/NOT FOR DISSEMINATION IN THE UNITED
STATES OR FOR DISTRIBUTION TO UNITED
STATES WIRE SERVICES/
EDMONTON, June 26, 2019 /CNW/ - Fire & Flower Holdings
Corp. ("Fire & Flower" or the "Company")
(TSXV: FAF), today announced the closing of its previously
announced bought deal private placement (the "Private
Placement") of 27,188 convertible debenture units (the
"Units") at a price of $1,000
per Unit for aggregate gross proceeds of $27,188,000. Each Unit is comprised of one
$1,000 principal amount unsecured
convertible debenture (a "Convertible Debenture") and 278
common share purchase warrants (each, a "Warrant"). Each
Warrant entitles 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 Private Placement at an
exercise price of $1.45 per Warrant
Share.
"With the recent re-opening of cannabis retail licensing in
Alberta, being able to accelerate
store build-outs is key" shared Trevor
Fencott, Fire & Flower's Chief Executive Officer.
"Access to capital is critical to success in a growth industry, and
this financing clearly puts Fire & Flower in a position to
capitalize on market opportunities as they emerge."
The Private Placement was underwritten by a syndicate of
underwriters, led by Eight Capital and GMP Securities L.P. and
including AltaCorp Capital Inc., Canaccord Genuity Corp. and
Echelon Wealth Partners Inc. (collectively, the
"Underwriters").
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 26,
2020 (the "Maturity Date"). The principal amount of
Convertible Debenture and accrued and unpaid interest thereon will
be convertible at the holder's option into common shares of the
Company (the "Conversion Shares") at any time prior to
the earlier of: (a) the close of business on the business day
immediately preceding the Maturity Date; and (b) the date fixed for
redemption (as set out in the Debenture Indenture (as defined
below)). The conversion price for the principal amount of
Convertible Debentures is $1.20 per
Conversion Share. The conversion price for the accrued and
unpaid interest is the greater of (a) $1.20; and (b) the Market Price (as defined in
the policies of the TSX Venture Exchange) on the date of
conversion, per Conversion Share. The conversion of the
Convertible Debentures is subject to adjustment in certain
events as described in a debenture indenture dated as of
June 26, 2019 entered into between
the Company and Computershare Trust Company of Canada (the "Debenture Indenture").
In connection with the Private Placement, Fire & Flower has
paid the Underwriters aggregate cash consideration of $1,476,420. As additional consideration, the
Underwriters have received 1,355,350 compensation options
("Compensation Options") in connection with the Private
Placement. Each Compensation Option is exercisable for one common
share of the Company at a price of $1.20 per share until June
26, 2021.
The net proceeds of the Private Placement will be used for
working capital and general corporate purposes, including to grow
the Company's proprietary Hifyre digital platform.
Certain directors and officers of the Company participated in
the Private Placement and purchased an aggregate of 150
Units. Such participation constitutes a related-party
transaction under Multilateral Instrument 61-101-Protection of
Minority Security Holders in Special Transactions ("MI
61-101"). The Company has relied on exemptions from the
formal valuation and minority shareholder approval requirements of
MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101
in respect of related party participation in the Private Placement
as neither the fair market value (as determined under MI 61-101) of
the subject matter of, nor the fair market value of the
consideration for, the transaction, insofar as it involved related
parties, exceeded 25% of the Company's market capitalization as
determined under MI 61-101.
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 licensed 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.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION
This news release contains certain forward-looking
information within the meaning of applicable Canadian securities
laws ("forward-looking statements"). All statements other than
statements of present or historical fact are forward-looking
statements. Forward-looking statements are often, but not always,
identified by the use of words such as "anticipate", "achieve",
"could", "believe", "plan", "intend", "objective", "continuous",
"ongoing", "estimate", "outlook", "expect", "project" and similar
words, including negatives thereof, suggesting future outcomes or
that certain events or conditions "may" or "will" occur. These
statements are only predictions. Forward-looking statements in this
news release include statements regarding the closing of the
Private Placement and the intended use of proceeds of the Private
Placement.
Forward-looking statements are based on the opinions and
estimates of management of the Company at the date the statements
are made based on information then available to the Company.
Various factors and assumptions are applied in drawing conclusions
or making the forecasts or projections set out in forward-looking
statements. Forward-looking statements are subject to and involve a
number of known and unknown risks and uncertainties, many of which
are beyond the control of the Company, which may cause the
Company's actual performance and results to differ materially from
any projections of future performance or results expressed or
implied by such forward-looking statements. No assurance can be
given that the expectations reflected in forward-looking statements
will prove to be correct.
The Company assumes no obligation to publicly update or
revise forward-looking statements to reflect new information,
future events or otherwise, except as expressly required by
applicable law.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Fire & Flower Holdings Corp.