TORONTO--(BUSINESS WIRE)--Halo Labs Inc. ("Halo" or the "Company") (NEO: HALO, OTC: AGEEF, Germany: A9KN) is pleased to announce the closing of its previously announced marketed public offering (the “Offering”) of unsecured convertible debenture units of the Company (the “Debenture Units”) for aggregate gross proceeds of $18,143,000. In connection with the Offering, the Company issued (i) 18,143 Debenture Units at a price of $1,000 per Debenture Unit, and (ii) 3,020 Debenture Units to certain debtholders to satisfy and extinguish an aggregate of US$2,220,000 of debt and interest accrued thereon (the “Debt Repayment”).

As part of the Offering, the Agents (as defined below) were granted an over-allotment option (the “Over-Allotment Option”) for up to 30 days after the closing of the Offering in respect of: (i) additional Debenture Units (each an “Over-Allotment Unit”); (ii) additional Convertible Debentures (each an “Additional Debenture”) at a price of $839.99 per such Additional Debenture; (iii) additional Warrants (each an “Additional Warrant”) at a price of $0.2078 per Additional Warrant; or (iv) any combination thereof; provided that the aggregate number of Additional Debentures and Additional Warrants which may be issued under the Over-Allotment Option (including those comprising Over-Allotment Units) does not exceed 3,000 Additional Debentures or 2,310,000 Additional Warrants, respectively. Concurrent with the closing, the Agents partially exercised the Over-Allotment Option for 1,163 Over-Allotment Units.

The Offering was completed pursuant to an agency agreement (the “Agency Agreement”) dated March 29, 2019 between the Company and Canaccord Genuity Corp. (the “Lead Agent”), as lead agent, along with syndicate of agents including Gravitas Securities Inc., Clarus Securities Inc., Cormark Securities Inc. and PI Financial Corp. (together with the Lead Agent, the “Agents”).

The net proceeds received by the Company from the Offering are intended to be used for leasehold improvements, the purchase of extraction equipment, working capital and general corporate purposes.

Each Debenture Unit consists of one 8.0% $1,000 principal amount unsecured convertible debenture (the "Convertible Debentures") and 770 common share purchase warrants of the Company (the "Warrants"). The Convertible Debentures bear interest at a rate of 8.0% per annum from the date of issue, payable semi-annually in arrears on the last day of June and December in each year and have a maturity 36 months from the date of issuance (the “Maturity Date”). The principal amount of each Convertible Debenture shall be convertible, for no additional consideration, into common shares of the Company ("Common Shares") at the option of the holder at any time prior to 5:00 p.m. (Toronto time) on the business day prior to the Maturity Date at a conversion price equal to $0.65 (the “Conversion Price”), subject to certain adjustment and acceleration provisions. Each Warrant shall entitle the holder thereof to purchase one Common Share at an exercise price of $0.90 at any time up to 24 months following closing of the Offering.

Pursuant to the terms of the Agency Agreement, the Company paid the Agents a cash commission (the "Agents' Fee") 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: (a) paid the Lead Agent and Gravitas Securities Inc. a corporate finance fee comprised of 588,246 broker units (each, a "Broker Unit"); and (b) issued to the Agents 1,891,938 non-transferable broker warrants (the "Broker Warrants") to purchase up to 1,891,938 Broker Units at an exercise price of $0.65 per Broker Unit. Each Broker Unit consists of one Common Share (each, a "Broker Unit Share") and one-half of one Warrant. Notwithstanding the foregoing, (a) with respect to purchasers resident outside of Canada on a list provided to the Agents (the "President's List”), the Agents’ Fee was reduced to 3.5%; and (b) no Agents’ Fee was paid with respect to Convertible Debenture Units issued in connection with the Debt Repayment.

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

The Offering was made pursuant to a short-form prospectus filed in each of the provinces of Canada (except Québec), and otherwise by private placement exemption in those jurisdictions where the Offering can lawfully be made, including the United States. Neither the Debentures Units nor the Convertible Debentures and the Warrants comprising the Debenture 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.

In connection with the Debt Repayment, certain "related parties", for the purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"), entered into debt settlement agreements and received Debenture Units and which is considered a "related party transaction" for the purposes of MI 61-101. 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.

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 Debenture Units in any jurisdiction in which such offer, solicitation or sale would be unlawful. A copy of the short form prospectus dated March 29, 2019 is available under the Company’s profile on SEDAR at www.sedar.com.

ABOUT HALO

Halo is a cannabis extraction company that develops and manufactures quality cannabis oils and concentrates, which are the fastest growing segments in the cannabis industry. Halo has expertise in all major cannabis manufacturing processes, leveraging proprietary processes and products, and has produced over 3.0M grams of oils and concentrates since inception. The forward-thinking company is led by a strong management team with deep industry knowledge and blue-chip experience. The Company is currently operating in California and Oregon as well as Nevada with our partner Just Quality. The Company has also begun operations in Lesotho, Africa through a strategic partnership. With a consumer-centric focus, Halo will continue to market innovative branded and private label products across multiple product categories.

For further information regarding Halo, see Halo’s disclosure documents on SEDAR at www.sedar.com.

Cautionary Note Regarding Forward-Looking Information and Statements

This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Halo’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Halo’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. The forward-looking information and forward-looking statements contained herein may include, but is not limited to, the proposed use of proceeds of the Offering, the listing and commencement of trading of the Warrants on the NEO Exchange Inc. and Halo’s business generally.

By identifying such information and statements in this manner, Halo is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, Halo has made certain assumptions. Although Halo believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Halo does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to Halo or persons acting on its behalf is expressly qualified in its entirety by this notice.