Fire & Flower to Issue $15 Million in Convertible Notes

Fire & Flower Announces $15 million Bought Deal Private Placement

EDMONTON, Alberta, June 04, 2019 (GLOBE NEWSWIRE) — Fire & Flower Holdings Corp. (TSXV:FAF) (“Fire & Flower” or the “Company”) is pleased to announce that it has entered into a letter of engagement with Eight Capital under which Eight Capital has agreed to purchase, together with GMP Securities L.P., as co-lead underwriters and joint bookrunners (together, the “Lead Underwriters”), 15,000 convertible debenture units of the Company (the “Units”) on a “bought deal” private placement basis, subject to all required regulatory approvals, at a price of $1,000 per Unit (the “Issue Price”) for gross proceeds of $15,000,000 (the “Offering”). Each Unit will be comprised of one $1,000 principal amount unsecured convertible debenture (a “Convertible Debenture”) and 278 common share purchase warrants (each, a “Warrant”). Each Warrant shall entitle the holder thereof to purchase one common share in the capital of the Company (a “Warrant Share”) for a period of 24 months following the closing of the Offering, at an exercise price of $1.45 per Warrant Share.

The Company has agreed to grant the Lead Underwriters an over-allotment option to purchase up to an additional 5,000 Units at the Issue Price, exercisable in whole or in part, at any time on or prior to the date that is 48 hours prior to the closing of the Offering. If this option is exercised in full, an additional $5,000,000 will be raised pursuant to the Offering and the aggregate proceeds of the Offering will be $20,000,000.

The Convertible Debentures will have a maturity date of one year from the closing date of the Offering (the “Maturity Date”) and will bear interest from the date of closing at 8.0% per annum, payable semi-annually on June 30 and December 31 of each year. The principal amount of the Convertible Debentures will be convertible, at the option of the holder, into common shares of the Company (“Common Shares”) at any time prior to the close of business on the last business day immediately preceding the Maturity Date at a conversion price of $1.20 per Share (the “Conversion Price”).

The Company intends to use the net proceeds of the Offering for working capital and general corporate purposes, including to grow the Company’s proprietary Hifyre digital platform.

The closing date of the Offering is scheduled to be on or about June 25, 2019 and is subject to certain customary conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange (“TSXV”) and the applicable securities regulatory authorities.

Fire & Flower has been consistently delivering on our high-growth cannabis retail strategy since the launch of the adult-use cannabis market in October of 2018. This bought deal private placement provides a meaningful additional growth catalyst to further establish Fire & Flower as a dominant cannabis retail brand across Canada.

Trevor Fencott, Fire & Flower’s Chief Executive Officer

Capital raised through this financing will, in part, be used to grow our proprietary Hifyre digital platform, a key strategic advantage for us in cannabis retail that provides us with a deep understanding of what our customers want. Hifyre will also be an important part of our strategy as we consider the exploration of international markets.

As consideration for their services, the Lead Underwriters (along with any additional underwriters included in a syndicate of underwriters in connection with the Offering) will receive a cash commission equal to 6% of the gross proceeds of the Offering. The Company will also issue to the Lead Underwriters compensation warrants (the “Compensation Warrants”) in an amount equal to 6% of the gross proceeds of the Offering divided by the Conversion Price.  Each Compensation Warrant will be exercisable to purchase one Common Share at the Conversion Price, for a period of 24 months from the closing of the Offering.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the United States Securities Act of 1933, as amended, and applicable state securities laws.

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 that is centered around its proprietary Hifyre digital platform. The Company’s leadership team combines extensive experience in the cannabis industry with strong capabilities in retail operations.

Fire & Flower Holdings Corp. owns all issued and outstanding shares in Fire & Flower Inc., a licenced cannabis retailer in the provinces of Alberta and Saskatchewan and is a consultant and licensor to Fire & Flower-branded retail locations in province of Ontario.

Original press release

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Published by NCV Newswire
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