Unrivaled Brands Announces Non-Binding Letters of Intent For a Significant Acquisition and Provides Stockholder Update

SANTA ANA, Calif., Nov. 16, 2023 (GLOBE NEWSWIRE) -- Unrivaled Brands, Inc. (OTCQB: UNRV) (“Unrivaled,” “Unrivaled Brands,” “Company,” “we” or “us”), a cannabis company with operations throughout California, announced today that it has entered into various Non-Binding Letters of Intent (“Letters of Intent”), by and among the Company, an entity formed for the purpose of effectuating the roll-up of various cannabis assets (“Roll-Up Co.”), and various cannabis entities and operators with operations throughout California (the “Operators”).

The Letters of Intent outline the general terms and conditions of a proposed transaction pursuant to which, following a contribution of all assets by the Operators to Roll-Up Co. (the “Roll-Up”), the Company will acquire Roll-Up Co. in exchange for shares of common stock of the Company (the “Acquisition,” and together with the Roll-Up, the “Proposed Transaction”). Currently, the Operators who are party to the Letters of Intent include 11 operating retail dispensary entities, 4 cultivation operations, and 1 manufacturing facility which includes a commercial kitchen and distribution hub.

On the heels of our recent announcement of a proposed corporate reorganization (as further described below) and reverse stock split, the Company wishes to update our stockholders on these changes and our ongoing efforts to foster growth, including through the Proposed Transaction, given the Company’s current resources.

On October 10, 2023, the Company announced its plans to undergo a corporate reorganization in which a newly-formed Delaware holding company, Blum Holdings, Inc. (“Blüm”), would become the ultimate parent of the Company and its subsidiaries (the “Reorganization”). The objectives of the proposed Reorganization include (i) to provide the Company with greater organizational, operational, and financial flexibility in our restructuring and turnaround efforts, (ii) to position the Company to leverage potential positive developments in the cannabis industry, particularly with the possible changes in cannabis legislation during a Presidential election year (including (a) the potential rescheduling of cannabis from Schedule 1 to Schedule 3, which would eliminate taxes associated with Section 280E of the Internal Revenue Code and could free up the Company’s cashflows and possibly lead to increased valuations, and (b) the potential passage of the SAFER Banking Act and/or the MORE Act, either or both of which could result in the opening of NASDAQ to plant touching US-based cannabis companies), (iii) to prepare the Company for the Proposed Transaction contemplated by the non-binding Letters of Intent which aims to diversify our asset base and drive growth in 2024, (iv) to allow the Company to take advantage of historically low valuations of nonpublic cannabis assets, and (v) to elevate our position among US-based publicly traded cannabis companies, increasing investor awareness, and enhancing media coverage and visibility.

The Company is pleased to announce the execution of the non-binding Letters of Intent, which would involve the acquisition of a collection of California-based assets that the Company believes could generate between $60,000,000 and $80,000,000 in total combined revenue annually post Roll-Up, based on current run rates of the Operators and the Company.

The Company is conducting a diligence review of each Operator, which the Company expects will assist in determining the Operators that will enter into definitive agreements for the Proposed Transaction as well as provide information on the economics and amount of consideration to be paid for the assets.

Each of the parties’ obligations to close the Proposed Transaction will be subject to customary conditions and any other conditions agreed to by the parties to be included in the definitive agreements for the Proposed Transaction, including but not limited to the receipt of all necessary approvals and consents required by each party to complete the Proposed Transaction.

No assurances can be made that the Company will successfully negotiate and enter into definitive agreements for the Proposed Transaction or that the Company will be successful in completing the Proposed Transaction.

Key Highlights of the Proposed Transaction:

If the Proposed Transaction is completed as currently contemplated, Unrivaled Brands may be positioned to capitalize on the following:

Talent Acquisition: The Proposed Transaction would add a group of successful, highly experienced cannabis retail, cultivation, and distribution entrepreneurs to the Company’s team. Many of these entrepreneurs have been in the cannabis industry for 10+ years.
Asset Enhancement: Acquisitions of assets that complement and bolster Unrivaled's current offerings. The Proposed Transaction may also add key branded assets to the Company’s portfolio and may serve as a model for future expansion.
Geographic Expansion: The Proposed Transaction expands and connects the Company's footprint statewide, opening up fresh avenues and synergies in previously untapped markets.
Synergistic Integration: The new assets are anticipated to seamlessly integrate with Unrivaled’s existing operations driving operational efficiencies and improved profitability.
Enhanced Stakeholder Value: Acquisitions underline Unrivaled's commitment to delivering continuous and augmented value to its stockholders and employees.

Sabas Carrillo, Unrivaled’s Chief Executive Officer, said, "This pivotal move marks a significant step forward in the Company’s efforts to expand its reach and continue building the right team in order to generate a truly transformative event for the Company."

About Unrivaled Brands

Unrivaled Brands is a company focused on the cannabis sector with operations in California. Unrivaled Brands operates four dispensaries and direct-to-consumer delivery, a cultivation facility, and several leading company-owned brands. Korova, an Unrivaled Brand, is known for its high potency products across multiple product categories, including the legendary 1000 mg THC Black Bar.

