Friday, June 10 2022

the Flow Corporation (TSXV:FLWR) started selling assets to stay afloat. The company indicated this morning that it will sell its Portugal-based business this morning to reduce its current debt.

The transaction will see the company sell Holiden Holdings to that of Akanda Corp (NASDAQ:AKAN) in a cash and stock transaction valued at $35.0 million. The sale will include certain intercompany receivables, as well as $5.1 million in debt associated with the Portugal transaction.

The consideration is to consist of $3.75 million in cash, 1.9 million shares of Akanda common stock, $5.1 million in assumed debt and $834,000 in bridge financing for the transaction. As part of the transaction, Akanda will also invest $1.0 million in Flowr, which aims to “ensure that both parties are aligned for the future success of Flowr and Akanda.”

The sale of the Portugal-based assets follows an auction process conducted by the company to “strengthen its balance sheet”. Closing of the transaction is expected to reduce the company’s senior debt to $2.6 million, while cash and marketable securities will be $25.0 million.

As of September 30, the company had a cash position of $7.9 million, with total current assets of $24.2 million. Current liabilities totaled $13.9 million. Revenue for the nine-month period was $8.5 million, of which $0.6 million was attributed to Holigen, or just 6.9%. These revenues were generated by the cost of sales of $2.2 million.

The transaction is subject to the approval of the TSX Venture Exchange. Closing is expected to occur in the second quarter of 2022.

Flowr Corporation last traded at $0.08 on the TSX Venture Exchange.

Information for this briefing was found via Sedar and Flowr Corp. The author has no security or affiliation related to this organization. Not a buy or sell recommendation. Always do additional research and consult a professional before purchasing a title. The author holds no license.


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