Halo and High Tide Announce Amended Terms on Sale of KushBar Assets to Halo

Nachrichtenquelle: Business Wire (engl.)
02.09.2020, 01:27  |  935   |   |   

Halo Labs Inc. (“Halo”) (NEO: HALO, OTCQX: AGEEF, Germany: A9KN) and High Tide Inc. (“High Tide”) (CSE:HITI) (OTCQB:HITIF) (Frankfurt:2LY) and are pleased to announce that they have entered into an amended and restated asset purchase agreement (the “Amended Agreement”) to amend the terms of the previously announced asset purchase agreement dated February 14, 2020 (the “Asset Purchase Agreement”) wherein High Tide agreed to sell KushBar retail cannabis assets to Halo Labs Inc., a wholly owned subsidiary of Halo.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20200901006124/en/

Under the Amended Agreement, High Tide will sell its three operating KushBar retail cannabis stores (the “Portfolio”) to Halo for $5.7 million, payable in the form of:


a deposit of $3.5 million which has already been paid to High Tide by way of issuance of 13,461,538 Halo common shares to High Tide at a deemed price of $0.26 per common share;



a convertible promissory note to be issued by Halo on closing (the “Initial Note”) in the principal amount of $1.8 million with a conversion rate of $0.16 per Halo common share; and



a convertible promissory note to be issued by Halo on the 12-month anniversary of closing (the “Earnout Note”; together with the Initial Note, the “Halo Notes”) in the principal amount of $400,000 with a conversion rate of $0.16 per Halo common share, provided that certain revenue thresholds are met. If the Portfolio has produced aggregate revenue of less than the set threshold during the prior 12 months, then the principal amount of the Earnout Note will be reduced dollar for dollar.

Each of the Halo Notes above are secured solely by the Portfolio.

Upon closing, Halo will continue to engage High Tide to substantially oversee all aspects of its retail cannabis operations with respect to the Portfolio and will pay High Tide ongoing royalties for regulatory advisory services and retail management through blended monthly payments.

The parties entered into the Amended Agreement to better align the terms of the Asset Purchase Agreement with broader market and economic factors, to reduce the amount of capital expenditures for both parties, and to provide Halo the opportunity to acquire operational cannabis retail stores. While the Amended Agreement provides for the sale of less assets, namely, the exclusion of cannabis retail stores in the midst of development and development permits, and a lower purchase price of $5.7 million compared to $12 million under the Asset Purchase Agreement, the terms of the Amended Agreement are preferable to Halo because they are consistent with Halo’s goal to obtain a strong foothold in the Canadian cannabis retail industry swiftly by acquiring cannabis retail stores that are already operational. The Amended Agreement is also preferable to High Tide because it can better focus its efforts on the development of its brand, Canna Cabana, it reduced the deemed price per Halo share from $0.26 to $0.16, and results in High Tide being paid the consideration for the sale in cash versus Halo securities.

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