TPCO Holding Corp., doing business as The Parent Co. announced a restructuring in an effort to save millions of dollars in the coming years.
Under the arrangement, Shawn “Jay-Z” Carter affiliates and Roc Nation will return 7.1 million common shares of the company – a move that’s projected to save roughly $33.5 million in top-line costs over an eight-year period, according to a news release.
Roc Nation will also forgo future Parent Co. equity payments, while SC Branding has agreed to forgo future cash and/or equity payments.
The terms allow Roc Nation and Jay-Z affiliates, who are expected to remain substantial shareholders, to continue working with The Parent Co. on innovation, brand strategy and social equity opportunities, according to the release.
As part of the deal, ownership of the Monogram brand will transfer to an entity designated by SC Branding and Shawn “Jay-Z” Carter.
San Jose-based The Parent Co. will have an exclusive, royalty-free license for eight years to commercialize Monogram in California as well as the right to sell any Monogram products.
“Collectively, we have agreed to restructure our partnership in order to afford The Parent Company the best opportunity to execute a longstanding and successful strategy,” Carter said in a statement.
The Parent Co., which was created in 2020 through a special purpose acquisition company, also operates the brands Caliva, Deli, Fun Uncle and Mirayo by Santana.
The company in November reported:
- Third-quarter revenue of $19.5 million, up 3.5% from the same period a year ago.
- An adjusted loss of nearly $16 million, compared with an adjusted loss of $14.6 million year-over-year.
The Parent Co. shares, which list as GRAMF on the over-the-counter markets, were trading at 23 cents on Monday, down 85% from the 52-week high.