Flower One adds $20 million into their bank account Great breakdown of the news release today from
The Deep Dive Flower One Holdings (CSE: FONE) announced this morning that it will be selling its North Las Vegas indoor cultivation and production facility. The sale is part of a sale-leaseback agreement that will see Flower One receive US$20 million in exchange for the property.
The property, known as the Neeham Property, was acquired as part of an acquisition of NLV Organics conducted in October 2018, which allowed Flower One to begin selling product within Nevada while its greenhouse remained under construction. At the time, the firm paid US$27.2 million for the property including all tangible and intangible assets.
The current sale-leaseback agreement, which provides
$20 million in cash up front, is as a result arguably reasonable terms based on what Flower One paid for the property a year ago. The current agreement is for a term of twenty years, plus two additional optional ten year terms. Treehouse Real Estate Investment Trust, the firm whom is conducting the sale-leaseback agreement, will also have the right of first refusal for a five year period for any potential future sale-leaseback agreements conducted by Flower One Holdings as well.
The transaction is expected to close by November 16, 2019, providing
significant capital for Flower One to continue its facility development. The agreed upon cash has been provided up front to the firm as a loan, which bears interest at a rate of 15% per annum.
The proceeds from the agreement will be utilized to develop the property into a commercial kitchen and manufacturing facility.