock of Greenrose with terms substantially similar to the warrants issued to the Company’s sponsors in connection with the initial public offering of the Company.

In addition, the Loan will be subject to the Company’s compliance with certain on-going financial covenants customary to other senior secured loans of this type, as will be negotiated by Sunstream and the Company in the course of ongoing due diligence by Sunstream prior to funding of the Loan.

In connection with the Commitment Letter, the Company and Sunstream have agreed to deal exclusively with one another until the earlier of September 30, 2021 or the closing of one or more of the Company’s previously announced Business Combinations with respect to any financing proposals similar to the financings contemplated by the Loan commitments.

Tranche I of the Loan is anticipated to close substantially simultaneously with the consummation of one or more of the Company’s previously announced Business Combinations.

Related Party Loans

On June 18, 2021, the Company issued an unsecured promissory note (the “Note”), in the principal amount of $300,000 to Greenrose Associates LLC (the “Sponsor”), the Company’s sponsor and owner of more than 10% of the Company’s issued and outstanding Common Stock, evidencing a loan in the amount of $300,000. The Note is non-interest bearing and payable upon the consummation of a business combination.

On August 26, 2021, the Company issued an unsecured promissory note (the “Note”), in the principal amount of $450,000 to Greenrose Associates LLC (the “Sponsor”), the Company’s sponsor and owner of more than 10% of the Company’s issued and outstanding Common Stock, evidencing a loan in the amount of $450,000. The Note is non-interest bearing and payable upon the consummation of a business combination.

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GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 11 — SUBSEQUENT EVENTS (cont.)

On September 9, 2021, Greenrose Acquisition Corp. (“Greenrose” or the “Company”) issued an unsecured promissory note (the “Note”), in the principal amount of $180,000 to Greenrose Associates LLC (the “Sponsor”), the Company’s sponsor and owner of more than 10% of the Company’s issued and outstanding Common Stock, evidencing a loan in the amount of $180,000. The Note is non-interest bearing and payable upon the consummation of a business combination.

On September 20, 2021, Greenrose Acquisition Corp. (“Greenrose” or the “Company”) issued an unsecured promissory note (the “Note”), in the principal amount of $65,000 to Greenrose Associates LLC (the “Sponsor”), the Company’s sponsor and owner of more than 10% of the Company’s issued and outstanding Common Stock, evidencing a loan in the amount of $65,000. The Note is non-interest bearing and payable upon the consummation of a business combination.

On October 1, 2021, Greenrose Acquisition Corp. (“Greenrose” or the “Company”) issued an unsecured promissory note (the “Note”) in the principal amount of $100,000 to Greenrose Associates LLC (the “Sponsor”), the Company’s sponsor and owner of more than 10% of the Company’s issued and outstanding Common Stock, evidencing a loan in the amount of $100,000. The Note is non-interest bearing and payable upon the consummation of a business combination.

Merger Agreement

True Harvest

On July 2, 2021, the Company entered into an amendment (the “True Harvest Amendment No.1”) to the True Harvest Holdings, Inc. Asset Purchase Agreement, dated as of March 12, 2021. Pursuant to True Harvest Amendment No. 1, the table in Section 1.05(c) of the Purchase Agreement was deleted and replaced with the following table:

Percentage of Earnout

Flower Production – average price

0%

<$2,199

20%

$2,200-$2,199

50%

$2,200-$2,499

80%

$2,500-$2,799

100%

$2,800+

In addition, pursuant to the True Harvest Amendment No. 1, a new Section 1.05.1 Hurdle Amount is added to the Purchase Agreement, whereby the purchase price of True Harvest would be adjusted by the addition of (i) up to a maximum of four million seven hundred thousand dollars ($4,700,000) added to the principal amount of the secured note to be issued at closing and (ii) up to a maximum of one million four hundred thousand dollars ($1,400,000) of additional debt to be assumed by the Buyer at closing, in each case, subject to True Harvest achieving certain revenue targets, as well as True Harvest having constructed eight grow rooms in a condition ready to accept plants for grow prior to closing, in each case as set forth in the True Harvest Amendment No. 1. Also, in addition, pursuant to the True Harvest Amendment No. 1, the “drop dead” date for closing was amended to be November 30, 2021.

Theraplant

On August 10, 2021, the Company entered into an amendment (the “Theraplant Amendment No.1”) to the Agreement and Plan of Merger dated as of March 12, 2021, by and among the Company, GNRS CT Merger Sub, LLC, Theraplant and Shareholder Representative Services LLC (the “Merger Agreement”).

Pursuant to the Theraplant Amendment No. 1, the purchase price of Theraplant would be adjusted by the addition of the issuance registered shares of the Company’s common stock, par value $10.00 per share, in the aggregate amount of Fifty Million Dollars ($50,000,000). Theraplant’s selling shareholders will receive customary registration rights

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GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 11 — SUBSEQUENT EVENTS (cont.)

in connection with the issuance of shares of the Company’s common stock as part of the merger consideration. Also, in addition, pursuant to the Theraplant Amendment No. 1, the “drop dead” date for closing was amended to be November 30, 2021.

The Theraplant Amendment No.1 also provides that the Company shall bear (i) 50% of all documented accounting transaction expenses incurred by Theraplant in connection with the auditor review of the Theraplant’s 2021 first quarter financial statements and (ii) all documented legal, accounting and other transaction expenses of Theraplant incurred in connection with the Merger from and after the date of the Theraplant Amendment No. 1.

Vendor Agreements

On September 1, 2021, the Company entered into an agreement with a vendor to provide multimedia services related to the Company’s Business Combination and virtual investor event. This agreement requires that the Company pay $32,500 when the current financing closes-the consummation of a Business Combination. The agreement will terminate on August 31, 2022.

Non-Redemption Agreement

In order to help facilitate the closing of Greenrose’s previously announced Qualified Business Combinations (as defined in the Definitive Proxy Statement on Schedule 14A filed with the U.S. Securities and Exchange Commission on October 5, 2021 (the “Proxy”)), on October 20, 2021, Greenrose Acquisition Corp. (“Greenrose” or the “Company”) and YA II PN, LTD. (the “Investor”), a Cayman Islands exempt limited partnership and an affiliate of Yorkville Advisors Global, LP, entered into a Non-Redemption Agreement (the “Non-Redemption Agreement”), pursuant to which the Investor has agreed to commit to purchase (collectively, the “Purchased Shares”) up to 1,000,000 shares common stock of the Company, $0.0001 par value per share, in open market transactions or in private transactions from the certain selling shareholders who are not affiliated with the Company, at a purchase price not to exceed $10.14 per share, or a combination of the foregoing.

Standby Equity Purchase Agreement

On October 20, 2021, Greenrose and the Investor, entered into a Standby Equity Purchase Agreement (the “Equity Purchase Agreement” or “SEPA”), whereby the Investor agreed to purchase from the Company up to $100 million of the Company’s shares of common stock, par value $0.0001 per share (the “Common Stock”), for a purchase price per share of 96% multiplied by the lowest daily volume weighted average price of shares during regular trading hours as reported by Bloomberg L.P. of the Company’s common stock during the three (3) consecutive trading days commencing on the advance notice date.

Registration Rights Agreement

In connection with the entry of the Non-Redemption Agreement, Greenrose entered into a Registration Rights Agreement with the Investor (the “Yorkville Registration Rights Agreement”) pursuant to which Greenrose agrees that to file a registration statement with the Securities and Exchange Commission (the “SEC”) covering the resale of the Common Stock requested to be included in such registration statement (the “Resale Registration Statement”), and Greenrose shall use its best efforts to have the Resale Registration Statement declared effective as soon as practicable after the filing thereof, but in no event later than the 45th calendar day following the filing of the Resale Registration Statement (or, the fifth calendar day following the date on which the Company is notified by the SEC that the Resale Registration Statement will not be or is no longer subject to further review and comments.

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GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 11 — SUBSEQUENT EVENTS (cont.)

Amendment No. 2 to True Harvest Asset Purchase Agreement

On October 28, 2021, Company entered into an amendment (“Amendment No. 2”) to the Purchase Agreement. Pursuant to Amendment No. 2, Greenrose and True Harvest agreed that the Purchase Price Adjustment for the year 2021 will be calculated using the cumulative year-to-date revenue of the Business as of September 30, 2021.

Cancellation of Commitment for Senior Secured Loan

On November 8, 2021, SunStream Bancorp Inc. (“Sunstream”) notified the Company that the conditions precedent in connection with the previously announced financing have not been satisfied, and until such time as they are satisfied, Sunstream was not prepared to proceed with the proposed financing. In addition, on November 8, 2021, Sunstream waived the Company’s obligation to deal exclusively with Sunstream and indicated its support of the Company’s exploration of alternative financing sources. Sunstream also communicated its agreement to revisit financing opportunities at a future date, including on a co-lending basis.

Voluntary delisting from Nasdaq

On June 18, 2021, the OTC Markets Group, Inc. approved the Company’s application to list its common stock for trading on the OTCQX over-the-counter market. Trading of the Company’s Common Stock on the OTCQX began at the open of business on June 22, 2021. Upon effectiveness of the listing of the Company’s Common Stock for trading on the OTCQX, the Company’s common stock was not quoted on the NASDAQ Capital Markets.

Amendment to Theraplant Merger Agreement

On November 26, 2021, Greenrose Acquisition Corp. (“Greenrose” or the “Company”) entered into an amendment (the “Amendment No. 2”) to the Agreement and Plan of Merger dated as of March 12, 2021, by and among Greenrose Acquisition Corp., GNRS CT Merger Sub, LLC, Theraplant, LLC (“Theraplant”) and Shareholder Representative Services LLC, as amended (the “Merger Agreement”).

Pursuant to Amendment No. 2, the “Aggregate Consideration” to be paid by Greenrose in respect of the Theraplant merger will equal “Cash Consideration” in the amount of One Hundred Million Dollars ($100,000,000), minus the escrow amount, the expense amount, the Managing Member Expense Amount (as defined in the Merger Agreement), and the Deferred Cash Payment Amount described below. Furthermore, Aggregate Consideration would include the amount equal to the difference between the Estimated Closing Net Working Capital and the Base Net Capital (each as defined in the Merger Agreement). The Aggregate Consideration would include the amount released from the Escrow and Expense Fund, the amount released from the Managing Member Expense Fund, and the Stock Consideration comprised of five million (5,000,000) unregistered shares of Greenrose common stock valued at $10.00 per share, valued in the aggregate amount of Fifty Million Dollars ($50,000,000). The Merger Agreement as amended provides that the Stock Consideration is subject to upward adjustment in the event a registration statement covering the resale of the Stock Consideration has not been declared effective 7 days after the Merger and the Parent Stock Price is less than $10.00 per share. In such circumstances, Greenrose has agreed to issue additional Parent Common Stock in such number of additional shares of Parent Common Stock, to be confirmed by the Theraplant Steering Committee, that, when multiplied by the Parent Common Stock Price (determined pursuant to the Merger Agreement) would increase the Stock Consideration to $50,000,000; provided that the number of shares of additional Common Stock Greenrose shall issue shall not exceed $5,000,000 in additional Parent Stock. Amendment No. 2 provides for a Deferred Cash Payment Amount in the amount of ten million dollars ($10,000,000) plus simple interest at the rate of nine percent (9%) per annum, payable in equal monthly installments during the first twelve months following the closing of the merger contemplated by the Merger Agreement. The Deferred Cash Payment Amount may, at the election of the Theraplant Steering Committee, be converted (in whole or in part and at any time or from time to time), into common stock of Greenrose at a price per share of $10.00, subject to adjustment.

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GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 11 — SUBSEQUENT EVENTS (cont.)

Any agreement of Greenrose with any third-party financing source shall expressly permit payment by Greenrose of the Deferred Cash Payment Amount (either in cash or common stock of Greenrose) (i) with respect to the first six monthly payments, without restriction, and (ii) with respect to the last six monthly payments, subject solely to blockage by the such financing source as a result of an Event of Default (as defined in the credit agreement between Greenrose and such financing source) as a result of a payment default or in the event such financing source accelerates its loan to Greenrose.

Senior Secured Credit Agreement

The Company, TPT Merger Sub and Theraplant (the “Loan Parties”) entered into a senior secured credit agreement (the “Credit Agreement”) with DXR Finance, LLC as Agent (“Agent”) and DXR-GL HOLDINGS I, LLC, DXR-GL HOLDINGS II, LLC, and DXR-GL HOLDINGS III, LLC as lenders (collectively the “Lenders”). Upon entering into the Credit Agreement and the associated loan documents and agreements described below, the Lenders provided the initial term loan (the “Initial Term Loan”) in the amount of Eighty-Eight Million Dollars ($88,000,000). The Company may also draw upon the remaining amount of Seventeen Million Dollars ($17,000,000) (the “Delayed Draw Commitment”) upon providing at least five (5) business days prior notice to the Agent. The loans mature on November 26, 2024 and bear an interest rate of the LIBOR plus the applicable margin of 16% per annum provided that for the first 12 months after the Closing Date, 8.5% per annum may be payable-in-kind and thereafter 5% may be payable in kind. Interest shall be payable on the last business day of each quarter.

The proceeds of the Initial Term Loans made on the Closing Date shall be applied to fund the Theraplant Acquisition (as defined in the Credit Agreement) and to fund related transaction costs. The proceeds of the Delayed Draw Term Loans shall be applied by the Borrower to fund the True Harvest Acquisition (as defined in the Credit Agreement) and to fund related transaction costs.

The Credit Agreement provides for the Company’s optional prepayment of outstanding loans, subject to certain terms and procedures set forth in the Credit Agreement.

Under certain circumstances, if any Loan Party receives cash proceeds from an asset sale, insurance payments, and condemnation awards, then the Company must either reinvest such proceeds within one year or use the proceeds to make a prepayment. There are mandatory prepayment provisions for some issuance of debt and excess cash flow scenarios.

Pursuant to the Credit Agreement, commencing June 30, 2022, the Company will be subject to minimum adjusted EBITDA, total net leverage ratio, and total secured net leverage ratio covenants tested quarterly subject to varying thresholds.

The Credit Agreement contains other provisions customary for this type of transaction, including, without limitation, representations and warranties, indemnities, covenants, events of defaults, and confidentiality undertaking.

Lender Warrants

Pursuant to the Credit Agreement, the Company has issued a common stock purchase warrant (the “Lender Warrant”) to the Agent which will entitle the Agent to acquire shares of unregistered shares of common stock of the Company at an exercise price of $11.50$0.01 per share, subjectWarrant Share until November 26, 2026.

Lender Registration Rights

Substantially simultaneously with the Closing and the Company’s issuance of penny warrants to adjustment. The private securitiesthe Agent, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the Lenders, whereby the a majority-in-interest of the Lenders and underlying shares of common stockits directors, officers and warrants have been deemed compensation by FINRA and are therefore subject to a 180-day lock-upaffiliates may, pursuant to FINRA Rule 5110(g)(1). Additionally, the private securities purchased by Imperial Capital may not be sold, transferred, assigned, pledged or hypothecated or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic dispositionterms of the securities by any person for a 180-day period following the effective date of this prospectus except to any selected dealer participating in the offering and the bona fide officers or partners of the underwriter and any such participating selected dealer. Imperial Capital has agreed that the private securities it purchases will not be sold or transferred by it (except to certain permitted transferees) until after we have completed an initial business combination. We have granted the holders of private units, including Imperial Capital, the registration rights as described under the section “Shares Eligible for Future Sale — Registration Rights.” In compliance with FINRA Rule 5110(f)(2)(H), the Imperial Capital registration rights are limited to Agreement, demand and “piggy back” rights for periods of five and seven years, respectively, from the effective date of this prospectus with respect to the registration under the Securities Act of 1933, as amended, all or part of the private securities andCompany’s non-voting common stock issuable upon exercise of the underlying securities.Lender Warrant (the “Registrable Securities”)

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GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020

IndemnificationNOTE 11 — SUBSEQUENT EVENTS (cont.)

We have agreed to indemnifyheld by them. Such demand may not be effectuated until a registration statement of the underwriter against certain liabilities, including certain liabilities underCompany has been declared effective by the Securities Act. If we are unable to provide this indemnification, we have agreed to contribute to payments the underwriterand Exchange Commission. The registration may be required to make in respect of those liabilities.

NASDAQ Listing

We intend to apply to have our units listed on the Nasdaq Capital Market under the symbol “GNRSU” and, once the common stock and warrants begin separate trading, under the symbols “GNRS” and “GNRSW,” respectively.

Price Stabilization, Short Positions

In connection with this offering, the underwriters may engage in activities that stabilize, maintain or otherwise affect the price of units during and after this offering, including:

•        stabilizing transactions;

•        short sales;

•        purchases to cover positions created by short sales;

93

•        imposition of penalty bids; and

•        syndicate covering transactions.

Stabilizing transactions consist of bids or purchases made for the purpose of preventing or retarding a decline in the market priceform of our units while thisan underwritten offering is in progress. Stabilization transactions permit bids to purchaseif a majority-in-interest of such demanding security holders elect. The Registration Rights Agreement also provides the underlying security so long as the stabilizing bids do not exceed a specified maximum. These transactions may also include making short sales of our units, which involve the sale by the underwriters of a greater number of units than they are required to purchase in this offering and purchasing units on the open market to cover short positions created by short sales. Short sales may be “covered short sales,” which are short positions in an amount not greater than the underwriters’ option to purchase additional units referred to above, or may be “naked short sales,” which are short positions in excess of that amount.

The underwriters may close out any covered short position by either exercising their option, in whole or in part, or by purchasing units in the open market. In making this determination, the underwriters will consider, among other things, the price of units available for purchase in the open market as compared to the price at which they may purchase units through the over-allotment option.

Naked short sales are short sales made in excessholders of the overRegistrable Securities with piggy-allotment-back option. The underwriters must close out any naked short position by purchasing units in the open market. A naked short position is more likely to be createdrights if the underwriters are concerned that there may be downward pressure on the priceCompany proposes to file a registration statement with respect to an offering of equity securities or other securities exercisable or exchangeable for, or convertible into, equity securities of the units inCompany. In addition, the open market that could adversely affect investors who purchased in this offering.

The underwriters also may impose a penalty bid. This occurs when a particular underwriter repays to the representativeholders of the underwriters a portion of the underwriting discount received by it because the representative has repurchased units sold by or for the account of that underwriter in stabilizing or short covering transactions.

These stabilizing transactions, short sales, purchases to cover positions created by short sales, the imposition of penalty bids and syndicate covering transactions may have the effect of raising or maintaining the market price of our units or preventing or retarding a decline in the market price of our units. As a result of these activities, the price of our units may be higher than the price that otherwise might exist in the open market. The underwriters may carry out these transactions on the Nasdaq, in the over-the-counter market or otherwise. Neither we nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the price of the units. Neither we, nor the underwriters, make any representation that the underwriter will engage in these stabilization transactions or that any transaction, once commenced, will not be discontinued without notice.

Determination of Offering Price

Prior to this offering, there was no public market for our units. The initial public offering price will be determined by negotiation between us and the representative of the underwriters. The principal factors to be considered in determining the initial public offering price include:

•        the information set forth in this prospectus and otherwise available to the representative;

•        our history and prospects and the history and prospects for the industry in which we compete;

•        our past and present financial performance;

•        our prospects for future earnings and the present state of our development;

•        the general condition of the securities market at the time of this offering;

•        the recent market prices of, and demand for, publicly traded units of generally comparable companies; and

•        other factors deemed relevant by the underwriters and us.

Neither we nor the underwriters can assure investors that an active trading market will develop for our units, warrants or common stock or that the units will trade in the public market at or above the initial public offering price.

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Affiliations

Imperial Capital and its affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. Imperial Capital and its affiliates may from time to time in the future engage with us and perform services for us or in the ordinary course of their business for which they will receive customary fees and expenses. In the ordinary course of their various business activities, the underwriters and their respective affiliates may also make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and such investment and securities activities may involve securities and/or instruments of us. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of these securities or instruments andRegistrable Securities may at any time hold, or recommend to clients that they acquire, long and/or short positions in these securities and instruments.

Additional Future Arrangements

As discussed above in “Business Combination Marketing Agreement,” Imperial Capital will assist us in our shareholder relations regarding any potential business combinations for which we will pay them a fee equal to 4.5% of the gross proceeds of this offering and, to the extent that they assist us in any financing in connection with such business combination they will receive a cash fee in an amount equal to 5% of the face amount of any equity securities and 3% of the face amount of any debt sold or arranged. Additionally, if any of the underwriters provide services to us after this offering, we may pay such underwriter fair and reasonable fees that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with any underwriter and no fees for such services will be paid to any underwriter prior to the date that is 90 days from the date of this prospectus, unless FINRA determines that such payment would not be deemed underwriter’s compensation in connection with this offering.

The underwriting agreement provides that in the event the Company completes a financing transaction similar to this offering or a business combination, or enters into a statement or letter of intent that results in such a transaction, within 18months following the effectiveness of this registration statement, Imperial Capital shall be entitled to receive any expense reimbursement due to it along with payment in full of its applicable fee of either (i) 2% of the gross proceeds of the offering, of which 1% will be in cash and 1% will be in equity of the Company for a financing transaction, or (ii) an amount equal to 5% of the face amount of any equity securities and 3% of the face amount of any debt sold or arranged as part of the business combination (exclusive of any applicable finders’ fees which might become payable). Additionally, Imperial Capital has the right to act as a booktime-runner-to-time and managing underwriter for all underwritten follow-on offerings for 18months following completion of this offering and the right to approve any co-lead managing underwriter or co-book runner.

Any such fees and right of first refusal shall be subject to FINRA Rule 5110(f)(2), and the Company shall have a right of termination for cause, which includesrequest that the Company may terminateregister the engagement of Imperial Capital upon Imperial Capital’s material failure to provide the underwriting services; the Company’s exercise of the right of termination for cause will eliminate any obligations with respect to the paymentresale of any termination fee or provision of any right of first refusal; the amount of any termination fee will be reasonable in relation to the underwriting services,all such termination fee not applying for termination for cause, and any fees arising from underwriting services provided under a right of first refusal must be customary for those types of services; and the Company will not be responsible for paying any termination fee unless a private and/or public offering of securities with another brokerRegistrable Securities on Form S-dealer-3 or any other person without the written permission of Imperial Capital is consummated within 18months of the effectiveness of thesimilar short-form registration statement.

Electronic Distribution

A prospectus in electronic format may be made available on the Internet sites or through other online services maintained by the underwriters participating in this offering, or by their affiliates. In those cases, prospective investors may view offering terms online and, depending upon the particular underwriter, prospective investors may be allowed to place orders online. The underwriters may agree with us to allocate a specific number of units for sale to online brokerage account holders. Any such allocation for online distributions will be made by the underwriters on the same basis as other allocations. Other than the prospectus in electronic format, the information on any underwriter’s website and any information contained in any other website maintained byat an underwriter is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or any underwriter in its capacity as underwriter and should not be relied upon by investors.

95

Selling Restrictions

Canada

Resale Restrictions

We intend to distribute our securities in the Province of Ontario, Canada (the “Canadian Offering Jurisdiction”) by way of a private placement and exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in such Canadian Offering Jurisdiction. Any resale of our securities in Canada must be made under applicable securities laws that will vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Canadian resale restrictions in some circumstances may apply to resales of interests made outside of Canada. Canadian purchasers are advised to seek legal advice prior to any resale of our securities. We may never be a “reporting issuer”, as such term is defined under applicable Canadian securities legislation, in any province or territory of Canada in which our securities will be offered and there currently is no public market for any of the securities in Canada, and one may never develop. Canadian investors are advised that we have no intention to file a prospectus or similar document with any securities regulatory authority in Canada qualifying the resale of the securitiesaggregate price to the public in any province or territory in Canada.

Representations of Purchasers

A Canadian purchaser will be required to represent to us and the dealer from whom the purchase confirmation is received that:

•        the purchaser is entitled under applicable provincial securities laws to purchase our securities without the benefit of a prospectus qualified under those securities laws;

•        where required by law, that the purchaser is purchasing as principal and not as agent;

•        the purchaser has reviewed the text above under Resale Restrictions; and

•        the purchaser acknowledges and consents to the provision of specified information concerning its purchase of our securities to the regulatory authority that by law is entitled to collect the information.

Rights of Action — Ontario Purchasers Only

Under Ontario securities legislation, certain purchasers who purchase a security offered by this prospectus during the period of distribution will have a statutory right of action for damages, or while still the owner of our securities, for rescission against us in the event that this prospectus contains a misrepresentation without regard to whether the purchaser relied on the misrepresentation. The right of action for damages is exercisable not later than the earlier of 180 days from the date the purchaser first had knowledge of the facts giving rise to the cause of action and three years from the date on which payment is made for our securities. The right of action for rescission is exercisable not later than 180 days from the date on which payment is made for our securities. If a purchaser elects to exercise the right of action for rescission, the purchaser will have no right of action for damages against us. In no case will the amount recoverable in any action exceed the price at which our securities were offered to the purchaser and if the purchaser is shown to have purchased the securities with knowledge of the misrepresentation, we will have no liability. In the case of an action for damages, we will not be liable for all or any portion of the damages that are proven to not represent the depreciation in value of our securities as a result of the misrepresentation relied upon. These rights are in addition to, and without derogation from, any other rights or remedies available at law to an Ontario purchaser. The foregoing is a summary of the rights available to an Ontario purchaser. Ontario purchasers should refer to the complete text of the relevant statutory provisions.

Enforcement of Legal Rights

All of our directors and officers as well as the experts named herein are located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All of our assets and the assets of those persons are located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.

96

Collection of Personal Information

If a Canadian purchaser is resident in or otherwise subject to the securities laws of the Province of Ontario, the Purchaser authorizes the indirect collection of personal information pertaining to the Canadian purchaser by the Ontario Securities Commission (the “OSC”) and each Canadian purchaser will be required to acknowledge and agree that the Canadian purchaser has been notified by us (i) of the delivery to the OSC of personal information pertaining to the Canadian purchaser, including, without limitation, the full name, residential address and telephone number of the Canadian purchaser, the number and type of securities purchased and the total purchase price paid in respect of the securities, (ii) that this information is being collected indirectly by the OSC under the authority granted to it in securities legislation, (iii) that this information is being collected for the purposes of the administration and enforcement of the securities legislation of Ontario, and (iv) that the title, business address and business telephone number of the public official in Ontario who can answer questions about the OSC’s indirect collection of the information is the Administrative Assistant to the Director of Corporate Finance, the Ontario Securities Commission, Suite 1903, Box 5520, Queen Street West, Toronto, Ontario, M5H 3S8, Telephone: (416) 593-8086, Facsimile: (416) 593-8252.

Notice to Prospective Investors in Australia

No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission (“ASIC”), in relation to the offering. This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (the “Corporations Act”), and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.

Any offer in Australia of the shares may only be made to persons (the “Exempt Investors”) who are “sophisticated investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the shares without disclosure to investors under Chapter 6D of the Corporations Act.

The shares applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring shares must observe such Australian on-sale restrictions.

This prospectus contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.

Notice to Prospective Investors in the Dubai International Financial Centre

This prospectus relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (“DFSA”). This prospectus is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for the prospectus. The shares to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares offered should conduct their own due diligence on the shares. If you do not understand the contents of this prospectus you should consult an authorized financial advisor.

Notice to Prospective Investors in the European Economic Area

In relation to each member state of the European Economic Area that has implemented the Prospectus Directive (each, a “relevant member state”), with effect from and including the date on which the Prospectus Directive is implemented in that relevant member state (the “relevant implementation date”), an offer of units described in this prospectus may not be made to the public in that relevant member state prior to the publication of a prospectus in relation to the units

97

that has been approved by the competent authority in that relevant member state or, where appropriate, approved in another relevant member state and notified to the competent authority in that relevant member state, all in accordance with the Prospectus Directive, except that, with effect from and including the relevant implementation date, an offer of our units may be made to the public in that relevant member state at any time:

•        to any legal entity which is a qualified investor as defined in the Prospectus Directive;

•        to fewer than 100, or, if the relevant member state has implemented the relevant provisions of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the relevant Dealer or Dealers nominated by the issuer for any such offer; or natural or legal persons (other than qualified investors as defined below) subject to obtaining the prior consent of the underwriter for any such offer; or

•        in any other circumstances that do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive.

Each purchaser of units described in this prospectus located within a relevant member state will be deemed to have represented, acknowledged and agreed that it is a “qualified investor” within the meaning of Article 2(1) (e) of the Prospectus Directive.

For the purpose of this provision, the expression an “offer to the public” in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the offer and the units to be offered so as to enable an investor to decide to purchase or subscribe for the units, as the expression may be varied in that member state by any measure implementing the Prospectus Directive in that member state, and the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the PD 2010 Amending Directive to the extent implemented by the relevant member state) and includes any relevant implementing measure in each relevant member state, and the expression 2010 PD Amending Directive means Directive 2010/73/EU.

We have not authorized and do not authorize the making of any offer of securities through any financial intermediary on their behalf, other than offers made by the underwriters with a view to the final placement of the units as contemplated in this prospectus. Accordingly, no purchaser of the units, other than the underwriters, is authorized to make any further offer of the units on behalf of us or the underwriters.

Notice to Prospective Investors in Switzerland

The shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the shares or the offering may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering or marketing material relating to the offering, the Company or the shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA (FINMA), and the offer of shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (“CISA”). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of shares.

Notice to Prospective Investors in the United Kingdom

This prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as a “relevant person”). The units are only available to, and any invitation, offer or agreement to purchase or otherwise acquire such units will be engaged in

98

only with, relevant persons. This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this document or any of its contents.

Notice to Prospective Investors in France

Neither this prospectus nor any other offering material relating to the units described in this prospectus has been submitted to the clearance procedures of the Autorité des Marchés Financiers or by the competent authority of another member state of the European Economic Area and notified to the Autorité des Marchés Financiers. The units have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France. Neither this prospectus nor any other offering material relating to the units has been or will be:

•        released, issued, distributed or caused to be released, issued or distributed to the public in France; or

•        used in connection with any offer for subscription or sale of the units to the public in France.

Such offers, sales and distributions will be made in France only:

•        to qualified investors (investisseurs qualifiés) and/or to a restricted circle of investors (cercle restreint d’investisseurs), in each case investing for their own account, all as defined in, and in accordance with, Article L.411-2, D.411-1, D.411-2, D.734-1, D.744-1, D.754-1 and D.764-1 of the French Code monétaire et financier;

•        to investment services providers authorized to engage in portfolio management on behalf of third parties; or

•        in a transaction that, in accordance with article L.411-2-II-1°-or-2°-or 3° of the French Code monétaire et financier and article 211-2 of the General Regulations (Règlement Général) of the Autorité des Marchés Financiers, does not constitute a public offer (appel public à l’épargne).

The units may be resold directly or indirectly, only in compliance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3 of the French Code monétaire et financier.

