The Flowr Corporation announces its financial results for the period ended September 30, 2022. All financial information in this news release is reported in thousands of Canadian dollars and represents results from continuing operations, unless otherwise indicated.
Key Q3 events:
On July 27, 2022, the Company completed the sale of its KRS research facility to Hawthorne Canada Limited for an aggregate purchase price of $15,900. The Company used the proceeds from the sale of this non-core asset to reduce the outstanding principal debt under its ATB led credit facility.
On August 10, the Company announced a leadership transition and governance changes with the appointment of Darren Karasiuk to the role of CEO and Director and the additions of Stephen Arbib as Chairman and Marvin Singer to the Board of Directors.
On August 11, the Company sold it’s Flowr Forest assets for $3,400 cash. The Company used $1,000 of the proceeds from the sale of this non-core asset to repay the outstanding balance of its ATB-led credit facility in full.
On September 30, 2022, Joanne Lee resigned from the board of directors of the Company.
As at September 30, 2022, the Company had insufficient cash on hand to fund its planned operations for the next 3 months. In addition, the Company was not successful in obtaining the necessary funding.
Subsequent events:
On October 17, 2022 Stephen Arbib resigned from the board of directors of the Company.
On October 20, 2022, the Company initiated proceedings under the Companies’ Creditors Arrangement Act (“CCAA”) and obtained an initial order (the “Initial Order”) from the Ontario Superior Court of Justice (Commercial List) (the “Court”) which included, among other things, a stay of proceedings, approval of a debtor-in-possession loan in the amount of $2,000,000 from 1000343100 Ontario Inc. (the “DIP Lender”), and the appointment of Ernst & Young Inc. as monitor (the “Monitor”).
On October 28, 222, the Court issued an order authorizing and directing the Company to undertake a sale and investment solicitation process (the “SISP”). All bids under the SISP were due on November 25, 2022.
On November 3, 2022, the Court authorized the Company to enter into a stalking horse purchase agreement (the “Stalking Horse Purchase Agreement”) between The Flowr Canada Holdings ULC, as vendor, The Flowr Group (Okanagan) Inc. and the DIP Lender, as purchaser.
