It is really never a good sign for shareholders when management releases news on a Friday and especially after the market closes..
Just who is High Tower? Once again, in my opinion, it looks like long term shareholders are going to the shaft again...
2020-10-30 20:05 ET - News Release
Mr. Joel Shacker reports
CORE ONE LABS SIGNS LETTER OF INTENT TO SELL CERTAIN ASSETS
Core One Labs Inc. has entered into a letter of intent with High Tower Capital Inc., dated effective Oct. 15, 2020, to sell certain assets and subsidiaries to High Tower for $3-million and for the assumption of $4,015,885 (U.S.) in related liabilities. High Tower will also assume all continuing obligations related to the assets (as defined below).
Core One has engaged in negotiations to sell off non-core assets of the business, allowing it to focus on entering the psychedelic space and the continued development of its CannaStrip technology. The additional capital generated from this sale will be used to further develop the thin strip technologies for use with psilocybin, as well as expanding the newly acquired psychedelic assets. In addition to the money coming in from the sale of the asset, this move also significantly reduces the monthly capital outlays the company had been paying, resulting in cash to be allocated to strategic initiatives designed at increasing visibility in the psychedelic space.
"Reducing Core One's capital outlays on non-core assets is essential to repositioning the company in the psychedelic space. I believe the psychedelic space is poised to become the next large pharmaceutical breakthrough in addressing both alcohol and opioid addiction, as well as anxiety and depression. The global market size for the treatment of these conditions is substantial, and the company is excited to be part of these developments. By adapting our existing technology to become an effective and safe delivery method for psilocybin, Core One has the ability to become a leader in this space," said Joel Shacker, chief executive officer of the company.
Terms of the LOI
In consideration for the acquisition of the assets, High Tower will complete a series of cash payments to the company totalling $3-million and will assume responsibility for all outstanding liabilities and obligations of Reveur Holdings Inc., Core, CSPA, LDS Agrotech Inc., LDS Scientific Inc., Agrotech LLC and LDS Development Corp. (all as defined below), including all continuing employment obligations and certain additional liabilities of the company associated with the assets.
The assets are composed of the following:
- All of the issued and outstanding share capital of Reveur Holdings, a California corporation, including its principal assets, which are all of the issued and outstanding share capital of Core Isogenics Inc., a California corporation, and CSPA Group Inc. , a California corporation;
- All of the issued and outstanding share capital of LDS Agrotech, a Nevada corporation, held by the company, which represents 75 per cent of the outstanding share capital of AgroCo;
- All of the issued and outstanding share capital of LDS Scientific (SciCo), a Nevada corporation, held by the company, which represents 75 per cent of the outstanding share capital of SciCo;
- The membership interest in Agrotech, a California limited liability company, held by the company, which represents a 50-per-cent membership interest in AgroLLC;
- All of the issued and outstanding share capital of LDS Development, a California corporation, except for all tangible and intangible assets of DevCo related to the manufacturing and distribution of CannaStrips, including all associated intellectual property and manufacturing equipment;
- All tangible and intangible assets currently being held by and utilized by Reveur, Core, CSPA and DevCo, including, without limitation, all existing contracts, leases, client files, client billing records, vendor records, furniture, fixtures, equipment, employee files, employee time records and other information customary for the cultivation, manufacturing and distribution of cannabis and cannabis-related products, but excluding the excluded assets.
Completion of the sale of the assets remains subject to a number of conditions, including the satisfactory completion of due diligence, receipt of any required regulatory approvals and the negotiation of definitive documentation. The sale of the assets cannot be completed until these conditions have been satisfied.
The company is at arm's length from High Tower and each of its shareholders. A success fee of $30,000, payable in common shares of the company, is expected to be paid to a third party consultant who will be assisting with the asset sale.
About Core One Labs Inc.
Core One is a research and technology company with a state-of-the-art cannabis production and packaging facility located in Southern California. The company's technology produces infused strips (like breath strips) that not only are a safer, healthier option to other forms of delivery but also have superior bioavailability of cannabis constituents. The technology provides a new way to accurately meter the dosage and assure the purity of selected product. The company holds an interest in walk-in medical clinics located in Vancouver and West Vancouver, B.C., which maintain a database of over 200,000 patients combined. The company intends to further develop its product offerings through research and development in these clinics, including the integration of intellectual property related to psychedelic treatments and novel drug therapies.
We seek Safe Harbor.