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Flower One Holdings Inc. has secured a $5M loan from RB Loan Portfolio II, LLC, aiming to enhance financial flexibility and complete greenhouse upgrades. This funding will help the company work towards achieving positive cash flow and support existing $45.65M term debt. The loan arrangement, linked to an insider transaction, is exempt from standard valuation and approval requirements due to financial hardship exemptions. CEO Kellen O’Keefe emphasized the importance of this loan for future growth and shareholder value.
Positive
Secured $5M loan to improve financial flexibility.
Funding targets completion of greenhouse upgrades.
Aims to achieve positive cash flow.
Negative
Existing term debt of $45.65M may indicate financial strain.
Loan to Provide Company with Near-Term Financial Flexibility, and Ability to Complete First Phase of Greenhouse Upgrades
LAS VEGAS--(BUSINESS WIRE)--
Flower One Holdings Inc. (“Flower One” or the “Company”) (CSE: FONE) (OTCQX: FLOOF) (FSE: F11), the leading cannabis cultivator and producer in Nevada, is pleased to announce the receipt of a $5M loan (the “Loan”) from RB Loan Portfolio II, LLC, (the “Term Lender”). All amounts are expressed in U.S. dollars unless indicated otherwise.
“This capital infusion will enable us to complete the first phase of capital expenditures and provide working capital to the business. We are grateful for the runway this will provide as we work towards our goal of achieving positive cash flow,” said Kellen O’Keefe, President & CEO of Flower One.
The Company and certain of its subsidiaries are parties to an existing loan agreement with the Term Lender with respect to the Company’s existing $45.65M term debt (the “Term Debt”), secured by the facility at 3950 N. Bruce St., North Las Vegas, Nevada. The Company’s receipt of the Loan was facilitated by the assignment to an insider of the Company, of a portion of the interest owing in the Term Debt from the Term Lender in the amount of $5M. The Loan has made an additional $5M available to the Company with respect to the Term Debt. The maturity date of the Term Debt is June 30, 2023.
The Company has determined that the Loan is 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 (“MI 61-101”) pursuant to the financial hardship exemptions set forth in Sections 5.5(g) and 5.7(1)(e) of MI 61-101.
“We have been working diligently with our lenders to find solutions that position Flower One for future success. Our goal is to ensure we have the appropriate capital structure that enables the Company to deliver growth and shareholder value over the long term,” said Araxie Grant, CFO of Flower One.
About Flower One Holdings Inc.
Flower One is the largest cannabis cultivator, producer, and full-service brand fulfillment 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 fulfillment 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: pre-rolls, 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-tech 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 accessible 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”. For more information, visit: https://flowerone.com.
Cautionary Note Regarding Forward-Looking Information
Statements in this press release that are not statements of historical or current fact constitute “forward-looking information” within the meaning of Canadian securities laws and “forward-looking statements” within the meaning of United States securities laws (collectively, “forward-looking statements”). Such forward-looking statements involve known and unknown risks, uncertainties, and other unknown factors that could cause the actual results of the Company to be materially different from historical results or from any future actual results expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms “believes,” “belief,” “expects,” “intends,” “anticipates,” “potential,” “should,” “may,” “will,” “plans,” “continue” or other similar expressions to be uncertain and forward-looking.
Forward-looking statements may include, without limitation, statements pertaining to: the use of proceeds; the ability of the Company to complete the capital expenditures and provide working capital to its business; the ability of the Company to improve or achieve positive cash flow and profitability; the ability of the Company to deliver growth and provide shareholder value; expectation of continued or improved financial performance growth of the Company; statements relating to the Company’s position as a leader in the Nevada cannabis market and anticipated sales and record revenue; the Company’s leadership as a cannabis cultivator, producer, innovator and full-service brand fulfillment partner; and the production of a wide range of products for the nation’s top-performing brands.
The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement, the “Cautionary Statement regarding Forward-Looking Information” section contained the Company’s management’s discussion and analysis for the three and six months ended September 30, 2021 (the “MD&A”). All forward-looking statements in this press release are made as of the date of this press release. The forward-looking statements contained herein are also subject generally to assumptions and risks and uncertainties that are described from time to time in the Company’s public securities filings with the Canadian securities commissions, including the Company’s MD&A. Although Flower One has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended.
Although the Company believes that any forward-looking information and statements herein are reasonable, in light of the use of assumptions and the significant risks and uncertainties inherent in such information and statements, there can be no assurance that any such forward-looking information and statements will prove to be accurate, and accordingly readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance upon such forward-looking information and statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this press release are made as of the date of this release. Flower One disclaims and does not undertake any intention or obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR THEIR REGULATIONS SERVICES PROVIDER HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
