Not for Distribution to U.S. Newswire Services or For Dissemination in the United States
Toronto, Ontario – February 19, 2021 – Halo Collective Inc. (“Halo” or the “Company“) (NEO: HALO, OTCQX: HCANF, Germany: A9KN) is pleased to announce the closing of its previously announced overnight marketed public offering (the “Offering“) of units of the Company (the “Units“). In connection with the Offering, the Company issued an aggregate of 65,714,450 Units for aggregate gross proceeds of $11,500,029, which includes the full exercise of the over-allotment option by the Underwriters (as defined below).
The Offering was completed pursuant to an underwriting agreement (the “Underwriting Agreement“) dated February 12, 2021 between the Company and Eight Capital, Canaccord Genuity Corp. and PI Financial Corp. (collectively, the “Underwriters“).
The net proceeds received by the Company from the Offering are intended to be used for raw materials and packaging supplies, the development of Canmart Limited, the development of Bophelo Bioscience & Wellness (Pty) Ltd. and working capital and general corporate purposes.
Each Unit consists of one common share of the Company (each, a “Unit Share“) and one common share purchase warrant of the Company (each, a “Warrant“). Each Warrant entitles the holder thereof to purchase one common share of the Company at an exercise price of $0.225 at any time up to 36 months following closing of the Offering. The Warrants were issued pursuant to, and are governed by, the terms of a warrant indenture dated February 19, 2021 (the “Warrant Indenture“) between the Company and Odyssey Trust Company.
Pursuant to the terms of the Underwriting Agreement, the Company paid the Underwriters a cash commission equal to 7.0% of the gross proceeds of the Offering. As additional consideration for the services rendered in connection with the Offering, the Company issued to the Underwriters 4,600,011 compensation options to purchase up to 4,600,011 Units at an exercise price of $0.175 per Unit at any time up to 36 months following closing of the Offering.
The Warrants have been conditionally approved for listing on the Neo Exchange Inc. and are expected to commence trading following the closing, subject to the satisfaction of all listing conditions.
Neither the Units nor the Unit Shares and the Warrants comprising the Units have been or will be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“), or any state securities laws, and such securities may therefore not be offered or sold in the United States or to or for the account or benefit of a person in the United States or a U.S. Person (as defined in Regulation S of the U.S. Securities Act) absent registration or an exemption from the registration requirements.
The Offering is considered a “related party transaction” for the purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“), as a director of the Company subscribed for 91,500 Units pursuant to the Offering. The Company is relying on exemptions from the formal valuation and minority shareholder approval requirements available under MI 61-101. The Company is exempt from the formal valuation requirement in section 5.4 and the minority shareholder approval requirement in section 5.6 of MI 61-101 in reliance on sections 5.5(a) and 5.7(a), respectively, of MI 61-101 as the fair market value of the transaction, insofar as it involves related parties, is not more than 25% of the Company’s market capitalization. The participants in the Offering and the extent of such participation were not finalized until shortly prior to the completion of the Offering. Accordingly, it was not possible to publicly disclose details of the nature and extent of related party participation in the Offering pursuant to a material change report filed at least 21 days prior to the completion of the Offering.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Units in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Halo is a leading, vertically-integrated cannabis company that cultivates, extracts, manufactures, and distributes quality cannabis flower, oils, and concentrates, and has sold approximately six million grams of oils and concentrates since inception. Halo continues to evolve its business and scale efficiently, partnering with trustworthy leaders in the industry, who value the Company’s operational expertise in bringing top-tier products to market. Current growth includes expansion in key US markets, the United Kingdom and Africa, with planned expansion into the Canadian retail market.
Halo is led by a strong, diverse, and innovative management team, with deep industry knowledge and blue-chip experience. The Company is currently operating in the United States in California, Oregon and Nevada. The Company sells cannabis products principally to dispensaries under its own brands Hush, Mojave, Exhale and under partnership or license with OG DNA Genetics, Terphogz (doing business as Zkittlez™) and FlowerShop*, a cannabis lifestyle and conceptual wellness brand in which G-Eazy is a partner and key member of Flowershop*.
As part of continued expansion and vertical integration in the US, Halo boasts several grow operations throughout Oregon and California. In Oregon, the Company has a combined 7 acres of outdoor cultivation, including East Evans Creek, a six-acre grow site in Jackson County, and Winberry Farms; a one-acre grow site located 30 miles outside Eugene in Lane County. In California, the Company is building out Ukiah Ventures, a planned 30,000-square-foot indoor grow, processing, and manufacturing facility including up to an additional five acres of industrial land to expand. Recently, Halo partnered with Green Matter Holding (“GMH“) to purchase Bar X Ranch in Lake County, with plans to develop up to 80 acres of cultivation which would comprise the largest grow in Northern California.
Internationally, the Company is currently cultivating cannabis at Bophelo Bioscience & Wellness (Pty) Ltd (“Bophelo“) in Lesotho which holds one of the largest marijuana cultivation licenses in Africa with a future capacity of up to 495 acres. To further Halo’s global presence, the Company has recently acquired CBPM importation and distribution licensing in the United Kingdom via cannabis suppliers Canmart Ltd (“Canmart“). Halo expects the cultivation and manufacturing operations of Bophelo, combined with the importation and distribution capabilities of Canmart, to drive growth of a well-positioned business to serve the U.K. market.
The Company also has acquired a range of software development assets, including technology platforms CannPOS, Cannalift, and more recently CannaFeels. Halo also owns the discrete sublingual dosing technology, Accudab.
For further information regarding Halo, see Halo’s disclosure documents on SEDAR at www.sedar.com.
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”. Forward-looking information may relate to anticipated events or results including, but not limited to: the intended use of proceeds from the Offering, Halo’s planned expansion into the Canadian retail market, Halo’s planned operations in Malta, the expected size and capabilities of the final facility planned at Ukiah Ventures, the size of Halo’s planned cultivation facility in Northern California and the ability of Bophelo and Canmart to serve the U.K. market.
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. Among others, the key factors that could cause actual results to differ materially from those projected in the forward-looking information and statements are the following: delays in obtaining required approvals from regulators, changes in general economic;, business and political conditions, including changes in the financial markets; delays in obtaining required licenses or approvals; delays or unforeseen costs incurred in connection with construction; the ability of competitors to scale operations in Northern California; delays or unforeseen difficulties in connection with the cultivation and harvest of Halo’s raw material; and the other risks disclosed in the Company’s annual information form dated April 16, 2020 and available on the Company’s profile at www.sedar.com. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.
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.