Notice to Prospective Investors in Hong Kong

The units may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong) and no advertisement, invitation or document relating to the units may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to units which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

Notice to Prospective Investors in Japan

The units have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended) and, accordingly, will not be offered or sold, directly or indirectly, in Japan, or for the benefit of any Japanese Person or to others for re-offering or resale, directly or indirectly, in Japan or to any Japanese Person, except in compliance with all applicable laws, regulations and ministerial guidelines promulgated by relevant Japanese governmental or regulatory authorities in effect at the relevant time. For the purposes of this paragraph, “Japanese Person” shall mean any person resident in Japan, including any corporation or other entity organized under the laws of Japan.

99

Notice to Prospective Investors in Singapore

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the units may not be circulated or distributed, nor may the units be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with conditions set forth in the SFA.

Where the units are subscribed or purchased under Section 275 of the SFA by a relevant person that is:

•        a corporation (which is not an accredited investor (as defined in Section 14A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor, or

•        a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the shares pursuant to an offer made under Section 275 of the SFA except:

•        to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange$500,000.

Corporate Name Change

On November 24, 2021, the Company filed an amended and restated certificate of securities or other assets, and further for corporations, in accordance with the conditions specified in Section 275 of the SFA;

•        where no consideration is or will be given for the transfer; or

•        where the transfer is by operation of law.

100

LEGAL MATTERS

Tarter Krinsky & Drogin LLP, New York, New York, is acting as our counsel in connection with the registration of our securities under the Securities Act, and as such, will pass upon the validity of the securities offered in this offering. K&L Gates LLP, Los Angeles, CA is acting as counsel to the underwriters.

EXPERTS

The financial statements of Greenrose Acquisition Corp. at September30, 2019 and for the period from August26, 2019 (inception) through September30, 2019 included in this Prospectus have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report, thereon (which contains an explanatory paragraph relating to substantial doubt about the ability of Greenrose Acquisition Corp. to continue as a going concern as described in Note 1 to the financial statements), appearing elsewhere in this prospectus, and are included in reliance on such report given upon such firm as experts in auditing and accounting.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the securities we are offering by this prospectus. This prospectus does not contain all of the information includedincorporation in the registration statement. For further information about us and our securities, you should refer to the registration statement and the exhibits and schedules filed with the registration statement. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are materially complete but may not include a description of all aspects of such contracts, agreements or other documents, and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.

Upon completion of this offering, we will be subject to the information requirements of the Exchange Act and will file annual, quarterly and current event reports, proxy statements and other information with the SEC. You can read our SEC filings, including the registration statement, over the Internetform approved by Greenrose stockholders at the SEC’s website atwww.sec.gov. You may also read and copy any document we file with the SEC at its public reference facility at 100 F Street, N.E., Washington, D.C. 20549.

You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.

101

INDEX TO FINANCIAL STATEMENTS

Page

Report of Independent Registered Public Accounting Firm

F-2

Balance Sheet

F-3

Statement of Operations

F-4

Statement of Changes in Stockholders’ Equity

F-5

Statement of Cash Flows

F-6

Notes to Financial Statements

F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholder and Board of Directors of
Greenrose Acquisition Corp.

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Greenrose Acquisition Corp. (the “Company”) as of September30, 2019, the related statements of operations, changes in stockholder’s equity and cash flows for the period from August26, 2019 (inception) through September30, 2019 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial positionSpecial Meeting of the Company asheld October 27,2021 (the “Certificate of September30, 2019, andIncorporation”) with the resultsSecretary of its operations and its cash flows forState of the period from August26, 2019 (inception) through September30, 2019, in conformity with accounting principles generally accepted inState of Delaware, which became effective on the United States of America.

Explanatory Paragraph — Going Concern

The accompanying financial statements have been prepared assuming thatsame date, pursuant to which the Company will continue as a going concern. As discussed in Note 1changed its name from “Greenrose Acquisition Corp.” to the financial statements, the Company’s business plan is dependent on the completion“The Greenrose Holding Company Inc.”

F-47

Table of a financing and the Company’s cash and working capital as of September30, 2019 are not sufficient to complete its planned activities. These conditions raise substantial doubt about Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Notes 1 and 3 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ Marcumllp

Marcumllp

We have served as the Company’s auditor since 2019.

New York, NY

October22, 2019

F-2Contents

GREENROSE ACQUISITION CORP.
CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2019SHEETS

ASSETS

 

 

 

 

Current asset – Cash

 

$

25,000

 

Deferred offering costs

 

 

141,542

 

Total Assets

 

$

166,542

 

  

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Accrued expenses

 

$

3,500

 

Due to Greenrose Associates LLC

 

 

139,665

 

Total Current Liabilities

 

 

143,165

 

  

 

 

 

Commitments

 

 

 

 

Stockholders’ Equity

 

 

 

 

Common stock, $0.0001 par value; 10,000,000 shares authorized; 4,312,500 shares issued and outstanding(1)

 

 

431

 

Additional paid-in capital

 

 

24,569

 

Accumulated deficit

 

 

(1,623

)

Total Stockholders’ Equity

 

 

23,377

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

166,542

 

 

September 30,
2021

 

December 31,
2020

  

(Unaudited)

 

(Restated)

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash

 

$

102,081

 

 

$

309,849

 

Prepaid expenses

 

 

66,536

 

 

 

45,096

 

Total Current Assets

 

 

168,617

 

 

 

354,945

 

  

 

 

 

 

 

 

 

Marketable securities held in Trust Account

 

 

174,507,917

 

 

 

173,656,603

 

Other asset

 

 

50,000

 

 

 

 

TOTAL ASSETS

 

$

174,726,534

 

 

$

174,011,548

 

  

 

 

 

 

 

 

 

LIABILITIES, TEMPORARY EQUITY AND PERMANENT DEFICIT

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accrued expenses

 

$

2,015,264

 

 

$

399,999

 

Promissory note – related party

 

 

1,095,000

 

 

 

 

Total Current Liabilities

 

 

3,110,264

 

 

 

399,999

 

  

 

 

 

 

 

 

 

Derivative Liability – Private Warrants

 

 

1,168,200

 

 

 

1,980,000

 

Convertible promissory note, net – related party

 

 

2,751,948

 

 

 

1,593,605

 

TOTAL LIABILITIES

 

 

7,030,412

 

 

 

3,973,604

 

  

 

 

 

 

 

 

 

Commitments

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

Common stock subject to possible redemption; 17,250,000 shares at redemption value at September 30, 2021 and December 31, 2020

 

 

174,457,917

 

 

 

173,439,148

 

  

 

 

 

 

 

 

 

Permanent Deficit

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding

 

 

 

 

 

 

Common stock, $0.0001 par value; 70,000,000 shares authorized; 4,642,500 shares issued and outstanding (excluding 17,250,000 shares subject to possible redemption) at September 30, 2021 and December 31, 2020

 

 

464

 

 

 

464

 

Additional paid-in capital

 

 

 

 

 

 

Accumulated deficit

 

 

(6,762,259

)

 

 

(3,401,668

)

Total Permanent Deficit

 

 

(6,761,795

)

 

 

(3,401,204

)

TOTAL LIABILITIES, TEMPORARY EQUITY AND PERMANENT DEFICIT

 

$

174,726,534

 

 

$

174,011,548

 

____________

(1)      Includes up to 562,500shares subject to forfeiture if the over-allotment is not exercised in full or in part by the underwriters.

The accompanying notes are an integral part of thesethe unaudited condensed consolidated financial statementsstatements.

F-3F-48

Table of Contents

GREENROSE ACQUISITION CORP.
STATEMENTCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIOD FROM AUGUST 26, 2019 (INCEPTION) TO SEPTEMBER 30, 2019(UNAUDITED)

Formation and operating costs

 

$

1,623

 

Net Loss

 

$

(1,623

)

  

 

 

 

Weighted average shares outstanding, basic and diluted(1)

 

 

3,750,000

 

  

 

 

 

Basic and diluted net loss per common share

 

$

(0.00

)

 

Three Months Ended
September 30,

 

Nine months Ended
September 30,

  

2021

 

2020

 

2021

 

2020

    

(Restated)

   

(Restated)

Operating and formation costs

 

$

1,203,002

 

 

$

436,062

 

 

$

3,577,513

 

 

$

985,093

 

Loss from operations

 

 

(1,203,002

)

 

 

(436,062

)

 

 

(3,577,513

)

 

 

(985,093

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (expenses) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest earned on marketable securities held in Trust Account

 

 

4,378

 

 

 

4,377

 

 

 

12,984

 

 

 

1,152,225

 

Interest Expense – Promissory Note

 

 

(78,319

)

 

 

(89,662

)

 

 

(1,117,630

)

 

 

(183,222

)

Change in fair value of private warrants liabilities

 

 

277,200

 

 

 

(59,400

)

 

 

811,800

 

 

 

930,600

 

Change in fair value of Convertible promissory note, net – related party

 

 

222,000

 

 

 

(22,676

)

 

 

959,287

 

 

 

299,794

 

Other (expenses) income, net

 

 

425,259

 

 

 

(167,361

)

 

 

666,441

 

 

 

2,199,397

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) Income before income taxes

 

 

(777,743

)

 

 

(603,423

)

 

 

(2,911,072

)

 

 

1,214,304

 

Benefit from (Provision for) income taxes

 

 

 

 

 

90,338

 

 

 

 

 

 

(35,746

)

Net (loss) income

 

$

(777,743

)

 

$

(513,085

)

 

$

(2,911,072

)

 

$

1,178,558

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common stock

 

 

21,892,500

 

 

 

21,892,500

 

 

 

21,892,500

 

 

 

19,069,434

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net (loss) income per share, Common stock

 

$

(0.04

)

 

$

(0.02

)

 

$

(0.13

)

 

$

0.06

 

____________

(1)      Excludes an aggregate of up to 562,500shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters.

The accompanying notes are an integral part of thesethe unaudited condensed consolidated financial statementsstatements.

F-4F-49

Table of Contents

GREENROSE ACQUISITION CORP.
STATEMENTSTATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITYPERMANENT DEFICIT
FOR THE PERIOD FROM AUGUST 26, 2019 (INCEPTION) TOTHREE AND NINE MONTHS ENDED SEPTEMBER 30, 20192021
(UNAUDITED)

 


Common Stock

 

Additional
Paid in
Capital

 

Accumulated
Deficit

 

Total
Stockholders’
Equity

  

Shares

 

Amount

 

Balance – August 26, 2019 (inception)

 

 

$

 

$

 

$

 

 

$

 

Issuance of common stock par value $0.0001 to Sponsor(1)

 

4,312,500

 

 

431

 

 

24,569

 

$

 

 

 

25,000

 

Net loss for the period ended
September 30, 2019

 

 

 

 

 

 

 

(1,623

)

 

 

(1,623

)

Balance – September 30, 2019

 

4,312,500

 

$

431

 

$

24,569

 

$

(1,623

)

 

$

23,377

 

____________

(1)      Includes 562,500shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters.

 


Common Stock

 

Additional
Paid-in
Capital

 

Accumulated
Deficit

 

Total
Permanent
Deficit

  

Shares

 

Amount

 

Balance – January 1, 2021 (restated)

 

4,642,500

 

$

464

 

$

 

 

$

(3,401,668

)

 

$

(3,401,204

)

Accretion of carrying value to redemption value

 

 

 

 

 

 

 

 

15,964

 

 

 

15,964

 

Net loss

 

 

 

 

 

 

 

 

(784,951

)

 

 

(784,951

)

Balance – March 31, 2021 (restated)

 

4,642,500

 

$

464

 

$

 

 

$

(4,170,655

)

 

$

(4,170,191

)

Accretion of carrying value to redemption value

 

 

 

 

 

 

 

 

70,655

 

 

 

70,655

 

Net loss

 

 

 

 

 

 

 

 

(1,348,378

)

 

 

(1,348,378

)

Balance – June 30, 2021 (restated)

 

4,642,500

 

$

464

 

$

 

 

$

(5,448,378

)

 

$

(5,447,914

)

Capital contribution to Trust Account

 

 

 

 

 

569,250

 

 

 

 

 

 

(569,250

)

Accretion of carrying value to redemption value

 

 

 

 

 

(569,250

)

 

 

(536,138

)

 

 

(1,105,388

)

Net loss

 

 

 

 

 

 

 

 

(777,743

)

 

 

(777,743

)

Balance – September 30, 2021

 

4,642,500

 

$

464

 

$

 

 

$

(6,762,259

)

 

$

(6,761,795

)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020
(Unaudited)

 


Common Stock

 

Additional
Paid-in
Capital

 

Accumulated
Deficit

 

Total
Permanent
Deficit

  

Shares

 

Amount

 

Balance – January 1, 2020

 

4,312,500

 

$

431

 

$

24,569

 

 

$

(2,199

)

 

$

22,801

 

Sale of 330,000 Private Units, net of warrant liability

 

330,000

 

 

33

 

 

3,065,667

 

 

 

 

 

 

3,065,700

 

Contribution in excess of fair value of sale of 1,650,000 Private Warrants

 

 

 

 

 

478,500

 

 

 

 

 

 

478,500

 

Accretion of carrying value to redemption value

 

 

 

 

 

(3,568,736

)

 

 

(1,739,853

)

 

 

(5,308,589

)

Net Income

 

 

 

 

 

 

 

 

1,130,254

 

 

 

1,130,254

 

Balance – March 31, 2020 (restated)

 

4,642,500

 

$

464

 

$

 

 

$

(611,798

)

 

$

(611,334

)

Accretion of carrying value to redemption value

 

 

 

 

 

 

 

 

(50,849

)

 

 

(50,849

)

Net Income

 

 

 

 

 

 

 

 

561,389

 

 

 

561,389

 

Balance – June 30, 2020 (restated)

 

4,642,500

 

$

464

 

$

 

 

$

(101,258

)

 

$

(100,794

)

Accretion of carrying value to redemption value

 

 

 

 

 

 

 

 

(26,315

)

 

 

(26,315

)

Net loss

 

 

 

 

 

 

 

 

(513,085

)

 

 

(513,085

)

Balance – September 30, 2020
(restated)

 

4,642,500

 

$

464

 

$

 

 

$

(640,658

)

 

$

(640,194

)

The accompanying notes are an integral part of thesethe unaudited condensed consolidated financial statementsstatements.

F-5F-50

Table of Contents

GREENROSE ACQUISITION CORP.
STATEMENTCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIOD FROM AUGUST 26, 2019 (INCEPTION) TO SEPTEMBER 30, 2019(UNAUDITED)

Cash Flows from Operating Activities:

 

 

 

 

Net loss

 

$

(1,623

)

Net cash used by operating activities

 

 

(1,623

)

  

 

 

 

Cash Flows from Financing Activities

 

 

 

 

Common Stock Issuance

 

 

25,000

 

Payment of Offering Costs

 

 

(138,042

)

Due to Greenrose Associates LLC

 

 

139,665

 

Net Cash provided by Financing Activities

 

 

26,623

 

Net Increase in Cash and Cash Equivalents

 

 

25,000

 

Cash – Beginning

 

 

 

Cash – Ending

 

$

25,000

 

  

 

 

 

Non-cash investing and financing activities:

 

 

 

 

Offering cost included in accrued expenses

 

$

3,500

 

 

Nine months Ended
September 30,

  

2021

 

2020

    

(Restated)

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(2,911,072

)

 

$

1,178,558

 

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Interest earned on marketable securities held in Trust Account

 

 

(12,984

)

 

 

(1,152,225

)

Interest Expense – Promissory Note

 

 

1,117,630

 

 

 

183,222

 

Change in fair value of private warrants liability

 

 

(811,800

)

 

 

(930,600

)

Change in fair value of Convertible promissory note, net – related party

 

 

(959,287

)

 

 

(299,794

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses

 

 

(21,440

)

 

 

(6,299

)

Other asset

 

 

(50,000

)

 

 

 

Accrued expenses

 

 

1,615,265

 

 

 

235,988

 

Income taxes payable

 

 

 

 

 

35,746

 

Net cash used in operating activities

 

 

(2,033,688

)

 

 

(755,404

)

  

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

Investment of cash in Trust Account

 

 

(569,250

)

 

 

(172,500,000

)

Cash withdrawn from trust account for taxes

 

 

300,170

 

 

 

 

Net cash used in investing activities

 

 

(269,080

)

 

 

(172,500,000

)

  

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

Proceeds from sale of Units, net of underwriting discounts paid

 

 

 

 

 

169,050,000

 

Proceeds from sale of Private Units

 

 

 

 

 

3,300,000

 

Proceeds from sale of Private Warrants

 

 

 

 

 

1,650,000

 

Advances from related party

 

 

 

 

 

164,753

 

Repayment of advances from related party

 

 

 

 

 

(796,119

)

Proceeds from promissory note – related party

 

 

1,095,000

 

 

 

 

Proceeds from Convertible promissory note – related party

 

 

1,000,000

 

 

 

1,000,000

 

Payment of offering costs

 

 

 

 

 

(368,949

)

Net cash provided by financing activities

 

 

2,095,000

 

 

 

173,999,685

 

  

 

 

 

 

 

 

 

Net Change in Cash

 

 

(207,768

)

 

 

744,281

 

Cash – Beginning of period

 

 

309,849

 

 

 

24,970

 

Cash – End of period

 

$

102,081

 

 

$

769,251

 

  

 

 

 

 

 

 

 

Non-Cash investing and financing activities:

 

 

 

 

 

 

 

 

Initial classification of common stock subject to possible redemption

 

 

 

 

$

172,500,000

 

Change in value of common stock subject to possible redemption

 

$

1,018,769

 

 

$

966,479

 

Initial classification of private warrants liability

 

 

 

 

$

1,405,800

 

Initial classification of Convertible promissory note, net – related party

 

 

1,087,401

 

 

 

492,165

 

Offering costs included in accrued offering costs

 

$

 

 

$

 

The accompanying notes are an integral part of thesethe unaudited condensed consolidated financial statementsstatements.

F-6F-51

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 1 — Description of Organization and Business Operations

Greenrose Acquisition CorpCorp. (the “Company”) was incorporated in Delaware on August26,August 26, 2019. The Company was formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities (the “Business Combination”).

Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends to focus its search on companies in the cannabis industry. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

On March 12, 2021, the Company entered into definitive agreements to acquire four cannabis companies. The companies are Shango Holdings Inc. (Shango), Futureworks LLC (d/b/a The Health Center), Theraplant, LLC, and True Harvest, LLC. As part of the acquisition, the company formed wholly owned subsidiaries to effect the business combinations: i) GNRS NV Merger Sub, Inc., a Nevada corporation on March 10, 2021, ii) GNRS CT Merger Sub, LLC, a Connecticut limited liability company on March 5, 2021, iii) Futureworks Holdings, Inc. a Delaware corporation on March 11, 2021, and iv) True Harvest Holdings, Inc., a Delaware corporation on March 10, 2021, (see Note 7).

As of September30, 2019,September 30, 2021, the Company had not commenced any operations. All activity for the period from August26, 2019 (inception) through September30, 2019September 30, 2021 relates to the Company’s formation, and the proposed initial public offering (“ProposedInitial Public Offering”), which is described below.below, identifying a target company or companies for a Business Combination and working towards the consummation of the Business Combination more fully described in Note 7. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generategenerates non-operating income in the form of interest income from the proceeds derived from assets held in the Proposed Public Offering. The Company has selected December 31Trust Account, interest expense from the amortization of the debt discount on our promissory note and recognizes changes in the fair value of derivative liabilities as its fiscal year end.other income (expense).

The registration statement for the Company’s ability to commence operations is contingent upon obtaining adequate financial resources through a ProposedInitial Public Offering was declared effective on February 10, 2020. On February 13, 2020, the Company consummated the Initial Public Offering of 15,000,000 units (the “Units” and, with respect to the shares of common stock included in the Units being offered,sold, the “Public Shares”) at $10.00 per Unit (or 17,250,000 units if the underwriters’ over-allotment option is exercised in full), generating gross proceeds of $150,000,000, which is discusseddescribed in Note3, andNote 4.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 300,000 units (or 330,000 if the underwriters’ over-allotment is exercised in full) (the “Private Units”) and 1,500,000 warrants (or 1,650,000 if the underwriters’ over-allotment is exercised in full) (the “Private Warrants” and, together with the Private Units, the “Private Securities”) at a price of $10.00 per Private Unit and $1.00 per Private Warrant in a private placement to Greenrose Associates, LLC (the “Sponsor”) and Imperial Capital, LLC (“Imperial”), generating gross proceeds of $4,500,000, which is described in Note 5.

Following the closing of the Initial Public Offering on February 13, 2020, an amount of $150,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Securities was placed in a trust account (the “Trust Account”) located in the United States, which will be only invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that will close simultaneously withholds itself out as a money market fund selected by the Proposed Public Offering.Company meeting the conditions of Rule 2a-7 of the Investment Company Act of 1940, as amended (the “Investment Company Act”), as determined by the Company, until the earlier of: (i) the completion of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below.

On February 14, 2020, the underwriters notified the Company of their intention to exercise their over-allotment option in full. As such, on February 14, 2020, the Company consummated the sale of an additional 2,250,000 Units, at $10.00 per Unit, and the sale of an additional 30,000 Private Units, at $10.00 per Private Unit, and 150,000 Private Warrants, at $1.00 per Private Warrant, generating total gross proceeds of $22,950,000. A total of $22,500,000 of the net proceeds was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $172,500,000.

F-52

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 1 — Description of Organization and Business Operations (cont.)

Transaction costs amounted to $4,419,274 consisting of $3,450,000 of underwriting fees and $969,274 of other offering costs.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the ProposedInitial Public Offering and the sale of the Private Units and Private Warrants,Securities, although substantially all of the net proceeds are intended to be applied generally toward consummatingcompleting a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (as defined below) (excluding taxes payable on income earned on the Trust Account) at the time of the agreement to enter into an initial Business Combination. The Company will only complete a Business Combination if the post-transaction Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act 1940, as amended (the “InvestmentAct. There is no assurance that the Company Act”). Upon the closing of the Proposed Public Offering, management has agreed that an amount equal to at least $10.00 per Unit sold in the Proposed Public Offering, including the proceeds from the sale of the Private Units and Private Warrants, will be held in a trust account (“Trust Account”), located in the United States and invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion ofable to successfully complete a Business Combination and (ii) the distribution of the Trust Account, as described below.Combination.

The Company will provide its holders of the outstanding Public Shares (the “public stockholders”)stockholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00($10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its franchise and income tax obligations.obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares subject to redemption will be recorded at redemption value and classified as temporary equity upon the completion of the Proposed Offering in

F-7

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS

Note 1 — Description of Organization and Business Operations(cont.)

accordance with the Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Company’s Sponsor and Imperial have agreed to vote their FounderFounder’s Shares (as defined in Note 5)6), Private Shares (as defined in Note 4)5), Private Warrants and any Public Shares purchased during or after the ProposedInitial Public Offering in favor of approving a Business Combination and not to convert any shares in connection with a stockholder vote to approve a Business Combination or sell any shares to the Company in a tender offer in connection with a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction or don’t vote at all.Business Combination.

The Sponsor and Imperial have agreed (a) to waive their redemption rights with respect to their FounderFounder’s Shares, Private Shares and Public Shares held by it in connection with the completion of a Business Combination, (b) to waive their rights to liquidating distributions from the Trust Account with respect to the FounderFounder’s Shares and Private Shares if the Company fails to consummate a Business Combination, and (c) not to propose an amendment to the Amended and Restated Certificate of Incorporation that would affect a public stockholders’ ability to convert or sell their shares to the Company in connection with a Business Combination or affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.

F-53

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 1 — Description of Organization and Business Operations (cont.)

The Company will have until 18months from the closing of the Proposed Public Offering — subjectAugust 13, 2021 (subject to its right to extend the period of time to consummate an initial business combinationa Business Combination for up to an additional 3monthsthree months if the Sponsor agrees to deposit $495,000 ($569,250 if the over-allotment is exercised)$569,250 in the Trust Account for each 1month extension —one month extension) to complete a Business Combination (the “Combination Period”). See note 11 for details regarding extension of the business combination and amendments to business combination agreements. If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay franchise and income taxes, divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in(in each case of (ii) and (iii) above) to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.

Extension of Business Combination

On August 11, 2021, Greenrose notified Continental Stock Transfer & Trust Company that it was exercising its option to extend the time available to consummate a Business Combination with the target businesses by an additional month, thereby extending the de-SPAC deadline from August 13, 2021 to September 13, 2021. Furthermore, in accordance with Investment Management Trust Agreement between Greenrose Acquisition Corp and Continental Stock Transfer & Trust Company, February 11, 2020, Greenrose authorized the trustees to deposit $569,250 into the trust account. The Sponsor has the right to exercise its right to extend the time available to consummate a Business Combination for up to two additional months.

On September 8, 2021, Greenrose notified Continental Stock Transfer & Trust Company that it was exercising its option to extend the time available to consummate a Business Combination with the target businesses by an additional month, thereby extending the de-SPAC deadline from September 13, 2021 to October 13, 2021. Furthermore, in accordance with Investment Management Trust Agreement between Greenrose and Continental Stock Transfer & Trust Company, dated to February 11, 2020, Greenrose authorized the trustees to deposit $569,250 into the trust account.

On October 8, 2021 and October 27, 2021, the Company extended the dates by which the Company has to consummate a business combination from October 13, 2021 to November 13, 2021 and then to November 30, 2021 (see Note 11).

In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below $10.00 per Public Share, except as to any claims by a third party who executed a valid and enforceable agreement with the Company waiving any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of ProposedInitial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable

F-8

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS

Note 1 — Description of Organization and Business Operations(cont.)

against a third party, none of the Company’s officers or directors, the Sponsor, Imperial or their respective officers, directors, shareholder or members (collectively, the “Insiders”) will be responsible to the extent of any liability for such third party claims. The Company will seek to reduce the possibility that the Insiders will have to indemnify the

F-54

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 1 — Description of Organization and Business Operations (cont.)

Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Going Concern ConsiderationRisks and Uncertainties

At September30, 2019,Management continues to evaluate the Company had $25,000 cashimpact of the COVID-19 pandemic and working capital deficit of $118,165. The Company has incurred and expects to continue to incur significant costs in pursuitconcluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its financing and acquisition plans. These conditions raise substantial doubt aboutoperations and/or search for a target company, the Company’s ability to continuespecific impact is not readily determinable as a going concern within one year afterof the date that theof these financial statements are issued. Management plans to address this uncertainty through a Proposed Public Offering as discussed in Note 3. There is no assurance that the Company’s plans to raise capital will be successful.statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Liquidity and Going Concern

As of September 30, 2021, the Company had cash of $102,081 held outside of the Trust Account, total current liabilities of $3,110,264 which excludes franchise taxes payable of $50,000, of which such amount will be paid from interest earned on the Trust Account. For the nine months ended September 30, 2021, we incurred a net loss of $2,911,072 and used $2,033,688 cash from operating activities.

Until the consummation of a Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination.

The Company will need to raise additional capital through loans or additional investments from its Sponsor, shareholders, officers, directors, or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern through November 30, 2021, the date that the Company will be required to cease all operations, except for the purpose of winding up, if a Business Combination is not consummated. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. See note 11 for details regarding extension of the business combination and additional financing.

Senior Secured Loan

On July 30, 2021, the Company entered into a commitment letter (the “Commitment Letter”) with SunStream Bancorp Inc. (“Sunstream”), pursuant to which Sunstream committed to provide, subject to the satisfaction of customary closing conditions stipulated in the Commitment Letter, a multi-tranche senior secured loan (the “Loan”) to the Company. The proceeds of the Loan are expected to be used (i) to consummate one or more of the Company’s previously announced Business Combinations and (ii) for general working capital purposes.

The Loan consists of $78.1 million of loan principal including an initial tranche of $52.1 million (“Tranche I”) on the closing date of the Loan and second tranche of $26.0 million (“Tranche II”) available prior to the 12-month anniversary of the closing date of the Loan, in each case.

F-55

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 1 — Description of Organization and Business Operations (cont.)

The Loan will be collateralized by a senior secured first-priority lien over all of the assets of the Company and its subsidiaries, subject to to-be-agreed upon carve-outs and exceptions. The Loan matures 48 months following the closing date of the Loan and has an interest rate, payable monthly, of 11.9% per annum on the outstanding principal. The Loan amortizes at a rate of 15.0% of outstanding principal per annum, beginning on the 24-month anniversary of the closing date of the Loan.

Tranche I of the Loan is prepayable, at Greenrose’s option, prior to the 36-month anniversary of the closing of the loan, subject to certain fees. In addition, Tranche II of the Loan is prepayable, at the Company’s option, prior to the 36-month anniversary of the Tranche II drawdown date, subject to certain fees.

The Company has also agreed to pay to Sunstream certain additional fees customary to transactions of this type.

In connection with the Loan commitments, Sunstream will be issued warrants with a five-year term to acquire additional shares of common stock of Greenrose with terms substantially similar to the warrants issued to the Company’s sponsors in connection with the initial public offering of the Company.

In addition, the Loan will be subject to the Company’s compliance with certain on-going financial covenants customary to other senior secured loans of this type, as will be negotiated by Sunstream and the Company in the course of ongoing due diligence by Sunstream prior to funding of the Loan.

In connection with the Commitment Letter, the Company and Sunstream have agreed to deal exclusively with one another until the earlier of September 30, 2021 or the closing of one or more of the Company’s previously announced Business Combinations with respect to any financing proposals similar to the financings contemplated by the Loan commitments.

Tranche I of the Loan is anticipated to close substantially simultaneously with the consummation of one or more of the Company’s previously announced Business Combinations.

The accompanying condensed consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of the uncertainty related to our ability to continue as a going concern.

Note 2 — Restatement of Previously Issued Financial Statements

In connection with the preparation of the Company’s financial statements as of September 30, 2021, management identified errors made in its historical financial statements where, at the closing of the Company’s Initial Public Offering, the Company improperly valued its common stock subject to possible redemption. The Company previously determined the common stock subject to possible redemption to be equal to the redemption value, while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that the Public Shares underlying the Units issued during the Initial Public Offering can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company’s control. Therefore, management concluded that the redemption value should include all shares of common stock subject to possible redemption, resulting in the common stock subject to possible redemption being equal to their redemption value. As a result, management has noted a reclassification error related to temporary equity and permanent equity. This resulted in a restatement to the initial carrying value of the common stock subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and common stock. (see Note 8 for discussion of permanent equity).

F-56

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 2 — Restatement of Previously Issued Financial Statements (cont.)

In connection with the change in presentation for the common stock subject to redemption, the Company also restated its income (loss) per common share calculation to allocate net income (loss) evenly to all common stock. This presentation contemplates a Business Combination as the most likely outcome, in which case, all common stock share pro rata in the income (loss) of the Company.

The impact of the revision on the Company’s financial statements is reflected in the following table.

