By Sarah Lizee
Olympia, Wash., March 6 – Flower One Holdings Inc. priced C$50 million, or 50,000 units, of convertible debenture units, according to a Wednesday press release.
Each unit holds C$1,000 principal amount of 9.5% convertible debentures due in three years and 192 common share purchase warrants.
The deal is being marketed via short form prospectus in each of the provinces of Canada.
Mackie Research Capital Corp. and Canaccord Genuity Corp. are leading the syndicate of underwriters for the offering, which carries a greenshoe of 15% of the offering, or C$7.5 million.
The debentures are convertible at any time at a conversion price of C$2.60 a share, which was the closing share price on March 5.
The company may force the conversion of the debentures at the conversion price on not more than 60 days' and not less than 30 days' notice if the daily volume weighted average trading price of the common shares is greater than C$3.51 for the consecutive 20 trading days preceding the notice.
Upon a change of control, holders can put the convertibles in whole or in part 30 days following the giving of notice of the change of control at 104% of par plus accrued interest. If 90% or more of the debt has been tendered in that instance, the company can redeem whatever is left outstanding at 104% of par plus accrued interest.
The common share purchase warrants may be exercised for one common share and will expire in three years.
Proceeds will be used for the payment of outstanding notes, ongoing construction and development of the company’s Nevada production facility, working capital and general corporate purposes.
Closing is slated for the week of March 18.
Flower One Holdings is a Toronto-based cannabis company focused on becoming the leading cannabis cultivator and producer in Nevada.
| Issuer: | Flower One Holdings Inc.
|
| Securities: | Convertible debenture units
|
| Amount: | C$50 million
|
| Greenshoe: | C$7.5 million
|
| Maturity: | Three years
|
| Lead agents: | Mackie Research Capital Corp. and Canaccord Genuity Corp.
|
| Agents: | Cormark Securities Inc., Eight Capital Corp., Industrial Alliance Securities Inc. and PI Financial Corp.
|
| Coupon: | 9.5%
|
| Price: | Par of C$1,000
|
| Yield: | 9.5%
|
| Conversion price: | C$2.60 a share
|
| Contingent conversion: | Yes, if share price is greater than C$3.51 for 20 consecutive trading dates
|
| Change-of-control put: | At 104% of par plus accrued interest
|
| Call options: | If 90% or more of the paper has been tendered upon a change of control, the company can redeem whatever is outstanding at par plus accrued interest
|
| Warrants: | 192 warrants per unit
|
| Warrant expiration: | Three years
|
| Strike price: | C$2.60
|
| Pricing date: | March 5
|
| Stock symbol: | CSE: FONE
|
| Stock price: | C$2.60 as of March 5 close
|
| Market capitalization: | C$312,602,000
|
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