Blum Holdings, Inc. (OTCPK:BLMH) entered into a binding letter of intent to acquire Operators Only Corp for $9.7 million on February 9, 2024. The consideration consists of secured promissory notes in the aggregate principal amount of approximately $1.9 million to be paid in monthly installments of approximately $55,600 per month over 34 to 42 months. The issuance of 1.83533 million common stock.

The Notes may be converted into common stock of the Company at the transaction valuation, on terms to be agreed-upon. On the date which is 24 months after the Closing Date, the Target Shareholders shall have the option, but not the obligation, for a period of ninety (90) days thereafter, to exchange with Blum Holdings shares received as part of the purchase price for a promissory note. $1.9 million promissory note can be converted to $7.76 million in Blum Holdings common stock.

If the $7.76 million in Blum Holdings common stock is converted to cash in two years with a 35% discount, the value shall be approximately $5.05 million, totaling a purchase price of approximately $6.99 million. This arrangement is subject to US GAAP considerations, including the classification of financial instruments (this will likely have to be accounted for as debt as opposed to equity), measurement and recognition at fair value on a quarterly basis, and treatment as contingent consideration. The closing of the transactions contemplated shall take place as soon as practicable and the Parties hereby agree to act in good faith to enter into Definitive Agreements and to complete the Closing by April 30, 2024.

In a related transaction Blum Holdings will acquire Golden Health & Wellness, Inc., Safe Accessible Solutions, Inc., and Sacramento Commercial Services, Inc.