(Unaudited)

Balance Sheet as of February 13, 2020 (restated)

 

As
Previously
Reported

 

Restatement
Adjustment

 

As Restated

Common stock subject to possible redemption

 

$

144,147,194

 

 

$

5,852,806

 

 

$

150,000,000

 

Common stock

 

$

521

 

 

$

(59

)

 

$

462

 

Additional paid-in capital

 

$

5,002,212

 

 

$

(5,002,212

)

 

$

 

Accumulated deficit

 

$

(2,731

)

 

$

(850,535

)

 

$

(853,266

)

Total Permanent Equity (Deficit)

 

$

5,000,001

 

 

$

(5,852,806

)

 

$

(852,805

)

Number of shares subject to possible redemption

 

 

14,414,719

 

 

 

581,281

 

 

 

15,000,000

 

  

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet as of March 31, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Common stock subject to possible redemption

 

$

167,777,974

 

 

$

5,611,341

 

 

$

173,389,315

 

Common stock

 

$

520

 

 

$

(56

)

 

$

464

 

Additional paid-in capital

 

$

3,871,432

 

 

$

(3,871,432

)

 

$

 

Accumulated deficit

 

$

1,128,055

 

 

$

(1,739,853

)

 

$

(611,798

)

Total Permanent Equity (Deficit)

 

$

5,000,007

 

 

$

(5,611,341

)

 

$

(611,334

)

Number of shares subject to possible redemption

 

 

16,691,744

 

 

 

558,256

 

 

 

17,250,000

 

  

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet as of June 30, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Common stock subject to possible redemption

 

$

168,339,363

 

 

$

5,100,801

 

 

$

173,440,164

 

Common stock

 

$

514

 

 

$

(50

)

 

$

464

 

Additional paid-in capital

 

$

3,310,049

 

 

$

(3,310,049

)

 

$

 

Accumulated deficit

 

$

1,689,444

 

 

$

(1,790,702

)

 

$

(101,258

)

Total Permanent Equity (Deficit)

 

$

5,000,007

 

 

$

(5,100,801

)

 

$

(100,794

)

Number of shares subject to possible redemption

 

 

16,745,577

 

 

 

504,423

 

 

 

17,250,000

 

  

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet as of September 31, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Common stock subject to possible redemption

 

$

167,826,278

 

 

$

5,640,201

 

 

$

173,466,479

 

Common stock

 

$

520

 

 

$

(56

)

 

$

464

 

Additional paid-in capital

 

$

3,823,128

 

 

$

(3,823,128

)

 

$

 

Accumulated deficit

 

$

1,176,359

 

 

$

(1,817,017

)

 

$

(640,658

)

Total Permanent Equity (Deficit)

 

$

5,000,007

 

 

$

(5,640,201

)

 

$

(640,194

)

Number of shares subject to possible redemption

 

 

16,692,005

 

 

 

557,995

 

 

 

17,250,000

 

F-57

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 2 — Restatement of Previously Issued Financial Statements (cont.)

(Unaudited)

Balance Sheet as of December 31, 2020 (restated)

 

As
Previously
Reported

 

Restatement
Adjustment

 

As Restated

Common stock subject to possible redemption

 

$

165,037,937

 

 

$

8,401,211

 

 

$

173,439,148

 

Common stock

 

$

548

 

 

$

(84

)

 

$

464

 

Additional paid-in capital

 

$

6,611,441

 

 

$

(6,611,441

)

 

$

 

Accumulated deficit

 

$

(1,611,982

)

 

$

(1,789,686

)

 

$

(3,401,668

)

Total Permanent Equity (Deficit)

 

$

5,000,007

 

 

$

(8,401,211

)

 

$

(3,401,204

)

Number of shares subject to possible redemption

 

 

16,414,428

 

 

 

835,572

 

 

 

17,250,000

 

  

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet as of March 31, 2021 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Common stock subject to possible redemption

 

$

164,252,986

 

 

$

9,170,198

 

 

$

173,423,184

 

Common stock

 

$

556

 

 

$

(92

)

 

$

464

 

Additional paid-in capital

 

$

7,396,384

 

 

$

(7,396,384

)

 

$

 

Accumulated deficit

 

$

(2,396,933

)

 

$

(1,773,722

)

 

$

(4,170,655

)

Total Permanent Equity (Deficit)

 

$

5,000,007

 

 

$

(9,170,198

 

 

$

(4,170,191

)

Number of shares subject to possible redemption

 

 

16,333,556

 

 

 

916,444

 

 

 

17,250,000

 

  

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet as of June 30, 2021 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Common stock subject to possible redemption

 

$

162,904,607

 

 

$

10,447,922

 

 

$

173,352,529

 

Common stock

 

$

568

 

 

$

(104

)

 

$

464

 

Additional paid-in capital

 

$

8,744,751

 

 

$

(8,744,751

)

 

$

 

Accumulated deficit

 

$

(3,745,311

)

 

$

(1,703,067

)

 

$

(5,448,378

)

Total Permanent Equity (Deficit)

 

$

5,000,008

 

 

$

(10,447,922

)

 

$

(5,447,914

)

Number of shares subject to possible redemption

 

 

16,210,346

 

 

 

1,039,654

 

 

 

17,250,000

 

F-58

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 2 — Restatement of Previously Issued Financial Statements (cont.)

 

As
Previously
Reported:
Redeemable
and Non-
Redeemable

 

Restatement
Adjustment

 

As
Restated:
Common
Stock

Statement of Operations for the Three Month Period Ended March 31, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

 

 

16,664,719

 

 

 

(16,664,719

)

 

 

 

Basic and diluted net income per share, Common stock subject to possible redemption

 

$

0.05

 

 

$

(0.05

)

 

$

 

Basic and diluted weighted average shares outstanding, Non-redeemable common stock, Common Stock

 

 

4,785,228

 

 

 

8,607,052

 

 

 

13,392,280

 

Basic and diluted net loss per share, Non-redeemable common stock, Common Stock

 

$

0.06

 

 

$

0.02

 

 

$

0.08

 

  

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations for the Three Month Period Ended June 30, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

 

 

16,694,628

 

 

 

(16,694,628

)

 

 

 

Basic and diluted net income per share, Common stock subject to possible redemption

 

$

 

 

$

 

 

$

 

Basic and diluted weighted average shares outstanding, Non-redeemable common stock, Common Stock

 

 

5,197,872

 

 

 

16,694,628

 

 

 

21,892,500

 

Basic and diluted net loss per share, Non-redeemable common stock, Common Stock

 

$

0.10

 

 

$

(0.07

)

 

$

0.03

 

  

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations for the Six Month Period Ended June 30, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

 

 

16,684,442

 

 

 

(16,684,442

 

 

 

 

Basic and diluted net income per share, Common stock subject to possible redemption

 

$

0.05

 

 

$

(0.05

)

 

$

 

Basic and diluted weighted average shares outstanding, Non-redeemable common stock, Common Stock

 

 

4,991,550

 

 

 

12,650,840

 

 

 

17,642,390

 

Basic and diluted net loss per share, Non-redeemable common stock, Common Stock

 

$

0.16

 

 

$

(0.06

)

 

$

0.10

 

  

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations for the Three Month Period Ended September 30, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

 

 

16,745,577

 

 

 

(16,745,577

)

 

 

 

Basic and diluted net income per share, Common stock subject to possible redemption

 

$

 

 

$

 

 

$

 

Basic and diluted weighted average shares outstanding, Non-redeemable common stock, Common Stock

 

 

5,146,923

 

 

 

16,745,577

 

 

 

21,892,500

 

Basic and diluted net loss per share, Non-redeemable common stock, Common Stock

 

$

(0.10

)

 

$

0.08

 

 

$

(0.02

)

F-59

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 2 — Restatement of Previously Issued Financial Statements (cont.)

 

As
Previously
Reported:
Redeemable
and Non-
Redeemable

 

Restatement
Adjustment

 

As
Restated:
Common
Stock

Statement of Operations for the Nine Period Ended September 30, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

 

 

16,708,896

 

 

 

(16,708,896

)

 

 

 

Basic and diluted net income per share, Common stock subject to possible redemption

 

$

0.05

 

 

$

(0.05

)

 

$

 

Basic and diluted weighted average shares outstanding, Non-redeemable common stock, Common Stock

 

 

5,043,719

 

 

 

14,025,715

 

 

 

19,069,434

 

Basic and diluted net loss per share, Non-redeemable common stock, Common Stock

 

$

0.05

 

 

$

0.01

 

 

$

0.06

 

  

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations for the Year Ended December 31, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

 

 

16,704,070

 

 

 

(16,704,070

)

 

 

 

Basic and diluted net income per share, Common stock subject to possible redemption

 

$

0.05

 

 

$

(0.05

)

 

 

 

Basic and diluted weighted average shares outstanding, Non-redeemable common stock, Common Stock

 

 

5,083,127

 

 

 

14,695,930

 

 

 

19,779,057

 

Basic and diluted net loss per share, Non-redeemable common stock, Common Stock

 

$

(0.49

)

 

$

0.41

 

 

$

(0.08

)

  

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations for the Three Month Period Ended March 31, 2021 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

 

 

16,414,428

 

 

 

(16,414,428

)

 

 

 

Basic and diluted net income per share, Common stock subject to possible redemption

 

$

 

 

$

 

 

$

 

Basic and diluted weighted average shares outstanding, Non-redeemable common stock, Common Stock

 

 

5,478,072

 

 

 

16,414,428

 

 

 

21,892,500

 

Basic and diluted net loss per share, Non-redeemable common stock, Common Stock

 

$

(0.14

)

 

$

0.10

 

 

$

(0.04

)

  

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations for the Three Month Period Ended June 30, 2021 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

 

 

16,337,862

 

 

 

(16,337,862

)

 

 

 

Basic and diluted net income per share, Common stock subject to possible redemption

 

$

 

 

$

 

 

$

 

Basic and diluted weighted average shares outstanding, Non-redeemable common stock, Common Stock

 

 

5,554,638

 

 

 

16,337,862

 

 

 

21,892,500

 

Basic and diluted net loss per share, Non-redeemable common stock, Common Stock

 

$

(0.24

)

 

$

0.18

 

 

$

(0.06

)

F-60

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 2 — Restatement of Previously Issued Financial Statements (cont.)

 

As
Previously
Reported:
Redeemable
and Non-
Redeemable

 

Restatement
Adjustment

 

As
Restated:
Common
Stock

Statement of Operations for the Six Month Period Ended June 30, 2021 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

 

 

16,375,933

 

 

 

(16,375,933

)

 

 

 

Basic and diluted net income per share, Common stock subject to possible redemption

 

$

 

 

$

 

 

$

 

Basic and diluted weighted average shares outstanding, Non-redeemable common stock, Common Stock

 

 

5,516,567

 

 

 

16,375,933

 

 

 

21,892,500

 

Basic and diluted net loss per share, Non-redeemable common stock, Common Stock

 

$

(0.39

)

 

$

0.29

 

 

$

(0.10

)

  

 

 

 

 

 

 

 

 

 

 

 

Statement of Changes in Permanent Equity (Deficit) for the Three Months Ended March 31, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Sale of 17,250,000 Units, net of underwriting discounts, offering costs and warrant liability

 

$

168,080,726

 

 

$

(168,080,726

)

 

$

 

Common stock subject to possible redemption

 

$

(167,777,974

)

 

$

167,777,974

 

 

$

 

Change in value of common stock subject to redemption

 

$

302,752

 

 

$

(302,752

)

 

$

 

Accretion for common stock subject to redemption amount

 

$

 

 

$

(5,308,589

)

 

$

(5,308,589

)

  

 

 

 

 

 

 

 

 

 

 

 

Statement of Changes in Permanent Equity (Deficit) for the Three Months Ended June 30, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Change in value of common stock subject to redemption

 

$

(561,389

)

 

$

561,389

 

 

$

 

Accretion for common stock subject to redemption amount

 

$

 

 

$

(50,849

)

 

$

(50,849

)

  

 

 

 

 

 

 

 

 

 

 

 

Statement of Changes in Permanent Equity (Deficit) for the Three Months Ended September 30, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Change in value of common stock subject to redemption

 

$

513,085

 

 

$

(513,085

)

 

$

 

Accretion for common stock subject to redemption amount

 

$

 

 

$

(26,315

)

 

$

(26,315

)

  

 

 

 

 

 

 

 

 

 

 

 

Statement of Changes in Permanent Equity (Deficit) for the Three Months Ended December 31, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Change in value of common stock subject to redemption

 

$

2,788,341

 

 

$

(2,788,341

)

 

$

 

Accretion for common stock subject to redemption amount

 

$

 

 

$

27,331

 

 

$

27,331

 

  

 

 

 

 

 

 

 

 

 

 

 

Statement of Changes in Permanent Equity (Deficit) for the Three Months Ended March 30, 2021 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Change in value of common stock subject to redemption

 

$

784,950

 

 

$

(784,950

)

 

$

 

Accretion for common stock subject to redemption amount

 

$

 

 

$

15,964

 

 

$

15,964

 

  

 

 

 

 

 

 

 

 

 

 

 

Statement of Changes in Permanent Equity (Deficit) for the Three Months Ended June 30, 2021 (restated)

 

 

 

 

 

 

 

 

 

 

 

 

Change in value of common stock subject to redemption

 

$

1,348,380

 

 

$

(1,348,380

)

 

$

 

Accretion for common stock subject to redemption amount

 

$

 

 

$

70,655

 

 

$

70,655

 

F-61

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 2 — Restatement of Previously Issued Financial Statements (cont.)

Non-Cash investing and financing activities:

 

As
Previously
Reported

 

Restatement
Adjustments

 

As
Restated

Statement of Cash Flows for the Period Ended March 31, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

Initial classification of common stock subject to possible redemption

 

$

166,647,190

 

 

$

5,852,810

 

 

$

172,500,000

Change in value of common stock subject to possible redemption

 

$

1,130,784

 

 

$

(241,469

)

 

$

889,315

  

 

 

 

 

 

 

 

 

 

 

Statement of Cash Flows for the Period Ended June 30, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

Initial classification of common stock subject to possible redemption

 

$

166,647,190

 

 

$

5,852,810

 

 

$

172,500,000

Change in value of common stock subject to possible redemption

 

$

(1,609,253

)

 

$

2,549,417

 

 

$

940,164

  

 

 

 

 

 

 

 

 

 

 

Statement of Cash Flows for the Period Ended September 30, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

Initial classification of common stock subject to possible redemption

 

$

166,647,190

 

 

$

5,852,810

 

 

$

172,500,000

Change in value of common stock subject to possible redemption

 

$

1,179,088

 

 

$

(212,609

)

 

$

966,479

  

 

 

 

 

 

 

 

 

 

 

Statement of Cash Flows for the Year Ended December 31, 2020 (restated)

 

 

 

 

 

 

 

 

 

 

 

Initial classification of common stock subject to possible redemption

 

$

166,647,190

 

 

$

5,852,810

 

 

$

172,500,000

Change in value of common stock subject to possible redemption

 

$

(1,609,253

)

 

$

2,548,401

 

 

$

939,148

  

 

 

 

 

 

 

 

 

 

 

Statement of Cash Flows for the Period Ended March 30, 2021 (restated)

 

 

 

 

 

 

 

 

 

 

 

Change in value of common stock subject to possible redemption

 

$

(784,951

)

 

$

784,951

 

 

$

  

 

 

 

 

 

 

 

 

 

 

Statement of Cash Flows for the Period Ended June 30, 2021 (restated)

 

 

 

 

 

 

 

 

 

 

 

Change in value of common stock subject to possible redemption

 

$

(2,133,329

)

 

$

2,133,329

 

 

$

Note 3 — Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying unaudited condensed consolidated financial statements are presentedhave been prepared in in conformityaccordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. We consolidate the financial statements of our wholly-owned subsidiaries and all intercompany transactions and account balances have been eliminated in consolidation. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed consolidated or omitted, pursuant to the rules and regulations of the SEC.SEC for interim financial reporting. Accordingly, they do not include all the information

F-62

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 3 — Summary of Significant Accounting Policies (cont.)

and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2020 as filed with the SEC on May 27, 2021, which contains the audited financial statements and notes thereto. The Company restated the condensed consolidated financial statements for the period ended September 30, 2020 and for the year ended December 31, 2020 in its previously filed Form 10-K. The interim results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(l) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

F-9

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS

Note 2 — Summary of Significant Accounting Policies(cont.)

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly,One of the more significant accounting estimates included in these condensed financial statements is the determination of the fair value of the warrant liabilities. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates.

F-63

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 3 — Summary of Significant Accounting Policies (cont.)

Cash and cash equivalentsCash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had $25,000 indid not have any cash equivalents as of September30, 2019.September 30, 2021 and December 31, 2020.

Deferred Offering CostsMarketable Securities Held in Trust Account

Deferred offering costs consistAt September 30, 2021 and December 31, 2020, substantially all of legal, accounting, underwriting fees and other costs incurred throughthe assets held in the Trust Account were held in money market funds which are invested in U.S. Treasury securities. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust Account in the accompanying condensed statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information.

Derivative Liabilities

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company’s own common shares and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the instruments are outstanding.

For issued or modified instruments that meet all of the criteria for equity classification, the instruments are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified instruments that do not meet all the criteria for equity classification, the instruments are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the instruments are recognized as a non-cash gain or loss on the statements of operations. The fair value of the instruments was estimated using a Black-Scholes model.

Common Stock Subject to Possible Redemption

The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are directly relatedconsidered to the Proposed Public Offering and that will be charged to stockholder’s equity upon the completionoutside of the Proposed Public Offering. ShouldCompany’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the Proposed Public Offering provestockholders’ equity section of the Company’s condensed consolidated balance sheets.

F-64

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 3 — Summary of Significant Accounting Policies (cont.)

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to be unsuccessful, these deferred costs, as well asequal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional expenses to be incurred will be charged to operations.paid in capital and accumulated deficit.

At September 30, 2021, the common stock reflected in the condensed consolidated balance sheet and at December 31, 2020, the common stock reflected in the consolidated balance sheet are reconciled in the following table:

Gross proceeds

 

$

172,500,000

 

Less:

 

 

 

 

Common stock issuance costs

 

 

(4,419,274

)

Plus:

 

 

 

 

Accretion of carrying value to redemption value

 

 

5,358,422

 

  

 

 

 

Common stock subject to possible redemption at December 31, 2020

 

 

173,439,148

 

Plus:

 

 

 

 

Accretion of carrying value to redemption value

 

 

1,018,769

 

Common stock subject to possible redemption at September 30, 2021

 

$

174,457,917

 

Income Taxes

The Company follows the asset and liability method of accountingaccounts for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized forTaxes” (“ASC 740”). ASC 740 requires the estimated future tax consequences attributable to differences between the financial statements carrying amountsrecognition of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances arevaluation allowance to be established when necessary, to reduceit is more likely than not that all or a portion of deferred tax assets to the amount expected towill not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and a measurement attributeprocess for the financial statement recognition and measurement of a tax positionsposition taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not-likely -than -not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September30, 2019.September 30, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

The provision forCompany’s currently taxable income taxes was deemed immaterialprimarily consists of interest income on the Trust Account. The Company’s general and administrative costs are generally considered start-up costs and are not currently deductible. During the three months and nine months ended September 30, 2021, the Company recorded no income tax expense.

Net Income (Loss) Per Common Share

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common share outstanding for the period August26, 2019 (inception) through September30, 2019.period. The Company applies the two-class method in calculating income (loss) per share. Accretion associated with the redeemable shares of common stock is excluded from income (loss) per share as the redemption value approximates fair value.

F-65

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 3 — Summary of Significant Accounting Policies (cont.)

The calculation of diluted income (loss) per common share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 19,230,000 shares of common stock in the aggregate. As of September 30, 2021 and 2020, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net income (loss) per common share is the same as basic net income (loss) per common share for the periods presented.

The following table reflects the calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts):

 

Three Months
Ended
September 30,
2021

 

Three Months
Ended
September 30,
2020

 

Nine Months
Ended
September 30,
2021

 

Nine Months
Ended
September 30,
2020

  

Common Stock

 

Common Stock

 

Common Stock

 

Common Stock

Basic and diluted net income (loss) per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allocation of net income (loss), as
adjusted

 

$

(777,743

)

 

$

(513,085

)

 

$

(2,911,072

)

 

$

1,178,558

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average stock outstanding

 

 

21,892,500

 

 

 

21,892,500

 

 

 

21,892,500

 

 

 

19,069,434

Basic and diluted net income (loss) per common share

 

$

(0.04

)

 

$

(0.02

)

 

$

(0.13

)

 

$

0.06

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash accountaccounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000. At September30, 2019, theThe Company has not experienced losses on this accountthese accounts and management believes the Company is not exposed to significant risks on such account.

Net Loss Per Common Share

Net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period, excluding shares of common stock subject to forfeiture by the Sponsor. Weighted average shares were reduced for the effect of an aggregate of 562,500shares of common stock that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (see Note 6). At September30, 2019, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented.

F-10

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS

Note 2 — Summary of Significant Accounting Policies(cont.)

Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.accounts.

Recent Accounting PronouncementsStandards

In August 2020, the FASB issued ASU No. 2020-06, “Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.

Management does not believe that any recently issued, but not yet effective, accounting pronouncements,standards, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements.

F-66

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 34 — Public Offering

Pursuant to the ProposedInitial Public Offering, the Company intends to offer for sale 15,000,000 unitssold 17,250,000 Units, which includes a full exercise by the underwriters of their over-allotment option in the amount of 2,250,000 Units, at a price of $10.00 per Unit. Each whole Unit consists of one share of common stock and one warrant (“Public Warrant”). Each Public Warrant entitles the holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment (see Note 7)8).

Note 45 — Private Placement

TheSimultaneously with the closing of the Initial Public Offering, the Sponsor and Imperial have agreed to purchasepurchased an aggregate of 300,000 Private Units (or 330,000 Private Units if the over-allotment option is exercised in full) at a price of $10.00 per Private Unit and 1,500,000 Private Warrants (or 1,650,000 Private Warrants if the over-allotment option is exercised in full) at a price of $1.00 per Private Warrant, for an aggregate purchase price of $4,500,000 or $4,950,000 if the over-allotment option is exercised in full, in a private placement that will occur simultaneously with the closing of the Proposed Public Offering.$4,500,000. The Sponsor has agreed to purchasepurchased 200,000 Private Units and 1,000,000 Private Warrants (or 220,000 Private Units and 1,100,000 Private Warrants if the over-allotment option is exercised in full) and Imperial has agreed to purchasepurchased 100,000 Private Units and 500,000 Private Warrants (or 110,000 Private Units and 550,000 ifWarrants. As a result of the underwriters’ election to fully exercise their over-allotment option is exercised in full).on February 14, 2020, the Sponsor and Imperial purchased an additional 30,000 Private Units, at a purchase price of $10.00 per Private Unit, and 150,000 Private Warrants, at a purchase price of $1.00 per Private Warrant, for an aggregate purchase price of $450,000. Each Private Unit will consistconsists of one share of common stock (“Private Share”) and one warrant. Each whole Private Warrant is exercisable to purchase one share of common stock at an exercise price of $11.50 per share, subject to adjustment (see Note 7)8). The proceeds from the Private Units and Private Warrants will beSecurities were added to the proceeds from the ProposedInitial Public Offering to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Units and Private WarrantsSecurities will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Units, the Private Warrants and all underlying securitiesShares will expire worthless.

Note 56 — Related Party Transactions

FounderFounder’s Shares

In August 2019, the Sponsor purchased 4,312,500shares4,312,500 shares (the “Founder“Founder’s Shares”) of the company’sCompany’s common stock for an aggregate price of $25,000. The FounderFounder’s Shares includeincluded an aggregate of up to 562,500shares562,500 shares subject to forfeiture by the sponsorSponsor to the extent that the underwriters’ over-allotment iswas not exercised in full or in part, so that the Sponsor willwould collectively own 20% of the Company’s issued and outstanding shares after the proposed public offeringInitial Public Offering (assuming the Sponsor doesdid not purchase any public sharesPublic Shares in the proposed public offeringInitial Public Offering and excluding the private units and private warrants)Private Shares underlying the Private Securities). On February 14, 2020, as a result of the underwriters’ election to fully exercise their over-allotment option, 562,500 Founder’s Shares are no longer subject to forfeiture.

The Sponsor has agreed that, subject to certain limited exceptions, it will not transfer, assign or sell any of the Founder’s Shares until (i) with respect to 50% of the Founder’s Shares, for a period ending on the earlier of the one-year anniversary of the date of the consummation of the Business Combination and the date on which the closing price of the Company’s common stock equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within a 30-trading day period following the consummation of the Business Combination and (ii) with respect to the remaining 50% of the Founder’s Shares, for a period ending on the one-year

F-11

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS

Note 5 — Related Party Transactions(cont.)

anniversary of the date of the consummation of the Business Combination, or earlier if, subsequent to the Business Combination, the Company consummates a liquidation, merger, stock exchange or other similar transaction which results in all of its stockholders having the right to exchange their shares of common stock for cash, securities or other property. The limited exceptions include transfers, assignments or sales (i) to the Company’s or Sponsor’s officers, directors, consultants or their affiliates, (ii) to an entity’s members upon its liquidation, (iii) to relatives and trusts for estate planning purposes, (iv) by virtue of the laws of descent and distribution upon death, (v) pursuant to a qualified domestic relations order, (vi) to the Company for no value for cancellation in connection with the consummation of our initial business combination,a Business Combination, or (vii) in connection with the consummation of a business combinationBusiness Combination at prices no greater than the price at which the shares were originally purchased, in each case (except for clause (vi) or with the Company’s prior consent) where the transferee agrees to the terms of the escrow agreement and to be bound by these transfer restrictions.

F-67

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 6 — Related Party Transactions (cont.)

In addition, to any restrictions to be contained in that certain letter agreement (commonly known as an “Insider Letter”) to be dated as of the closing of the IPO by and between Sponsor and the Company, Sponsor agreeshas agreed not to sell, transfer, pledge, hypothecate or otherwise dispose of all or any part of the FounderFounder’s Shares unless, prior to (a) a registration statement on the appropriate form under the Securities Act and applicable state securities laws with respect to the FounderFounder’s Shares proposed to be transferred shall then be effective or (b) the Company has received an opinion from counsel reasonably satisfactory to the Company, that such registration is not required because such transaction is exempt from registration under the Securities Act and the rules promulgated by the Securities and Exchange CommissionSEC thereunder and with all applicable state securities laws.

Advances — Related Party

Since our inception ourAs of December 31, 2019, the Sponsor hashad advanced an aggregate of $139,665$631,366 on ourthe Company’s behalf to cover certain expenses (the “Advances”). An additional $164,753 was advanced as of February 2020. The Advances will bewere non-interest bearing and due on demand. Total advances of $796,119 were repaid upon the consummation of the Proposed Public Offering from funds not held in the trust account.on March 9, 2020.

Related Party Loans

In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor, or certain of the Company’s officers and directors or their affiliates may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $2,000,000 of the Working Capital Loans may be convertible into units at a price of $10.00 per unit and/or warrants at a price of $1.00 per warrant. The units would be identical asto the Private Units and the warrants would be identical to the Private Warrants.

On March 26, 2020, the Company issued an unsecured promissory note (the “2020 Note”) in the principal amount of $1,000,000 to the Sponsor. The Note is non-interest bearing and payable upon the consummation of a Business Combination. Up to $1,000,000 of such loans may be convertible into units at a price of $10.00 per unit and/or warrants at a price of $1.00 per warrant. The units would be identical to the Private Units and the warrants would be identical to the Private Warrants.

On January 29, 2021, the Company issued an unsecured promissory note (the “2021 Note”) in the principal amount of $1,000,000 to the Sponsor. The Note is non-interest bearing and payable upon the consummation of a Business Combination. Up to $1,000,000 of such loans may be convertible into units at a price of $10.00 per unit and/or warrants at a price of $1.00 per warrant. The units would be identical to the Private Units and the warrants would be identical to the Private Warrants.

The Company assessed the provisions of the convertible promissory note under ASC 815-15. The derivative component of the obligation is initially valued and classified as a derivative liability with an offset to a discount on the promissory note. The discount will be amortized over the life of the Note. For the three and nine months ended September 30, 2021, $267,372 and $1,306,683, respectively, were included within interest expense. To calculate the value of the embedded derivative we utilized a “with” and “without” approach. In the “with” scenario we valued the convertible promissory notes using a Black-Scholes model as it was determined that on a business combination, a holder would likely convert into private warrants, which were themselves valued using a Black-Scholes model and are considered to be a Level 3 fair value measurement (see Note 10). In the “without” scenario, we valued the repayment of the notional value of the convertible promissory note using a risk-adjusted discounted cash flow model. The primary unobservable inputs utilized in determining the fair value of the conversion option are volatility and credit spread.

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Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 6 — Related Party Transactions (cont.)

For the 2020 and 2021 Notes, the assumptions used to value the conversion option were consistent with those utilized in the Company’s Black-Scholes valuation for private warrants and are detailed below:

 

January 29,
2021

 

September 30,
2021
(2)

Expected volatility (%)

 

 

17.5

%

 

 

10.1

%

Risk-free interest rate (%)

 

 

0.54

%

 

 

1.00

%

Expected dividend yield (%)

 

 

0.0

%

 

 

0.0

%

Contractual term (years)

 

 

0.5

 

 

 

0.12

 

Conversion price(1)

 

 

((1

))

 

 

((1

))

Underlying share price

 

 

10.28

 

 

 

10.08

 

Convertible notes amount

 

$

1,000,000

 

 

$

2,000,000

 

Fair value of the conversion feature(3)

 

$

1,087,401

 

 

$

941,000

 

____________

(1)      The conversion price is $10.00 per unit and/or $1.00 per warrant

(2)      September 30, 2021 reflects the inputs for the fair value assumptions for the 2020 Note, 2021 Note, and private warrants

(3)      The fair value adjustments for both the 2020 Note and 2021 Note are included in the September 30, 2021 column

The following table presents the change in the fair value of conversion option:

 

2020 Note

 

2021 Note

Fair value as of January 1, 2020

 

$

 

 

$

 

Initial measurement on March 26, 2020

 

 

492,165

 

 

 

 

Change in valuation inputs and other assumptions

 

 

320,721

 

 

 

 

Fair value as of December 31, 2020

 

$

812,886

 

 

$

 

Initial measurement on January 29, 2021

 

 

 

 

 

 

1,087,401

 

Change in valuation inputs and other assumptions

 

 

(342,385

)

 

 

(616,901

)

Fair value as of September 30, 2021

 

$

470,500

 

 

$

470,500

 

The assumptions used to value the conversion option were consistent with those utilized in the Company’s Black-Scholes valuation for stock options are detailed below:

 

March 26,
2020

 

December 31,
2020

Expected volatility (%)

 

 

15.0

%

 

 

15.0

%

Risk-free interest rate (%)

 

 

0.60

%

 

 

0.43

%

Discount Rate (%)

 

 

25.0

%

 

 

25.0

%

Expected dividend yield (%)

 

 

0.0

%

 

 

0.0

%

Contractual term (years)

 

 

0.88

 

 

 

0.5

 

Conversion price

 

 

 (*

 

 

 (*

Underlying share price

 

 

8.97

 

 

 

10.13

 

Convertible notes amount

 

$

1,000,000

 

 

$

1,000,000

 

Fair value of the conversion feature

 

$

492,165

 

 

$

812,886

 

____________

(*)      the conversion price is $10.00 per unit and/or $1.00 per warrant

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Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 6 — Related Party Transactions (cont.)

