Halo Announces Termination of Previously Announced Letter of Intent (LOI) with PhytoCann
Provides update on KushBar
TORONTO, July 26, 2022 /CNW/ - Halo Collective Inc. ("Halo" or the "Company") (NEO: HALO) (OTCQX: HCANF) (Germany: A9KN) today announced the expiration of Halo's previously announced letter of intent to acquire PhytoCann Holdings SA ("Phytocann") in accordance with the terms thereof. The Company cited market conditions as the driving factor for not pursuing the proposed acquisition.
Ms. Katie Field, Halo's CEO and Director commented, "I have worked in the legal U.S. cannabis industry for nearly a decade and frankly have never seen market conditions as challenging as what we are experiencing today. In conjunction with the Board of Directors, I have therefore decided to focus on Halo's core assets, including California and Oregon. We are simplifying and strengthening in order to enhance shareholder value. Even under the best conditions, managing an international business out of our core product line presents complexities. We wish Phytocann's management all the best and look forward to their continued success."
Ms. Field continued, "As the new CEO, I have aggressively reduced overhead costs and plan to continue streamlining expenses to make Halo's core business profitable. Furthermore, I have opted for a local, tactical approach to sales and marketing that we expect to improve speed to market and connections with our consumers in California and Oregon. We are focused on the Hollywood store opening and improving inventory levels company-wide. We expect to deliver a comprehensive business update in the coming weeks."
Update on Halo Kushbar
Pursuant to an amended and restated asset purchase agreement dated September 1, 2020 (the "APA"), Halo Kushbar Retail Inc. ("Kushbar"), a wholly-owned subsidiary of Halo, purchased three cannabis stores in Alberta (the "Stores") from High Tide Inc. ("High Tide") on July 15, 2021. The purchase price for the Stores was paid by Halo, on behalf of Kushbar, by way of issuance to High Tide of shares in the capital Halo and a convertible promissory note (the "Note"). The debt owing under the Note was secured by, among other things, a share pledge of Halo in respect of the shares it held in Kushbar (the "Share Pledge").
Due to a dispute between Halo and High Tide with respect to certain payments in respect of the Stores, Halo did not perform certain of its obligations under the APA. In determining not to perform certain of its obligations, Halo considered a variety of factors, including (1) that the Stores were not generating the revenue or profits Halo expected them to, (2) the only recourse available to High Tide under the Note was to enforce the Share Pledge, and (3) Halo's desire to focus on its west coast US cannabis operations. Accordingly, Halo allowed High Tide to enforce the Share Pledge and gain control of Kushbar and the Stores. As High Tide enforced the Share Pledge and now controls the Stores, Halo has no further obligations or liabilities under the Note nor the APA.
About Halo Collective
Halo is a multi-national incubation company with assets and operations centered in both THC and non-THC sectors. For the THC sector, Halo is focused on the West Coast of the United States, where it has vertically integrated operations covering the entire value chain from seed to sale. Halo cultivates, extracts, manufactures, and distributes quality cannabis flower, pre-rolls, vape carts, edibles, and concentrates. Halo sells these products under a portfolio of brands including Hush™, Winberry Farms™, Williams Wonder Farms, its retail brand Budega™, and under license agreements with Papa's Herb®, DNA Genetics, and FlowerShop*. Halo has opened a dispensary in Los Angeles under the Budega™ brand in North Hollywood and plans to open two more in Hollywood, and Westwood in the second quarter of 2022.
In the non-THC sector, Halo is expanding into health and wellness categories including CBD and functional supplements such as nootropic nutraceuticals and non-psychotropic mushrooms. Halo, through a series of acquisitions, has product offerings in the form of beverages (H2C Beverages), dissolvable strips (Dissolve Medical), capsules (Hushrooms™), and topical supplements (Hatshe) with proposed national distribution via a strategic agreement with SWAY Energy Corporation.
As an incubator, Halo has successfully acquired and integrated a variety of companies which were subsequently reorganized to create Akanda Corp. (NASDAQ: AKAN), an international medical cannabis and wellness company, of which Halo currently owns approximately 40% of the common shares. Halo has also acquired a range of software development assets, including CannPOS, Cannalift, CannaFeels, and a discrete sublingual dosing technology, Accudab. Halo intends to reorganize these entities (including their intellectual property and patent applications) into a subsidiary called Halo Tek Inc., and to complete a distribution of the shares of Halo Tek Inc. to shareholders on record, at a date to be determined.
For further information regarding Halo, see Halo's disclosure documents on SEDAR at www.sedar.com.
Connect with Halo Collective: Email | Website | LinkedIn | Twitter | Instagram
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 management's plans regarding its portfolio of cannabis and other businesses.
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: inability of management to successfully integrate the operations of acquired businesses, changes in the consumer market for cannabis products, changes in the expected outcomes of the proposed changes to Halo's operations, delays in obtaining required licenses or approvals necessary for the build-out of the Company's cannabis operations, dispensaries or Canadian operations, the proposed spin-out with Halo Tek Inc., 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, changes in general economic, business and political conditions, including changes in the financial markets; and the other risks disclosed in the Company's annual information form dated March 31, 2022 and other disclosure documents 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.
Non-Solicitation
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
SOURCE Halo Collective Inc.
Halo Collective Inc., Investor Relations, [email protected]
Share this article