07:00:41 EDT Fri 29 Mar 2024
Enter Symbol
or Name
USA
CA



Flower One Holdings Inc
Symbol FONE
Shares Issued 460,679,630
Close 2022-06-30 C$ 0.03
Market Cap C$ 13,820,389
Recent Sedar Documents

Flower One enters debt modification deal with RB Loan

2022-07-01 01:00 ET - News Release

Mr. Kellen O'Keefe reports

FLOWER ONE ANNOUNCES SIGNIFICANT ADVANCEMENTS WITH ONGOING RESTRUCTURING

Flower One Holdings Inc. has made advancements with its continuing restructuring, including the restructuring of its term debt and its master lease.

"This debt restructuring is a major step in our turnaround plan as it will provide the company with additional liquidity and a significant runway to continue our operational restructuring efforts and position the company for sustainable growth," said Kellen O'Keefe, president and chief executive officer. "We would like to thank our term lenders and loan participants for facilitating these momentous transactions."

Term debt restructuring

The company and certain of its subsidiaries have entered into a term debt modification agreement with RB Loan Portfolio II LLC, with respect to the company's existing $45.65-million term debt, secured by the facility at 3950 North Bruce St., North Las Vegas, Nev. Through the term debt modification agreement, the company would: (i) defer interest payments through Oct. 31, 2022, to provide additional liquidity to the business; (ii) reduce the cash interest payments by 30 per cent; (iii) extend the maturity date of the term debt to Jan. 31, 2026; and (iv) pay $9-million to the term lender on Sept. 30, 2023, whereas the company has the option to pay this first loan paydown on Jan. 31, 2024, with a 2.5-per-cent penalty.

Master lease restructuring

The company through its subsidiaries has also entered into a master lease modification agreement in connection with the agreement dated Feb. 1, 2019, with RB Loan Portfolio I LP, a Delaware limited partnership, regarding the equipment lease financing of certain equipment at the Bruce facility, pursuant to which the lessor has agreed to forbear existing events of default and make certain modifications to the master lease, including: (i) the deferral of certain payments through Oct. 31, 2022, to provide additional liquidity to the business; (ii) revising the amortization schedule to enable a reduction in monthly payments for the duration of the master lease; and (iii) extending the maturity date of the master lease to March 3, 2025.

"Given the current state of the capital markets for cannabis, we are very pleased with this notable transaction. This crucial step in our restructuring not only provides the company with significant cash interest savings, but also allows for a deferral of interest payments, ensuring we are able to preserve capital," Araxie Grant, Flower One's chief financial officer.

The company has determined that the term debt and master lease are exempt from the formal valuation and minority approval requirements applicable to related-party transactions under Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions) pursuant to the financial hardship exemptions set forth in Sections 5.5(g) and 5.7(1)(e) of MI 61-101.

About Flower One Holdings Inc.

Flower One is the largest cannabis cultivator, producer and full-service brand fulfilment partner in the state of Nevada. By combining more than 20 years of greenhouse operational excellence with best-in-class cannabis operators, Flower One offers consistent, reliable and scalable fulfilment to a growing number of industry-leading cannabis brands (Cookies, Kiva, Old Pal, Heavy Hitters, Lift Ticket's, The Clear, Huxton and Flower One's leading in-house brand, Nlvo, and more). Flower One currently produces a wide range of products from flower, full-spectrum oils and distillates to finished consumer packaged goods, including a variety of: prerolls, concentrates, edibles, topicals and more for top-performing brands in cannabis. Flower One's Nevada footprint includes the company's flagship facility, a 400,000-square-foot high-technology greenhouse and 55,000-square-foot production facility, as well as a second site with a 25,000-square-foot indoor cultivation facility and commercial kitchen. Flower One has built an industry-leading team focused on making high-quality cannabis available to all.

The company's common shares are traded on the Canadian Securities Exchange under the company's symbol FONE, in the United States on the OTCQX Best Market under the symbol FLOOF and on the Frankfurt Stock Exchange under the symbol F11.

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