The following table presents the change in the fair value of conversion option:

Fair value as of January 1, 2020

 

$

Initial measurement on March 26, 2020

 

 

492,165

Change in valuation inputs and other assumptions

 

 

320,721

Fair value as of December 31, 2020

 

$

812,886

On June 18, 2021, the Company issued an unsecured promissory note (the “Note”), in the principal amount of $300,000 to Greenrose Associates LLC (the “Sponsor”), the Company’s sponsor and owner of more than 10% of the Company’s issued and outstanding Common Stock, evidencing a loan in the amount of $300,000. The Note is non-interest bearing and payable upon the consummation of a business combination.

On August 26, 2021, the Company issued an unsecured promissory note (the “Note”), in the principal amount of $450,000 to Greenrose Associates LLC (the “Sponsor”), the Company’s sponsor and owner of more than 10% of the Company’s issued and outstanding Common Stock, evidencing a loan in the amount of $450,000. The Note is non-interest bearing and payable upon the consummation of a business combination.

On September 9, 2021, Greenrose Acquisition Corp. (“Greenrose” or the “Company”) issued an unsecured promissory note (the “Note”), in the principal amount of $180,000 to Greenrose Associates LLC (the “Sponsor”), the Company’s sponsor and owner of more than 10% of the Company’s issued and outstanding Common Stock, evidencing a loan in the amount of $180,000. The Note is non-interest bearing and payable upon the consummation of a business combination.

On September 20, 2021, Greenrose Acquisition Corp. (“Greenrose” or the “Company”) issued an unsecured promissory note (the “Note”), in the principal amount of $65,000 to Greenrose Associates LLC (the “Sponsor”), the Company’s sponsor and owner of more than 10% of the Company’s issued and outstanding Common Stock, evidencing a loan in the amount of $65,000. The Note is non-interest bearing and payable upon the consummation of a business combination.

On October 1, 2021, Greenrose Acquisition Corp. (“Greenrose” or the “Company”) issued an unsecured promissory note (the “Note”) in the principal amount of $100,000 to Greenrose Associates LLC (the “Sponsor”), the Company’s sponsor and owner of more than 10% of the Company’s issued and outstanding Common Stock, evidencing a loan in the amount of $100,000. The Note is non-interest bearing and payable upon the consummation of a business combination.

Administrative Support Agreement

The Company has agreed,entered into an agreement whereby, commencing on the effective date of the Proposed Public OfferingFebruary 10, 2020, through the earlier of the Company’s consummation of a Business Combination and its liquidation, tothe Company will pay the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. For the three months ended September 30, 2021 and 2020, the Company incurred and paid $30,000 and $30,000 in fees for these services, respectively. For the nine months ended September 30, 2021 and 2020, the Company incurred and paid $90,000 and $80,000 in fees for these services, respectively.

F-12F-70

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 67 — Commitments and Contingencies

Registration Rights

ThePursuant to a registration rights agreement entered into on February 11, 2020, the holders of the FounderFounder’s Shares, Private Units, Private Warrants, and any units or warrants that may be issued upon conversion of Working Capital Loans (and all underlying securities) will beare entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of the Proposed Public Offering.rights. The holders of the majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the FounderFounder’s Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which the FounderFounder’s Shares are to be released from escrow. The holders of a majority of the Private Units or units issued in payment of working capital loansWorking Capital Loans made to the Company (or underlying securities) can elect to exercise these registration rights at any time commencing after the Company consummates a Business Combination. Notwithstanding anything to the contrary, Imperial may only make a demand on one occasion and only during the five-year period beginning on the effective date of the ProposedInitial Public Offering. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination; provided, however, that Imperial may participate in a “piggy-back” registration only during the seven-year period beginning on the effective date of the ProposedInitial Public Offering. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The Company will grant the underwriters a 30-day option from the date of this prospectus to purchase up to 2,250,000 additional Units to cover over-allotments, if any, at the ProposedInitial Public Offering price less the underwriting discounts and commissions.

The underwriters will be entitled to a cash underwriting discount of $0.20 per Unit, or $3,000,000 in the aggregate (or $3,450,000 in the aggregate if the underwriters’ over-allotment option is exercised in full), payable upon the closing of the Proposed Public Offering.

The underwriting agreement provides that in the event the Company completes a financing transaction similar to the ProposedInitial Public Offering or Business Combination, or enters into a statement or letter of intent that results in such a transaction, within 18months18 months following its termination, Imperial shall be entitled to receive any expense reimbursement due to it along with payment in full of its applicable fee of either (i) 2% of the gross proceeds of the offering, of which 1% will be in cash and 1% will be in equity of the Company for a financing transaction, or (ii) an amount equal to 5% of the face amount of any equity securities and 3% of the face amount of any debt sold or arranged as part of the Business Combination (exclusive of any applicable finders’ fees which might become payable). Additionally, Imperial has the right to act as a book-runner and managing underwriter for all underwritten follow-on offerings for 18months18 months following completion of this offeringthe Initial Public Offering and the right to approve any co-lead managing underwriter or co-book runner.

Business Combination Marketing Agreement

The Company has engaged Imperial as an advisor in connection with a Business Combination to assist the Company in holding meetings with its shareholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company in obtaining shareholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay Imperial a cash fee for such services upon the consummation of a Business Combination in an amount equal to 4.5% of the gross proceeds of ProposedInitial Public Offering, or $7,762,500 (exclusive of any applicable finders’ fees which might become payable); provided that up to 20% of the fee may be allocated at the Company’s sole discretion to other FINRA members that assist the Company in identifying and consummating a Business Combination.

F-13

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS

Note 6 — Commitments(cont.)

Additionally, the Company has agreed to pay Imperial a cash fee for assisting it in obtaining financing for the Business Combination in an amount equal to 5% of the face amount of any equity securities and 3% of the face amount of any debt sold or arranged as part of the Business Combination (exclusive of any applicable finders’ fees which might become payable).

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Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 7 — Commitments and Contingencies (cont.)

Merger Agreement

True Harvest

On July 2, 2021, the Company entered into an amendment (the “True Harvest Amendment No.1”) to the True Harvest Holdings, Inc. Asset Purchase Agreement, dated as of March 12, 2021. Pursuant to True Harvest Amendment No. 1, the table in Section 1.05(c) of the Purchase Agreement was deleted and replaced with the following table:

36 Month Price Point

Percentage of Earnout

Flower Production – average price

0%

<$2,199

20%

$2,200 – $2,199

50%

$2,200 – $2,499

80%

$2,500 – $2,799

100%

$2,800+

In addition, pursuant to the True Harvest Amendment No. 1, a new Section 1.05.1 Hurdle Amount is added to the Purchase Agreement, whereby the purchase price of True Harvest would be adjusted by the addition of (i) up to a maximum of four million seven hundred thousand dollars ($4,700,000) added to the principal amount of the secured note to be issued at closing and (ii) up to a maximum of one million four hundred thousand dollars ($1,400,000) of additional debt to be assumed by the Buyer at closing, in each case, subject to True Harvest achieving certain revenue targets, as well as True Harvest having constructed eight grow rooms in a condition ready to accept plants for grow prior to closing, in each case as set forth in the True Harvest Amendment No. 1. Also in addition, pursuant to the True Harvest Amendment No. 1, the “drop dead” date for closing was amended to be November 30, 2021.

Theraplant

On August 10, 2021, the Company entered into an amendment (the “Theraplant Amendment No.1”) to the Agreement and Plan of Merger dated as of March 12, 2021, by and among the Company, GNRS CT Merger Sub, LLC, Theraplant and Shareholder Representative Services LLC (the “Merger Agreement”).

Pursuant to the Theraplant Amendment No. 1, the purchase price of Theraplant would be adjusted by the addition of the issuance registered shares of the Company’s common stock, par value $10.00 per share, in the aggregate amount of Fifty Million Dollars ($50,000,000). Theraplant’s selling shareholders will receive customary registration rights in connection with the issuance of shares of the Company’s common stock as part of the merger consideration. Also in addition, pursuant to the Theraplant Amendment No. 1, the “drop dead” date for closing was amended to be November 30, 2021.

The Theraplant Amendment No.1 also provides that the Company shall bear (i) 50% of all documented accounting transaction expenses incurred by Theraplant in connection with the auditor review of the Theraplant’s 2021 first quarter financial statements and (ii) all documented legal, accounting and other transaction expenses of Theraplant incurred in connection with the Merger from and after the date of the Theraplant Amendment No. 1.

Vendor Agreements

On December 15, 2020, the Company entered into an agreement with a vendor to provide accounting advisory services. The agreement requires that the Company pay $10,000 per month based on an agreed hourly time and materials rate for work performed with any additional services to be only payable upon the consummation of a Business Combination. As of September 30, 2021, the Company had paid $60,000 pursuant to this agreement and has incurred an additional 441,790 of which an additional $30,000 is included in accrued expenses and would become due upon a successful Business Combination.

F-72

Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 7 — Commitments and Contingencies (cont.)

On October 9, 2020, the Company entered into an agreement with a vendor to provide investor relations services related to the Company’s Business Combination. The agreement requires that the Company pay $15,000 upon commencement of the agreement plus reimbursement for any out-of-pocket expenses. In addition, the Company has agreed to pay a $100,000 fee only upon the consummation of a Business Combination. The agreement also requires the continuation of investor relations services for a minimum of six months subsequent to the consummation of a Business Combination at the rate of $15,000 per month.

On September 1, 2021, the Company entered into an agreement with a vendor to provide multimedia services related to the Company’s Business Combination and virtual investor event. This agreement requires that the Company pay $32,500 when the current financing closes-the consummation of a Business Combination. The agreement will terminate on August 31, 2022.

Note 8 — Common Stock Subject To Possible Redemption

Common Stock — On February 10, 2020, the Company amended its certificate of incorporation such that the Company is authorized to issue up to 70,000,000 shares of common stock with a par value of $0.0001 per share. Holders of the common stock are entitled to one vote for each share. At September 30, 2021 and December 31, 2020, there were 4,642,500 shares of Common stock issued and outstanding, excluding 17,250,000 shares of Common stock subject to possible redemption which are presented as temporary equity.

Note 9 — Stockholders’ Equity

Preferred Stock —The On February 10, 2020, the Company intends to amendamended its certificate of incorporation on or priorsuch that the Company is authorized to the date of the Proposed Public Offeringissue up to authorize the issuance of 1,000,000shares1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors.

Common Stock — The Company is authorized to issue 10,000,000shares of common stock with a par value of $0.0001 per share. The Company intends to amend its certificate of incorporation on or prior to the date of the Proposed Public Offering to increase the authorized common stock to 70,000,000shares. Holders of the common stock are entitled to one vote for each share. At September30, 2019,September 30, 2021 and December 31, 2020, there were 4,312,500sharesno shares of commonpreferred stock issued and outstanding, of which an aggregate of up to 562,500shares are subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the Sponsor will collectively own 20% of the Company’s issued and outstanding common stock after the Proposed Public Offering (assuming the Sponsor does not purchase any Public Shares in the Proposed Public Offering and excluding the Private Units and Private Warrants).outstanding.

Warrants — The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12months12 months from the closing of the ProposedInitial Public Offering. No warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the public warrants is not effective within a specified period following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.

Once the warrants become exercisable, the Company may redeem the Public Warrants:

•        in whole and not in part;

•        at a price of $0.01 per warrant;

•        upon not less than 30 days’ prior written notice of redemption;

•        if, and only if, the reported last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the notice of redemption to the warrant holders; and

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Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 9 — Stockholders’ Equity (cont.)

•        if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

F-14

GREENROSE ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS

Note 7Stockholders’ Equity(cont.)

The Private Warrants will be identical to the Public Warrants underlying the Units being sold in the Proposed Public Offering, except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger, or consolidation. However, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

In addition, if (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of an initial Business Combination at an issue price or effective issue price of less than $9.50 per share of common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors, and in the case of any such issuance to our sponsor,the Sponsor, initial stockholders or their affiliates, without taking into account any founders’ sharesFounder Shares held by them prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of an initial Business Combination on the date of the consummation of an initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the common stock during the 20 trading-trading day period starting on the trading day prior to the day on which the Company consummatedconsummates an initial Business Combination (such price, the “Market Value”) is below $9.50 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the price at which the Company issues the additional shares of common stock or equity-linked securities.

Note 810 — Fair Value Measurements

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1:

Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2:

Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3:

Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

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Table of Contents

GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 10 — Fair Value Measurements (cont.)

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Description

 

Level

 

September 30,
2021

Assets:

   

 

 

Marketable securities held in Trust Account

 

1

 

$

174,507,917

    

 

 

Liabilities:

   

 

 

Private warrants liability

 

2

 

$

1,168,200

Convertible component of convertible promissory note

 

3

 

$

941,000

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at December 31, 2020, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Description

 

Level

 

December 31,
2020

Assets:

   

 

 

Marketable securities held in Trust Account

 

1

 

$

173,656,603

    

 

 

Liabilities:

   

 

 

Private warrants liability

 

2

 

$

1,980,000

Convertible component of convertible promissory note

 

3

 

$

812,886

The private warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the private warrants and the shares of common stock issuable upon the exercise of the private warrants will not be transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the private warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the private warrants are held by someone other than the initial purchasers or their permitted transferees, the private warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

The private placement warrants and the convertible component of the convertible promissory note (collectively, the “Derivative Instruments”) were accounted for as liabilities in accordance with ASC 815-40 and are presented within the private warrant liabilities and convertible promissory note, net — related party on our condensed consolidated balance sheets. The instruments are measured at fair value at inception and on a recurring basis, with changes in fair value presented within Change in fair value of private warrant liabilities and change in fair value of Convertible promissory note, net — related party in the condensed consolidated statements of operations.

Initial Measurement

The Company established the initial fair value for the warrants on February 13, 2020, the date of the Company’s Initial Public Offering, using a Black-Scholes model for the private warrants. The Company allocated the proceeds received from the sale of private warrants first to the warrants based on their fair values as determined at initial measurement, with the remaining proceeds allocated to common stock subject to possible redemption and common stock based on their relative fair values at the initial measurement date. The warrants were classified as Level 3 at the initial measurement date due to the use of unobservable inputs, and they move to a Level 2 when the public warrants begin trading separately on May 11, 2020.

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GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 10 — Fair Value Measurements (cont.)

Subsequent Measurement

The private warrants are measured at fair value on a recurring basis. As of March 31, 2020, the private warrants are classified as Level 2 due to the use of an observable market quote in an active market.

As of September 30, 2021, the aggregate values of the private warrants and the convertible component of convertible promissory note were $1,168,200 and $941,000, respectively. The fair value assumptions are included in Note 6.

The following tables present the changes in the fair value of private warrants and the convertible component of Convertible promissory note:

 

Private
Warrants

Fair value as of December 31, 2020

 

$

1,980,000

 

Change in fair value

 

 

(811,800

)

Fair value as of September 30, 2021

 

$

1,168,200

 

 

Convertible
Components

Fair value as of December 31, 2020

 

$

812,886

 

Convertible Components issued in 2021

 

 

1,087,401

 

Change in fair value

 

 

(959,286

)

Fair value as of September 30, 2021

 

$

941,000

 

The private warrants are measured at fair value on a recurring basis. As of March 31, 2020, the private warrants are classified as Level 2 due to the use of an observable market quote in an active market.

As of December 31, 2020, the aggregate values of the private warrants and the convertible component of convertible promissory note were $1,980,000 and $812,886, respectively.

The following table presents the changes in the fair value of derivative liabilities:

 

Private
Warrants

 

Convertible
Component

Fair value as of January 1, 2020

 

$

 

$

Initial measurement on February 13, 2020

 

 

1,405,800

 

 

 

Initial measurement on March 26, 2020

 

 

  

 

492,165

Changes in fair value

 

 

574,200

 

 

320,721

Fair value as of December 31, 2020

 

$

1,980,000

 

$

812,886

Note 11 — Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to October22, 2019, the date that the unaudited condensed consolidated financial statements were available to be issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.

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15,000,000 UnitsGREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

Note 11 — Subsequent Events (cont.)

Promissory Note

On October 1, 2021, Greenrose issued an unsecured promissory note in the principal amount of $100,000 to the Company’s Sponsor and owner of more than 10% of the Company’s issued and outstanding Common Stock, evidencing a loan in the amount of $100,000. The note is non-interest bearing and payable upon the consummation of a business combination.

On November 1, 2021, Greenrose issued an unsecured promissory note in the principal amount of $140,000 to the Company’s Sponsor and owner of more than 10% of the Company’s issued and outstanding Common Stock, evidencing a loan in the amount of $140,000. The note is non-interest bearing and payable upon the consummation of a business combination.

Business Combination Extension

On October 8, 2021, Greenrose notified Continental Stock Transfer & Trust Company that it was exercising its option to extend the time available to consummate a Business Combination with the target businesses by an additional month, thereby extending the de-SPAC deadline from October 13, 2021 to November 13, 2021. Furthermore, in accordance with the Investment Management Trust Agreement between Greenrose and Continental Stock Transfer& Trust Company, dated February 11, 2020, Greenrose authorized the trustees to deposit $569,250 into the trust account on October 13, 2021.

On October 27, 2021, the stockholders approved to amend the Company’s amended and restated certificate of incorporation to extend the date by which the Company has to consummate a business combination from November 13, 2021 to November 30, 2021. The amended and restated certificate of incorporation of the Company was filed with the Secretary of State of the State of Delaware on November 9, 2021.

Non-Redemption Agreement

In order to help facilitate the closing of Greenrose’s previously announced Qualified Business Combinations (as defined in the Definitive Proxy Statement on Schedule 14A filed with the U.S. Securities and Exchange Commission on October 5, 2021 (the “Proxy”)), on October 20, 2021, Greenrose Acquisition Corp. (“Greenrose” or the “Company”) and YA II PN, LTD. (the “Investor”), a Cayman Islands exempt limited partnership and an affiliate of Yorkville Advisors Global, LP, entered into a Non-Redemption Agreement (the “Non-Redemption Agreement”), pursuant to which the Investor has agreed to commit to purchase (collectively, the “Purchased Shares”) up to 1,000,000 shares common stock of the Company, $0.0001 par value per share, in open market transactions or in private transactions from the certain selling shareholders who are not affiliated with the Company, at a purchase price not to exceed $10.14 per share, or a combination of the foregoing.

Standby Equity Purchase Agreement

On October 20, 2021, Greenrose and the Investor, entered into a Standby Equity Purchase Agreement (the “Equity Purchase Agreement”), whereby the Investor agreed to purchase from the Company up to $100 million of the Company’s shares of common stock, par value $0.0001 per share (the “Common Stock”), for a purchase price per share of 96% multiplied by the lowest daily volume weighted average price of shares during regular trading hours as reported by Bloomberg L.P. of the Company’s common stock during the three (3) consecutive trading days commencing on the advance notice date.

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GREENROSE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)

_________________Note 11 — Subsequent Events (cont.)

PROSPECTUSRegistration Rights Agreement

In connection with the entry of the Non-Redemption Agreement, Greenrose entered into a Registration Rights Agreement with the Investor (the “Yorkville Registration Rights Agreement”) pursuant to which Greenrose agrees that to file a registration statement with the Securities and Exchange Commission (the “SEC”) covering the resale of the Common Stock requested to be included in such registration statement (the “Resale Registration Statement”), and Greenrose shall use its best efforts to have the Resale Registration Statement declared effective as soon as practicable after the filing thereof, but in no event later than the 45th calendar day following the filing of the Resale Registration Statement (or, the fifth calendar day following the date on which the Company is notified by the SEC that the Resale Registration Statement will not be or is no longer subject to further review and comments.

Amendment No. 2 to True Harvest Asset Purchase Agreement

On October 28, 2021, Company entered into an amendment (“Amendment No. 2”) to the Purchase Agreement. Pursuant to Amendment No. 2, Greenrose and True Harvest agreed that the Purchase Price Adjustment for the year 2021 will be calculated using the cumulative year-to-date revenue of the Business as of September 30, 2021.

Cancellation of Commitment for Senior Secured Loan

On November 8, 2021, SunStream Bancorp Inc. (“Sunstream”) notified the Company that the conditions precedent in connection with the previously announced financing have not been satisfied, and until such time as they are satisfied, Sunstream was not prepared to proceed with the proposed financing. In addition, on November 8, 2021, Sunstream waived the Company’s obligation to deal exclusively with Sunstream and indicated its support of the Company’s exploration of alternative financing sources. Sunstream also communicated its agreement to revisit financing opportunities at a future date, including on a co-lending basis.

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Report of Independent Registered Public Accounting Firm

To the Members

Theraplant, LLC

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Theraplant, LLC (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations, changes in members’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provides a reasonable basis for our opinion.

We have served as the Company’s auditor since 2020.

/s/ Macias Gini & O’Connell LLP

Los Angeles, California

March 18, 2021, except for earnings per share information included in the consolidated statements of operations and Notes 2P and 9, which is as of May 18, 2021.

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THERAPLANT, LLC

Consolidated Balance Sheets
December 31, 2020 and 2019

 

2020

 

2019

ASSETS

 

 

  

 

 

Current Assets:

 

 

  

 

 

Cash and Cash Equivalents

 

$

2,263,061

 

$

7,185,250

Accounts Receivable, Net

 

 

1,420,896

 

 

1,113,997

Inventories

 

 

3,298,310

 

 

3,998,456

Prepaid Expenses and Other Current Assets

 

 

233,221

 

 

141,337

Total Current Assets

 

 

7,215,488

 

 

12,439,040

  

 

  

 

 

Property and Equipment, Net

 

 

8,073,028

 

 

7,937,128

Deferred Loan Expenses, Net

 

 

23,869

 

 

25,989

  

 

  

 

 

TOTAL ASSETS

 

$

15,312,385

 

$

20,402,157

  

 

  

 

 

LIABILITIES AND MEMBERS’ EQUITY

 

 

  

 

 
  

 

  

 

 

LIABILITIES

 

 

  

 

 

Current Liabilities:

 

 

  

 

 

Accounts Payable and Accrued Liabilities

 

$

1,349,285

 

$

1,038,090

Current Portion of Note Payable

 

 

68,674

 

 

64,742

Distributions Payable to Members

 

 

169,782

 

 

4,704,197

Total Current Liabilities

 

 

1,587,741

 

 

5,807,029

  

 

  

 

 

Deferred Tax Liability

 

 

57,500

 

 

54,000

Note Payable, Net of Current Portion

 

 

1,710,051

 

 

1,778,725

TOTAL LIABILITIES

 

 

3,355,292

 

 

7,639,754

  

 

  

 

 

COMMITMENTS AND CONTINGENCIES

 

 

  

 

 
  

 

  

 

 

TOTAL MEMBERS’ EQUITY

 

 

11,957,093

 

 

12,762,403

  

 

  

 

 

TOTAL LIABILITIES AND MEMBERS’ EQUITY

 

$

15,312,385

 

$

20,402,157

The Accompanying Notes Are an Integral Part of These Consolidated Financial Statements.

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THERAPLANT, LLC

Consolidated Statements of Operations

Years Ended December 31, 2020 and 2019

 

2020

 

2019

Revenues, net of discounts

 

$

28,375,477

 

 

$

17,773,900

 

  

 

 

 

 

 

 

 

Costs and Expenses from Operations:

 

 

 

 

 

 

 

 

Cost of Goods Sold (excludes depreciation and amortization)

 

 

8,874,978

 

 

 

5,166,916

 

Selling and Marketing

 

 

333,114

 

 

 

330,627

 

General, and Administrative

 

 

2,504,877

 

 

 

2,504,874

 

Depreciation and Amortization

 

 

798,538

 

 

 

976,702

 

Total Costs and Expenses from Operations

 

 

12,511,507

 

 

 

8,979,119

 

  

 

 

 

 

 

 

 

Income From Operations

 

 

15,863,970

 

 

 

8,794,781

 

  

 

 

 

 

 

 

 

Other Income (Expense):

 

 

 

 

 

 

 

 

Other Income (Expense), net

 

 

18

 

 

 

2,057

 

Gai on Sale of Property and Equipment

 

 

6,000

 

 

 

 

Interest Expense, net

 

 

(101,560

)

 

 

(112,017

)

Total Other Income (Expense)

 

 

(95,542

)

 

 

(109,960

)

  

 

 

 

 

 

 

 

Income Before Provision for Income Taxes

 

 

15,768,428

 

 

 

8,684,821

 

  

 

 

 

 

 

 

 

Provision for Income Taxes

 

 

(1,178,500

)

 

 

(747,527

)

  

 

 

 

 

 

 

 

Net Income

 

$

14,589,928

 

 

$

7,937,294

 

  

 

 

 

 

 

 

 

Net Income per share – basic and diluted – attributable to:

 

 

 

 

 

 

 

 

Angel Founder Units

 

$

48.65

 

 

$

43.96

 

Series A Units

 

$

158.35

 

 

$

72.53

 

Series R Units

 

$

45.69

 

 

$

 

  

 

 

 

 

 

 

 

Weighted average shares – basic and diluted – attributable to:

 

 

 

 

 

 

 

 

Angel Founder Units

 

 

110,000

 

 

 

110,000

 

Series A Units

 

 

42,761

 

 

 

42,761

 

Series R Units

 

 

54,000

 

 

 

54,000

 

The Accompanying Notes Are an Integral Part of These Consolidated Financial Statements.

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THERAPLANT, LLC

Consolidated Statements of Changes in Members’ Equity

Years Ended December 31, 2020 and 2019

 

Total

Balance, January 1, 2019

 

$

9,529,306

 

Distributions to Members

 

 

(4,704,197

)

Net Income

 

 

7,937,294

 

  

 

 

 

Balance, December 31, 2019

 

$

12,762,403

 

Distributions to Members

 

 

(15,449,238

)

Warrants Exercised for Cash

 

 

54,000

 

Net Income

 

 

14,589,928

 

Balance, December 31, 2020

 

$

11,957,093

 

The Accompanying Notes Are an Integral Part of These Consolidated Financial Statements.

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THERAPLANT, LLC

Consolidated Statements of Cash Flows

Years Ended December 31, 2020 and 2019

 

2020

 

2019

CASH FLOW FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net income

 

$

14,589,928

 

 

$

7,937,294

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

798,538

 

 

 

976,702

 

Deferred tax liabilities

 

 

3,500

 

 

 

54,000

 

Gain on sale of property and equipment

 

 

(6,000

)

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(306,899

)

 

 

(985,623

)

Inventories

 

 

700,146

 

 

 

(2,116,443

)

Prepaid expenses and other current assets

 

 

(91,884

)

 

 

(118,773

)

Accounts payable and accrued liabilities

 

 

311,195

 

 

 

434,596

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

 

15,998,524

 

 

 

6,181,753

 

  

 

 

 

 

 

 

 

CASH FLOW FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(932,318

)

 

 

(693,519

)

Proceeds from sale of property and equipment

 

 

6,000

 

 

 

 

NET CASH USED IN INVESTING ACTIVITIES

 

 

(926,318

)

 

 

(693,519

)

  

 

 

 

 

 

 

 

CASH FLOW FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Warrants exercised for cash

 

 

54,000

 

 

 

 

Distributions to members

 

 

(19,983,653

)

 

 

(1,978,947

)

Escrow Refund – State of Connecticut

 

 

 

 

 

500,000

 

Principal repayments of notes payable

 

 

(64,742

)

 

 

(61,515

)

NET CASH USED IN FINANCING ACTIVITIES

 

 

(19,994,395

)

 

 

(1,540,462

)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS

 

 

(4,922,189

)

 

 

3,947,772

 

  

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

 

 

7,185,250

 

 

 

3,237,478

 

  

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, END OF YEAR

 

$

2,263,061

 

 

$

7,185,250

 

  

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

 

 

 

 

 

 

 

 

Interest paid

 

$

101,560

 

 

$

112,017

 

  

 

 

 

 

 

 

 

NON-CASH TRANSACTIONS

 

 

 

 

 

 

 

 

Distributions to members

 

 

4,534,415

 

 

 

(2,725,250

)

The Accompanying Notes Are an Integral Part of These Consolidated Financial Statements.

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THERAPLANT, LLC

Notes to the Consolidated Financial Statements

Years Ended December 31, 2020 and 2019

1. NATURE OF OPERATIONS

Theraplant, LLC, (the “Company”) is a Connecticut State licensed marijuana producer, dedicated to providing patients options to improve their wellbeing. The Company hand selects premium cannabis genetics grown in a controlled, clean environment, under the watch of an award-winning cultivation team, and tested by a third-party laboratory for pesticides and microbiologics.

The Company is a licensed producer of medical cannabis in Connecticut pursuant to the provisions of the State of Connecticut regulations on such. The Company received its license from the State of Connecticut Department of Consumer Protection on February 7, 2014.

The Company has one wholly-owned subsidiary, TPT Holdings, LLC. TPT Holdings, LLC, has not had any activity since inception other than its singular purpose of holding securities — Leafline Industries, LLC.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

_________________(a)    Basis of Preparation

The accompanying consolidated financial statements have been presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and reflect the accounts and operations of the Company.

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, customers, economies, and financial markets globally, potentially leading to an economic downturn. It has also disrupted the normal operations of many businesses, including those of the Company. This outbreak could decrease spending, adversely affect demand for the Company’s product and harm the Company’s business and results of operations. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on its business or results of operations at this time.

(b)    Basis of Consolidation

The accompanying consolidated financial statements include the accounts of Theraplant, LLC, and its wholly-owned subsidiary, TPT Holdings, LLC.

(c)     Cash and Cash Equivalents

Cash and Cash Equivalents include cash deposits in financial institutions and other deposits that are readily convertible to cash. The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. At December 31, 2020 and 2019, the Company had balances in excess of insured limits totaling approximately $7,370,705 and $6,422,452, respectively. The Company has not experienced any losses in such accounts.

(d)    Accounts Receivable and Allowances

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Allowances for doubtful accounts reflect the Company’s estimate of amounts in its existing accounts receivable that may not be collected due to customer claims or customer inability or unwillingness to pay. The allowance is determined based on a combination of factors, including the Company’s risk assessment regarding the credit worthiness of its customers, historical collection experience and length of time the receivables are past due. Though infrequent, if ever, account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered. No allowance for doubtful accounts was required as of December 31, 2020 and 2019.

