Unrivaled Brands Inc (OTCQX:UNRV) said it has entered into securities purchase agreements (SPA) with certain investors, including Sabas Carrillo, the company’s chief executive officer, Patty Chan, the company’s interim chief financial officer, and Robert Baca, the company’s interim chief legal officer, to raise up to $2 million in a private placement transaction of newly designated Series V Class of preferred stock.
The company said it intends to use the net proceeds raised from the private placement for operations with a focus on driving revenue, increasing its marketing spend, inventories, further funding certain litigation, and investing in company culture.
In a statement, Carrillo commented: “We now have skin in the game. For the last five months, our team has been working diligently on execution. It is equally important that we as the management team make a financial commitment in this financing. It’s important to us that our goals are properly aligned with our shareholders as well as with our team.”
READ: Unrivaled Brands announces binding letters of intent with two California Cookies dispensaries
The company is issuing (i) up to approximately 14 million shares of Series V preferred stock at $0.14 per Series V preferred share which price is equal to the closing share price of the common stock on December 30, 2022, on an as-converted-to-common stock-basis of 10 shares of common stock for each one share of Series V preferred stock or $0.014 per share of common stock, and (ii) up to approximately 71 million warrants to purchase up to 71 million shares of common stock with an exercise price of $0.028 or equivalent to two times the as-converted-to-common stock purchase price of $0.014.
The Series V Class of preferred stock have a one-year lock-up and have a 2 times voting right which automatically expires in two years. Purchasers have agreed to enter into a voting agreement assigning their voting rights to Carrillo.
The private placement is expected to close no later than 10 business days after the effective date of each respective SPA. The SPAs contain customary representations, warranties, covenants, and indemnification provisions.
Unrivaled Brands is a company focused on the cannabis sector with operations in California. The company operates retail and direct-to-consumer delivery, a cultivation facility, and several leading company-owned brands. Unrivaled Brands is home to Korova, known for its high-potency products across multiple product categories, currently available in California, Oregon, Arizona, and Oklahoma.
Contact the author at jon.hopkins@proactiveinvestors.com