Halo Labs Inc. (“Halo” or the “Company”) (NEO: HALO, OTC: AGEEF, Germany: A9KN) is pleased to announce that it has filed a preliminary short form prospectus (the “Prospectus”) in connection with a “best efforts” offering (the “Offering”) of convertible debenture units of the Company (the “Initial Units”) at a price of $1,000 per Initial Unit (the “Offering Price”) for gross proceeds of up to $10,000,000. Canaccord Genuity Corp. (the “Lead Agent”) will act as the lead agent and sole bookrunner on behalf of a syndicate of agents, including Gravitas Securities Inc., Clarus Securities Inc., Cormark Securities Inc. and PI Financial Corp. (collectively, the “Agents”) in respect of the Offering.

The Company has granted to the Agents an option (the “Over-Allotment Option”), exercisable in whole or in part, in the sole discretion of the Agents, at any time prior to the date that is the 30th day after the closing of the offering (the “Closing Date”), to purchase up to an additional 15% of the number of Initial Units sold pursuant to the Offering on the same terms as set forth above to cover over-allotments, if any (the “Additional Units” and together with the Initial Units, the “Convertible Debenture Units”).

Each Convertible Debenture Unit will consist of (i) one 8.0% unsecured convertible debenture of the Company in the principal amount of $1,000 (each, a “Convertible Debenture”) with interest payable semi-annually on June 30 and December 31 of each year, commencing June 30, 2019 (each, an “Interest Payment Date”) and maturing 36 months from the Closing Date (the “Maturity Date”), and (ii) 715 warrants (each, a “Warrant”), each Warrant being exercisable for a period of 24 months following the Closing Date to purchase one common share of the Company (each, a “Warrant Share”) at an exercise price of $0.90 per Warrant Share, subject to adjustment in certain events.

Each Convertible Debenture will be convertible into common shares of the Company (the “Debenture Shares”) at a price of $0.70 per Debenture Share (the “Conversion Price”) at the option of the holder (each, a “Debentureholder”) at any time prior to the earlier of: (i) the last business day immediately preceding the Maturity Date; and (ii) the business day immediately preceding the date specified for redemption of the Convertible Debentures upon a change of control, subject to acceleration in certain events.

Beginning on the date that is four months and one day following the Closing Date, the Company may force the conversion of the principal amount of the then outstanding Convertible Debentures at the Conversion Price on not less than 30 days’ notice should the daily volume weighted average trading price of the Company’s outstanding common shares (the “Common Shares”) on the NEO Aequitas Exchange (the “NEO”) be equal to or greater than $1.35 per Common Share for the preceding 10 consecutive trading days.

Upon a change of control of the Company, Debentureholders will have the right to require the Company to repurchase their Convertible Debentures, in whole or in part, on the date that is 30 days following the giving of the notice of change of control, at a price equal to 105% of the principal amount of the Convertible Debentures then outstanding plus accrued and unpaid interest thereon (the “Offer Price”). If 90% or more of the principal amount of the Convertible Debentures outstanding are tendered for redemption, the Company will have the right to redeem all of the remaining Convertible Debentures at the Offer Price.

The Company has agreed to pay a cash commission (the “Agents’ Fee”) to the Agents equal to 7.0% of the gross proceeds of the Offering, including in respect of any Additional Units issued upon exercise of the Over-Allotment Option. As additional consideration for the services rendered in connection with the Offering, the Company has agreed to: (a) pay the Lead Agent, on the Closing Date, a corporate finance fee equal to 2.0% of the gross proceeds of the Offering divided by the Conversion Price (the “Corporate Finance Fee”), which will be satisfied through the issuance of broker units (each, a “Broker Unit”); and (b) issue to the Agents, on the Closing Date, non-transferable broker warrants (the “Broker Warrants”) to purchase such number of Broker Units as is equal to 7.0% of the gross proceeds of the Offering divided by the Conversion Price, at an exercise price equal to the Conversion Price. Each Broker Unit will consist of one Common Share (each, a “Broker Unit Share”) and one-half of one Warrant. Notwithstanding the foregoing, (a) with respect to purchasers resident outside of Canada on a list to be provided to the Agents prior to the Closing Date (the “President’s List”), the Agents’ Fee and Broker Warrants shall be reduced to 3.5%; and (b) with respect to Convertible Debenture Units issued in satisfaction of retiring certain existing debt of the Company, no Agents’ Fee, Broker Warrants or Corporate Finance Fee shall be payable.

The Company intends to apply to list the Warrants, the Debenture Shares, the Warrant Shares and the Broker Unit Shares to be issued in connection with the Offering on the NEO.

The Convertible Debenture Units will be offered by way of the Prospectus which has been filed in all of the provinces of Canada, excluding Québec, pursuant to National Instrument 44-101 – Short Form Prospectus Distributions. The Prospectus contains important information relating to the Offering and is still subject to completion or amendment. For more information, potential investors should read the Prospectus which is available on SEDAR at www.sedar.com. There will not be any sale or any acceptance of an offer to buy the Convertible Debenture Units until a receipt for a final short form prospectus has been issued.

The Company intends to use the net proceeds of the Offering for leasehold improvements at the Company’s facilities, the purchase of extraction equipment, for strategic acquisition opportunities and for general working capital purposes.

The Offering is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals, including the approval of the NEO, and the entering into of an agency agreement by the Company and the Agents.

The Convertible Debenture Units, Convertible Debentures, Warrants, Debenture Shares, Warrant Shares, Broker Warrants, Broker Units and Broker Unit Shares have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any U.S. state securities laws and may not be offered or sold in the United States absent registration or an available exemption from the registration requirement of the U.S. Securities Act and applicable U.S. state securities laws. 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 Convertible Debenture Units, Convertible Debentures, Warrants, Debenture Shares, Warrant Shares, Broker Warrants, Broker Units or Broker Unit Shares in any jurisdiction in which such offer, solicitation or sale would be unlawful.


Halo is a cannabis extraction company that develops and manufactures quality cannabis oils and concentrates, which are the fastest growing segments in the cannabis industry. Halo has expertise in all major cannabis manufacturing processes, leveraging proprietary processes and products, and has produced over 3.0M grams of oils and concentrates since inception. The forward-thinking company is led by a strong management team with deep industry knowledge and blue-chip experience. The Company is currently operating in California, Nevada and Oregon as well as Lesotho Africa through a strategic partnership. With a consumer-centric focus, Halo will continue to market innovative branded and private label products across multiple product categories.

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”. The forward-looking information and forward-looking statements contained herein may include, but is not limited to, information concerning the completion of the Offering, the approval of the NEO of the Offering and the listing of certain securities being issued thereunder, the receipt of any additional regulatory approvals required to complete the Offering, the number of Convertible Debenture Units to be sold by the Company, the payment of interest and principal amount, the conversion or exercise of any securities offered pursuant to the Offering, the payment of the Agents’ Fee, Broker Warrants and Corporate Finance Fee, the exercise of the Over-Allotment Option and the expected use of the proceeds from the Offering.

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, level of activity, performance or achievements of Halo 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.

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 the necessary approvals from the NEO; delays in obtaining approvals from securities regulators; adverse changes in applicable laws; changes in general economic, business and political conditions, including changes in the financial markets and the other risks disclosed in the most recent annual information form and the Prospectus (including the documents incorporated by reference therein). 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.

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. Key assumptions used herein are that there will be no unexpected delays regarding approvals from the NEO or other regulatory authorities, the Offering will be completed on the terms and within the timeline expected and no unexpected costs or events will occur requiring a change to the use of net proceeds. 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.


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