Nevada-based cannabis company Unrivaled Brands Inc. (OTCQB: UNRV), which has operations across California, plans to undergo a major restructuring, including a rebranding.
The company said in a Tuesday news release that it will reorganize under a new publicly traded banner, Blüm Holdings Inc. The new entity, which was named after Unrivaled’s California dispensaries, would see every share of Unrivaled’s common stock swapped equally for shares in Blüm Holdings. Rights to convert securities into Unrivaled shares similarly would be transferred to Blüm.
Leadership and day-to-day business operations will remain unchanged under the new structure, and the move is expected to be tax-free for both the company and its shareholders under U.S. federal income tax guidelines.
Additionally, shareholders will review a potential reverse stock split proposal, ranging from 1-for-70 to 1-for-100, during their 2023 annual meeting. If approved, this adjustment will occur right before the larger restructuring. The outcome would have Unrivaled shareholders holding equivalent portions of Blüm Holdings, though the specific number of shares could differ due to the split.
Lead Up
Unrivaled Brands, which was formerly known as Terra Tech, reported some notable financial improvements over the past year.
The company managed to slash its liabilities by $48.3 million, ending 2022 at $77 million. Debt renegotiations, settlements with creditors, and capital management were among the successful strategies, alongside a Series V Preferred Share offering that raked in an additional $2 million.
Adnant Consulting’s role in Unrivaled’s comeback has been pivotal, having first partnered with Terra Tech in 2015. The consulting has focused on business and brand repositioning. Sabas Carillo, the current CEO and chairman of Unrivaled, oversaw the partnership with firm.
Danielle Sebastian, director of marketing at Unrivaled, praised the strategic collaboration, saying in April that the partnership “has reshaped our trajectory in the cannabis industry.”
The company has also renegotiated terms with People’s California LLC, extending due dates for significant debt payments and creating options to pay half of monthly interest with registered common stock, providing extra runway for the future.
Still, 2022 concluded with a loss of $193.8 million for Unrivaled, mainly due to acquisition-related costs for companies UMBRLA, People’s, and SilverStreak, which totaled $163.7 million in charges. The company took steps to mitigate losses by dissolving SilverStreak and its related entities in November 2022, yielding a $7.2 million gain.
By June 30, the company’s workforce reduced to 145, down from 238 the previous year.
For the second quarter, it posted a net loss of $1.4 million for the period, a substantial improvement from the $63.7 million loss in the previous year. This was despite a decline in year-over-year operational income, down to $8.8 million from $15.8 million.
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