For more info, please visit: https://unrivaledbrands.com.

Cautionary Note Regarding Forward Looking Statements

Certain statements contained in this communication regarding matters that are not historical facts, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, known as the PSLRA. The Company uses words such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “will,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “guidance,” and similar expressions to identify these forward-looking statements that are intended to be covered by the safe-harbor provisions of the PSLRA. These include statements regarding management's intentions, plans, beliefs, expectations, or forecasts for the future, and, therefore, you are cautioned not to place undue reliance on them. Forward-looking information in this news release includes statements regarding the possible changes in cannabis legislation and any potential benefits that may result therefrom, the growth of the Company’s business and projected annual revenue as a result of the Proposed Transaction, and that the Proposed Transaction will be completed on the terms set forth in the non-binding letter of intent. Such forward-looking statements are based on the Company’s current expectations based on information currently available and involve risks and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements due to a number of factors. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected.

New factors emerge from time-to-time and it is not possible for the Company to predict all such factors, nor can the Company assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Such risks may include, among others, the risk that the Company will not achieve the anticipated benefits of the Proposed Transaction, such as growth of the retail, cultivation and manufacturing facilities and anticipated financial results; the risk that certain Operators may elect to not participate in the Proposed Transaction; the risk that we may not be able to execute our growth strategies; the risk that we experience difficulties in managing our growth and expanding operations after the Proposed Transaction; the ability to recognize the anticipated benefits of the Proposed Transaction to achieve its commercialization and development plans, and identify and realize additional opportunities, which may be affected by, among other things, competition, our ability to grow and manage growth economically and hire and retain key employees; the risk that the parties will need to raise additional capital to execute the proposed growth plan following completion of the Proposed Transaction, which may not be available on acceptable terms or at all; changes in applicable laws or regulations; the risk that the United States fails to implement federal legalization of cannabis or changes may not develop in the timeframe or manner most favorable to our business objectives; the risk that unfavorable changes or lack of commercial legalization could impact our ability to carry on our business as currently conducted and the potential expansion of our business and adversely affect our ability to realize anticipated benefits from the Proposed Transaction; the risk that we may not successfully negotiate and enter into definitive agreements for the Proposed Transaction; and the risk that even if we are able to negotiate and enter into definitive agreements, the Proposed Transaction may not be completed. Additional risks and uncertainties are identified and discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed from time to time with the Securities and Exchange Commission (the “SEC”). Forward-looking statements included in this press release are based on information available to the Company as of the date of this press release. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by law.

No Offer or Solicitation

This press release shall not constitute a solicitation of a proxy, consent, or authorization with respect to any securities or in respect of the proposed acquisition. This press release shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended (the “Securities Act”), or an exemption therefrom.

Important Information and Where to Find It

The Company has mailed to its stockholders of record as of October 16, 2023 a definitive proxy statement (the “Reorganization Proxy Statement”) for an annual meeting of stockholders to be held on December 5, 2023 to approve the Reorganization, a reverse stock split, and other annual meeting proposals as described in the Reorganization Proxy Statement (collectively, the “Reorganization and Annual Meeting Proposals”).

No offer of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act. In connection with the Reorganization, Blüm has filed a definitive prospectus of Blüm, and the Company and Blüm may file with the SEC other relevant documents in connection with the proposed Reorganization. THE COMPANY’S STOCKHOLDERS ARE URGED TO CAREFULLY READ THESE DOCUMENTS AND THE DEFINITIVE PROXY STATEMENT/PROSPECTUS, WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN AND WILL CONTAIN IMPORTANT INFORMATION REGARDING THE REORGANIZATION. Investors may obtain a free copy of Blüm’s definitive prospectus and the Company’s Reorganization Proxy Statement, as well as other filings containing information about the Company, Blüm and the Reorganization, from the SEC at the SEC’s website at http://www.sec.gov. In addition, copies of Blüm’s definitive prospectus and the Company’s Reorganization Proxy Statement, as well as other filings containing information about the Company, Blüm and the Reorganization can be obtained without charge by sending a request to Unrivaled Brands, Inc., 3242 S. Halladay Street, Suite 202, Santa Ana, California 92705; by calling 678-570-6791; or by accessing them on the Company’s investor relations web page at https://ir.unrivaledbrands.com/sec-filings.

Participants in the Solicitation

The Company and its directors, executive officers and certain other members of management and employees may be deemed to be participants in the solicitation of proxies from the Company’s stockholders in connection with the Reorganization and Annual Meeting Proposals and the potential transaction described herein under the rules of the SEC. Additional information regarding the interests of potential participants in the proxy solicitation is included in Blüm’s definitive prospectus, the Company’s Reorganization Proxy Statement and other relevant documents that the Company and Blüm have filed, and intend to file, with the SEC in connection with the Reorganization. Copies of these documents can be obtained without charge as described in the paragraph above.

Contact:
Jason Assad
LR Advisors LLC.
jassad@unrivaledbrands.com
678-570-6791

Source: Unrivaled Brands, Inc.

Released November 16, 2023