All Figures in USD Unless Stated Otherwise
Not for Distribution to U.S. Newswire Servicers or For Dissemination in the United States
TORONTO–(BUSINESS WIRE)–Halo Labs Inc. (“Halo” or the “Company”) (NEO: HALO, OTCQX: AGEEF, Germany: A9KN) is pleased to announce that, further to its press release dated January 16, 2020, it has signed a definitive agreement to acquire Crimson & Black LLC (“C&B”), a retail management accompany with a long-term contract to provide management services to LKJ11 LLC (“LKJ11”), which is working to open a cannabis dispensary in North Hollywood and is subject to be acquired by the Company.
Pursuant to the press release dated March 2, 2020, Halo entered into a definitive agreement to acquire a controlling interest in LKJ a North Hollywood cannabis dispensary applicant. Halo completed the next important step by signing a definitive agreement to acquire 100% of the outstanding membership interest in LKJ’s retail manager C&B in exchange for 6,432,247 shares of Halo common shares at a deemed price of $0.2332 per share (C$0.3128(1)). This represents $1.5 million of the total $11.5 million acquisition price for both companies as previously announced on January 16, 2020. The Halo common shares for C&B will only be issued upon the completion of two pre-determined performance milestones:
- 3,216,124 Halo common shares when LKJ11 is licensed by all applicable state and local regulatory agencies and the first legal sale of cannabis is made; and
- 3,216,123 Halo common shares when LKJ11 is granted a lease extension for an aggregate of 5 years or a new location lease for a term of at least 5 years from the closing date.
The Halo common shares will be subject to trading restrictions whereby, for one year following their issuance, the aggregate shares sold may not exceed: (a) 10% of the prior trading day’s total volume if the closing price of common shares of Halo is less than C$0.30; or (b) 15% of the prior trading day’s total volume if the closing price of common shares of Halo is greater than or equal to C$0.30.
Crimson & Black LLC
The management agreement with LKJ entitles C&B to 7% of net revenue in exchange for the provision of management services. Further, the acquisition will facilitate the addition of key management team members. Notably, David Cho will be leading the management of the NOLA dispensary. Mr. Cho was formerly the Director of Specialty Retail at Adidas North America where he oversaw all aspects of Adidas’ most complex retail stores and event activations including seven NBA, NHL, and MLS team arena stores, ComplexCon in Long Beach, and 747 Warehouse Street for NBA All-Star Weekend in Los Angeles.
David Cho states, “We are excited for this opportunity to team up with Halo to open a flagship dispensary in Los Angeles. It is a premium location and we believe that the unique fit of skills and experience between the two teams will result in a successful endeavor. We still are moving forward with the originally negotiated deal, despite a market adjustment, because we believe in Halo’s vision as a vertically integrated and global cannabis operator.”
Kiran Sidhu, CEO and Co-Founder of Halo, states, “I am pleased that Halo has closed on the acquisition of Crimson & Black, augmenting Halo’s already blue-chip level management. Appointing an experienced retail management team to our anticipated NOLA dispensary will provide a smooth transition towards verticalization in California. We anticipate that David Cho’s leadership and the Crimson and Black team spearheading build out and operations will set Halo up for success in the Los Angeles dispensary market.”
Halo is a leading cannabis cultivation, manufacturing, and distribution company that grows and extracts and processes quality cannabis flower, oils, and concentrates and has sold over 5 million grams of oils and concentrates since inception. Additionally, Halo has continued to evolve its business through delivering value with its products and now via verticalization in key markets in the United States and Africa with planned expansion into European and Canadian markets. With a consumer-centric focus, Halo markets innovative, branded, and private label products across multiple product categories.
Recently, the Company entered into binding agreements to acquire a dispensary in Los Angeles, 3 KushBar branded dispensaries, 5 development permits in Alberta Canada, and Canmart Limited which holds wholesale distribution and special licenses allowing the import and distribution of cannabis based products for medicinal use (CBPM’s) in the United Kingdom. Halo is led by a strong, diverse management team with deep industry knowledge and blue-chip experience. The Company is currently operating in the United States in California, Oregon, and Nevada while having an international presence in Lesotho within a planned 205-hectare cultivation zone via Bophelo as well as planned importation and distribution in the United Kingdom via Canmart.
For further information regarding Halo, see Halo’s disclosure documents on SEDAR at www.sedar.com.
(1) Based off an exchange rate of 1:1.3415 as presented by the Bank of Canada for March 5, 2020
Cautionary Note Regarding Forward-Looking Information and Statements
This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Halo’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Halo’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. The forward-looking information and forward-looking statements contained herein may include, but is not limited to, statements regarding the acquisition of Crimson & Black.
By identifying such information and statements in this manner, Halo is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, Halo has made certain assumptions. Although Halo believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Halo does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to Halo or persons acting on its behalf is expressly qualified in its entirety by this notice.