Fire & Flower Raises $16 Million in Private Placement and Loan Agreement with Alimentation Couche-Tard – Alimentation Couche-Tard (OTC:ANCTF), Fire & Flower Holdings (OTC:FFLWF)


Fire & Flower Holdings Corp. FFLWF FAF entered a amendment agreement with respect to certain amendments to the Company’s Series C common equity warrants issued to an indirect wholly-owned subsidiary of Food Couche-Tard Inc.. ANCTF As part of the Amending Agreement, ACT and the Company have entered into: a loan agreement with respect to a $11 million loan of the principal amount to the company and a subscription purchase agreement ordinary actions of the company for the overall product about $5 million.

ACT currently holds 17.8 million Series C Warrants.

Proposed Changes

  • The Series C Warrants will be divided into two equal tranches: the Series C-1 Warrants and the Series C-2 Warrants;

  • The Series C-1 Warrants will be exercisable at a price equal to 85% of the 20-day VWAP of the Common Shares at any time between the effective date of the Amendments and June 30, 2023;

  • The Series C-2 Warrants will be exercisable at a price equal to the modified Series C exercise price at any time between December 1, 2023 and August 31, 2024;

  • The number of Series C-1 Warrants will be reduced by the number of common shares issued to ACT under the private placement; provided, however, that the aggregate number of Series C-1 Warrants and Series C-2 Warrants will, upon closing of the Private Placement, permit ACT to acquire such number of Common Shares, which , together with the common shares then held and as- the converted common shares underlying the debentures held by ACT and its affiliates would represent at least 50.1% of the issued and outstanding common shares on a fully diluted basis;

  • any subsequent Series C Warrants to be issued to ACT under its Participation Right and its Supplemental Right will have an exercise price equal to the greater of:

    • with respect to the Participation Right, the amended series C exercise price and the price per security issued under the offering giving rise to the Participation Right;

    • with respect to the Supplemental Right, the amended Series C exercise price and the trading price of the common stock on the date ACT delivers its notice of exercise of its Supplemental Right;

  • if the Series C-1 Warrants are not exercised in full by the Series C-1 Expiry Date, all Series C-2 Warrants will be immediately cancelled.

The Investor Rights Agreement would also be amended to reflect the above changes to the Series C Warrants.

A loan

Under the terms of the loan agreement, ACT will lend the company $11 million with a interest rate of 11.0% per annum and payable quarterly, provided that during the first six months of the term of the loan, the company may elect to increase the principal amount of the loan by the amount of interest accrued during this period instead of paying such interest accrued at ACT. The loan matures on December 31, 2023 and ACT will have first priority security over all assets of the company and its subsidiaries, including all intellectual property, subject only to permitted liens. In accordance with the loan agreement, the company may prepay all or part of the loan without bonus or penalty, subject to five working days’ notice.

Private placement

Pursuant to the terms of the subscription agreement, ACT and the Company have agreed to complete a private placement, whereby ACT will subscribe for 3 million common shares at a price of $1.64798 per common share, for aggregate proceeds of approximately $5 million. The Company is entitled to terminate the Subscription Agreement and enter into an Unsolicited Superior Proposal Agreement, in which case the Loan will become immediately due and payable.

Fire and flower board recommendation

The company’s board of directors, based on the unanimous recommendation of a special committee composed of independent directors and after consultation with its legal and financial advisers, has unanimously determined that the loan and the transaction of warrants and shares are in the best interest of Fire & Fleur.

The company intends to seek the required shareholder approval at a special meeting of shareholders expected to be held in December 2022. The amendments and the private placement are conditional on each transaction being approved by minority shareholders before its entry into force. The loan agreement does not require minority shareholder approval.

Photo: Benzinga; Sources: Courtesy of Kindel Media via Pexels

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