Halo Enters Into Second Amended and Restated Convertible Promissory Note For Aggregate Principal Amount of up to C$15 Million and Clarifies Previous Disclosure
Halo Labs Inc. ("Halo" or the "Company") (NEO:HALO, OTCQX:AGEEF, Germany:A9KN) today announces that the Company has entered into a second amended and restated promissory note (the "Second A&R Promissory Note") for a principal amount of up to C$15 million.
The Second A&R Promissory Note amends and restates the amended and restated promissory note (the "Original A&R Promissory Note") that the Company entered into with a private arm's-length lender, as previously disclosed in the Company's press release dated June 9, 2020.
The Second A&R Promissory Note increases the committed funds available to the Company from C$10 million to C$15 million. To date, the Company has drawn down an aggregate of C$1 million of this committed amount. The Second A&R Promissory Note also contains an additional commitment fee of $35,000, to be satisfied through the issuance of 291,666 common shares in the capital of the Company ("Common Shares"). All of the other terms and conditions contained in the Original A&R Promissory Note remain unchanged.
A copy of the Second A&R Promissory Note will be filed under the Company's profile on SEDAR at www.sedar.com.
Clarification Regarding Certain Previous Disclosure
In connection with a regulatory review by Staff of the Ontario Securities Commission, the Company wishes to clarify previous disclosure included in the Company's press release dated July 6, 2020 (the "Previous Disclosure") with respect to the Company's acquisition of a majority interest in LKJ11 LLC ("LKJ11") and all of the issued and outstanding membership interests of Crimson & Black LLC ("Crimson & Black"). In the Previous Disclosure, the Company noted that: (i) the consideration paid for the majority interest in LKJ11 consisted of 42,881,646 Common Shares at a deemed price of USD$0.2332 per Common Share, representing a deemed value of approximately USD$10 million; and (ii) the consideration paid for all of the issued and outstanding membership interests of Crimson & Black consisted of 6,432,247 Common Shares at a deemed price of USD$0.2332 per Common Share, representing a deemed value of approximately USD$1.5 million. While the Company used deemed value to indicate the amount agreed upon between the parties at the time of the announcement of the transactions, as the consideration was payable in Common Shares, International Financial Reporting Standards require the use of fair value at the time of closing as this represents the actual value paid by the Company in connection with the acquisitions. In addition, the value of the acquisitions will be reported on the Company’s financial statements at fair value at the time of closing. Based on the closing price of the Common Shares on the Neo Exchange Inc. on July 6, 2020, the date of closing, being $0.12 (USD$0.0886), the fair value of the Company's acquisition of a controlling interest in LKJ11 was approximately $5.15 million (USD$3.8 million) and the fair value of the Company's acquisition of all of the issued and outstanding membership interests in Crimson & Black was approximately $0.77 million (USD$0.57 million). For additional information, the Company relied on the exemption contained in Section 2.11 of National Instrument 45-106 – Prospectus Exemptions to issue the Common Shares.