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THERAPLANT, LLC

Notes to the Consolidated Financial Statements

Years Ended December 31, 2020 and 2019

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

[•](e)     Inventories

Inventories purchased from third parties, which include work in process, finished goods, and packaging and supplies, are valued at the lower of cost and net realizable value. Costs incurred during the growing and production process are capitalized as incurred to the extent that cost is less than net realizable value. Cost is determined using the weighted average costing method. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs to sell. The Company reviews inventories for obsolete, redundant, and slow-moving goods and any such inventories identified are written down to net realizable value. As of December 31, 2020 and 2019, no reserve for inventories was required.

On February 8, 2020, one of the Company’s grow rooms had a fire, destroying the plants housed within that room. The inventory was immediately adjusted down to account for the loss of plants. The insurance company paid for the repairs to the room, and a claim is still pending for lost revenues of $1,000,000, the policy limit.

(f)     Property and Equipment

Property and equipment is stated at cost, net of accumulated depreciation and impairment losses, if any. Expenditures that materially increase the life of the assets are capitalized. Ordinary repairs and maintenance are expensed as incurred. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset using the following terms and methods:

Land Improvements

15 Years

Buildings and Improvements

39 Years

Furniture and Fixtures

7 Years

Computer Equipment and Software

3 Years

Vehicles

5 Years

Production and Processing Equipment

7 Years

(g)    Income Taxes

The Company’s Members have elected to have the Company treated as a partnership for income tax purposes. As such, all the Company’s items of income, loss, deduction, and credit are passed through to, and taken into account by, the Company’s Members in computing their own taxable income.

As the Company operates in the cannabis industry, it is subject to the limits of IRC Section 280E under which the Company is only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E.

The State of Connecticut imposes a corporate flow through tax on partnership earnings, resulting in an accrued tax liability on the consolidated balance sheets as of December 31, 2020 and 2019 in the amounts of $209,046 and $92,807, respectively.

The deferred tax amounts arise from timing differences between federal and state depreciation regulations. The deferred tax liabilities on the consolidated balance sheets as of December 31, 2020 and 2019 are $57,500 and $54,000, respectively.

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THERAPLANT, LLC

Notes to the Consolidated Financial Statements

Years Ended December 31, 2020 and 2019

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Sole Book(h)    Revenue Recognition

For the years ended December 31, 2020 and 2019, the Company has adopted Financial Accounting Standards Board (“FASB”) Audit Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” and all the related amendments, which are also codified into Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers”.

Through application of this standard, the Company recognizes revenue to depict the transfer of promised goods or services to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

In order to recognize revenue under ASC 606, the Company applies the following five (5) steps:

•        Identify a customer along with a corresponding contract;

•        Identify the performance obligation(s) in the contract to transfer goods or provide distinct services to a customer;

•        Determine the transaction price the Company expects to be entitled to in exchange for transferring promised goods or services to a customer;

•        Allocate the transaction price to the performance obligation(s) in the contract;

•        Recognize revenue when or as the Company satisfies the performance obligation(s).

Revenues is generally recognized at a point in time when control over goods have been transferred to the customer and is recorded net of sales discounts. Payment is typically due upon transferring the goods to the customer or within a specified time period permitted under the Company’s policy. Sales discounts were not material during the years ended December 31, 2020 and 2019.

(i)     Fair Value of Financial Instruments

The carrying amounts of financial instruments, including accounts receivable, accounts payable, accrued liabilities, and short-term borrowings, approximate fair value due to the short maturity of these instruments. The carrying amounts of long-term debt approximate fair value because the interest rates fluctuate with market interest rates or the fix rate are based on current rates received by the Company for instruments with similar terms and maturities.

It is the Company’s policy, in general, to measure nonfinancial assets and liabilities at fair value on a nonrecurring basis. These items are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (such as evidence of impairment) which, if material, are disclosed in the accompanying notes to these consolidated financial statements.

Financial instruments recorded at fair value are classified using a fair value hierarchy that reflects the significance of the inputs to fair value measurements. The three levels of hierarchy are:

Level 1:

Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2:

Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; and

Level 3:

Inputs for the asset or liability that are not based on observable market data.

There have been no transfers between fair value levels during the years ended December 31, 2020 and 2019.

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THERAPLANT, LLC

Notes to the Consolidated Financial Statements

Years Ended December 31, 2020 and 2019

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(j)     Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes and related disclosures. Although these estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future, actual results ultimately may differ from the estimates.

The Company is subject to a number of risks similar to those of other companies of similar size and having a focus on serving the cannabis industry, including limited number of suppliers, acquisitions and integration, and government regulations.

(k)    Impairment of Long-Running-Lived ManagerAssets

The Company accounts for its longImperial Capital,-lived assets such as property and equipment in accordance with FASB ASC Topic No. 360, “Accounting for the Impairment or Disposal of Long-lived Assets” (“ASC 360”).

Management reviews long-lived assets for impairment whenever changes in events or circumstances indicate the assets may be impaired, but no less frequently than annually. Pursuant to ASC 360, an impairment loss is to be recorded when the net book value of an asset exceeds the undiscounted cash flows expected to be generated from the use of the asset. If an asset is determined to be impaired, the asset is written down to its realizable value, and the loss is recognized in the consolidated statement of operations in the period when the determination is made. No impairment charges for long-lived assets have been recorded for the years ended December 31, 2020 and 2019.

(l)     Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company places its cash investments with financial institutions and limits the amount of credit exposure to any one financial institution. Concentrations of credit risk with respect to trade receivables are limited due to the historical collectability and large number of customers. The Company does not believe it is subject to any significant risk of loss related to concentrations of credit risk.

(m)   Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASC 842”), which will replace ASC 840, “Leases”. This standard introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than twelve months unless the underlying asset is of low value. A lessee is required to recognize a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. For private companies, the standard will be effective for annual periods beginning on or after December 15, 2020, with earlier application permitted. The standard requires a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. At December 31, 2020 and 2019, the Company does not have any leases that qualify under ASU 2016-02.

In August 2018, the FASB issued ASU 2018-13, Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820). ASU 2018-13 adds, modifies, and removes certain fair value measurement disclosure requirements. For private companies, ASU 2018-13 is effective for annual beginning after December 15, 2019. The Company is currently evaluating the effect of adopting this ASU on the Company’s consolidated financial statements.

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THERAPLANT, LLC

Notes to the Consolidated Financial Statements

Years Ended December 31, 2020 and 2019

Co2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

In June 2016, the FASB issued ASC 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires entities to measure all expected credit losses for most financial assets held at the reporting date based on an expected loss model which includes historical experience, current conditions, and reasonable and supportable forecasts. Companies will now use forward-looking information to better form their credit loss estimates. ASU 2016-13 also requires enhanced disclosures to help financial statement users better understand significant estimates and judgements used in estimating credit losses, as well as the credit quality and underwriting standards of a company’s portfolio. For private companies, ASU 2016-13 is effective for annual periods beginning after December 15, 2022. The Company does not believe that the impact of the new standard on its consolidated financial statements will be material.

(n)    Advertising

Advertising amounts are expensed as incurred. For the years ended December 31, 2020 and 2019 the advertising amounts were $333,114 and $330,627, respectively.

(o)    Stock-Manager

I-Bankers-Based Securities, Inc.Compensation

UntilThe Company accounts for its share[•]-based awards in accordance with ASC Subtopic 718-10, “Compensation — Stock Compensation”, which requires fair value measurement on the grant date and recognition of compensation expense for all share-based payment awards made to employees and directors, including restricted share awards. The Company estimates the fair value using a closed option valuation (Black-Scholes) model. The fair value model requires the input of certain assumptions that require the Company’s judgment, including the expected term and the expected share price volatility of the underlying share. The assumptions used in calculating the fair value of share-based compensation represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change resulting in the use of different assumptions, share-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. If the actual forfeiture rate is materially different from management’s estimates, the share-based compensation expense could be significantly different from what the Company has recorded in the current period.

(p)    Net Income Per Share

The Company follows the two-class method when computing net income per unit as the Company has issued units that meet the definition of participating securities. The two- class method determines net income per unit for each class of Angel Founder Units, Series A and Series R Units and participating units according to distributions declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to the Angel Founder Units, Series A Units and Series R Units for the period to be allocated between the Angel Founder Units, Series R Units, and Series A Units based upon their respective rights to share in undistributed earnings as if all income for the period had been distributed.

Basic net income per unit attributable to Angel Founder Units, Series A Units and Series R Units is computed by dividing net income attributable to those units by the respective weighted-average number of units outstanding for the period. Diluted net income per unit attributable to Angel Founder Units and Series R Units is computed by adjusting net income attributable to Angel Founder Units, Series A Units and Series R Units to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net income per unit attributable to Angel Founder Units, Series A Units and Series R Units is computed by dividing the diluted net income attributable to the respective unit class by the weighted-average number of units outstanding for the period, including potentially dilutive units. For purposes of this calculation, the Company’s outstanding warrants are considered potentially dilutive Series R Units.

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THERAPLANT, LLC

Notes to the Consolidated Financial Statements

Years Ended December 31, 2020 (25 days afterand 2019

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

The Company’s Series A Units contractually entitle the holders of such securities to participate in dividends limited to their original investment plus 35%. Once the Series A Units have been repaid their investment plus a 35% return, they share equally with the Angel Founder Units and Series R Units, respectively. The Company completed the repayment of the Series A Unit holders original investment plus 35% return in the first half of 2020.

(q)    Segment Reporting

Operating segments are identified as components of an enterprise where separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assess performance. The Company operates as a single segment which is its only reportable segment: the production and sale of cannabis products. The Company has determined that its Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer, and the CODM makes decisions based on the Company as a whole.

3. INVENTORIES

At December 31, 2020 and 2019, the Company’s inventories include the following:

 

2020

 

2019

Raw Materials

 

$

666,516

 

$

579,221

Work In Process

 

 

2,131,736

 

 

2,616,069

Finished Goods

 

 

500,058

 

 

803,166

  

 

  

 

 

Total Inventories

 

$

3,298,310

 

$

3,998,456

4. PROPERTY AND EQUIPMENT

At December 31, 2020 and 2019, the Company’s property and equipment consisted of the following:

 

2020

 

2019

Land

 

$

488,193

 

 

$

488,193

 

Land Improvements

 

 

356,628

 

 

 

356,628

 

Buildings and Improvements

 

 

6,612,492

 

 

 

6,101,519

 

Furniture and Fixtures

 

 

180,155

 

 

 

167,775

 

Computer Equipment and Software

 

 

74,448

 

 

 

74,448

 

Vehicles

 

 

100,473

 

 

 

100,473

 

Production and Processing Equipment

 

 

4,856,512

 

 

 

4,505,411

 

Total Property and Equipment, Gross

 

 

12,668,901

 

 

 

11,794,447

 

Less accumulated depreciation

 

 

(4,595,873

)

 

 

(3,857,319

)

  

 

 

 

 

 

 

 

Property and Equipment, Net

 

$

8,073,028

 

 

$

7,937,128

 

Depreciation and amortization expense for the years ended December 31, 2020 and 2019 totaled $798,538 and $976,702, respectively.

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THERAPLANT, LLC

Notes to the Consolidated Financial Statements

Years Ended December 31, 2020 and 2019

5. NOTE PAYABLE

At December 31, 2020 and 2019, note payable consisted of the following:

 

2020

 

2019

Promissory note dated March 31, 2017, in the original amount of $2,000,000, which matures April 1, 2027. Principal and interest (5.5% per annum) payments of $13,849 are due monthly through March 2022. On April 1, 2022, the interest rate adjusts to equal 3% above the Federal Home Loan Bank of Boston “Classic Advance Rate” for 5 years, however, monthly payments of principal and interest may not be less than $13,849 through April 1, 2027, upon which date the unpaid principal amount is due.*

 

$

1,778,725

 

 

$

1,843,467

 

  

 

 

 

 

 

 

 

Total Note Payable

 

 

1,778,725

 

 

 

1,843,467

 

Less: current portion

 

 

(68,674

)

 

 

(64,742

)

  

 

 

 

 

 

 

 

Note payable, net of current portion

 

$

1,710,051

 

 

$

1,778,725

 

Maturities of note payable are as follows:

Year Ending December 31:

  

2021

 

 

68,674

2022

 

 

72,606

2023

 

 

76,763

2024

 

 

81,159

2025

 

 

85,805

Thereafter

 

 

1,393,718

  

$

1,778,725

____________

*        The promissory note is secured by the Mortgage attached to the real property located at 856 Echo Lake Road, Watertown, CT (the “Premises”), and is subject to various financial and non-financial covenants.

6. MEMBERS’ EQUITY

The Company’s operating agreement provides for the issuance of Series A Units, Angel Founder Units, Series R Units and Service Units.

The Series A Units, Angel Founder Units and Series R Units have voting rights, whereas the Service Units are non-voting.

The operating agreement allows for Managing Members to make periodic distributions to Members in connection with taxable income allocated to Members for income tax purposes multiplied by the assumed income tax rate of 44% (“Tax Distributions”). Other distributions, as approved by Managing Members, are based on each Members’ unit percentage interest. Distributions to Angel Founder Members were subordinated to a return of the Series A Members value of their capital interests at the time of the issuance of the Series R Units. The Series A Preferred Members had a preference on distributions (“Preferred Distributions”) totaling 90% of any distributions until they received their initial investment plus an additional 35%. Only Angel Founder Members were entitled to the 10% distribution until the Series A Members were paid off. Once the Series A Members have received their initial investment plus the 35%, all distributions going forward are paid pro-rata amongst all units.

The Company issued 110,000 Angel Founder Units, and 42,761 Series A Units during 2013. On September 17, 2018, the Company issued 54,000 Series R Warrants. On January 7, 2020, 29,000 Series R Warrants were exercised, and on March 12, 2020, the remaining 25,000 Series R Warrants were exercised, resulting in 54,000 Series R Units being issued in exchange for the warrants. As of December 31, 2020, the Company has issued 110,000 of Angel Founder Units, 54,000 of Series R Units, and 42,761 of Series A Units.

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THERAPLANT, LLC

Notes to the Consolidated Financial Statements

Years Ended December 31, 2020 and 2019

6. MEMBERS’ EQUITY (cont.)

Except for Tax Distributions and Preferred Distributions as discussed above, distributions are to be made to Members in proportion to their respective Percentage Interests as of the time of such distribution.

All Service units are intended to constitute profit interests for U.S. federal income tax purposes. As of December 31, 2020 and 2019, no Service Units have been issued.

7. STOCK-BASED COMPENSATION

On September 17, 2018, the Company issued 54,000 warrants to various members of management. The warrants vested immediately and had an exercise price of $1 per unit. The fair value of the warrants at the time of issuance was determined to be $1,921,860. As the warrants vested immediately, the Company recorded stock-based compensation of $1,921,860 on the date of issuance. During the first quarter of 2020, the warrant holders exercised their options resulting in the Company issuing 54,000 Series R Units to the warrant holders.

The fair value of warrants granted with a fixed exercise price was determined using the Black-Scholes option-pricing model with the following assumptions at the time of grant:

 

Number of
Warrants

 

Weighted
Average
Exercise price

Balance, January 1, 2019

 

54,000

 

 

$

1

Granted

 

 

 

 

Balance, December 31, 2019

 

54,000

 

 

$

1

Granted

 

 

 

 

Exercised

 

(54,000

)

 

$

1

Balance, December 31, 2020

 

 

 

$

September 17,
2018

Weighted-Average Risk-Free Annual Interest Rate

2.81

%

Weighted-Average Expected Annual Dividend Yield

0.00

%

Weighted-Average Expected Annual Stock Price Volatility

111.92

%

Weighted-Average Expected Annual Life in Years

3

Weighted-Average Estimated Forfeiture Rate

0.00

%

Stock price volatility was estimated by using the average historical volatility of comparable companies from a representative peer group of publicly-traded cannabis companies. The expected life represents the period of time that the warrants granted are expected to be outstanding. The risk-free rate was based on United States Treasury zero coupon bond with a remaining term equal to the expected life of the options.

8. COMMITMENTS AND CONTINGENCIES

(a)    Contingencies

The Company’s operations are subject to a variety of local and state regulation. Failure to comply with one or more of those regulations could result in fines, restrictions on its operations, or losses of permits that could result in the Company ceasing operations. While management of the Company believes that the Company is in compliance with applicable local and state regulation at December 31, 2020 and 2019, medical cannabis regulations continue to evolve and are subject to differing interpretations. As a result, the Company may be subject to regulatory fines, penalties, or restrictions in the future.

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THERAPLANT, LLC

Notes to the Consolidated Financial Statements

Years Ended December 31, 2020 and 2019

8. COMMITMENTS AND CONTINGENCIES (cont.)

(b)    Claims and Litigation

From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. At December 31, 2020 and 2019, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s consolidated operations. There are also no proceedings in which any of the Company’s Managing Members or affiliates is an adverse party or has a material interest adverse to the Company’s interest.

9. NET INCOME PER SHARE

Basic and diluted net loss per share attributable to members was calculated as follows:

 

Year ended December 31,

  

2020

 

2019

  

Angel
Founder
Units

 

Series A
Units

 

Series R
Units

 

Angel
Founder
Units

 

Series A
Units

 

Series R
Units

Net income allocation

 

$

5,351,769

 

$

6,770,995

 

$

2,467,164

 

$

4,835,814

 

$

3,101,480

 

$

Weighted averaged units – basic

 

 

110,000

 

 

42,761

 

 

54,000

 

 

110,000

 

 

42,761

 

 

54,000

Weighted averaged units – diluted

 

 

110,000

 

 

42,761

 

 

54,000

 

 

110,000

 

 

42,761

 

 

54,000

Earnings per unit – basic

 

$

48.65

 

$

158.35

 

$

45.69

 

$

43.96

 

$

72.53

 

$

Earnings per unit – diluted

 

$

48.65

 

$

158.35

 

$

45.69

 

$

43.96

 

$

72.53

 

$

10. SUBSEQUENT EVENTS

The Company entered into a construction loan in the amount of $4,036,000, and a commercial term loan in the amount of $550,000 on February 22, 2021.

The construction loan note matures February 1, 2032. The note shall bear interest through January 31, 2027, at a rate of 6.875% per annum, adjusting to 3% above the Federal Home Loan Bank of Boston “Classic Advance Rate” on February 1, 2027 for the duration of the loan, with a “floor interest rate” of 5.5%. The construction loan note is secured by the Mortgage attached to the real property located at 856 Echo Lake Road, Watertown, CT (the “Premises”), and is subject to various financial and non-financial covenants.

The commercial term note matures March 1, 2026. The note shall bear interest for the entire term of the loan at a rate of 6.875% per annum. The commercial term note is secured by a General Security Agreement and other Loan Documents, and is subject to various financial and non-financial covenants.

On March 12, 2021, the Company managing members entered into an agreement with Greenrose Acquisition Corp, (Greenrose), a special purpose acquisition company, to sell the entity to Greenrose for approximately one hundred million dollars subject to regulatory and stockholder/equity holder’s approval as well as other customary closing conditions.

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THERAPLANT, LLC

Notes to the Consolidated Financial Statements

Years Ended December 31, 2020 and 2019

10. SUBSEQUENT EVENTS (cont.)

On March 14, 2021, the Company received a letter from counsel for four (4) members of the Company (i) requesting information regarding the 2018 issuance of warrants to certain members of management and a consultant of the Company, and (ii) alleging potential claims against the Company, including for breach of fiduciary duty, fraudulent misrepresentation and omissions, and potentially breach of the Company’s operating agreement. The Company is preparing a written response and no claims have been filed.

With respect to the foregoing matter, because the Company has not concluded that the likelihood of an unfavorable outcome is either “probable” or “remote”, the Company expresses no opinion as to the likely outcome of such matter. Furthermore, the Company is unable to provide an estimate of the amount or range of potential loss if the outcome of pending or overtly threatened litigation, claims or assessments should be unfavorable.

Subsequent events have been evaluated through May 18, 2021, which is the date these consolidated financial statements were available to be issued.

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THERAPLANT, LLC
Consolidated Balance Sheets
September 30, 2021 and December 31, 2020

 

September 30, 2021

 

December 31, 2020

  

(Unaudited)

  

ASSETS

 

 

  

 

 

Current Assets:

 

 

  

 

 

Cash and Cash Equivalents

 

$

3,678,125

 

$

2,263,061

Accounts Receivable, Net

 

 

1,381,115

 

 

1,420,896

Inventories

 

 

3,230,929

 

 

3,298,310

Prepaid Expenses and Other Current Assets

 

 

239,756

 

 

233,221

Total Current Assets

 

 

8,529,925

 

 

7,215,488

Property and Equipment, Net

 

 

12,264,611

 

 

8,073,028

TOTAL ASSETS

 

$

20,794,536

 

$

15,288,516

  

 

  

 

 

LIABILITIES AND MEMBERS’ EQUITY

 

 

  

 

 
  

 

  

 

 

LIABILITIES

 

 

  

 

 

Current Liabilities:

 

 

  

 

 

Accounts Payable and Accrued Liabilities

 

$

1,494,426

 

$

1,349,285

Current Portion of Notes Payable

 

 

216,676

 

 

68,674

Distributions Payable to Members

 

 

 

 

169,782

Total Current Liabilities

 

 

1,711,102

 

 

1,587,741

Deferred Tax Liabilities

 

 

58,000

 

 

57,500

Note Payables, Net of Current Portion

 

 

5,147,027

 

 

1,686,182

TOTAL LIABILITIES

 

 

6,916,129

 

 

3,331,423

Commitments and Contingencies

 

 

  

 

 

TOTAL MEMBERS’ EQUITY

 

 

13,878,407

 

 

11,957,093

TOTAL LIABILITIES AND MEMBERS’ EQUITY

 

$

20,794,536

 

$

15,288,516

The Accompanying Notes are an Integral Part of These Unaudited Consolidated Financial Statements.

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THERAPLANT, LLC
Unaudited Consolidated Statements of Operations
Three and Nine Months Ended September 30, 2021 and 2020

 

For the Three Months Ended

 

For the Nine Months Ended

  

September 30, 2021

 

September 30, 2020

 

September 30, 2021

 

September 30, 2020

Revenues, net of discounts

 

$

6,235,744

 

 

$

7,366,062

 

 

$

19,955,892

 

 

$

21,344,457

 

Cost and expenses from operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs of goods sold (excluding depreciation)

 

 

2,001,181

 

 

 

2,469,397

 

 

 

6,420,529

 

 

 

6,881,485

 

Selling and Marketing

 

 

12,004

 

 

 

116,148

 

 

 

198,159

 

 

 

256,353

 

General, and Administrative

 

 

853,002

 

 

 

532,961

 

 

 

2,850,983

 

 

 

1,972,998

 

Depreciation

 

 

204,805

 

 

 

199,105

 

 

 

606,780

 

 

 

597,314

 

Total costs and expenses

 

 

3,070,992

 

 

 

3,317,611

 

 

 

10,076,451

 

 

 

9,708,150

 

Income from operations

 

 

3,164,752

 

 

 

4,048,451

 

 

 

9,879,441

 

 

 

11,636,307

 

Other Income (Expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense, net

 

 

(62,491

)

 

 

(25,987

)

 

 

(145,652

)

 

 

(78,263

)

Total Other Income (Expense)

 

 

(62,491

)

 

 

(25,987

)

 

 

(145,652

)

 

 

(78,263

)

Income Before Provision for Income Taxes

 

 

3,102,261

 

 

 

4,022,464

 

 

 

9,733,789

 

 

 

11,558,044

 

Provision for Income Taxes

 

 

(262,625

)

 

 

(286,125

)

 

 

(812,475

)

 

 

(889,500

)

Net Income

 

$

2,839,636

 

 

$

3,736,339

 

 

$

8,921,314

 

 

$

10,668,544

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income per share – basic and diluted – attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Angel Founder Units

 

$

13.73

 

 

$

18.07

 

 

$

43.15

 

 

$

29.93

 

Series A Units

 

 

13.73

 

 

 

18.07

 

 

 

43.15

 

 

 

139.07

 

Series R Units

 

 

13.73

 

 

 

18.07

 

 

 

43.15

 

 

 

26.48

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares – basic and diluted – attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Angel Founder Units

 

 

110,000

 

 

 

110,000

 

 

 

110,000

 

 

 

110,000

 

Series A Units

 

 

42,761

 

 

 

42,761

 

 

 

42,761

 

 

 

42,761

 

Series R Units

 

 

54,000

 

 

 

54,000

 

 

 

54,000

 

 

 

54,000

 

The Accompanying Notes are an Integral Part of These Unaudited Consolidated Financial Statements.

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THERAPLANT, LLC
Unaudited Consolidated Statements of Changes in Members’ Equity
Nine Months Ended September 30, 2021 and 2020

 

Total

Balance, December 31, 2020

 

$

11,957,093

 

Distributions to Members

 

 

(7,000,000

)

Net Income

 

 

8,921,314

 

Balance, September 30, 2021

 

$

13,878,407

 

Balance, December 31, 2019

 

$

12,762,403

 

Distributions to Members

 

 

(8,449,238

)

Warrants Exercised for Cash

 

 

54,000

 

Net Income

 

 

10,668,544

 

Balance, September 30, 2020

 

$

15,035,709

 

The Accompanying Notes are an Integral Part of These Unaudited Consolidated Financial Statements.

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THERAPLANT, LLC
Unaudited Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2021 and 2020

 

September 30, 2021

 

September 30, 2020

CASH FLOW FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net income

 

$

8,921,314

 

 

$

10,668,544

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

606,780

 

 

 

597,314

 

Deferred tax liabilities

 

 

500

 

 

 

5,250

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

39,781

 

 

 

(140,973

)

Inventories

 

 

67,381

 

 

 

523,782

 

Prepaid expenses and other current assets

 

 

(6,535

)

 

 

(72,982

)

Accounts payable and accrued liabilities

 

 

145,141

 

 

 

827,399

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

 

9,774,362

 

 

 

12,408,334

 

CASH FLOW FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(4,798,363

)

 

 

(480,370

)

NET CASH USED IN INVESTING ACTIVITIES

 

 

(4,798,363

)

 

 

(480,370

)

CASH FLOW FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Proceeds from notes payable, net of loan fees

 

 

3,696,230

 

 

 

 

Distributions to members

 

 

(7,169,782

)

 

 

(12,931,213

)

Warrants exercised for cash

 

 

 

 

 

54,000

 

Principal repayments of notes payable

 

 

(87,383

)

 

 

(46,489

)

NET CASH USED IN FINANCING ACTIVITIES

 

 

(3,560,935

)

 

 

(12,923,702

)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS

 

 

1,415,064

 

 

 

(995,738

)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

 

 

2,263,061

 

 

 

7,185,250

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

 

$

3,678,125

 

 

$

6,189,512

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

 

 

 

 

 

 

 

 

Interest paid

 

$

135,242

 

 

$

76,673

 

Distributions To Members

 

 

 

 

 

 

 

 

Accrued distributions as of December 31, 2020 and 2019

 

$

169,782

 

 

$

4,704,197

 

Distribution to members, September 30, 2021 and 2020

 

 

7,000,000

 

 

 

8,449,238

 

Accrued distributions as of September 30, 2021 and 2020

 

 

 

 

 

(222,222

)

Cash distributions to members

 

$

7,169,782

 

 

$

12,931,213

 

The Accompanying Notes are an Integral Part of These Unaudited Consolidated Financial Statements.

F-97

Table of Contents

THERAPLANT, LLC
Notes to Consolidated Financial Statements

1. NATURE OF OPERATIONS

Theraplant, LLC, (the “Company”) is a licensed producer of medical cannabis in Connecticut pursuant to the provisions of the State of Connecticut, Department of Consumer Protection rules & regulations. The Company received its license from the State of Connecticut Department of Consumer Protection on February 7, 2014.

The Company has one wholly-owned subsidiary, TPT Holdings, LLC. TPT Holdings, LLC, has not had any activity since inception other than its singular purpose of holding units (0.78% ownership) in Leafline Industries, LLC.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

The accompanying unaudited consolidated financial statements have been presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and reflect the accounts and operations of the Company. The accompanying financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2020. Results for the nine months ended September 30, 2021 are not necessarily an indication of the results that may be expected for the full year ending December 31, 2021.

In March 2020, the World Health Organization declared the coronavirus (COVID-19) a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, customers, economies, and financial markets globally, potentially leading to an economic downturn. It has also disrupted the normal operations of many businesses, including those of the Company. This outbreak could decrease spending, adversely affect demand for the Company’s product and harm the Company’s business and results of operations. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on its business or results of operations at this prospectus)time.

(b) Basis of Consolidation

The accompanying consolidated financial statements include the accounts of Theraplant, LLC, and its wholly-owned subsidiary, TPT Holdings, LLC. TPT Holdings, LLC is fully consolidated and will continue to be consolidated until the date when such control ceases. The financial statements of TPT Holdings, LLC is prepared for the same reporting period as the Company. All intercompany balances and transactions are eliminated.

(c) Cash and Cash Equivalents

Cash and Cash Equivalents include cash deposits in financial institutions and other deposits that are readily convertible to cash. However, these deposits in the financial institutions are not covered by FDIC Insurance.

(d) Income Taxes

The Company’s Members have elected to have the Company treated as a partnership for federal income tax purposes. As such, all the Company’s items of income, loss, deduction, and credit are passed through to, and reported by the Company’s Members in computing their own taxable income.

The State of Connecticut imposes a 6.99% pass through income based tax on partnership earnings, resulting in the applicability of ASC 740.

The Company has computed its provision for income taxes under the discrete method which treats the year-to-date period as if it were the annual period and determines the income tax expense or benefit on that basis. The discrete method is applied when application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. We believe that, at this time, the use of this discrete method is more appropriate than the annual effective tax rate method as the estimated annual effective tax rate method is not reliable due to the high degree of uncertainty in estimating annual pre-tax income due to the early growth stage of the business.

F-98

Table of Contents

THERAPLANT, LLC
Notes to Consolidated Financial Statements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

As the Company operates in the cannabis industry, it is subject to the limits of IRC Section 280E under which the Company is only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E.

State income tax expense for the three months ended September 30, 2021 and 2020 is $262,625 and $286,125, respectively. State income tax expenses for the nine months ended September 30, 2021 and 2020 is $812,475 and $889,500, respectively. State tax payable/(prepaid) included in “Accounts Payable and Accrued Expenses” on the consolidated balance sheets as of September 30, 2021 and December 31, 2020 is ($22,979) and $209,046, respectively.

The deferred tax amounts relate to temporary differences between federal and state depreciation regulations. The deferred tax liabilities on the consolidated balance sheets as of September 30, 2021 and December 31, 2020, are $58,000 and $57,500, respectively.

(e) Revenue Recognition

On January 1, 2020, the Company adopted Financial Accounting Standards Board (“FASB”) Audit Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” and all the related amendments, which are also codified into Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers”.

