In a letter to shareholders, Resonate Chairman and CEO Geoff Selzer said since 2019 the company has sought to raise money to execute its business plan.
“The present economy without federal cannabis reform, the restrictions on commercial banking, the saturated nature of the cannabis industry, the strength of the illicit market and the decline in public investor interest in cannabis stocks over the past 18 months have all prevented this from happening,” Seltzer wrote. “We have been very vocal in our belief that all stakeholders, from our employees, our customers and our financial community, need to be considered as we drive our strategy. We are clear that a relative startup in the cannabis industry, as a public company, does not serve those interests and have decided to set our sights on new opportunities.”
Selzer added Resonate has searched for other businesses that could bring new investors and opportunities. The company has signed a non-binding letter of intent with Pegasus Specialty Vehicles, a leader in low-emission and zero-emission electric vehicles and hydrogen fuel cell technology for school buses and specialty vehicles. Pegasus has created a nationwide network of distributors to sell its buses and specialty vehicles in all 50 U.S. states, Canada, Micronesia, Guam, the U.S. Virgin Islands and the Caribbean.
Pegasus addresses the needs of the traditional, hybrid electric, full electric (EV) battery and hydrogen fuel cell markets. To leverage its position in this emerging market, Pegasus has developed partnerships with leaders in the EV and hydrogen fuel cell sectors, such as Peterbilt, Zeus Electric Chassis, Hyperion Motors and Via Motors.
“To summarize, we are excited to let the investment community and our loyal shareholders know we are moving our public holding company towards an opportunity we all feel will provide a clearer path to near term revenue opportunities, revenue growth and overall profitability than what our current business can provide,” Selzer wrote. “As always, we are grateful for our shareholders’ support and patience as we continue the process towards our expected closing of Pegasus. We expect to be in contact over the coming weeks detailing our progress towards this exciting opportunity.”
Completion of the proposed merger is subject to the negotiation of a definitive merger agreement and related documentation, approval by Resonate’s Board of Directors, the completion of due diligence to the satisfaction of both parties, financing, and satisfaction of other conditions that are to be negotiated as part of the merger agreement.