Flower One Holdings Inc. (CSE: FONE) (OTCQX: FLOOF) has made some motion with its ongoing restructuring, together with the restructuring of its time period debt and its grasp lease. This comes on the heels of the corporate reporting its annual earnings. For the yr ending in December 2021, Flower One reported 2021 income of $58.4 million, representing a 70% enhance from the prior yr. Regardless of all that income, as of December 31, 2021, the corporate solely had money and money equivalents of $0.9 million, in contrast with $1.1 million as of December 31, 2020
Whereas the corporate skilled a year-over-year income enhance, It famous that fourth-quarter revenues have been affected as Nevada traditionally endured a decline in each hashish gross sales and tourism in its fourth quarter, compared to the rest of the yr. “Moreover, elevated competitors mixed with decreased demand led to cost compression within the wholesale market. Because of these compounding elements and the COVID-19 variants, the Firm endured a decline in income in its fourth-quarter ending December 31, 2021. The corporate trimmed its web losses to $24.4 million versus the web lack of $117.5 million in 2020.
Time period Debt Restructuring
Flower One stated it has entered right into a Time period Debt Modification Settlement with its lender, RB Mortgage Portfolio II, LLC, on its current $45.65 million Time period Debt, secured by the ability at 3950 N. Bruce St., North Las Vegas, Nevada. The corporate will be capable to defer curiosity funds by means of October 31, 2022, with a purpose to present further liquidity to the enterprise, scale back the money curiosity funds by 30%, prolong the maturity date of the Time period Debt to January 31, 2026, and pay $9 million to the Time period Lender on September 30, 2023, and if it misses that fee, it has the choice to pay this First Mortgage Paydown on January 31, 2024, with a 2.5% penalty.
“This debt restructuring is a significant step in our turnaround plan, as it can present the Firm with further liquidity and a major runway to proceed our operational restructuring efforts, and place the Firm for sustainable progress,” stated Kellen O’Keefe, President & CEO. “We want to thank our time period lenders and mortgage contributors for facilitating these momentous transactions.” Flower One additionally restructured its debt in 2021.
Grasp Lease Restructuring
The corporate additionally stated in its assertion that it has additionally entered right into a Grasp Lease Modification Settlement in reference to the settlement dated February 1, 2019 with RB Mortgage Portfolio I, LP, a Delaware restricted partnership, concerning the tools lease financing of sure tools on the Bruce Facility. The assertion learn, “Pursuant to which the Lessor has agreed to forbear current occasions of default and make sure modifications to Grasp Lease, together with (i) the deferral of sure funds by means of October 31, 2022, with a purpose to present further liquidity to the enterprise, (ii) revising the amortization schedule to allow a discount in month-to-month funds throughout the Grasp Lease and (iii) prolong the maturity date of the Grasp Lease to March 3, 2025.”
“Given the present state of the capital markets for hashish, we’re very happy with this notable transaction. This significant step in our restructuring not solely supplies the Firm with important money curiosity financial savings, but additionally permits for a deferral of curiosity funds, guaranteeing we’re in a position to protect capital,” Araxie Grant, Flower One’s CFO.
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