Through application of this standard, the Company recognizes revenue to depict the transfer of promised goods or services to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

In order to recognize revenue under ASC 606, the Company applies the following five (5) steps:

1.      Identify a customer along with a corresponding contract;

2.      Identify the performance obligation(s) in the contract to transfer goods or provide distinct services to a customer;

3.      Determine the transaction price the Company expects to be entitled to in exchange for transferring promised goods or services to a customer;

4.      Allocate the transaction price to the performance obligation(s) in the contract;

5.      Recognize revenue when or as the Company satisfies the performance obligation(s).

Revenues is generally recognized at a point in time when control over goods have been transferred to the customer and is recorded net of sales discounts. Payment is typically due upon transferring the goods to the customer or within a specified time period permitted under the Company’s policy.

The Company’s policy is not to offer returns and credits on products sold.

(f) Net Income Per Unit

The Company follows the two-class method when computing net income per unit as the Company has issued units that meet the definition of participating securities. The two-class method determines net income per unit for each class of Angel Founder Units, Series A and Series R Units and Service units according to distributions declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to the Angel Founder Units, Series A Units and Series R Units for the period to be allocated between the Angel Founder Units, Series R Units, and Series A Units based upon their respective ownership rights. To share in undistributed earnings as if all income for the period had been distributed.

Basic net income per unit attributable to Angel Founder Units, Series A Units and Series R Units is computed by dividing net income attributable to those units by the respective weighted-average number of units outstanding for the period. Diluted net income per unit attributable to Angel Founder Units, Series A and Series R Units is computed

F-99

Table of Contents

THERAPLANT, LLC
Notes to Consolidated Financial Statements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

by adjusting net income attributable to Angel Founder Units, Series A Units and Series R Units to consider reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net income per unit attributable to Angel Founder Units, Series A Units and Series R Units is computed by dividing the diluted net income attributable to the respective unit class by the weighted-average number of units outstanding for the period, including potentially dilutive units. For purposes of this calculation, the Company’s outstanding warrants are considered potentially dilutive Series R Units.

The Company’s Series A Units contractually entitle the holders of such securities to participate in distributions limited to their original investment plus 35%. Once the Series A Units have been repaid their investment plus a 35% return, they share based on their ownership percentage with the Angel Founder Units and Series R Units, respectively. The Company completed the repayment of the Series A Unit holders’ original investment plus 35% return during 2020.

(g) Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future, actual results ultimately may differ from the estimates and those differences could be material.

(h) Recently Issued But Not Yet Adopted Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04 (ASU), Reference Rate Reform (Topic 848) (“ASC 848”), this standard provides optional guidance for a limited period of time to ease the potential burden in accounting for the effects of reference rate reform on financial reporting. Reference rates are widely used in a broad range of financial instruments and other agreements. In response to concerns about structural risks of interbank offered rates, regulators in several jurisdictions around the world have undertaken efforts generally referred to as reference rate reform, to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. As a result of the reference rate reform initiative, certain widely used reference rates are expected to be discontinued. The ASU can be adopted no later than December 31, 2022 with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance.

(i) Reclassification

Certain prior year/period amounts have been reclassified for consistency with the current period presentation.

(j) Segment Reporting

Operating segments are identified as components of an enterprise where separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assess performance. The Company operates as a single segment which is its only reportable segment: the production and sale of cannabis products. The Company has determined that its Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer, and the CODM makes decisions based on the Company as a whole.

3. INVENTORIES

At September 30, 2021 and December 31, 2020, the Company’s inventories consisted of the following:

 

September 30, 2021

 

December 31, 2020

Raw materials, packaging supplies and consumables

 

$

722,234

 

$

666,516

Work In process

 

 

2,025,516

 

 

2,131,736

Finished goods

 

 

483,179

 

 

500,058

Total Inventories

 

$

3,230,929

 

$

3,298,310

F-100

Table of Contents

THERAPLANT, LLC
Notes to Consolidated Financial Statements

4. PROPERTY AND EQUIPMENT

At September 30, 2021 and December 31, 2020, the Company’s property and equipment consisted of the following:

 

September 30, 2021

 

December 31, 2020

Land

 

$

488,193

 

 

$

488,193

 

Land Improvements

 

 

356,628

 

 

 

356,628

 

Buildings and Improvements

 

 

10,900,006

 

 

 

6,612,492

 

Furniture and Fixtures

 

 

460,561

 

 

 

180,155

 

Computer Equipment and Software

 

 

81,492

 

 

 

74,448

 

Vehicles

 

 

131,466

 

 

 

100,473

 

Production and Processing Equipment

 

 

5,048,918

 

 

 

4,856,512

 

Total Property and Equipment, Gross

 

 

17,467,264

 

 

 

12,668,901

 

Less accumulated depreciation

 

 

(5,202,653

)

 

 

(4,595,873

)

Property and Equipment, Net

 

$

12,264,611

 

 

$

8,073,028

 

Depreciation expense for the three months ended September 30, 2021 and 2020 totaled $204,805 and $199,105, respectively. Depreciation expense for the nine months ended September 30, 2021 and 2020 totaled $606,780 and $597,314, respectively.

5. NOTES PAYABLE

At September 30, 2021 and December 31, 2020, notes payable consisted of the following:

 

September 30, 2021

 

December 31, 2020

Promissory note dated March 31, 2017, in the original amount of $2,000,000, which matures April 1, 2027. Principal and interest (compute at 5.5% per annum) payments of $13,849 are due monthly through March 2022. On April 1, 2022, the interest rate adjusts to equal 3% above the Federal Home Loan Bank of Boston “Classic Advance Rate” for 5 years, however, monthly payments of principal and interest may not be less than $13,849 through April 1, 2027, upon which date the unpaid principal amount is due.

 

$

1,727,597

 

 

$

1,778,725

 

Construction loan dated February 22, 2021, provides for borrowing up to $4,360,000, which matures on February 1, 2032. The note shall bear interest through January 31, 2027, at a rate of 6.875% per annum, adjusting to 3% above the Federal Home Loan Bank of Boston “Classic Advance Rate” on February 1, 2027 for the duration of the loan, with a “floor interest rate” of 5.5%.

 

 

3,287,961

 

 

 

 

Commercial term loan dated February 22, 2021, in the original amount of $550,000, which matures on March 1, 2026. The note shall bear interest for the entire term of the loan at a rate of 6.875% per annum. The commercial term note is secured by a General Security Agreement and other Loan Documents and is subject to various financial and non-financial covenants.

 

 

503,335

 

 

 

 

Total Notes Payable

 

$

5,518,893

 

 

$

1,778,725

 

Less deferred loan finance costs

 

 

(155,190

)

 

 

(23,869

)

Less current portion

 

 

(216,676

)

 

 

(68,674

)

Note Payables, Net of Current Portion

 

$

5,147,027

 

 

$

1,686,182

 

F-101

Table of Contents

THERAPLANT, LLC
Notes to Consolidated Financial Statements

5. NOTES PAYABLE (cont.)

The aggregate annual principal maturities of debt as of September 30, 2021 and December 31, 2020 for the next five years and thereafter are as follows:

2022

 

$

216,676

 

$

68,674

2023

 

 

264,475

 

 

72,606

2024

 

 

282,205

 

 

76,763

2025

 

 

301,133

 

 

81,159

2026

 

 

253,193

 

 

85,805

Thereafter

 

 

4,201,211

 

 

1,393,718

  

$

5,518,893

 

$

1,778,725

6. MEMBERS’ EQUITY

The Company’s operating agreement provides for the issuance of Angel Founders Units, Series A Units, Series R Units and Service Units.

The Angel Founders Units, Series A Units and Series R Units have voting rights, whereas the Service Units are non-voting.

The operating agreement allows for Managing Members to make periodic distributions to Members in connection with taxable income allocated to Members for income tax purposes multiplied by the top individual income tax rate at the time of the distribution (“Tax Distributions”). Other distributions, as approved by Managing Members, are based on each Members’ unit percentage interest. Distributions to Angel Founder Members were subordinated to a return of the Series A Members value of their capital interests at the time of the issuance of the Series R Units. The Series A Preferred Members had a preference on distributions (“Preferred Distributions”) totaling 90% of any distributions until they received their initial investment plus an additional 35%. Only Angel Founder Members were entitled to the 10% distribution until the Series A Members were paid off. Once the Series A Members have received their initial investment plus the 35%, all dealersdistributions going forward are paid pro-rata amongst all units.

The Company issued 110,000 Angel Founder Units, and 42,761 Series A Units during 2013. On September 17, 2018, the Company issued 54,000 Series R Warrants. On January 7, 2020, 29,000 Series R Warrants were exercised, and on March 12, 2020, the remaining 25,000 Series R Warrants were exercised, resulting in 54,000 Series R Units being issued in exchange for the warrants. As of September 30, 2021 and December 31, 2020, the Company has issued and outstanding 110,000 of Angel Founder Units, 54,000 of Series R Units, and 42,761 of Series A Units. Except for Tax Distributions and Preferred Distributions as discussed above, distributions are to be made to Members in proportion to their respective Percentage Interests as of the time of such distribution.

All Service units are intended to constitute profit interests for U.S. federal income tax purposes. As of September 30, 2021, and December 31, 2020, no Service Units have been issued.

7. STOCK-BASED COMPENSATION

On September 17, 2018, the Company issued 54,000 warrants to various members of management. The warrants vested immediately and had an exercise price of $1 per unit. The fair value of the warrants at the time of issuance was determined to be $1,921,860. As the warrants vested immediately, the Company recorded stock-based compensation of $1,921,860 on the date of issuance. During the nine months ended September 30, 2020, the warrant holders exercised their options resulting in the Company issuing 54,000 Series R Units to the warrant holders (see Note 6).

F-102

Table of Contents

THERAPLANT, LLC
Notes to Consolidated Financial Statements

7. STOCK-BASED COMPENSATION (cont.)

The fair value of warrants granted with a fixed exercise price was determined using the Black-Scholes option-pricing model with the following assumptions at the time of grant:

 

Number of
Warrants

 

Weighted
Average
Exercise
Price

Balance, December 31, 2019

 

54,000

 

 

$

1

Granted

 

 

 

 

Exercised

 

(54,000

)

 

$

1

Balance, September 30, 2020

 

 

 

$

Stock price volatility was estimated by using the average historical volatility of comparable companies from a representative peer group of publicly-traded cannabis companies. The expected life represents the period of time that buy,the warrants granted are expected to be outstanding. The risk-free rate was based on United States Treasury zero coupon bond with a remaining term equal to the expected life of the options.

8. COMMITMENTS AND CONTINGENCIES

The Company’s operations are subject to a variety of local and state regulation. Failure to comply with one or more of those regulations could result in fines, restrictions on its operations, or losses of permits that could result in the Company ceasing operations. While management of the Company believes that the Company is in compliance with applicable local and state regulations, medical cannabis regulations continue to evolve and are subject to differing interpretations. As a result, the Company may be subject to regulatory fines, penalties, or restrictions in the future.

On March 14, 2021, the Company received a letter from counsel for four (4) members of the Company (i) requesting information regarding the 2018 issuance of warrants to certain members of management and a consultant of the Company, and (ii) alleging potential claims against the Company, including for breach of fiduciary duty, fraudulent misrepresentation and omissions, and potentially breach of the Company’s operating agreement. The Company, through its legal counsel has responded to two separate information requests and no claims have been filed. Because the Company has not concluded that the likelihood of an unfavorable outcome in either “probable” or “remote,” the Company expresses no opinion as to the likely outcome of such matter. Furthermore, the Company is unable to provide an estimate of the amount or range of potential loss if the outcome of pending or overtly threatened litigation, claims or assessments should be unfavorable.

From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. At September 30, 2021 and December 31, 2020, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s consolidated operations. There are also no proceedings in which any of the Company’s Managing Members or affiliates is an adverse party or has a material interest adverse to the Company’s interest.

On March 12, 2021, the Company entered into a definitive agreement with Greenrose Acquisition Corp, (Greenrose), a special purpose acquisition company, to sell or trade our100% of its equity to Greenrose for approximately one hundred million dollars and assumption of its debt, subject to regulatory and stockholder/equity holder’s approval as well as other customary closing conditions.

On August 10, 2021, the Company agreed to an amendment of the original agreement with the Acquirer. The amendment provides for $50,000,000 of additional consideration, in the form of common stock whether or not participating in this offering, may be required to deliver a prospectus.of the Acquirer, valued at $10 per share. This additional consideration is in addition to the dealers’$100,000,000 of cash consideration provided for in the original agreement. The Company also agreed to extend the date on which either party can terminate the definitive agreement from August 13, 2021 to November 30, 2021.

F-103

Table of Contents

THERAPLANT, LLC
Notes to Consolidated Financial Statements

9. NET INCOME PER SHARE

Basic and diluted net income per share attributable to members was calculated as follows:

 

Three Months Ended September 30,

  

2021

 

2020

  

Angel Founder Units

 

Series A Units

 

Series R Units

 

Angel Founder Units

 

Series A Units

 

Series R Units

Net income allocation

 

$

1,510,729

 

$

587,276

 

$

741,631

 

$

1,987,789

 

$

772,726

 

$

975,823

Weighted average units – basic

 

 

110,000

 

 

42,761

 

 

54,000

 

 

110,000

 

 

42,761

 

 

54,000

Weighted average units – diluted

 

 

110,000

 

 

42,761

 

 

54,000

 

 

110,000

 

 

42,761

 

 

54,000

Earnings per unit – basic

 

$

13.73

 

$

13.73

 

$

13.73

 

$

18.07

 

$

18.07

 

$

18.07

Earnings per unit – diluted

 

 

13.73

 

 

13.73

 

 

13.73

 

 

18.07

 

 

18.07

 

 

18.07

 

Nine Months Ended September 30,

  

2021

 

2020

  

Angel Founder Units

 

Series A Units

 

Series R Units

 

Angel Founder Units

 

Series A Units

 

Series R Units

Net income allocation

 

$

4,746,275

 

$

1,845,049

 

$

2,329,990

 

$

3,291,789

 

$

5,946,696

 

$

1,430,059

Weighted average units – basic

 

 

110,000

 

 

42,761

 

 

54,000

 

 

110,000

 

 

42,761

 

 

54,000

Weighted average units – diluted

 

 

110,000

 

 

42,761

 

 

54,000

 

 

110,000

 

 

42,761

 

 

54,000

Earnings per unit – basic

 

$

43.15

 

$

43.15

 

$

43.15

 

$

29.93

 

$

139.07

 

$

26.48

Earnings per unit – diluted

 

 

43.15

 

 

43.15

 

 

43.15

 

 

29.93

 

 

139.07

 

 

26.48

10. SUBSEQUENT EVENTS

For the nine months ended September 30, 2021, the Company has evaluated subsequent events for potential recognition and disclosures through the date the consolidated financial statements were available to be issued and no material subsequent events were identified.

F-104

Table of Contents

Independent Auditor’s Report

Management and Those Charged with Governance
True Harvest, LLC
Phoenix, Arizona

Report on the Financial Statements

We have audited the accompanying financial statements of True Harvest, LLC (the “Company”), which comprise the balance sheets as of December 31, 2020 and 2019, and the related statements of operations, changes in members’ deficit, and cash flows for the years then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

/s/ Macias Gini & O’Connell LLP

San Diego, California
April 5, 2021

F-105

Table of Contents

TRUE HARVEST, LLC

Balance Sheets
As of December
31, 2020 and 2019

 

2020

 

2019

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

$

447,455

 

 

$

49,833

 

Restricted Cash

 

 

200,000

 

 

 

200,000

 

Accounts Receivable

 

 

267,577

 

 

 

190,322

 

Inventories

 

 

1,401,779

 

 

 

1,675,239

 

Other Current Assets

 

 

141,688

 

 

 

11,664

 

Total Current Assets

 

 

2,458,499

 

 

 

2,127,058

 

Property and Equipment, Net

 

 

3,335,849

 

 

 

2,547,437

 

Note Receivable from Customer

 

 

85,574

 

 

 

198,428

 

Deposits and Other Assets

 

 

133,347

 

 

 

214,347

 

TOTAL ASSETS

 

$

6,013,269

 

 

$

5,087,270

 

LIABILITIES AND MEMBERS’ DEFICIT

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts Payable

 

$

1,092,508

 

 

$

1,140,963

 

Accrued Liabilities

 

 

851,978

 

 

 

1,756,509

 

Distribution Payable

 

 

37,500

 

 

 

 

Current Portion of Notes Payable

 

 

3,298,842

 

 

 

3,482,331

 

Total Current Liabilities

 

 

5,280,828

 

 

 

6,379,803

 

Long-Term Liabilities

 

 

 

 

 

 

 

 

Notes Payable, Net of Current Portion

 

 

8,042,405

 

 

 

4,896,233

 

Deferred Rent

 

 

533,210

 

 

 

464,163

 

TOTAL LIABILITIES

 

 

13,856,443

 

 

 

11,740,199

 

MEMBERS’ DEFICIT

 

 

(7,843,174

)

 

 

(6,652,929

)

TOTAL LIABILITIES AND MEMBERS’ DEFICIT

 

$

6,013,269

 

 

$

5,087,270

 

The Accompanying Notes Are an Integral Part of These Financial Statements.

F-106

Table of Contents

TRUE HARVEST, LLC
Statements of Operations
Years Ended December 31, 2020 and 2019

 

2020

 

2019

Revenues, Net

 

$

8,036,344

 

 

$

1,281,452

 

Costs and Expenses from Operations:

 

 

 

 

 

 

 

 

Cost of Revenues (Excludes Depreciation)

 

 

5,817,553

 

 

 

2,406,351

 

Selling, General and Administrative

 

 

1,022,046

 

 

 

952,131

 

Depreciation

 

 

541,883

 

 

 

398,182

 

Total Costs and Expenses from Operations

 

 

7,381,482

 

 

 

3,756,664

 

Income (Loss) From Operations

 

 

654,862

 

 

 

(2,475,212

)

Interest Expense

 

 

1,555,835

 

 

 

1,329,989

 

Other Expense, Net

 

 

101,032

 

 

 

1,955

 

Net Loss

 

$

(1,002,005

)

 

$

(3,807,156

)

The Accompanying Notes Are an Integral Part of These Financial Statements.

F-107

Table of Contents

TRUE HARVEST, LLC
Statements of Changes in Members’ Deficit
Years Ended December 31, 2020 and 2019

 

Total

Balance, January 1, 2019

 

$

(3,045,773

)

Conversion of a note to membership interests

 

 

200,000

 

Net loss

 

 

(3,807,156

)

Balance, December 31, 2019

 

 

(6,652,929

)

Distribution to members

 

 

(188,240

)

Net loss

 

 

(1,002,005

)

Balance, December 31, 2020

 

$

(7,843,174

)

The Accompanying Notes Are an Integral Part of These Financial Statements.

F-108

Table of Contents

TRUE HARVEST, LLC
Statements of Cash Flows
Years Ended December 31, 2020 and 2019

 

2020

 

2019

CASH FLOW FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net loss

 

$

(1,002,005

)

 

$

(3,807,156

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

541,883

 

 

 

398,182

 

Loss on disposal of property and equipment

 

 

35,193

 

 

 

57,551

 

Loss on debt forgiveness

 

 

81,000

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(77,255

)

 

 

(190,322

)

Note receivable from customer

 

 

112,854

 

 

 

(198,428

)

Inventories

 

 

273,460

 

 

 

(1,675,239

)

Other current assets

 

 

(130,024

)

 

 

(11,233

)

Other assets

 

 

 

 

 

 

 

Accounts payable

 

 

(48,455

)

 

 

697,290

 

Accrued liabilities

 

 

1,091,671

 

 

 

1,373,265

 

Deferred rent

 

 

69,047

 

 

 

103,529

 

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

 

 

947,369

 

 

 

(3,252,561

)

CASH FLOW FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(1,365,488

)

 

 

(493,025

)

Proceeds from disposition of property and equipment

 

 

 

 

 

2,000

 

NET CASH USED IN INVESTING ACTIVITIES

 

 

(1,365,488

)

 

 

(491,025

)

CASH FLOW FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Distributions to members

 

 

(150,740

)

 

 

 

Proceeds from issuance of notes payable

 

 

1,814,432

 

 

 

3,993,419

 

Principal repayment of notes payable

 

 

(847,951

)

 

 

 

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

 

815,741

 

 

 

3,993,419

 

  

 

 

 

 

 

 

 

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

 

397,622

 

 

 

249,833

 

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

 

 

249,833

 

 

 

 

CASH AND CASH EQUIVALENTS, END OF YEAR

 

$

647,455

 

 

$

249,833

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

 

 

 

 

 

 

 

 

Interest paid

 

$

396,011

 

 

$

1,294

 

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Conversion of a note to membership interests

 

$

 

 

$

200,000

 

Conversion of existing promissory notes and associated accrued interest into new promissory notes

 

$

10,317,044

 

 

$

167,509

 

Distribution declared

 

$

37,500

 

 

$

 

The Accompanying Notes Are an Integral Part of These Financial Statements.

F-109

Table of Contents

TRUE HARVEST, LLC
Notes to the Financial Statements
Years ended December 31, 2020 and 2019

1. NATURE OF OPERATIONS

True Harvest, LLC (the “Company”) is a limited liability company established in 2015 in the State of Arizona. The Company cultivates, manufactures, and sells medical marijuana in the State of Arizona, under a cultivation agreement with a third-party licensor, who has a medical marijuana dispensary registration certificate from Arizona Department of Health Services and is authorized to operate an off-site cultivation facility.

The Company managed and operated a facility located at 4301 W. Buckeye, Phoenix, AZ (the “Facility”) to cultivate and manufacture medical marijuana since its inception, expanding cultivation space within the Facility over time. The Facility is under a ten-year lease since 2017 with a ten-year renewal option. The Facility is the Company’s registered office and headquarters.

On March 25, 2019, Superior Court of Arizona granted the application for the appointment of a receiver, which resulted in a court receivership. On January 9, 2020, Superior Court of Arizona ordered that the receiver is discharged from all obligations, duties and liabilities, if any, owed under the receivership order, upon consideration of the motion to approve discharge of receiver, which ended the court receivership.

2. SIGNIFICANT ACCOUNTING POLICIES

(a)    Basis of Preparation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and reflect the accounts and operations of the Company.

(b)    Cash and Cash Equivalents

Cash and cash equivalents include cash on hands and cash deposits in financial institutions that are readily convertible into cash with original maturities of three months or less.

(c)     Restricted Cash

Restricted cash represents the fund in an escrow account in connection with a litigation. See note 9(b) — Commitment and Contingencies in the financial statements for more detail about the litigation.

(d)    Accounts Receivable

Accounts receivable are recorded net of an allowance for doubtful accounts. The Company estimates the allowance for doubtful accounts based on existing contractual payment terms, actual payment patterns of its customers, individual customer’s circumstances and general economic conditions.

(e)     Inventories

Inventory is primarily comprised of work-in-progress and finished goods. Miscellaneous consumables are expensed. Costs incurred during the growing and production process are capitalized as incurred to the extent that cost is less than net realizable value. These costs include materials, labor and manufacturing overhead used in the growing and production processes.

Net realizable value is determined as the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Cost is determined using the weighted average cost basis. The Company reviews inventory for obsolete, redundant and slow-moving goods and any such inventories are written down to net realizable value.

F-110

Table of Contents

TRUE HARVEST, LLC
Notes to the Financial Statements
Years ended December 31, 2020 and 2019

2. SIGNIFICANT ACCOUNTING POLICIES (cont.)

(f)     Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation and impairment losses. Expenditures that materially increase the life of the assets are capitalized. Ordinary repairs and maintenance are expensed as incurred. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset using the following terms and methods:

Equipment

5 Years

Leasehold Improvements

Shorter of 10 years or lease term

Vehicle

5 Years

The assets’ residual values, useful lives and methods of depreciation are reviewed at each financial year-end and adjusted prospectively, if appropriate. An item of equipment is derecognized upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on de-recognition of the asset, calculated as the difference between the net disposal proceeds and the carrying value of the asset, is included in operations in the year the asset is derecognized.

(g)    Impairment of Long-Lived Assets

The Company evaluates the recoverability of long-lived assets such as property and equipment, whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. Factors which could trigger an impairment review include (i) a significant adverse change in the extent or manner in which long-lived asset or asset group is being used or in its physical condition, (ii) a current period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group, and (iii) a current expectation that, more likely than not, a long-lived asset or asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.

When the Company determines that the carrying value of long-lived assets or asset group may not be recoverable based upon the existence of one or more of the indicators, the assets or asset group are assessed for impairment based on the estimated future undiscounted cash flows expected to result from the use of the asset or asset group and its eventual disposition. If the carrying value of an asset or asset group exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s or asset group’s carrying value over its fair value.

For the years ended December 31, 2020 and 2019, there was no impairment charge related to the Company’s long-lived assets.

(h)    Income Taxes

The Company is a limited liability company with multiple members, which is treated as a partnership for federal and state income tax purposes. Since the Company pass-through all tax attributes to its partners, the Company does not present tax expense, tax payable or deferred taxes in its financial statements.

The Company accounts for the effect of any uncertain tax positions based on a “more likely than not” threshold to the recognition of the tax positions being sustained based on the technical merits of the position under scrutiny by the applicable taxing authority. If a tax position or positions are deemed to result in uncertainties of those positions, the unrecognized tax effect is estimated based on a “cumulative probability assessment” that aggregates the estimated tax liability for uncertain tax positions. The Company is taxed as a pass-through entity as a tax position and has determined that such tax position does not result in an uncertainty requiring recognition.

F-111

Table of Contents

TRUE HARVEST, LLC
Notes to the Financial Statements
Years ended December 31, 2020 and 2019

2. SIGNIFICANT ACCOUNTING POLICIES (cont.)

(i)     Revenue Recognition

On January 1, 2020, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606 Revenue from Contracts with Customers (“ASC 606”) using the modified retrospective method. Under the modified retrospective method, the new standard was applied to new contracts and those that were not completed as of January 1, 2020. The cumulative effect of initially applying ASC 606 was not material as of January 1, 2020.

Through application of the standard, the Company recognizes revenue to depict the transfer of promised goods or services to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

In order to recognize revenue under ASC 606, the Company applies the following five (5) steps:

•        Identify a customer along with a corresponding contract;

•        Identify the performance obligation(s) in the contract to transfer goods or provide distinct services to a customer;

•        Determine the transaction price the Company expects to be entitled to in exchange for transferring promised goods or services to a customer;

•        Allocate the transaction price to the performance obligation(s) in the contract; and

•        Recognize revenue when or as the Company satisfies the performance obligation(s).

Revenues consist of sales of cannabis product, which are recognized at a point in time when control over the goods have been transferred to the customer and is recorded net of sales discounts, if any. Payment is typically due upon transferring the goods to the customer or within a specified time period permitted under the Company’s credit policy.

The cultivation agreement between the Company and a third-party licensor states the Company acts as an agent in the sale of cannabis products. However, economically, the Company effectively controls its products in the process of cultivation, manufacturing and sale. Therefore, the financial statements are prepared as if the Company acts as a principal in the sale and recognized revenue on a gross basis from an accounting perspective.

Revenue is recognized upon the satisfaction of the performance obligation. The Company satisfies its performance obligation upon delivery and acceptance of cannabis products by the customer.

Prior to deliver a prospectusthe adoption of ASC 606, the Company recognized revenue in accordance with ASC Topic 605 Revenue Recognition, when acting as underwritersall the following conditions were satisfied: (1) there was persuasive evidence of an arrangement; (2) the product had been delivered or the services had been provided to the customer; (3) the collection of fees was reasonably assured; and (4) the amount of fees to be paid by the customer was fixed or determinable.

Based on the Company’s assessment, the adoption of this new standard had no impact on the amounts recognized in the financial statements.

Sales discounts were not material during the years ended December 31, 2020 and 2019. The Company experienced very little or no sales return for the years ended December 31, 2020 and 2019.

F-112

Table of Contents

TRUE HARVEST, LLC
Notes to the Financial Statements
Years ended December 31, 2020 and 2019

2. SIGNIFICANT ACCOUNTING POLICIES (cont.)

(j)     Commitments and Contingencies

The Company is subject to lawsuits, investigations and other claims related to employment, commercial and other matters that arise out of operations in the normal course of business. Periodically, the Company reviews the status of each significant matter and assesses the potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable, and the amount can be reliably estimated, such amount is recognized in other liabilities.

Contingent liabilities are measured at management’s best estimate of the expenditure required to settle the obligation at the end of the reporting period and are discounted to present value where the effect is material. The Company performs evaluations to identify onerous contracts and, where applicable, records contingent liabilities for such contracts.

(k)    Concentration of Risk

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and accounts receivable. As of December 31, 2020, the Company’s cash and cash equivalents were maintained by financial institutions in the United States. The Company believes that the financial institutions that hold its cash and cash equivalents are financially sound and, accordingly, minimal credit risk exists with respect to their unsold allotmentsthese instruments. The Company had bank deposit of $446,709 as of December 31, 2020, up to $250,000 of which is covered by Federal Deposit Insurance Corporation insurance.

Accounts receivable relate to receivables from customers located in the United States. Generally, the Company’s accounts receivable settle relatively quickly, and the Company’s historical experience of credit loss was insignificant. As of December 31, 2020, accounts receivable from three customers made up 88% of total accounts receivable. As of December 31, 2019, accounts receivable from three customers made up 96% of total accounts receivable.

Top three customers for the year ended December 31, 2020 and top two customers for the year ended December 31, 2019 accounted for 10% or subscriptions.more of the Company’s revenue. The sales to these top three and top two customers made up 37% and 56% of the Company’s total revenue for the years ended December 31, 2020 and 2019, respectively.

(l)     Fair Value of Financial Instruments

The Company applies fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, the Company considers all related factors of the asset by market participants in which the Company would transact and the market- based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk.

The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 — Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; and

Level 3 — Inputs for the asset or liability that are not based on observable market data.

F-113

Table of Contents

TRUE HARVEST, LLC
Notes to the Financial Statements
Years ended December 31, 2020 and 2019

2. SIGNIFICANT ACCOUNTING POLICIES (cont.)

As of and for the years ended December 31, 2020 and 2019, the Company did not have financial assets or liabilities recognized at fair value on a recurring basis. The Company’s financial assets and liabilities include cash and cash equivalents, accounts receivable, note receivable, accounts payable and notes payable. As of December 31, 2020 and December 31, 2019, the book values of these financial assets and liabilities approximate fair values due to the short-term nature, market pricing, and/or the issue dates’ proximity to the balance sheet dates. There have been no transfers between fair value levels during the years ended December 31, 2020 and 2019.

(m)   Membership Interests

The Company is a limited liability company, owned by multiple members. The membership interest is classified in members’ equity. Contribution from members is recorded as an increase in membership interests. Incremental costs directly attributable to the issuance of membership interests, if any, are recognized as a reduction of membership interests. Distribution to members is recorded as a reduction of members’ equity.

