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. Meanwhile, 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.
As founder of The deep dive, Jay focuses on all aspects of the business. This includes operations, as well as serving as lead writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay writes freelance for a number of companies and has been published on Stockhouse.com and Canna Investor Magazine among others.