Halo Announces Completion of Share Purchase Agreement With Ukiah Ventures and Enters Into an Offtake Agreement
Halo Labs Inc. (“Halo” or the “Company”) (NEO: HALO, OTCQX: AGEEF, Germany: A9KN) is pleased to announce that it has completed its transaction (the “Transaction”) with Ukiah Ventures Inc. (“Ukiah”) that was previously announced on August 28, 2019. Pursuant to the Transaction, (i) Halo and Ukiah entered into a share purchase agreement pursuant to which Halo acquired 1,333,333 common shares in the capital of Ukiah (“Ukiah Shares”) in exchange for 5,940,000 common shares of Halo (“Halo Shares”), and (ii) Halo entered into an offtake agreement (the “Offtake Agreement”) with a third-party California based cannabis processor and distributor.
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The Offtake Agreement provides Halo with a right of first refusal to purchase up to 15,000 lbs. of cannabis products per month at a wholesale market price. The Offtake Agreement is for a three-year term and is expected to provide Halo access to a significant quantity of high-quality cannabis at market rate before being solicited to other companies.
The Ukiah Shares acquired by Halo represent a 17.5% interest in Ukiah. The Halo Shares issued pursuant to the Transaction were issued at a deemed value of C $0.50 per Halo Share for an aggregate deemed consideration of C$2,970,000. The Halo Shares are subject to a statutory hold period of four months plus a day from the date of issuance in accordance with applicable securities legislation. Certain directors of Halo own an aggregate of 45,303 Ukiah Shares, representing approximately 0.6% of the issued and outstanding Ukiah Shares following completion of the Transaction.
“Halo is pleased to announce that the transaction for acquiring 17.5% of Ukiah is complete, providing Halo equity in a unique business model” said Kiran Sidhu, CEO and Co-Founder of Halo. “In addition, the Offtake Agreement is expected to provide plentiful biomass for extraction. Access to high quality biomass is important to be able to grow revenues in California.”
Ukiah services licensed cannabis processors and distributors that currently focus on the procurement of biomass from farms located primarily in the northern California region, and distribution to manufacturers and processors throughout California. Ukiah allows licensed operators to provide a conduit for cannabis to flow from cultivators to manufacturers and distributors. Located in Ukiah, California, Ukiah Ventures Inc. owns a scalable facility of approximately 30,000 square feet, strategically located off Highway 101 and is easily accessible by the large number of licensed farms in the surrounding area. Ukiah also plans to offer value added services for to California cultivators, including trimming, curing, drying, freezing/storing services. Long-standing relationships with the farming communities in its area of operation allows Ukiah to identify arbitrage opportunities for operators when acquiring biomass and be able to procure supply at competitive prices.