(n)    Significant Accounting Judgments, Estimates and Assumptions

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, and revenue and expenses. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Significant judgments, estimates and assumptions that have the most significant effect on the amounts recognized in the financial statements are as follows:

(i)     Estimated Useful Lives and Impairment of Property and Equipment

Depreciation of property and equipment is recorded on a straight-line basis over their estimated useful lives, which do not exceed the lease term in the case of leasehold improvement. The Company evaluates the recoverability of property and equipment, whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable.

(ii)    Allowance for Uncollectible Accounts

Management determines the allowance for uncollectible receivables by evaluating individual receivable balances, customers’ financial condition and current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded as income when received.

(iii)   Inventory

Inventory is recorded at lower of cost or net realizable value. Net realizable value is determined as the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The Company reviews inventory for obsolete, redundant and slow-moving goods and any such inventories are written down to net realizable value.

F-114

Table of Contents

TRUE HARVEST, LLC
Notes to the Financial Statements
Years ended December 31, 2020 and 2019

2. SIGNIFICANT ACCOUNTING POLICIES (cont.)

(iv)    Loss Contingency

The Company is subject to lawsuits, investigations and other claims related to employment, commercial and other matters that arise out of operations in the normal course of business. If the potential loss from any claim or legal proceeding is considered probable, and the amount can be reliably estimated, such amount is recognized in other liabilities.

(o)    Recent Accounting Pronouncements

(i)     In February 2016, the FASB issued new guidance on the recognition and measurement of leases, ASC 842 Leases. Under this guidance, a lessee recognizes right-of-use assets and lease liabilities on the balance sheet for leases. Lease expenses continue to be recognized on the income statement in a manner similar to current accounting. Additionally, this guidance requires enhanced disclosures regarding the amount, timing, and uncertainty of cash flows arising from leasing arrangements. This new guidance will be effective for the Company for fiscal years beginning after December 15, 2021. The Company is currently evaluating the effect of adopting this guidance on the Company’s financial statements.

(ii)    In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires the measurement of current expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Adoption of ASU 2016-13 will require financial institutions and other organizations to use forward-looking information to better formulate their credit loss estimates. This update will be effective for the Company for fiscal years beginning after December 15, 2022. The Company is currently evaluating the effect of adopting this guidance on the Company’s financial statements.

(iii)   In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230). ASU 2018-13 require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted this guidance on January 1, 2019, which affected the presentation of its cash flow statements.

(iv)    In August 2018, the FASB issued ASU 2018-13, Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820). ASU 2018-13 adds, modifies, and removes certain fair value measurement disclosure requirements. ASU 2018-13 is effective for annual and interim periods beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020, which did not have material impact on the financial statements.

F-115

Table of Contents

TRUE HARVEST, LLC
Notes to the Financial Statements
Years ended December 31, 2020 and 2019

3. REVENUES, ACCOUNT RECEIVABLE, AND NOTE RECEIVABLE FROM CUSTOMER

For the years ended December 31, 2020 and 2019, the Company’s revenues by key product consisted of the following:

 

2020

 

2019

Flower

 

$

6,569,066

 

$

484,188

Trim

 

 

901,503

 

 

72,204

Others*

 

 

565,775

 

 

725,060

Total

 

$

8,036,344

 

$

1,281,452

____________

*        Others include kief, extracts and certain other products.

The Company sells its products to non-profit organization customers in the State of Arizona. Generally, customers pay cash upon delivery, or the payment is due 7~14 days from the delivery date. Accounts receivable arise from the sale of cannabis product on trade credit terms of 7~14 days. The Company recognizes revenue and accounts receivable upon delivery of the product. Therefore, accounts receivable represent the Company’s unconditional right to consideration. The Company does not have contract assets, which represent the Company’s right to consideration in exchange for goods or services, subject to the satisfaction of additional performance obligation. Customers do not pay prior to the delivery of the product. Therefore, the Company does not have any contract liability.

As of December 31, 2020 and 2019, the Company had accounts receivable of $267,577 and $190,322, respectively.

The Company has a note receivable from a third-party customer. In September 2019, the customer suspended the repayment of this promissory note, dated July 3, 2019. On January 30, 2020, the customer entered into a forbearance agreement with the Company and agreed to a revised repayment schedule for the full remaining balance and provided its then current and future equipment and certain other assets as collateral. As of December 31, 2020 and 2019, the Company had note receivable from customer of $85,574 and $198,428, respectively.

At each reporting date, the Company applies its judgment to evaluate the collectability of the accounts receivable and establishes an allowance for doubtful accounts based on existing contractual payment terms, actual payment patterns of its customers and individual customer’s circumstances. As of December 31, 2020 and 2019, the Company determined that an allowance for doubtful accounts was not required. Receivables are written off when it is determined not collectible. No accounts receivable were written off during the years ended December 31, 2020 and 2019.

4. INVENTORIES

The Company’s inventories include the following at December 31, 2020 and 2019:

 

2020

 

2019

Work-in-progress

 

$

1,194,156

 

$

1,506,962

Finished goods

 

 

207,623

 

 

168,277

Total

 

$

1,401,779

 

$

1,675,239

Inventory is written down for any obsolescence, spoilage and excess inventory or when the net realizable value of inventory is less than the carrying value. During the years ended December 31, 2020 and 2019, the Company recorded charges for inventory and inventory-related write downs as a component of cost of sales in the amount of $9,552 and $403,649, respectively.

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Table of Contents

TRUE HARVEST, LLC
Notes to the Financial Statements
Years ended December 31, 2020 and 2019

5. PROPERTY AND EQUIPMENT

At December 31, 2020 and 2019, property and equipment consisted of the following:

 

2020

 

2019

Equipment

 

$

1,279,222

 

 

$

529,710

 

Leasehold improvement

 

 

3,593,406

 

 

 

3,028,458

 

Vehicle

 

 

 

 

 

10,000

 

  

 

4,872,628

 

 

 

3,568,168

 

Less: Accumulated depreciation

 

 

(1,536,779

)

 

 

(1,020,731

)

Property and equipment, net

 

$

3,335,849

 

 

$

2,547,437

 

Depreciation expense for the years ended December 31, 2020 and 2019 totaled $541,884 and $398,182, respectively, which is included in depreciation in the statements of operations. The Company disposed of certain property and equipment in 2020 and 2019 in the course of normal business and recognized a loss of $35,193 and $57,551, respectively, which is reflected in Other Expense, Net in the statements of operations.

6. NOTES PAYABLE

As of December 31, 2020 and December 31, 2019, notes payable consisted of the following:

 

2020

 

2019

Financing from related parties – Certificate debt:

 

 

  

 

 

Three promissory notes dated April 15, 2020, in the aggregate original amount of $3,307,980: monthly payment amount, including interest at 1.0% per month, is calculated based on a percentage of available cash, as defined in the note, and will be made until all principal and interest is paid in full. There is no specified maturity date.

 

$

2,819,214

 

$

Receiver’s certificates of indebtedness at 12.0% interest per year for a loan term of up to 1 year, or as otherwise agreed by lenders and the receiver

 

 

 

 

3,032,067

Subtotal

 

 

2,819,214

 

 

3,032,067

Financing from related parties:

 

 

  

 

 

Three promissory notes dated April 15, 2020, in the aggregate original amount of $6,518,322: monthly payment amount, including interest at 1.25% per month, is calculated based on a percentage of available cash, as defined in the note, and will be made until all principal and interest is paid in full. There is no specified maturity date.

 

 

6,507,072

 

 

One promissory note dated July 20, 2018, in the original amount of $250,000, which matures on September 1, 2021, and two promissory notes dated July 11, 2018, in the aggregate original amount of $2,291,750, which matures on August 1, 2021: scheduled monthly payments, including interest at 1.25% per month. These notes were replaced with new promissory notes issued on April 15, 2020.

 

 

 

 

2,541,750

Line of credit promissory notes

 

 

1,301,963

 

 

2,059,180

Other promissory notes

 

 

36,000

 

 

43,183

Subtotal

 

 

7,845,035

 

 

4,644,113

  

 

  

 

 

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TRUE HARVEST, LLC
Notes to the Financial Statements
Years ended December 31, 2020 and 2019

6. NOTES PAYABLE (cont.)

 

2020

 

2019

Financing from third parties:

 

 

  

 

 

Promissory note dated May 1, 2020, in the original amount of $490,743, which matures on April 15, 2023: scheduled monthly payments, including interest at 1.0% per month

 

 

386,114

 

 

One promissory note dated December 19, 2017, in the original amount of $250,000, and a promissory note dated November 2, 2017, in the original amount of $100,000: scheduled monthly interest only payments at 1.5% per month with a right to convert the unpaid principal and accrued interest to membership interests. These notes were replaced with a new promissory note issued on May 1, 2020.

 

 

 

 

350,000

Promissory note dated May 16, 2018, in the original amount of $200,000, which matures on July 1, 2023: scheduled monthly payment of $3,333. This note is interest free in the absence of default. The Company suspended its payment on this note in connection with a litigation. See note 9 – Commitment and Contingencies.

 

 

167,509

 

 

167,509

Promissory note dated December 31, 2016, in the original amount of $175,000, which matured on June 1, 2019: scheduled monthly payment of $6,250. This note is interest free and 2.0% in the case of late payment. The noteholder agreed to an unspecified extended payment term based on the Company’s liquidity. The note is expected to be fully paid in 2021.

 

 

114,375

 

 

121,875

Other promissory notes

 

 

9,000

 

 

63,000

Subtotal

 

 

676,998

 

 

702,384

Total notes payable

 

 

11,341,247

 

 

8,378,564

Less: Current portion of notes payable

 

 

3,298,842

 

 

3,482,331

Notes payable, net of current portion

 

$

8,042,405

 

$

4,896,233

Financing from Related Parties — Certificate Debt

On March 25, 2019, Superior Court of Arizona granted the application for the appointment of a receiver, which resulted in a court receivership. Under the court receivership, the three members of the Company loaned the Company funds pursuant to one or more receiver’s certificate of indebtedness approved by the Superior Court of Arizona (“Certificate Debt”). The Certificate Debt is collateralized with all of the Company’s right, title and interest in and to all accounts, chattel paper, documents, equipment, fixtures, general intangibles, instruments, inventory, investment property, and letter of credit rights, including then and future personal property of the Company, insurance proceeds and the proceeds from the sale of such personal property.

The terms for repayment of the Certificate Debt are as follows: (i) loan term of up to 1 year, or as otherwise agreed by lenders and the receiver, (ii) on presentation and demand by the lenders, (iii) interest rate of 12% per annum, and (iv) otherwise all due and payable upon, termination or suspension of the receivership, the filing of bankruptcy or liquidation by the receiver of all or substantially all of the property of the Company.

On January 9, 2020, Superior Court of Arizona ordered that the receiver is discharged from all obligations, duties and liabilities, if any, owed under the receivership order, upon consideration of the motion to approve discharge of receiver, which ended the court receivership.

On April 15, 2020, the Company entered into promissory note and security agreements with the three members to memorialize the terms upon which the Company will repay over more extended periods without affecting the nature, character, or priority of the Certificate Debt. Unpaid accrued interest as of April 15, 2020 was added to the principal amount of the new promissory notes.

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TRUE HARVEST, LLC
Notes to the Financial Statements
Years ended December 31, 2020 and 2019

6. NOTES PAYABLE (cont.)

According to the promissory note and security agreements, the amount of monthly payments to service the promissory notes dated April 15, 2020 is determined as 70% of available cash. Available cash is defined in the promissory note and security agreements as cash on hand as of the last day of the month, less operating reserve, less scheduled payments required to be made in the first 10 days of the subsequent month in the course of business, as determined by the management. Such monthly payments will continue until full repayment of principal and interest. The Company may prepay any Certificate Debt at any time without premium or penalty.

Financing from Related Parties

Prior to the receivership, the Company issued promissory notes to certain members of the Company to meet its financing needs. In addition, an immediate family member of a member provided a loan prior to 2019, $36,000 of which was outstanding as of December 31, 2020 and 2019. These borrowings were not part of the Certificate Debt (“Non-Certificate Debt”).

On April 15, 2020, the Company issued three promissory notes to certain members in the aggregate original amount of $6,518,322, which replaced existing Non-Certificate Debt. The amount of monthly payments to service these promissory notes is determined as 15% of available cash. Available cash is defined in the promissory note and security agreements as cash on hand as of the last day of the month, less operating reserve, less scheduled payments required to be made in the first 10 days of the subsequent month in the course of business, as determined by the management. Such monthly payments will continue until full repayment of principal and interest. No collateral was provided in connection with these promissory notes. The Company may prepay these promissory notes at any time without premium or penalty.

In 2020 and 2019, the Company issued line of credit promissory notes to certain member, under which the Company may draw borrowings up to certain amount for a specified period. As of December 31, 2020, the specified period ended, and the Company cannot draw any additional funds under the line of credit promissory notes. As of December 31, 2020 and 2019, the Company had borrowings of $1,301,963 and $2,059,180, respectively. The line of credit promissory notes accrue interest at 1.25% per month and are collateralized with all of the Company’s right, title and interest in and to all accounts, chattel paper, documents, equipment, fixtures, general intangibles, instruments, inventory, investment property, and letter of credit rights, including then and future personal property of the Company, insurance proceeds and the proceeds from the sale of such personal property. The Company may prepay these line of credit promissory notes at any time without premium or penalty.

Financing from Third Parties

The Company issued promissory notes to certain third parties for financing. No collateral was provided in connection with these third-party borrowings, except for a promissory note dated May 16, 2018 in the original amount of $200,000, for which certain member’s equity interest was provided as collateral. The Company may prepay any of these third-party promissory notes at any time without premium or penalty.

Debt Issue Costs, Discount or Premium

All promissory notes were issued at par and no debt issue costs were incurred.

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TRUE HARVEST, LLC
Notes to the Financial Statements
Years ended December 31, 2020 and 2019

6. NOTES PAYABLE (cont.)

Debt Payment

As of December 31, 2020, the estimated principal repayments of the Company’s notes payable were as follows:

2021

 

$

3,298,842

2022

 

 

4,129,715

2023

 

 

3,912,690

Total

 

$

11,341,247

7. MEMBERS’ EQUITY

The Company is a limited liability company, owned by multiple members. The Company’s equity interest is not unitized, and each member owns certain percentage of the membership interest (“percentage interests”). All membership interests have voting rights for any matters upon which members may vote under the Company’s operating agreement. According to the Company’s operating agreement, distributions among the members are determined by the manager based on the member’s percentage interests on a pro rata basis. Each member’s liability for the debts and obligations of the Company is limited as set forth in the Arizona Revised Statutes and other applicable law.

Certain members invested in equity interests to finance certain phase of cultivation space expansion within the Facility. Under the associated membership purchase agreements, those members are entitled to preferred distribution based on a preferred distribution pool, determined by a formula based on revenues from the cannabis product, cultivated in the expanded space within the Facility until such preferred distribution totals the amount of the original investment. After reaching the original investment, members will be entitled solely to distributions as defined in the operating agreement of the Company. The Company has the right to buy back up to 50% of the equity purchased by the members between 12 months and 48 months from the date of the membership purchase agreement at an escalating predetermined price.

The Company had a promissory note issued on November 15, 2017, in the original principal amount of $200,000. The note had scheduled monthly interest payments at 1.5% per month and contained a right to convert the unpaid principal and accrued interest to membership interests. On January 1, 2019, the Company entered into a membership purchase agreement with the note investor, under which the note investor exercised its right to convert unpaid principal amount of $200,000 into voting membership interests. The conversion of the promissory note increased the Company’s membership interests by $200,000 in 2019.

As of December 31, 2020 and 2019, the Company does not have any promissory note outstanding, which contains a right to convert to membership interests.

In 2020, the Company made preference and regular distribution of $113,052 and $37,688, respectively, and decided to make additional preference and regular distribution of $28,125 and $9,375, respectively, in January 2021. Such additional distribution was recorded as Distribution Payable as of December 31, 2020 and was paid in January 2021.

8. RELATED PARTY TRANSACTIONS

Historically, the Company issued promissory notes to members and immediate family members of the Company’s members. See note 6 — Note Payable in the financial statements for detail terms and conditions of such related party transactions.

In 2018, the Company loaned $81,000 to an officer at no interest. Such loan of $81,000 was outstanding as of December 31, 2019, which was included in Deposits and other assets in the balance sheets.

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TRUE HARVEST, LLC
Notes to the Financial Statements
Years ended December 31, 2020 and 2019

9. COMMITMENTS AND CONTINGENCIES

The Company is subject to lawsuits, investigations and other claims related to employment, commercial and other matters that arise out of operations in the normal course of business. Periodically, the Company reviews the status of each significant matter and assesses the potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable, and the amount can be reliably estimated, such amount is recognized in other liabilities.

(a)    Contingencies

The Company’s operations are subject to a variety of local and state regulation. Failure to comply with one or more of those regulations could result in fines, restrictions on its operations, losses of a third- party licensor’s permits or termination of the cultivation agreement with a third-party licensor that could result in the Company ceasing operations in the State of Arizona. While management of the Company believes that the Company is in compliance with applicable local and state regulations at December 31, 2020, medical cannabis regulations continue to evolve and are subject to differing interpretations. As a result, the Company may be subject to regulatory fines, penalties, or restrictions in the future.

(b)    Claims and Litigation

From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. As of December 31, 2020, there are no proceedings in which any of the Company’s directors, officers or affiliates is an adverse party or has a material interest adverse to the Company’s interest. In addition, as of December 31, 2020, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s operations, except for the following:

Copper State Herbal Center, Inc. vs. True Harvest, LLC

The Company maintained a business relationship with Copper State Herbal Center, Inc. (“Copper State”) under an amended consulting services agreement entered into on April 1, 2017. Copper State and the Company have competing claims for breach of the amended consulting services agreement. In addition, the Company sued Copper State for breach of fiduciary duties arising out of Copper State’s failure, as an entity licensed by Arizona Department of Health Services, to protect the medical cannabis products and flowering plants in the Facility leading directly to the Company’s loss of several million dollars in revenue. The Company believes its damages outstrip Copper State’s alleged damages by at least 5:1. Currently, the parties are going through a discovery phase, which is nearing an end. The parties are ordered to participate in alternative dispute resolution by April 23, 2021. A trial date has not been set. Any gain or loss in connection with this litigation is currently not estimable. The Company did not recognize any receivable or liability in connection with the litigation as of December 31, 2020.

In 2019, in connection with the litigation, the Company suspended its payment on the promissory notes dated May 16, 2018 issued to Copper State. Certain member of the Company provided guarantee and all the membership interests of the guarantor member at the time of the issuance was provided as collateral. The promissory note bears no interest. However, upon default, the Company should pay penalty interest at 12% per year, compounded annually, and the lender may demand the repayment of the entire remaining notes payable. The Company recorded penalty interest expense of $21,400 and $11,667 in the years ended December 31, 2020 and 2019, respectively, and the entire remaining principal balance was included in Current Portion of Notes Payable in the balance sheets as of December 31, 2020 and 2019.

Non Profit Patient Center, Inc. vs. True Harvest, LLC

The Company maintained a business relationship with Non Profit Patient Center, Inc. (“NPPC”) since the Company entered into a cultivation service agreement with NPPC on November 5, 2018. In 2019, the Company sued NPPC for breach of contract, breach of the covenant of good faith and fair dealing,

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TRUE HARVEST, LLC
Notes to the Financial Statements
Years ended December 31, 2020 and 2019

9. COMMITMENTS AND CONTINGENCIES (cont.)

fraudulent inducement, negligent misrepresentation, and tortious interference with a business expectancy. These causes of action arose out of NPPC’s failure to abide by the cultivation services agreement with the Company.

On January 9, 2020, a trial court ordered settlement agreement and dismissed all matters. The Company deposited $200,000 in an escrow account for the settlement, included in Restricted Cash in the balance sheets as of December 31, 2020 and 2019. In addition, the Company had a payable of $200,000 for the settlement, included in accounts payable in the balance sheets as of December 31, 2020 and 2019.

On February 10, 2020, NPPC appealed the settlement order. The Court of Appeals dismissed the appeal, because the settlement order was not a final order from which an appeal lies. On February 5, 2021, the Company and its investors have filed a motion to dismiss this action in accordance with the settlement agreement. NPPC suggested that NPPC may appeal an order dismissing the case. Oral argument is set for April 16, 2021.

Rocinante Construction, LLC and PinderNation Electric, LLC vs. True Harvest, LLC

In 2020, True Harvest sued Rocinante Construction, LLC (“Rocinante”) and PinderNation Electric, LLC (“PinderNation”) for construction defects in relation to the electrical and lighting works at certain sections of the Facility, which resulted in losing the use of approximately 25% of the planned lighting in the sections. Rocinante has asserted a counterclaim against the Company for construction fees related to certain phase of construction work. Currently, the parties are going through a discovery phase, but the parties are committed to participate in alternative dispute resolution in 2021. A trial date has not been set. Any gain or loss in connection with this litigation is currently not estimable. The Company did not recognize any receivable or liability in connection with the litigation as of December 31, 2020.

(c)     Non-Cancellable Lease

The Company leased the Facility from a third party since its inception in 2015. The Company entered into a new lease agreement for the Facility in 2017 with a lease term of 10 years. The Company has an option to extend the lease term for a period of 10 years. Lease payments are annually escalated over the lease term and the Company recognizes lease expense on a straight-line basis. The Company recognized operating lease expense of $1,472,009 and $1,432,099 for the years ended December 31, 2020 and 2019, respectively, and recognized deferred rent of $533,210 and $464,163 as of December 31, 2020 and 2019, respectively.

Minimum lease payments of this non-cancellable operating lease as of December 31, 2020 were as follows:

 

2021

 

$

1,219,403

2022

 

 

1,255,986

2023

 

 

1,293,665

2024

 

 

1,332,475

2025

 

 

1,372,449

2026 and Thereafter

 

 

2,620,946

  

$

9,094,924

(d)    Cultivation Agreement

In May 2019, the Company entered into a cultivation agreement with Total Health & Wellness, Inc. (the “Licensor”). The Agreement has an initial term of five-years and will be automatically renewed for successive one-year terms in the absence of either party’s written notice.

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TRUE HARVEST, LLC
Notes to the Financial Statements
Years ended December 31, 2020 and 2019

9. COMMITMENTS AND CONTINGENCIES (cont.)

Under the cultivation agreement, the Company is allowed to operate its facility in compliance with Arizona Medical Marijuana Act and certain other regulations. In return, the Company should pay monthly fees of $40,000 in the first year, which is escalated in each of the following year to reach $50,000 in the fifth year. The Company made prepayment of $200,000 in connection with such monthly fees. In addition, the Company should reimburse the Licensor’s designated compliance officer up to certain amount per month.

10. LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2020, the Company had cumulative members’ deficit of $7,843,174. In 2020, the Company continued to meet its liquidity needs through financing from its members and other related parties, along with the cash generated from operating activities. If management is unsuccessful in its efforts to generate profit and/or to meet its liquidity needs through financing, the Company may not be able to continue as a going concern.

The ability of the Company to continue as a going concern and to meet its obligations will be dependent upon a return to profitable operations and continued generation of positive cash flows. The accompanying financial statements do not reflect any adjustment that might result from the outcome of this uncertainty.

The Company has evaluated subsequent events through April 5, 2021, the date that the financial statements were issued. The following event occurred subsequent to the balance sheet date.

11. SUBSEQUENT EVENTS

Settlement and Mutual Release of Legal Fees

In March 2021, the Company entered into a settlement and mutual releases agreement with an external legal counsel that represented the Company in several litigation related matters several years ago to settle a total outstanding balance of $443,131 in accrued fees and interest by paying cash in the amount of $125,000. The payment was made in March 2021 and the Company recognized a settlement gain for the difference between the amount of recorded liability and the cash payment in fiscal year 2021.

Issuance of a Promissory Note

On January 5, 2021, the Company issued a promissory note to one of its past service providers in the amount of $37,000, which included both principal and interest, to settle existing accounts payable. The note matures in 10 month and may be prepaid at any time without penalty or premium.

Definitive Agreement to Sell the Company’s Business

On March 12, 2021, the Company entered into a definitive agreement with Greenrose Acquisition Corp (the “Acquirer”), a special purpose acquisition company, to sell, assign and transfer substantially all of its assets, liabilities and employees relating to its business (the “Business”) to the Acquirer for a total price of (i) $50.0 million, which consists of an initial cash payment of $21.8 million, a three year secured promissory note of $25.0 million and assumption of certain debt of $3.2 million and (ii) earnout payment of up to $35.0 million based on the Business’ attaining, within 36 months after the closing date, a certain price point per pound of cannabis flower as compared to total flower production, irrespective of the final form in which such flower is sold.

The closing of this agreement is subject to the satisfaction of certain closing conditions in the agreement.

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TRUE HARVEST, LLC

Condensed Balance Sheets (Unaudited)
September 30, 2021 and December 31, 2020

 

September 30, 2021

 

December 31, 2020

  

 

  

 

(See Note 2)

ASSETS

 

 

  

 

 

Current Assets:

 

 

  

 

 

Cash and Cash Equivalents

 

$

1,521,685

 

$

447,455

Restricted Cash

 

 

284,550

 

 

200,000

Accounts Receivable

 

 

423,113

 

 

267,577

Inventories

 

 

2,131,962

 

 

1,401,779

Other Current Assets

 

 

21,688

 

 

141,688

Total Current Assets

 

 

4,382,998

 

 

2,458,499

Property and Equipment, Net

 

 

6,968,013

 

 

3,335,849

Note Receivable from Customer

 

 

 

 

85,574

Deposits and Other Assets

 

 

133,347

 

 

133,347

TOTAL ASSETS

 

$

11,484,358

 

$

6,013,269

LIABILITIES AND MEMBERS’ DEFICIT

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts Payable

 

$

774,228

 

 

$

1,092,508

 

Accrued Liabilities

 

 

1,581,373

 

 

 

851,978

 

Distribution Payable

 

 

127,694

 

 

 

37,500

 

Current Portion of Notes Payable

 

 

5,683,619

 

 

 

3,298,842

 

Total Current Liabilities

 

 

8,166,914

 

 

 

5,280,828

 

Long-Term Liabilities

 

 

 

 

 

 

 

 

Notes Payable, Net of Current Portion

 

 

7,607,653

 

 

 

8,042,405

 

Deferred Rent

 

 

558,358

 

 

 

533,210

 

TOTAL LIABILITIES

 

 

16,332,925

 

 

 

13,856,443

 

MEMBERS’ DEFICIT

 

 

(4,848,567

)

 

 

(7,843,174

)

TOTAL LIABILITIES AND MEMBERS’ DEFICIT

 

$

11,484,358

 

 

$

6,013,269

 

The Accompanying Notes Are an Integral Part of These Financial Statements.

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TRUE HARVEST, LLC
Condensed Statements of Operations (Unaudited)
Nine Months Ended September 30, 2021 and 2020

 

Nine Months Ended September 30,

  

2021

 

2020

Revenues, Net

 

$

12,538,356

 

 

$

5,418,133

 

Costs and Expenses from Operation:

 

 

 

 

 

 

 

 

Cost of Revenues (Excludes Depreciation)

 

 

5,579,420

 

 

 

4,214,417

 

Selling, General and Administrative

 

 

1,802,057

 

 

 

709,995

 

Depreciation

 

 

587,624

 

 

 

364,088

 

Total Costs and Expenses from Operation

 

 

7,969,101

 

 

 

5,288,500

 

Income From Operations

 

 

4,569,255

 

 

 

129,633

 

Interest Expense

 

 

1,330,366

 

 

 

1,177,769

 

Other Expense (Income), Net

 

 

(280,710

)

 

 

15,092

 

Net Income (Loss)

 

$

3,519,599

 

 

$

(1,063,228

)

The Accompanying Notes Are an Integral Part of These Financial Statements.

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TRUE HARVEST, LLC
Condensed Statements of Changes in Members’ Deficit (Unaudited)
Nine Months Ended September 30, 2021 and 2020

 

Total

Balance, January 1, 2020

 

$

(6,652,929

)

Distribution to Members

 

 

(117,749

)

Net Loss

 

 

(1,063,228

)

Balance, September 30, 2020

 

$

(7,833,906

)

Balance, January 1, 2021

 

$

(7,843,174

)

Distribution to Members

 

 

(524,992

)

Net Income

 

 

3,519,599

 

Balance, September 30, 2021

 

$

(4,848,567

)

The Accompanying Notes Are an Integral Part of These Financial Statements.

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TRUE HARVEST, LLC
Condensed Statements of Cash Flows (Unaudited)
Nine Months Ended September 30, 2021 and 2020

 

Nine Months Ended
September 30,

  

2021

 

2020

CASH FLOW FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net income (loss)

 

$

3,519,599

 

 

$

(1,063,228

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

587,624

 

 

 

364,088

 

Loss on disposal of property and equipment

 

 

34,504

 

 

 

35,192

 

Write down of inventory

 

 

32,523

 

 

 

39,623

 

Gain from settlement of certain payable

 

 

(349,159

)

 

 

 

Amortization of debt issuance costs

 

 

37,500

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(155,536

)

 

 

145,099

 

Note receivable from customer

 

 

85,574

 

 

 

88,854

 

Inventories

 

 

(762,706

)

 

 

354,704

 

Other current assets

 

 

120,000

 

 

 

1,664

 

Accounts payable

 

 

30,879

 

 

 

(17,684

)

Accrued liabilities

 

 

765,395

 

 

 

885,815

 

Deferred rent

 

 

25,148

 

 

 

51,786

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

 

3,971,345

 

 

 

885,913

 

CASH FLOW FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(4,261,332

)

 

 

(791,640

)

Disposal of property and equipment

 

 

7,040

 

 

 

 

NET CASH USED IN INVESTING ACTIVITIES

 

 

(4,254,292

)

 

 

(791,640

)

CASH FLOW FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Distributions to members

 

 

(434,798

)

 

 

(92,689

)

Proceeds from issuance of notes payable

 

 

4,341,455

 

 

 

1,004,806

 

Principal repayment of notes payable

 

 

(2,364,930

)

 

 

(702,062

)

Payment of debt issuance costs

 

 

(100,000

)

 

 

 

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

 

 

1,441,727

 

 

 

210,055

 

NET INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

 

 

1,158,780

 

 

 

304,328

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD

 

 

647,455

 

 

 

249,833

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END
OF PERIOD

 

$

1,806,235

 

 

$

554,161

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

 

 

 

 

 

 

 

 

Interest paid

 

$

722,767

 

 

$

255,334

 

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Distribution declared but unpaid

 

$

90,194

 

 

$

25,060

 

Settlement of accounts payable by issuing a promissory note

 

$

36,000

 

 

$

 

Conversion of accrued interest to notes payable

 

$

 

 

$

2,014,202

 

Increase of property and equipment through capitalized interest

 

$

110,301

 

 

$

 

The Accompanying Notes Are an Integral Part of These Financial Statements.

