Nevada-based cannabis company Planet 13 Holdings Inc. (CSE: PLTH) (OTCQX: PLNHF) confirmed Friday its co-CEOs Robert Groesbeck and Larry Scheffler have converted 52.25 million of the company’s Class A restricted voting shares into 52.25 million common shares.
Groesbeck and Scheffler completed the conversion via their joint respective actors - PRMN Investments Ltd. and Thirteen, LLC. Shares were transformed under previously set terms and for no further consideration.
On May 7th, another 2.98 million Class A shares not held by Groesbeck and Scheffler's joint actors were also converted, due to which Planet 13 now has no more outstanding Class A shares.
After the conversion, Groesbeck and his joint actor PRMN own zero Class A shares, 38.55 million common shares, accounting for 19.63% of the total amount of common shares outstanding and 1.05 million restricted share units.
Scheffler and his joint actors also hold zero Class A shares, 39.20 million common shares, which amass 19.96% of the total number of Planet 13’s common shares, and 1.05 million restricted share units.
Both Groesbeck and Scheffler plan to hold their shares for investment activities.
Planet 13 To Obtain U.S. Domestic Issuer Status.
Class A Shares were primarily issued to all former shareholders of MM Development Company, Inc. who were residents in the U.S. in relation to Planet 13’s going public business combination in 2018.
If the business combination had been finalized without Class A shares issuance, U.S. shareholders would have held a total of 67% of the total company’s shares, making a company a U.S. domestic issuer at that time.
Planet 13 is confident that more than 50% of its shares will be owned by U.S. residents prior to June 30, regardless of whether the Class A shares were converted. The company, therefore, projects it will no longer fall under the category of a “foreign private issuer” following U.S. securities laws and could be considered a U.S. domestic issuer starting January 1, 2022.
One of the U.S. reporting requirements is for the company’s financial data to be reported under U.S. GAAP, beginning with Planet 13’s annual report on Form 10-K for the year 2021.
Even though Planet 13 is projected to become subject to U.S. reporting requirements beginning January 1, 2022, it will remain a British Columbia corporation.
Just last week, the vertically-integrated cannabis company posted record sales figures for the month of April, hitting $10.7 million - almost as much as last year’s total second-quarter revenue of $10.8 million.
Planet 13 explained Wednesday that higher sales can be attributed to an increased number of tourists, constant progress at the Medizin dispensary and positive wholesale results.
Furthermore, the company recently revealed its new single-day record sales for this year’s 420 celebrations: $543,000 in sales in one day. For the month, the company said its gross margins were over 50%.
PLNHF Price Action: Planet 13’s shares were trading 1.49% lower at $6.60 at the time of writing.