- Halo Labs (NEO:HALO) has signed a definitive agreement to acquire retail management company Crimson & Black
- Crimson & Black currently holds a long-term contract providing management services to LKJ11 LLC, which Halo plans to acquire a stake in
- Halo Labs will issue 6,432,247 shares at 31.28 cents apiece for the acquisition – a total of approximately C$2 million
- Issuance of the shares will be subject to the completion of two performance milestones
- Halo Labs (HALO) shares are currently up 2.7 per cent to 19 cents, with a market cap of $60.4 million
Halo Labs (NEO:HALO) has signed a definitive agreement for the acquisition of retail management company Crimson & Black.
The company has executed many other acquisitions this year as part of its growth towards a “seed to sale” model.
Halo Labs will issue 6,432,247 shares at 31.28 cents apiece, totalling approximately C$2 million for the acquisition.
Crimson & Black currently holds a long-term contract with LKJ11 LLC, a North Hollywood dispensary applicant. Halo Labs has also announced its intention to acquire a controlling stake in LKJ11.
The contract, led by David Cho, entitles Crimson & Black to 7 per cent of LKJ11’s net revenue, in exchange for providing management services.
Cho has previously acted as Director of Specialty Retail at Adidas North America. During this time, he oversaw all aspects of the company’s most complex retail stores and event activations.
With the opportunity to open a LA flagship store approaching, Cho believes this is an exciting time for Halo Labs.
“It is a premium location and we believe that the unique fit of skills and experience between the two teams will result in a successful endeavor.
“We still are moving forward with the originally negotiated deal, despite a market adjustment. We believe in Halo’s vision as a vertically integrated and global cannabis operator,” he said.
Issuance of the shares, however, is subject to the satisfaction of two performance-based milestones.
3,216,124 shares will be issued when LKJ11 receives licensing from all necessary state and local regulatory bodies. The first legal sale of cannabis will also have to go through beforehand.
The remaining 3,216,123 shares will be issued when LKJ11 is granted a lease extension for a total of five years. The shares may also be issued should the company sign a new location lease for a term of at least five years from the acquisition’s closing date.
Several trading restrictions will also apply to the shares for a period of one year from the date of issuance.
The total number of shares sold may not exceed 10 per cent of the preceding day’s trading volume if Halo’s share price is less than 30 cents.
In addition, the total number of shares sold may not exceed 15 per cent of the preceding day’s trading volume if the price is greater than, or equal to, 30 cents.
Kiran Sidhu, CEO of Halo Labs, said that the acquisition of Crimson & Black augments Halo’s existing management.
“Appointing an experienced retail management team to our anticipated NOLA dispensary will provide a smooth transition towards verticalization in California.
“David Cho’s leadership and Crimson & Black spearheading build-out and operations will set Halo up for success in the LA dispensary market,” he added.
Halo Labs (HALO) shares are currently up 2.7 per cent to 19 cents at 1:40pm EST.