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TRUE HARVEST, LLC
Notes to the Condensed Financial Statements (Unaudited)

1.      NATURE OF OPERATIONS

True Harvest, LLC (the “Company”) is a limited liability company established in 2015 in the State of Arizona. The Company cultivates, manufactures, and sells medical marijuana in the State of Arizona, under a cultivation agreement with a third-party licensor, who has a medical marijuana dispensary registration certificate from Arizona Department of Health Services and is authorized to operate an off-site cultivation facility.

On March 12, 2021, the Company entered into a definitive agreement with Greenrose Acquisition Corp (the “Acquirer”), a special purpose acquisition company, to sell, assign and transfer substantially all of its assets, liabilities and employees relating to its business (the “Business”) to the Acquirer for a total price of

(i) $50.0 million, which consists of an initial cash payment of $21.8 million, a three year secured promissory note of $25.0 million and assumption of certain debt of $3.2 million and (ii) earnout payment of up to $35.0 million based on the Business’ attaining, within 36 months after the closing date, a certain price point per pound of cannabis flower as compared to total flower production, irrespective of the final form in which such flower is sold. The closing of this agreement is subject to the satisfaction of certain closing conditions in the agreement.

On July 2, 2021, the Company entered into an amendment to the agreement with the Acquirer. In the amendment, certain earnout percentage based on the price of flower was adjusted. In addition, hurdle amount was added to the agreement, whereby the purchase price would be adjusted as follows: (i) up to a maximum of $4,700,000 added to the principal amount of the secured promissory note to be issued at closing and (ii) up to a maximum of $1,400,000 of additional debt to be assumed by the Acquirer at closing, in each case, subject to the Company achieving certain revenue targets, as well as the Company having constructed eight grow rooms in a condition ready to accept plants for grow prior to closing, in each case as set forth in the amendment.

2.      SIGNIFICANT ACCOUNTING POLICIES

(a)    Basis of Presentation

The accompanying unaudited condensed interim financial statements of the Company should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2020 and 2019. The accompanying condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information. Accordingly, the accompanying condensed financial statements do not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying condensed interim financial statements reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year.

Note 2, “Significant Accounting Policies”, to the audited financial statements for the year ended December 31, 2020 and 2019 include a discussion of the significant accounting policies and estimates used in the preparation of the Company’s financial statements. There have been no material changes to the Company’s significant accounting policies and estimates during the nine months ended September 30, 2021.

(b)    Significant Accounting Judgements, Estimates and Assumptions

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, and revenue and expenses. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

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TRUE HARVEST, LLC
Notes to the Condensed Financial Statements (Unaudited)

2.      SIGNIFICANT ACCOUNTING POLICIES (cont.)

(c)     Fair Value of Financial Instruments

The Company applies fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, the Company considers all related factors of the asset by market participants in which the Company would transact and the market- based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk.

The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 — Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; and

Level 3 — Inputs for the asset or liability that are not based on observable market data.

As of and for the nine months ended September 30, 2021, the Company did not have financial assets or liabilities recognized at fair value on a recurring basis. The Company’s financial assets and liabilities include cash and cash equivalents, accounts receivable, note receivable, accounts payable, accrued liabilities and notes payable. As of September 30, 2021 and December 31, 2020, the book values of these financial assets and liabilities approximate fair values due to the short- term nature, market pricing, and/or the issue dates’ proximity to the balance sheet dates. There have been no transfers between fair value levels during the nine months ended September 30, 2021.

(d)    Restricted Cash

Restricted cash as of December 31, 2020 represents the fund in an escrow account in connection with a litigation. The fund was used to make a settlement payment in April 2021. See note 9(b)–Commitment and Contingencies in the condensed interim financial statements for more detail about the litigation. Restricted cash as of September 30, 2021 represents the fund in an escrow account, established to pay for construction costs to a vendor.

(e)     Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance on the recognition and measurement of leases, Accounting Standards Codification (“ASC”) Topic 842 Leases. Under this guidance, a lessee recognizes right-of-use assets and lease liabilities on the balance sheet for leases. Lease expenses continue to be recognized on the income statement in a manner similar to current accounting. Additionally, this guidance requires enhanced disclosures regarding the amount, timing, and uncertainty of cash flows arising from leasing arrangements. This new guidance will be effective for the Company for fiscal years beginning after December 15, 2021. The Company is currently evaluating the effect of adopting this guidance on the Company’s financial statements.

In January 2021, the FASB issued an amended guidance on ASC Topic 848 Reference Rate Reform. The amendments in this guidance clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The amendments in this guidance are effective immediately for all entities. The guidance did not have any effect on the Company’s financial statements.

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TRUE HARVEST, LLC
Notes to the Condensed Financial Statements (Unaudited)

3.      REVENUES, ACCOUNT RECEIVABLE, AND NOTE RECEIVABLE FROM CUSTOMER

For the nine months ended September 30, 2021 and 2020, the Company’s revenues by key product consisted of the following:

 

2021

 

2020

Flower

 

$

9,335,104

 

$

4,433,180

Trim

 

 

1,884,653

 

 

575,650

Others(*)

 

 

1,318,599

 

 

409,303

Total

 

$

12,538,356

 

$

5,418,133

____________

(*) Others include kief, extracts and certain other products.

The Company sells its products to non-profit organization customers in the State of Arizona. Generally, customers pay cash upon delivery, or the payment is due 7~14 days from the delivery date. Accounts receivable arise from the sale of cannabis product on trade credit terms of 7~14 days. The Company recognizes revenue and accounts receivable upon delivery of the product. Therefore, accounts receivable represent the Company’s unconditional right to consideration. The Company does not have contract assets, which represent the Company’s right to consideration in exchange for goods or services, subject to the satisfaction of additional performance obligation. Customers do not pay prior to the delivery of the product. Therefore, the Company does not have any contract liability.

As of September 30, 2021 and December 31, 2020, the Company had accounts receivable of $423,113 and $267,577, respectively.

The Company has a note receivable from a third-party customer. In September 2019, the customer suspended the repayment of this promissory note, dated July 3, 2019. On January 30, 2020, the customer entered into a forbearance agreement with the Company and agreed to a revised repayment schedule for the full remaining balance and provided its then current and future equipment and certain other assets as collateral. As of September 30, 2021 and December 31, 2020, the Company had note receivable from customer of $0 and $85,574, respectively.

At each reporting date, the Company applies its judgment to evaluate the collectability of the accounts receivable and establishes an allowance for doubtful accounts based on existing contractual payment terms, actual payment patterns of its customers and individual customer’s circumstances. As of September 30, 2021 and December 31, 2020, the Company determined that an allowance for doubtful accounts was not required. Receivables are written off when it is determined not collectible. No accounts receivable were written off during the nine months ended September 30, 2021 and 2020.

4.      INVENTORIES

The Company’s inventories include the following at September 30, 2021 and December 31, 2020:

 

2021

 

2020

Work-in-progress

 

$

1,159,119

 

$

1,194,156

Finished goods

 

 

972,843

 

 

207,623

Total

 

$

2,131,962

 

$

1,401,779

Inventory is written down for any obsolescence, spoilage and excess inventory or when the net realizable value of inventory is less than the carrying value. During the nine months ended September 30, 2021 and 2020, the Company recorded charges for inventory and inventory-related write downs as a component of cost of revenues in the amount of $32,523 and $39,623, respectively.

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TRUE HARVEST, LLC
Notes to the Condensed Financial Statements (Unaudited)

5.      PROPERTY AND EQUIPMENT

At September 30, 2021 and December 31, 2020, property and equipment consisted of the following:

 

2021

 

2020

Equipment

 

$

2,330,624

 

 

$

1,279,222

 

Leasehold improvement

 

 

4,399,026

 

 

 

3,593,406

 

Construction-in-progress

 

 

2,340,015

 

 

 

 

  

 

9,069,665

 

 

 

4,872,628

 

Less: Accumulated depreciation

 

 

(2,101,652

)

 

 

(1,536,779

)

Property and equipment, net

 

$

6,968,013

 

 

$

3,335,849

 

The Company began the construction of additional grow rooms during the nine months ended September 30, 2021. The construction was primarily financed from the issuance of certain line-of-credit promissory notes. Costs incurred for the construction, including interest expense of $110,301, were capitalized as construction-in-progress during the nine months ended September 30, 2021. Construction-in-progress is not depreciated.

Depreciation expense for the nine months ended September 30, 2021 and 2020 totaled $587,624 and $364,088, respectively, which is included in Depreciation in the condensed interim statements of operations. The Company disposed of certain property and equipment in the nine months ended September 30, 2021 and 2020 in the course of normal business and recognized a loss of $34,504 and $35,192, respectively, which is reflected in Other Expense (Income), Net in the condensed interim statements of operations.

For the nine months ended September 30, 2021 and 2020, there was no impairment charge related to the Company’s long-lived assets.

6.      NOTES PAYABLE

As of September 30, 2021 and December 31, 2020, notes payable consisted of the following:

 

2021

 

2020

Financing from related parties – Certificate debt:

 

 

  

 

 

Three promissory notes dated April 15, 2020, in the aggregate original amount of $3,307,980: monthly payment amount, including interest at 1.0% per month, is calculated based on a percentage of available cash, as defined in the note, and will be made until all principal and interest is paid in full. There is no specified maturity date.

 

$

648,549

 

$

2,819,214

Financing from related parties:

 

 

  

 

 

Three promissory notes dated April 15, 2020, in the aggregate original amount of $6,518,322: monthly payment amount, including interest at 1.25% per month, is calculated based on a percentage of available cash, as defined in the note, and will be made until all principal and interest is paid in full. There is no specified maturity date.

 

 

6,507,072

 

 

6,507,072

Line-of-credit promissory notes

 

 

5,643,418

 

 

1,301,963

Other promissory notes

 

 

18,000

 

 

36,000

Subtotal

 

 

12,168,490

 

 

7,845,035

Financing from third parties:

 

 

  

 

 

Promissory note dated May 1, 2020, in the original amount of $490,743, which matures on April 15, 2023: scheduled monthly payments, including interest at 1.0% per month.

 

 

273,449

 

 

386,114

Promissory note dated May 16, 2018, in the original amount of $200,000, which matures on July 1, 2023: scheduled monthly payment of $3,333. This note is interest free in the absence of default. The Company suspended its payment on this note in connection with a litigation. See note 9 – Commitment and Contingencies.

 

 

167,509

 

 

167,509

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TRUE HARVEST, LLC
Notes to the Condensed Financial Statements (Unaudited)

6.      NOTES PAYABLE (cont.)

 

2021

 

2020

Promissory note dated December 31, 2016, in the original amount of $175,000, which matured on June 1, 2019: scheduled monthly payment of $6,250. This note is interest free and 2.0% in the case of late payment. The noteholder agreed to an unspecified extended payment term based on the Company’s liquidity. The note is expected to be fully paid in 2021.

 

 

79,375

 

 

114,375

Other promissory notes

 

 

16,400

 

 

9,000

Subtotal

 

 

536,733

 

 

676,998

Total notes payable

 

 

13,353,772

 

 

11,341,247

Less: Current portion of notes payable

 

 

5,683,619

 

 

3,298,842

Less: Debt issuance cost and discount

 

 

62,500

 

 

Notes payable, net of current portion

 

$

7,607,653

 

$

8,042,405

On January 1, 2021, the Company issued additional three line-of-credit promissory notes to certain members of the Company, under which the Company could borrow up to total principal amount of $2,500,000 for the build-out of additional cultivation rooms for a period of up to seven months ending July 31, 2021 or at such time as the total amount of the loan has been disbursed. The promissory notes have interest rate of 1.25% per month. There is no repayment requirement until September 1, 2021. The Company should make monthly payments of principal and interest on a fully amortized basis based on a 24-month repayment period beginning September 1, 2021. The principal and interest may be prepaid at any time without penalty or premium. In September 2021, these line-of-credit promissory notes were amended, so that there is no repayment requirement until January 1, 2022.

In June 2021, the three line-of-credit promissory notes were amended to increase the borrowing limit from $2,500,000 to $4,940,000 in aggregate, which can be drawn anytime until October 31, 2021 or at such time as the total amount of the loan has been disbursed. During the nine months ended September 30, 2021, the Company borrowed $4,241,455 in total and repaid $0 under these line-of-credit promissory notes.

While any principal amount remains outstanding and unpaid under these notes, the Company shall not incur additional indebtedness except for (a) accounts payable arising from the Company’s ordinary course of business, unless the holders of such indebtedness expressly agree to subordinate their claims to the notes and (b) other indebtedness in excess of $25,000 unless the Company obtains the note holders’ prior written approval. The notes are collateralized with all of the Company’s right, title and interest in and to all accounts, chattel paper, documents, equipment, fixtures, general intangibles, instruments, inventory, investment property, and letter of credit rights, including then and future personal property of the Company, insurance proceeds and the proceeds from the sale of such personal property.

In addition, during the nine months ended September 30, 2021, the Company borrowed additional $100,000 under the existing two line-of-credit promissory notes issued in 2020. The existing line-of-credit promissory notes were issued to certain members, under which the Company may draw borrowings up to certain amount for a specified period. The line of credit promissory notes accrue interest at 1.25% per month and are collateralized with all of the Company’s right, title and interest in and to all accounts, chattel paper, documents, equipment, fixtures, general intangibles, instruments, inventory, investment property, and letter of credit rights, including then and future personal property of the Company, insurance proceeds and the proceeds from the sale of such personal property. The Company may prepay these line-of-credit promissory notes at any time without premium or penalty. As of September 30, 2021, the Company cannot borrow more under these line-of-credit promissory notes as full principal amount was drawn under these notes.

On January 5, 2021, the Company issued a promissory note to one of its past service providers in the amount of $36,000, which included both principal and interest, to settle existing accounts payable. The note matures in ten months and may be prepaid at any time without penalty or premium. The note is included in Financing from third parties — Other promissory note in the table above and had outstanding principal amount of $7,400 as of September 30, 2021.

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TRUE HARVEST, LLC
Notes to the Condensed Financial Statements (Unaudited)

6.      NOTES PAYABLE (cont.)

Debt Issue Costs, Discount or Premium

In connection with the additional borrowings in the nine months ended September 30, 2021, the Company incurred financing cost of $100,000 payable to the note holder members. The debt issue costs were recognized as a reduction of notes payable and were amortized as interest expense over the contractual term of the related promissory notes.

7.      MEMBERS’ EQUITY

During the nine months ended September 30, 2021, the Company decided to make preference and regular distribution of $393,750 and $131,242, respectively, a portion of which was paid in the nine months ended September 30, 2021. The remaining unpaid amount is presented in Distribution Payable as of September 30, 2021.

8.      RELATED PARTY TRANSACTIONS

Historically, the Company issued promissory notes to members and immediate family members of the Company’s members. See note 6 — Notes Payable in the financial statements for detail terms and conditions of such related party transactions.

9.      COMMITMENTS AND CONTINGENCIES

The Company is subject to lawsuits, investigations and other claims related to employment, commercial and other matters that arise out of operations in the normal course of business. Periodically, the Company reviews the status of each significant matter and assesses the potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable, and the amount can be reliably estimated, such amount is recognized in other liabilities.

(a)    Contingencies

The Company’s operations are subject to a variety of local and state regulation. Failure to comply with one or more of those regulations could result in fines, restrictions on its operations, losses of a third- party licensor’s permits or termination of the cultivation agreement with a third-party licensor that could result in the Company ceasing operations in the State of Arizona. While management of the Company believes that the Company is in compliance with applicable local and state regulations at September 30, 2021, medical cannabis regulations continue to evolve and are subject to differing interpretations. As a result, the Company may be subject to regulatory fines, penalties, or restrictions in the future.

(b)   Claims and Litigation

From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. As of September 30, 2021, there are no proceedings in which any of the Company’s directors, officers or affiliates is an adverse party or has a material interest adverse to the Company’s interest. In addition, as of September 30, 2021, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s operations, except for the following:

Copper State Herbal Center, Inc. vs. True Harvest, LLC

The Company maintained a business relationship with Copper State Herbal Center, Inc. (“Copper State”) under an amended consulting services agreement entered into on April 1, 2017. Copper State and the Company have competing claims for breach of the amended consulting services agreement. In addition, the Company sued Copper State for breach of fiduciary duties arising out of Copper State’s failure, as an entity licensed by Arizona Department of Health Services, to protect the medical cannabis products and flowering plants in the Facility leading directly to the Company’s loss of several million dollars in revenue.

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TRUE HARVEST, LLC
Notes to the Condensed Financial Statements (Unaudited)

9.      COMMITMENTS AND CONTINGENCIES (cont.)

The Company believes its damages outstrip Copper State’s alleged damages by at least 5:1. Currently, the parties are going through a discovery phase, which is nearing an end. A trial date has not been set. Any gain or loss in connection with this litigation is currently not estimable. The Company did not recognize any receivable or liability in connection with the litigation as of September 30, 2021.

(b)   Claims and Litigation

In 2019, in connection with the litigation, the Company suspended its payment on the promissory notes dated May 16, 2018 issued to Copper State. Certain member of the Company provided guarantee and all the membership interests of the guarantor member at the time of the issuance was provided as collateral. The promissory note bears no interest. However, upon default, the Company should pay penalty interest at 12% per year, compounded annually, and the lender may demand the repayment of the entire remaining notes payable. The Company recorded penalty interest expense, and the entire remaining principal balance was included in Current Portion of Notes Payable in the condensed balance sheets as of September 30, 2021 and December 31, 2020.

Non Profit Patient Center, Inc. vs. True Harvest, LLC

The Company maintained a business relationship with Non Profit Patient Center, Inc. (“NPPC”) since the Company entered into a cultivation service agreement with NPPC on November 5, 2018. In 2019, the Company sued NPPC for breach of contract, breach of the covenant of good faith and fair dealing, fraudulent inducement, negligent misrepresentation, and tortious interference with a business expectancy. These causes of action arose out of NPPC’s failure to abide by the cultivation services agreement with the Company.

On January 9, 2020, a trial court ordered settlement agreement and dismissed all matters. The Company deposited $200,000 in an escrow account for the settlement, included in Restricted Cash in the condensed balance sheets as of December 31, 2020. In addition, the Company had a payable of $200,000 for the settlement, included in Accounts Payable in the condensed balance sheets as of December 31, 2020.

On February 10, 2020, NPPC appealed the settlement order. The Court of Appeals dismissed the appeal, because the settlement order was not a final order from which an appeal lies. On February 5, 2021, the Company and its investors have filed a motion to dismiss this action in accordance with the settlement agreement. NPPC suggested that NPPC may appeal an order dismissing the case.

On or about April 16, 2021, the lawsuit was resolved by the entry of a consensual order dismissing the case, with prejudice. The dismissal fulfilled the final terms of the settlement that was reached between the litigants. Since the dismissal was with prejudice, all litigation between the Company and NPPC arising out of their prior contractual relationship should be concluded. Based on this, the Company made the payment of $200,000 and NPPC accepted the settlement payment in April 2021, which reduced the Company’s restricted cash and accounts payable.

Rocinante Construction, LLC and PinderNation Electric, LLC vs. True Harvest, LLC

In 2020, True Harvest sued Rocinante Construction, LLC (“Rocinante”) and PinderNation Electric, LLC (“PinderNation”) for construction defects in relation to the electrical and lighting works at certain sections of the Facility, which resulted in losing the use of approximately 25% of the planned lighting in the sections. Rocinante has asserted a counterclaim against the Company for construction fees related to certain phase of construction work. Currently, the parties are going through a discovery phase, but the parties are committed to participate in alternative dispute resolution in 2021. A trial date has not been set. Any gain or loss in connection with this litigation is currently not estimable. The Company did not recognize any receivable or liability in connection with the litigation as of September 30, 2021.

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TRUE HARVEST, LLC
Notes to the Condensed Financial Statements (Unaudited)

9.      COMMITMENTS AND CONTINGENCIES (cont.)

(c)    Non-Cancellable Lease

The Company leased the Facility from a third party since its inception in 2015. The Company entered into a new lease agreement for the Facility in 2017 with a lease term of 10 years. The Company has an option to extend the lease term for a period of 10 years. Lease payments are annually escalated over the lease term and the Company recognizes lease expense on a straight-line basis. The Company recognized operating lease expense of $1,160,310 and $1,081,943 for the nine months ended September 30, 2021 and 2020, respectively, and recognized deferred rent of $558,358 and $533,210 as of September 30, 2021 and December 31, 2020, respectively.

Minimum lease payments of this non-cancellable operating lease as of September 30, 2021 were as follows:

    

Remaining 2021

 

$

309,401

2022

 

 

1,255,986

2023

 

 

1,293,665

2024

 

 

1,332,475

2025

 

 

1,372,449

2026 and Thereafter

 

 

2,620,946

  

$

8,184,922

(d)   Cultivation Agreement

In May 2019, the Company entered into a cultivation agreement with Total Health & Wellness, Inc. (the “Licensor”). The Agreement has an initial term of five-years and will be automatically renewed for successive one-year terms in the absence of either party’s written notice.

Under the cultivation agreement, the Company is allowed to operate its facility in compliance with Arizona Medical Marijuana Act and certain other regulations. In return, the Company should pay monthly fees of $40,000 in the first year, which is escalated in each of the following year to reach $50,000 in the fifth year. The Company made prepayment of $200,000 in connection with such monthly fees. In addition, the Company should reimburse the Licensor’s designated compliance officer up to certain amount per month.

Certain payments from the Company’s customers are made to a designated bank account of the Licensor, which can be drawn by the Company at any time. As of September 30, 2021 and December 31, 2020, the Company had $1,832 and $1,973 in the designated bank account of the Licensor, respectively. Such amount is included in Other Current Assets in the condensed balance sheet.

(e)    Settlement and Mutual Release Agreement

In March 2021, the Company entered into a settlement and mutual releases agreement with an external legal counsel that represented the Company in several litigation related matters several years ago to settle a total outstanding balance of $443,131 in accrued fees and interest by paying cash in the amount of $125,000. The payment was made in March 2021 and the Company recognized a settlement gain of $318,131 for the difference between the amount of recorded liability and the cash payment, which is included in Other Expense (Income), Net in the condensed interim statements of operations.

In addition, the Company recognized gain of $31,028 from the settlement of certain vendor payable in the nine months ended September 30, 2021.

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TRUE HARVEST, LLC
Notes to the Condensed Financial Statements (Unaudited)

10.    LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2021, the Company had cumulative members’ deficit of $4,848,567. In the nine months ended September 30, 2021, the Company continued to meet its liquidity needs through financing from its members and other related parties, along with the cash generated from operating activities. If management is unsuccessful in its efforts to generate profit and/or to meet its liquidity needs through financing, the Company may not be able to continue as a going concern.

The ability of the Company to continue as a going concern and to meet its obligations will be dependent upon a return to profitable operations and continued generation of positive cash flows. The accompanying financial statements do not reflect any adjustment that might result from the outcome of this uncertainty.

11.    SUBSEQUENT EVENTS

The Company has evaluated subsequent events through November 8, 2021, the date that the condensed interim financial statements were issued.

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The estimated expenses payable by us in connection with the offering described in this registration statement (other than the underwriting discount and commissions) will be as follows:

SEC expenses

 

$

22,391

 

$

3,888.39

FINRA expenses

 

 

26,400

Accounting fees and expenses

 

 

32,500

 

 

120,000

Printing and engraving expenses

 

 

32,500

 

 

25,000

Legal fees and expenses

 

 

250,000

 

 

100,000

Stock exchange listing and filing fees

 

 

75,000

Miscellaneous

 

 

311,209

 

 

5,000

Total

 

$

750,000

 

$

253,888.39

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Our certificate of incorporation provides that all directors, officers, employees and agents of the registrant shall be entitled to be indemnified by us to the fullest extent permitted by Section 145 of the Delaware General Corporation Law.

Section 145 of the Delaware General Corporation Law concerning indemnification of officers, directors, employees and agents is set forth below.

“Section 145. Indemnification of officers, directors, employees and agents; insurance.

(a)     A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.

(b)    A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

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(c)     To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.

(d)    Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.

(e)     Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.

(f)     The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office.

(g)    A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section.

(h)    For purposes of this section, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.

(i)     For purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.

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(j)     The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

(k)    The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation’s obligation to advance expenses (including attorneys’ fees).”

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

Paragraph B of Article Eighth of our certificate of incorporation provides:

“The Corporation, to the full extent permitted by Section 145 of the GCL, as amended from time to time, shall indemnify all persons whom it may indemnify pursuant thereto. Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative, or investigative action, suit or proceeding for which such officer or director may be entitled to indemnification hereunder shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized hereby.”

Pursuant to the Underwriting Agreement filed as Exhibit 1.1 to this Registration Statement, we have agreed to indemnify the Underwriter and the Underwriter has agreed to indemnify us against certain civil liabilities that may be incurred in connection with this offering, including certain liabilities under the Securities Act.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

(a)     During the past three years, we sold the following shares of common stock and warrants without registration under the Securities Act:

Shareholders

 

Number of
Shares

Greenrose Associates LLC

 

4,312,5004,532,500

Imperial Capital, LLC

88,000

I-Bankers Securities, Inc.

22,000

YA II PN, LTD.

500,000

Former equity owners of Theraplant, LLC

5,000,000

True Harvest, LLC

4,430,378

Warrant holders

Number of Warrants

Imperial Capital, LLC

528,000

I-Bankers Securities, Inc.

132,000

Such shares were issued in August 2019 in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act as the shares were sold to an accredited investor. The shares issued were sold for an aggregate offering price of $25,000 at an average purchase price of approximately $0.006 per share.

The Company’s sponsor and Imperial Capital, LLC have also committed that they and/or their designees will purchase 300,000 units at $10.00 per unit and 1,500,000 warrants at $1.00 per warrant (for an aggregate of $4,500,000), or 330,000 units at $10.00 per unit and 1,650,000 warrants at $1.00 per warrant (for an aggregate of $4,950,000) if the underwriter’s option to purchase additional units is exercised in full. This purchase will take place on a private placement basis simultaneously with the consummation of the initial public offering. These issuances will be made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

No underwriting discounts or commissions were paid with respect to such sales.

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ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a)     The following exhibits are filed as part of this Registration Statement:

ExhibitNo.Exhibit No.

 

Description

1.12.1†

 

FormAmendment No. 3 to the Asset Purchase Agreement dated as of Underwriting Agreement.December 31, 2021, by and among True Harvest, LLC, an Arizona limited liability company, Greenrose Acquisition Corp, a Delaware corporation, and True Harvest Holdings, Inc., a Delaware corporation.

1.23.1(1)

 

FormSecond Amended & Restated Certificate of Business Combination Marketing Agreement.*Incorporation.

3.14.1(2)

 

CertificateRegistration Rights Agreement of Incorporation.*Former Equity holders of Theraplant, LLC.

3.24.2(3)

 

Amended and Restated CertificateRegistration Rights Agreement of Incorporation.Imperial Capital, LLC

3.3

Bylaws.*

4.1

Specimen Unit Certificate.

4.2

Specimen Common Stock Certificate.*.

4.3

 

Specimen Warrant Certificate.Registration Rights Agreement of True Harvest, LLC.

4.410.1††

 

Form of WarrantAmendment No. 1 to the Senior Secured Credit Agreement between Continental Stock Transfer & Trustamong the Company, TPT Merger Sub, Theraplant, DXR Finance, LLC as Agent (“Agent”) and the Registrant.

5.1

Opinion of Tarter Krinsky & Drogin LLP.

10.1

Form of Letter Agreement from each of the Registrant’s sponsor, officersDXR-GL HOLDINGS I, LLC, DXR-GL HOLDINGS II, LLC, and directors.

10.2

Form of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant.

10.3

Form of Registration Rights Agreement.

10.4.1

Subscription agreement for private units and private warrants by Greenrose Associates LLC.

10.4.2

Subscription agreement for private units and private warrants by Imperial Capital, LLC.

10.5

Form of Stock Escrow Agreement.

14

Code of Ethics.*DXR-GL HOLDINGS III, LLC as lenders.

23.1

 

Consent of Marcum LLP.

23.2

 

Consent of Tarter KrinskyMacias Gini & DroginO’Connell, LLP (included in Exhibit 5.1)for Theraplant, LLC.

23.3

Consent of Macias Gini & O’Connell, LLP. for True Harvest, LLC.

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Power of Attorney.*

99.1

Audit committee charter.*

99.2

Compensation committee charter.*

99.3

Nominating committee charter.*Attorney (included on signature page).

____________

*        Previously filed.†        Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the SEC upon request.

II-4††      Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the SEC upon request.

1        Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on November 30, 2021

2        Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on August 17, 2021

3        Incorporated by reference to the Company’s Registration Statement on Form S-1 filed with the Commission on January 14, 2021

4        Filed herewith

ITEM 17. UNDERTAKINGS.

(a)     The undersigned registrant hereby undertakes:

(1)    To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

i.       To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

ii.      To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

iii.     To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2)    That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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(3)    To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)    That for the purpose of determining any liability under the Securities Act of 1933 in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)     Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii)    Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii)   The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv)   Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(b)    The undersigned hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

(c)     Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.

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In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(d)    The undersigned registrant hereby undertakes that:

(1)    For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2)    For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fideoffering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Woodbury,Amityville,, New York, on the 314stth day of January, 2020.2022.

 

GREENROSE ACQUISITION CORP.

  

By:

 

/s/ William F. Harley III

  

Name:

 

William F. Harley III

  

Title:

 

Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints William F. Harley III and Scott Cohen his or her true and lawful attorney-in-fact, each with full power of substitution and re-substitution, severally, for him or her and in his or her name, place and stead, in any and all capacities to sign any and all amendments including pre- and post-effective amendments to this registration statement, on Form S-1 any subsequent registration statement for the same offering which may be filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and pre- or post-effective amendments thereto, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This power of attorney may be executed in counterparts.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Name

 

Position

 

Date

/s/ William F. Harley III

 

Chief Executive Officer, Director

 

January31, 2020January 4, 2022

William F. Harley III

 

(Principal Executive Officer)

  

            */s/ Paul Wimer

 

President & Chief OperatingBusiness Officer

 

January31, 2020January 4, 2022

Paul Wimer

    

            */s/ Scott Cohen

 

Chief Financial Officer

 

January31, 2020January 4, 2022

Jeffrey StegnerScott Cohen

 

(Principal Financial and Accounting Officer)

  

            */s/ Daniel Harley

 

Executive Vice President,

 

January31, 2020January 4, 2022

Daniel Harley

 

Business Development, Director

  

            *

Executive Vice President,

January31, 2020

/s/ Brendan Sheehan

Corporate Strategy and Investor Relations, Director

            *

 

Director

 

January31, 2020January 4, 2022

Brendan Sheehan

/s/ Steven Cummings

Director

January 4, 2022

Steven Cummings

    

            */s/ John Falcon

 

Chairman

 

January31, 2020January 4, 2022

John Falcon

    

            */s/ Thomas Megale

 

Director

 

January31, 2020January 4, 2022

Thomas Megale

    

            */s/ John Torrance, III

 

Director

 

January31, 2020January 4, 2022

John Torrance, III

    

____________

*        By William F. Harley III, Power of AttorneyII-6

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