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 12 months ending in December 2021, Flower One reported 2021 income of $58.4 million, representing a 70% improve from the prior 12 months. 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 improve, 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 12 months. “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 internet 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 power at 3950 N. Bruce St., North Las Vegas, Nevada. The corporate will have the ability to defer curiosity funds by way of October 31, 2022, so as to present extra liquidity to the enterprise, cut back the money curiosity funds by 30%, lengthen 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 cost, it has the choice to pay this First Mortgage Paydown on January 31, 2024, with a 2.5% penalty.
“This debt restructuring is a serious step in our turnaround plan, as it is going to present the Firm with extra liquidity and a major runway to proceed our operational restructuring efforts, and place the Firm for sustainable development,” stated Kellen O’Keefe, President & CEO. “We wish to thank our time period lenders and mortgage members 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 way of October 31, 2022, so as to present extra liquidity to the enterprise, (ii) revising the amortization schedule to allow a discount in month-to-month funds throughout the Grasp Lease and (iii) lengthen 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 important step in our restructuring not solely offers the Firm with important money curiosity financial savings, but in addition permits for a deferral of curiosity funds, guaranteeing we’re capable of protect capital,” Araxie Grant, Flower One’s CFO.
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