Flower One Holdings Inc (FLOOF)

[BillJay]

The Loan Agreement is for a seven-year interest-only loan at a rate of 10.5% for the term of the loan. Proceeds of the loan will be used to replace an existing US$30 million term loan that would have been due in June 2021, as well as to fund general corporate purposes and other Company debt obligations. The transaction is expected to close prior to October 30, 2020 and is subject to customary closing conditions.

The Sale-Leaseback Option is structured as a sale-leaseback with a 20-year term and two 10-year extension options. The value of the transaction is expected to be between US$70 million and US$80 million based on the Company meeting certain financial performance thresholds within the two-year option period. The proceeds from the sale would first be used to repay the US$39 million term loan. If agreed upon, both parties can also choose to execute on the sale-leaseback after one year for a minimum transaction value of US$70 million.