Halo Collective Announces Initiatives to Enhance Shareholder Value
All figures in USD unless stated otherwise
TORONTO, Aug. 8, 2022 /CNW/ - Halo Collective Inc. ("Halo" or the "Company") (NEO: HALO) (OTCQX: HCANF) (Germany: A9KN) today announced a series of initiatives intended to enhance shareholder value. These initiatives include:
- Implementing cost reduction measures over the past two months, which, in aggregate, are expected to provide annualized cash savings of approximately $7.5 million
- $5.5 million already achieved from streamlining staff at every level across the organization
- $2 million from reducing corporate G&A costs are being actively implemented
- Revamping the Company's sales organization and commission structure in Oregon to align with an aggressive sales goal to regain market share while emphasizing collections and account management.
- Pausing costly capital projects or payback periods that are not near-term.
- Completed the real property sale of Ukiah Ventures Inc., located at 4260 N Street, on June 30, for $2.35 million, with a portion of the proceeds used to reduce short-term debt by $1.5 million and the balance for general working capital.
The Company continues to identify other areas to reduce spending and become more efficient in its operations.
"Bringing a fresh perspective on how we run the business, we are focused on achieving more with less, with a near-term goal to make the operations cash neutral," said CEO and Director Katie Field. "We are taking many actions to benefit our P&L and balance sheet, such as reducing expenses, turning inventory into cash faster, liquidating unneeded equipment, and re-evaluating planned capital expenditures. We are also operating smarter, whether it be in how we incentivize our sales force or relying more heavily on local expertise to rebuild market share with Hush in California and Hush and Winberry in Oregon. Our goal is to leverage our existing assets with a focus on near-term payback."
Added Ms. Field, "The sale of the real property owned by Ukiah Ventures, which consisted of planned cannabis processing and distribution facilities, California, is a perfect example of moving on from something that did not meet our criteria for near-term payback. Given the saturation of the flower market in California and the lengthy time it would have required to build out the asset, we decided to sell the building to a third party and focus our resources on our other priorities."
Concluded Ms. Field, "I am highly confident that the initiatives Halo is undertaking will strengthen the Company and ultimately enhance shareholder value. Halo continues to be strategically well-positioned with a vertically integrated business model and a strong presence in key markets. With a leaner cost structure with and anticipating minimal impact upon revenues, cashflow breakeven is at a lower and we believe achievable threshold level. Additionally, we have an investment position in Akanda Corp. (Nasdaq: AKAN) which is worth well over US$10 million based on current market price and not reflected in Halo's current market cap."
Halo is focused on the United States West Coast, 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 license agreements with Papa's Herb®, DNA Genetics, and FlowerShop*. In addition, Halo has opened two dispensaries in Los Angeles under the Budega™ brand in North Hollywood and Hollywood, with plans to open one more in Hollywood in the third 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.
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 12,674,957 common shares worth approximately US$11.9 million as of August 8, 2022. 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 the 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.
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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 initiatives to enhance shareholder value and the impact thereof and intentions with respect to its portfolio of cannabis 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.
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], www.haloco.com/investors
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