Halo Collective Inc. (OTCMKTS: HCANF) Signs $14 Million Unsecured Loan Agreement With Global Tech Opportunities 6

Halo Collective Inc. (OTCMKTS: HCANF) has announced the signing of a Loan Agreement with Global Tech Opportunities 6. Pursuant to the agreement, Global Tech will loan Halo around $14 million in two $7 million tranches subject to certain conditions and terms.

Loan agreement to help Halo expand 

The funds issued under the Loan Agreement will be utilized to assist Halo’s growth into nutraceutical products and the completion of Halo’s BudegaTM retail locations in Westwood, California, and North Hollywood, Hollywood. The Loan Amount is unsecured and bears an annual interest rate of 8.0 percent, with each tranche repayable in six equal monthly payments (of integrated interest and principal) of $1.194 million (each a “Payment Instalment”).

The first Monthly Instalment is expected 30 days after the Loan Amount is advanced, and every following Payment Instalment is payable 30 days after the preceding Payment Instalment. Suppose the company chooses not to make a cash Payment Instalment. In that case, the corresponding Payment Instalment will be paid via the issue of a Convertible Debenture in accordance with the Subscription Agreement.

Halo paid a commitment fee of $350,000 to the Lender. 

Halo paid a $350,000 commitment fee to the Lender and granted and agreed to issue the Lender 2.625 million Common Share acquisition warrants (the “Warrants”), each exercisable at $1.60 for five years from the day of the Loan Agreement. The company will issue the Warrants three equal tranches, with one-third of the Warrants being issued on the Loan Agreement’s date, another third of the Warrants issued 30 days after the Loan Agreement’s date, and the final one-third of the Warrants issued 60 days after the Loan Agreement’s date. Notably, these Warrants do not provide a mechanism for cashless exercise.

In addition, Halo and the Lender signed a subscription agreement concurrently with the signature of the Loan Agreement, which allows for convertible debentures issuance to provide additional capital to Halo and fulfill Payment Instalments. The Subscription Agreement authorizes the issue of up to 15 Convertible Debentures, each having a principal amount of $1.231 million for a total principal amount of up to $19.3 million.