Planet 13 Announces Renegotiation of Santa Ana Acquisition
All figures are stated in United States dollars ($) unless otherwise indicated
LAS VEGAS, April 17, 2020 /PRNewswire/ - Planet 13 Holdings Inc. (CSE: PLTH) (OTCQX: PLNHF) ("Planet 13" or the "Company"), a leading vertically-integrated Nevada cannabis company, announced that following the announcement on April 13, 2020 that it had terminated a definitive agreement (the "Initial Definitive Agreement") to acquire a cannabis sales license and lease for a dispensary in Santa Ana, California (the "Acquisition") from Newtonian Principles, Inc. ("Newtonian"), it has renegotiated the terms of Acquisition and has entered into an amendment to the Initial Definitive Agreement.
Upon closing of the Acquisition, which is expected to occur when final state and local regulatory approvals are obtained, which is forecasted to be obtained in the next one to three weeks, Planet 13 will pay Newtonian $800,000 in cash (which, along with the Deposit (as defined below), results in a total cash purchase price of $1,000,000) and 3,940,932 Class A Restricted Shares in the capital of the Company (the "Shares") valued at $4.0 million. Newtonian will retain the $200,000 deposit (the "Deposit") that Planet 13 paid to Newtonion upon entering into of the Initial Definitive Agreement. The parties have also negotiated a 25% lease abatement with the landlord, effective during construction and until opening, reducing costs and increasing flexibility for Planet 13. The Shares will be subject to a four-month and one day hold period under Canadian securities laws and following such period will be subject to a lock-up whereby 1/8 of the Shares will be released from lock-up each month beginning on the date that is four months plus one day from the Acquisition closing date.
This compares to the Initial Definitive Agreement pursuant to which Planet 13 would have been required to pay an additional $5.8 million in cash and 2,039,808 Class A Restricted Shares in the capital of the Company valued at $4.0 million for the Acquisition.
"We've evaluated hundreds of locations in California and continue to believe that our Santa Ana location is the best suited for a Planet 13 style dispensary," said Bob Groesbeck Co-CEO of Planet 13. "While we can't forecast how COVID-19 might affect our timeline, we've negotiated an agreement that reduces the upfront capital invested, gives us control over the timing of fixed costs and provides flexibility on dispensary buildout. We de-risked the transaction substantially while securing the next stage of growth for Planet 13."
About Planet 13
Planet 13 (www.planet13holdings.com) is a vertically integrated cannabis company based in Nevada, with award-winning cultivation, production and dispensary operations in Las Vegas - the entertainment capital of the world. Planet 13's mission is to build a recognizable global brand known for world-class dispensary operations and a creator of innovative cannabis products. Planet 13's shares trade on the Canadian Stock Exchange (CSE) under the symbol PLTH and OTCQX under the symbol PLNHF.
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward looking-statements relate to, among other things, future expansion plans.
These forward-looking statements are based on reasonable assumptions and estimates of management of the Company at the time such statements were made. Actual future results may differ materially as forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors, among other things, include: final regulatory and other approvals or consents; risks associated with COVID-19 and other infectious diseases presenting as major health issues; fluctuations in general macroeconomic conditions; fluctuations in securities markets; expectations regarding the size of the Nevada cannabis market and changing consumer habits; the ability of the Company to successfully achieve its business objectives; plans for expansion; political and social uncertainties; inability to obtain adequate insurance to cover risks and hazards; and the presence of laws and regulations that may impose restrictions on cultivation, production, distribution and sale of cannabis and cannabis related products in the State of Nevada; and employee relations. Although the forward-looking statements contained in this news release are based upon what management of the Company believes, or believed at the time, to be reasonable assumptions, the Company cannot assure shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Readers should not place undue reliance on the forward-looking statements and information contained in this news release. The Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.
The Company is indirectly involved in the manufacture, possession, use, sale and distribution of cannabis in the recreational and medicinal cannabis marketplace in the United States through its subsidiary MM Development Company, Inc. (or "MMDC"). Local state laws where MMDC operates permit such activities however, these activities are currently illegal under United States federal law. Additional information regarding this and other risks and uncertainties relating to the Company's business, including COVID-19, are contained under the heading "Risk Factors" and elsewhere in the Company's annual information form dated April 13, 2020 filed on its issuer profile on SEDAR at www.sedar.com.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
SOURCE Planet 13 Holdings Inc.
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