An anonymous director reports
HALO COLLECTIVE COMPLETES TRANSACTION WITH ELEGANCE BRANDS
Further to the previous announcement on June 7, 2021, Halo Collective Inc. has completed its licensing arrangement with Elegance Brands Inc. for tetrahydrocannabinol-infused beverage products, and has acquired 100 per cent of a subsidiary of Elegance by way of a three-cornered amalgamation, in exchange for the issuance of 129,350,461 common shares in the capital of the company to a wholly owned subsidiary of Elegance. All figures are in U.S. dollars, unless stated otherwise.
The acquired company has entered into a licence agreement with Elegance whereby Elegance has provided the acquired company with an exclusive licence to the intellectual property rights for Elegance's THC brands and has agreed to provide support to the acquired company on operations and manufacturing technology for the manufacture and sale of certain THC-infused beverage products in exchange for a 2-per-cent royalty on all sales generated from these brands. The acquired company also holds manufacturing equipment custom built for THC beverage production and 9,333,333 Class A shares in the capital of Elegance, representing approximately 6 per cent of the outstanding shares of Elegance on a fully diluted basis. In connection with the transaction, Elegance also issued Class A share purchase warrants to Halo, which allow Halo to acquire up to five million Elegance shares, with each warrant exercisable at a price of 75 cents per Elegance share for a period of 18 months from the closing of the transaction.
An amount of 18,478,638 of the common shares issued to the vendor on closing are free trading and not subject to contractual restrictions on transfer. The remaining 110,871,823 common shares issued to the vendor on closing are subject to contractual restrictions on transfer whereby 18,478,638 of such common shares in the case of the first release and 18,478,637 common shares thereafter will be released from such restrictions and become freely tradable on the 21st day of each calendar month following closing until all of such common shares have been released.
In connection with the transaction, Halo has entered into a finder's agreement with 1306489 B.C. Ltd. Pursuant to the terms of the finder's agreement, Halo has issued 9,701,285 common shares to the finder as a finder's fee, being the number of common shares equal to 7.5 per cent of the aggregate number of common shares issued to the vendor in connection with the transaction. The finder's fee shares are subject to a statutory hold period of four months and one day.
About Elegance Brands Inc.
Elegance Brands is a global beverage company that develops, markets and distributes products with a focus on innovation. In addition to its flagship brand, Sway Energy + Immunity Drink, Elegance Brands offers a range of functional beverages, plus superpremium spirits and alcohol brands, including Elegance vodka, across a network of best-in-class distributors in the United States, as well as direct to consumer through its various brands' websites.
About Halo Collective Inc.
Halo is a leading, vertically integrated cannabis company that cultivates, extracts, manufactures and distributes quality cannabis flower, oils and concentrates, and has sold approximately nine million grams of oils and concentrates since inception. Halo continues to evolve its business and scale efficiently, partnering with trustworthy leaders in the industry, which value the company's operational expertise in bringing top-tier products to market. Current growth includes expansion in key U.S. markets, the United Kingdom and Africa, with planned expansion into the Canadian retail market.
Halo is led by a strong, diverse and innovative management team with deep industry knowledge and blue-chip experience. The company is currently operating in the United States in California and Oregon. The company sells cannabis products principally to dispensaries under its brands, Hush, Mojave and Exhale, and under partnership or licence with OG DNA Genetics, Terphogz and FlowerShop*, a cannabis lifestyle and conceptual wellness brand in which G-Eazy is a partner and key member of FlowerShop*.
As part of continued expansion and vertical integration in the U.S., Halo boasts several grow operations throughout Oregon and California. In Oregon, the company has a combined nine acres of outdoor cultivation, including East Evans Creek, a six-acre grow site in Jackson county, Blue Sky Farms, a two-acre grow site located in Jackson county, and Winberry Farms, a one-acre grow site located 30 miles outside Eugene in Lane county. In California, the company is building out Ukiah Ventures, a planned 30,000-square-foot indoor grow and cannabis processing facility, including up to an additional five acres of industrial land to expand this indoor grow site. Recently, Halo partnered with Green Matter Holding to purchase Bar X Farm in Lake county, developing up to 80 acres of cultivation, which would comprise the largest grow in California.
Internationally, the company's subsidiary Bophelo Bioscience & Wellness Pty. Ltd. is currently cultivating medicinal cannabis in Lesotho. Once fully built out, Halo believes Bophelo to be one of the largest licensed marijuana cultivation sites in the world with a future capacity of up to 495 acres. To further Halo's global presence, the company has recently acquired CBPM (cannabis-based products for medicinal use) importation and distribution licensing in the United Kingdom through medical cannabis supplier Canmart. Halo expects the cultivation and manufacturing operations of Bophelo, combined with the importation and distribution capabilities of Canmart, to drive a well-positioned business to serve the U.K. market.
The company also has acquired a range of software development assets, including technology platforms CannPOS, Cannalift and, more recently, CannaFeels. Halo also owns the discrete sublingual dosing technology, Accudab. The company intends to spin off these assets along with its intellectual property and patent applications into its subsidiary Halo Tek Inc. and complete a distribution to shareholders on a record date to be determined by Halo.
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