GREY:FLWPF - Post by User
Post by
Notthatbrighton Mar 09, 2022 3:22pm
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Post# 34500574
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Sale of Non-Revenue Generating Asset
The Company has entered into an agreement to sell its interest in the Kelowna Research Station R&D facility (the “KRS Facility”) to Hawthorne Canada Limited (“Hawthorne”) for an aggregate purchase price of $16 million (the “KRS Sale”), to be paid as follows: 1) an initial cash payment of $3.0 million; 2) full extinguishment of the principal amount outstanding under the existing loan agreement between Flowr and Hawthorne for the construction of the KRS Facility on closing, currently at approximately $12 million; and 3) the balance of the purchase price paid in cash upon closing. The KRS Sale is expected to close in Q2 2022 and is subject to certain closing conditions, including receipt of all necessary regulatory and third-party approvals.
“The KRS building and Hawthorne partnership has given us the ability to trial and commercialize exotic and unique cannabis strains, giving us a competitive advantage in the Canadian market,” commented Darryl Brooker, Chief Executive Officer. “Moving forward we will maintain a very close relationship with Hawthorne and will continue to benefit from shared Research and Development and the partnership will continue through a service agreement. In addition, this transaction further improves Flowr’s balance sheet with the cash proceeds of approximately $4 million and the elimination of $12 million of long-term debt outstanding.”