Halo Collective Announces Closing of $11.5 Million Overnight Marketed Offering

Halo Collective Inc. (“Halo” or the “Company“) (NEO: HALO) (OTCQX: HCANF) (Germany: A9KN) is pleased to announce the closing of its previously announced overnight marketed public offering (the “Offering“) of units of the Company (the “Units“). In connection with the Offering, the Company issued an aggregate of 65,714,450 Units for aggregate gross proceeds of $11,500,029, which includes the full exercise of the over-allotment option by the Underwriters (as defined below).

The Offering was completed pursuant to an underwriting agreement (the “Underwriting Agreement“) dated February 12, 2021 between the Company and Eight Capital, Canaccord Genuity Corp. and PI Financial Corp. (collectively, the “Underwriters“). 

The net proceeds received by the Company from the Offering are intended to be used for raw materials and packaging supplies, the development of Canmart Limited, the development of Bophelo Bioscience & Wellness (Pty) Ltd. and working capital and general corporate purposes. 

Each Unit consists of one common share of the Company (each, a “Unit Share“) and one common share purchase warrant of the Company (each, a “Warrant“). Each Warrant entitles the holder thereof to purchase one common share of the Company at an exercise price of $0.225 at any time up to 36 months following closing of the Offering. The Warrants were issued pursuant to, and are governed by, the terms of a warrant indenture dated February 19, 2021 (the “Warrant Indenture“) between the Company and Odyssey Trust Company.

Pursuant to the terms of the Underwriting Agreement, the Company paid the Underwriters a cash commission equal to 7.0% of the gross proceeds of the Offering. As additional consideration for the services rendered in connection with the Offering, the Company issued to the Underwriters 4,600,011 compensation options to purchase up to 4,600,011 Units at an exercise price of $0.175 per Unit at any time up to 36 months following closing of the Offering. 

The Warrants have been conditionally approved for listing on the Neo Exchange Inc. and are expected to commence trading following the closing, subject to the satisfaction of all listing conditions. 

Neither the Units nor the Unit Shares and the Warrants comprising the Units have been or will be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“), or any state securities laws, and such securities may therefore not be offered or sold in the United States or to or for the account or benefit of a person in the United States or a U.S. Person (as defined in Regulation S of the U.S. Securities Act) absent registration or an exemption from the registration requirements. 

The Offering is considered a “related party transaction” for the purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“), as a director of the Company subscribed for 91,500 Units pursuant to the Offering. The Company is relying on exemptions from the formal valuation and minority shareholder approval requirements available under MI 61-101. The Company is exempt from the formal valuation requirement in section 5.4 and the minority shareholder approval requirement in section 5.6 of MI 61-101 in reliance on sections 5.5(a) and 5.7(a), respectively, of MI 61-101 as the fair market value of the transaction, insofar as it involves related parties, is not more than 25% of the Company’s market capitalization. The  participants  in  the  Offering  and  the  extent  of  such  participation  were  not  finalized until shortly prior to the completion of the Offering. Accordingly, it was not possible to publicly disclose details of the nature  and  extent  of  related  party  participation  in  the  Offering  pursuant  to  a  material  change  report  filed  at  least  21  days  prior  to the completion of the Offering.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Units in any jurisdiction in which such offer, solicitation or sale would be unlawful.

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