Radiko Announces Halt in Cultivation at Carson City and Restructuring of Operations
Radiko Holdings (CSE:RDKO) announced the suspension of cultivation at its Carson City, Nevada facility due to operational challenges. The Company aims to maximize asset value potentially by building a new facility or utilizing licenses elsewhere. Key actions during the production hiatus include a salary reduction of $38,000 per month for senior management, the settlement of $772,000 in operating debt, and plans to issue 7,134,000 shares. CEO Steve Gormley emphasized that restructuring the debt positions the Company better for future capital raising efforts.
- Restructured immediate debt, improving capital raising prospects.
- Reduction of senior management salaries by $38,000 per month.
- Settled $772,000 in operating debt, enhancing financial stability.
- Halting cultivation suggests operational inefficiencies.
- Facility performance below expectations complicates profitability.
- Dependence on vendor cooperation for future plans.
LOS ANGELES, CA / ACCESSWIRE / April 22, 2021 / Radiko Holdings (CSE:RDKO) (the "Company") announced today that the Company is halting its cultivation activities at its indoor facility in Carson City, Nevada. Management, in conjunction with Jeff Malinovitz and Clyde Story, the operators of record at Carson City, have concluded that despite ongoing efforts to rectify matters, the current facility is not performing as expected and it is extremely challenging to produce the type of premium product the operators specialize in. As a result, the Company does not believe it can achieve profitable cultivation operations at the Carson City facility without substantial modifications.
Accordingly, Management is of the view that the Company needs to focus on maximizing the value of the Carson City assets, which may include building an adjunct facility and repurposing the current facility to be used for mothers, clones and drying space. Alternatively, the proposed changes may include utilizing the licenses at another location. The Company has initiated discussions with the vendors of the Carson City assets in order to evaluate all options and formulate a plan. The transaction was structured as a vendor take-back financing due December 31, 2024, so the proposed changes necessarily require their involvement.
Messrs. Malinovitz and Story have indicated they are willing to work with management on a new plan, and would also be willing support Management's efforts to raise the capital required to finance the reboot in Carson City. Jeff Malinovitz said, "We have really enjoyed working with Radiko and would be happy to be involved with a new approach that allows us to do what we do best."
Steve Gormley, CEO, said, "We are grateful for Jeff's expertise as he was able to identify the performance issues with the facility and allow us to react. We are also thankful for his commitment to help Radiko in its efforts to address this and move forward."
The Company also wishes to announce a number of key steps it is taking during the production hiatus in order to streamline the Company's operations while it evaluates its options and focusses on obtaining the funds necessary to move forward:
- Management has reduced salaries paid to senior management of Radiko Holdings, Inc. by US
$38,000 per month - the Company has settled amounts owing under its employment contracts with employees and retained key persons on an "as-needed" consulting basis
- the Company has reduced its operating debt by a total of CDN
$772,000 , consisting of an aggregate write-off of CDN$415,000 and the settlement of additional operating debt in the aggregate amount of CDN$357,000 at CDN$0.05 per share. The Company expects to issue an aggregate of 7,134,000 shares later this week once the paperwork is finalized. The shares will be subject to a four month hold period from the date of issue.
Steve Gormley, CEO, said, "Importantly, the Company has restructured its immediate debt and will be working to sort out the path forward in Carson City. The Company is in a better position to raise more capital on what we hope to be acceptable terms."
About Radiko Holdings
Radiko Holdings Corp. (RDKO) is a CBD and cannabis-focused brand portfolio, leveraging the potential of the plant by offering best of breed products that naturally complement today's consumer lifestyles. The Corporation's mission is to build and market a diversified portfolio of cannabis and CBD brands, with strategic manufacturing and distribution partnerships to support better EBITDA and margins.
For further information:
Steve Gormley
Chief Executive Officer
Radiko Holdings Corp.
12655 W Jefferson Blvd
Los Angeles, CA, 90066
Ph: +1-(323)-828-4321 or steve@radikoholdings.com
Media Inquiries: media@radikoholdings.com
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATION SERVICES PROVIDER HAS REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Disclaimer concerning Forward-looking Statements
Certain statements included herein constitute "forward-looking statements" relating to the operations of the Company and its business prospects within the meaning of applicable securities laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Investors are cautioned not to put undue reliance on forward-looking statements. Additional risks and uncertainties regarding the Company are described in its publicly-available disclosure documents filed by the Company on SEDAR (www.sedar.com). The forward-looking statements contained in this news release represent the Company's expectations as of the date of this news release, or as of the date they are otherwise stated to be made, and subsequent events may cause these expectations to change. Except as required by law, the Company does not intend, and undertakes no obligation to update any forward-looking statements to reflect, in particular, new information or future events.
SOURCE: Radiko Holdings Corp.
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FAQ
Why did Radiko Holdings halt cultivation at its Carson City facility?
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