Kiaro Holdings Corp. (TSXV: KO) announced this morning that it has completed the acquisition of Aegis Brands’ subsidiary 2734524 Ontario, which does business as Hemisphere Cannabis. Through the transaction, the cannabis retailer now owns all the issued and outstanding shares of the subsidiary.
Under the acquisition terms, Kiaro Holdings issued Aegis Brands a total of 61.3 million common shares, which holds a value of $6.13 million as of this writing. The transaction also included issuing 6.7 million share purchase warrants, with each warrant exercisable for one common share at $0.16 per share.
Further, Aegis Brands is also entitled to another 6.7 million Kiaro shares upon achieving set commercial milestones within the first year.
Kiaro Holdings also issued Aegis Brands a secured promissory note worth $104.6 million related to the transaction. The note is repayable on September 24, 2022.
Through the transaction, Aegis Brands CEO Steve Pelton also gets a seat on the Kiaro Holdings board of directors.
Hemisphere Cannabis comprises a portfolio of 7 retail locations in Ontario, bringing Kiaro Holdings’ footprint to 16 cannabis retail stores. Two more locations are expected to be opened by the end of its fiscal year.
The acquisition is expected to increase annual revenue to $42.7 million with a $13.7 million gross profit.
Kiaro Holdings last traded at $0.10 on the TSX Venture.
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