I bought more FFLWF when the PPS did slip and give back yesterday's gain.
If you have not seen this, the document is available on SEDAR:
SHORT FORM BASE SHELF PROSPECTUS
New Issue and/or Secondary Offering November 1, 2019
FIRE & FLOWER HOLDINGS CORP.
$200,000,000
COMMON SHARES
WARRANTS
UNITS
SUBSCRIPTION RECEIPTS
It means they can sell shares when they want to, so they can raise cash from shareholders. It dilutes the O/S.
As of December 16, 2019
Directly Owned Licence(s) ... 40
As of December 16, 2019 - Stores in Operation ... 34 ... generating (Canadian) C13.7M or a simple average of C$402,941.
Licences Pending ... 25
As of 2020-01-13 there are 46 open stores. If I add the simple store average, that adds C$4.8M or about 33% to the revenues, that equals C$18.5M.
Stores have to ramp up to maturity, so the additional revenues won't be realized from day 1.
I don't know how they are going to get all of the licenses they need to meet the store opening forecast?
From the Management Discussion and Analysis:
The Company intends to have eighty-five stores operating by the end of fiscal 2020, assuming no further restrictions on the number of stores that may be licensed in the various provincial jurisdictions and that
market conditions are favorable.
If they only ADD half of the forecast (85 - 36 existing = 49) that means they'll add 24 stores or 15 more in the entire year.
I don't think it will go that slow, but if it does, that means if the simple store average for 15 more stores is added to C$18.5M + C$6.0M = C$24.5M
So in my mind, that will be the minimum revenue run rate on Dec 31, 2020.
Will there be dilution to fund the growth?
Will Couche-Tard invest more to acquire a larger percentage of the company?
Will FFLWF be able to open stores in the most populace province (Ontario)? Those stores will likely generate 50% - 100% more revenue per store than the other individual stores' averages in other provinces.
