Fire & Flower Holdings Corp FFLWF

Fire & Flower Upsizes and Completes $28 Million Pvt placemnt

[Humanist]

Fire & Flower Holdings Corp. 
Apr 28, 2020, 16:30 ET

Green Acre Capital acting as Lead Investor

EDMONTON, April 28, 2020 /CNW/ - Fire & Flower Holdings Corp. ("FFHC", "Fire & Flower" or the "Company") (TSX: FAF OTCQX: FFLWF), today announced the closing of the previously announced private placement offering of $1,000 principal amount of 8.0% secured convertible debentures (the "Convertible Debentures") and subscription receipts (the "Subscription Receipts") for aggregate gross proceeds of $28 million (the "Offerings").

The private placement of Subscription Receipts was upsized from a previously announced $5.2 million to $8.2 million. Additionally, Alimentation Couche-Tard Inc., through a wholly-owned subsidiary has exercised its participation rights in respect of the Offerings.
The completion of the Offerings strengthens Fire & Flower's position to continue expanding its retail network across Canada. The proceeds will also be used for general working capital purposes and the repayment of existing debt.

"As we continue to build the leading brand of cannabis retail stores across Canada, the completion of these financings mark and important part in our growth story," shared Trevor Fencott, Chief Executive Officer of Fire & Flower. "We are very pleased that Alimentation Couche-Tard has exercised their participation right under the Investor Rights Agreement and look forward to continuing our strategic relationship."
Under the Offerings, the Company issued (a) 19,800 Convertible Debentures; and (b) 8,200 Subscription Receipts, each at an offering price of $1,000 per security, for aggregate gross proceeds of $28,000,000. Green Acre Capital LP and affiliates thereof acted as the lead investor and AltaCorp Capital Inc. acted as the Company's exclusive financial advisor.

The Convertible Debentures bear interest at an annual rate of 8.00% payable in arrears in equal installments semi-annually. The Convertible Debentures mature on June 1, 2021, which date may be extended to April 28, 2022 in the event certain outstanding securities of FFHC held by the Investor (as defined below) are converted, exercised or otherwise cancelled (the "Maturity Date") as further set out in the debenture indenture between FFHC and Computershare Trust Company of Canada ("CTCC") dated April 28, 2020. The principal amount of Convertible Debentures is convertible at the holder's option into common shares of FFHC (the "Conversion Shares") at any time prior to the Maturity Date at a conversion price of $0.50 per Conversion Share. The Company's obligations under the Convertible Debentures are secured by the assets of the Company and its subsidiaries.

Subject to the approval of the Toronto Stock Exchange (the "TSX"), which pursuant to the TSX policies requires the approval of the shareholders of FFHC, in lieu of paying any interest accrued and payable in respect of the Convertible Debentures up to and including December 31, 2020 (or June 30, 2021 in the event the Maturity Date is extended), FFHC may elect to add such accrued and unpaid interest to the then outstanding principal amount of Convertible Debentures.

The gross proceeds of the offering of Subscription Receipts (the "Subscription Receipt Proceeds") are held by CTCC, in its capacity as subscription receipt agent, pursuant to the terms of a subscription receipt agreement entered into between FFHC and CTCC. Upon the satisfaction and/or waiver of certain escrow release conditions (the "Escrow Release Conditions") each Subscription Receipt will automatically be converted into a $1,000 principal amount Convertible Debenture and the Subscription Receipt Proceeds will be released to FFHC.

The Escrow Release Conditions include the Conversion Shares underlying the Convertible Debentures issuable upon conversion of the Subscription Receipts being conditionally approved for listing on the TSX and the completion, satisfaction or waiver of all conditions precedent to such listing, including the receipt of shareholder approval which the Company will be seeking at its upcoming annual and general meeting of shareholders.
The Convertible Debentures, the Subscription Receipts and any underlying securities issued pursuant to the Offerings are subject to a statutory hold period of four months and one day from the date hereof.
In connection with the Offerings, certain "related parties", for the purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"), subscribed for an aggregate of 795 Convertible Debentures and 280 Subscription Receipts. The issuance and sale of these securities to such related parties constituted a "related party transaction" for the purposes of MI 61-101. The Company is relying on exemptions from the formal valuation and minority shareholder approval requirements available under MI 61-101. The Company is exempt from the formal valuation requirement in section 5.4 and the minority shareholder approval requirement in section 5.6 of MI 61-101 in reliance on sections 5.5(a) and 5.7(a), respectively, of MI 61-101 as the fair market value of the transaction, insofar as it involved related parties, was not more than 25% of the Company's market capitalization.
Strategic Relationship with Alimentation Couche-Tard
Pursuant to the terms of the investor rights agreement between FFHC and 2707031 Ontario Inc. (the "Investor"), a wholly-owned subsidiary of Alimentation Couche-Tard Inc., dated August 7, 2019 (the "IRA"), the Investor exercised its participation rights in respect of the Offerings and subscribed for an aggregate of 1,960 Convertible Debentures and 515 Subscription Receipts. Additionally, in accordance with the IRA, FFHC issued to the Investor an additional (a) 3,523,705 Series A Warrants; (b) 11,048,651 Series B Warrants; and (c) 22,686,864 Series C Warrants (as such terms are defined in the IRA).
Additional details on these financings can be found in the Company's documents that will be filed on SEDAR at www.sedar.com.
About Fire & Flower
Fire & Flower is a leading purpose-built, independent adult-use cannabis retailer poised to capture significant Canadian market share. The Company guides consumers through the complex world of cannabis through education-focused, best-in-class retailing while the Hifyre^™ digital platform connects consumers with cannabis products. The Company's leadership team combines extensive experience in the cannabis industry with strong capabilities in retail operations.
https://www.newswire.ca/news-releases/fire-amp-flower-upsizes-and-completes-28-million-private-placements-833334600.html

[Oldweed]

Nice to see CT commited even in tough times! This speaks volumes!

[spike55]

Thinking the same thing.......They certainly have more info then me so a posative for sure

[BayStreetCFA]

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[Oldweed]

Yep, DD done and a 3 year horizon for takeover with a floor set at 2.00 and ceiling at 6.00 it would take something pretty drastic to derail this deal now...even a pandemic didn't slow it down! I'm guessing it will steadily climbe as the market digests and may even pop to 2 bucks at some point and then trend higher. Imagine the panic to buy if the USA legalizes....unicorn:)

[Stockplay2020]

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[AutoflowernVdM4]

So I take it, you will be selling your shares .... Maybe consider a GIC, or if you are still interested in equities, an ETF. In the meantime, I'm going to hang in and weather the storm. This is a nascent industry, struggling in extreme market conditions, and that's justing speaking to the MJ sector. The Covid-19 impact has shown however, that retail will likely see the best potential in