Flower One Announces Modification to Loan Agreement and Issues Warrants to its Lender per the Loan Modification and Amendment Agreement
Flower One Holdings Inc. (“Flower One” or the “Company”) (CSE: FONE) (OTCQX: FLOOF) (FSE: F11), the leading cannabis cultivator and producer in Nevada, announced today that it has modified and amended certain terms of its loan agreement dated August 21, 2020 (the “Loan Agreement”) pursuant to a modification and amendment loan agreement dated March 8, 2021 among Gold Flora LLC, a California limited liability company (the “Lender”), CN Landco, LLC, a Nevada limited liability company (the “Borrower”) and the Company (the “Loan Modification and Amendment Agreement”).
Pursuant to the Loan Modification and Amendment Agreement, the Company, as guarantor, agreed to modify the terms of the Loan Agreement with the Lender to: (1) extend the Maturity Date of the Loan Agreement from May 20, 2021 to November 21, 2021; (2) convert the loan amount under the Loan Agreement from Canadian Dollars to United States Dollars; (3) reflect a new payment schedule of the current principal balance and outstanding accrued interest payable under the Loan Agreement; (4) modify the Secured Promissory Note dated August 21, 2020 by the Borrower for the benefit of the Lender to match the modifications to the Loan Agreement; (5) issue the Lender additional warrant rights with respect to common shares of Guarantor; and (6) otherwise modify the Loan Documents (as defined in the Loan Modification and Amendment Agreement).
In accordance with the terms of the Loan Modification and Amendment Agreement and in consideration for the Lenders consent to the previously announced January 2020 financing and other loan modifications, the Company has issued 397,873 common share purchase warrants (the “Lender Warrants”), entitling the Lender to one common share in the capital of the Company (a “Lender Warrant Common Share”) at an exercise price of CAD$0.315 per Lender Warrant Common Share at any time prior to the date which is thirty-six months (36) after the date of issuance of such Lender Warrants; provided, however, that in the event that the common shares trade on the Canadian Securities Exchange at a closing price equal to or greater than CAD$1.05 per common share for a period of twenty (20) consecutive trading days, the Company may implement an accelerated expiry date of the Lender Warrants by giving notice to the holders of the Lender Warrants of the accelerated expiry and, thereafter, the Lender Warrants will expire on the date that is ninety (90) days following the delivery of such notice.
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