Halo Collective Borrows CA$14M To Fund Expansion Into Nutraceutical Products And Retail

Halo Collective Inc. HALO HCANF announced Thursday that it is borrowing up to CA$14 million ($10.97 million) under a deal with Global Tech Opportunities 6.

Deal Details

The lender agreed to loan the money in two tranches of CA$7 million each, subject to certain terms and conditions.

Based in Toronto, the company said the loan amount is unsecured and will carry interest at 8% annually, with each tranche being repayable in six equal monthly installments of CA$1.2 million per installment.

In addition, the first payment installment is expected to be made a month after the first advance is made under the loan amount. Moreover, each subsequent payment Instalment is due 30 days after the previous one.

The proceeds are expected to support Halo's expansion into nutraceutical products, including Hushrooms, as well as the completion of Halo's Budega retail stores in North Hollywood and Westwood, California and for general corporate purposes.

In connection with the transaction, Halo paid Global Tech Opportunities a commitment fee of CA$350,000 and issued, and committed to issue, some 2.63 million common share purchase warrants to the lender, with each warrant, exercisable at CA$1.6 for a period of five years from the date of the loan agreement.

Issued in three equal tranches, the warrants do not include a cashless exercise provision.

Global Tech Opportunities is an investment fund managed by Alpha Blue Ocean, which was created by Pierre Vannineuse, Hugo Pingray and Amaury Mamou-Mani in 2017. Since then, ABO has executed over 75 transactions.

"Our innovative and tailored financing solution will provide Halo with the necessary capital to expand its already diversified portfolio for stellar growth in 2022." Amine Nedjai, CEO of ABO said. "We are proud that Halo has chosen ABO as a partner given our experience with more than €1.5bn in financing commitments executed for companies across the globe since 2018."

Subscription Agreement & Convertible Debenture

Simultaneously with the execution of the loan agreement, Halo and the lender entered into a subscription agreement that enables the issuance of convertible debentures to provide additional funding to the company and to satisfy payment installments.

Under the agreement, up to 15 convertible debentures can be issued, each with a principal amount of CA$1.23 million subject to specific terms and conditions, representing an aggregate principal amount of up to roughly CA$19.3 million.

The convertible debentures will mature on a date that is 24 months from the date of issuance. The conversion price of the convertible debentures equals the lower of CA$1.25 and the closing price of the common shares in the company's capital on the NEO Exchange on the date immediately preceding the date on which a conversion notice is delivered to the company.

More recent news from Halo Collective:

• Akanda Wraps Up $5M Private Placement, Will Distribute Cannim Cannabis Products Across UK Via CanMart
• Halo Collective's Q3 Revenue: 28% YoY Growth To $8.7M, Completes Simply Sweet Gummy Acquisition
• Akanda Corp Acquires Bophelo And CanMart From Halo Collective Creating International Medical Cannabis Co.
• Halo Collective Raises Nearly $16M Through ATM Program

HCANF Price Action

Halo Collective's shares traded at $0.957 per share at the time of writing on Friday.

Photo: Courtesy of Steve Johnson from Pexels