Fire and Flower Holdings Corp (TSX: FAF) last night filed a preliminary base shelf prospectus for $200.0 million. While not raising funds immediately, it signals that the company is likely preparing for a sizable raise in the comings months as it looks to expand its operations.
The prospectus enables the company to go to the markets to raise funds through several different equity types, including common shares, warrants, units, subscription receipts and debt securities. No specific use of proceeds was provided within, with Fire and Flower instead indicating that further details on the use of funds raised will be disclosed at the time of a final prospectus being filed.
The company did however indicate that it had cash and cash equivalents of approximately $24.5 million as of October 31, 2020.
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The filing notes that the company has also withdrawn certain prior guidance issued as of late, including the expected operation of 78 stores by the end of January 2021. The delays have been largely blamed on a combination of COVID-19 and governmental bodies that have been slow to approve new store locations. Upon the completion of its recent Friendly Stranger acquisition announcement, the company expects to have only 66 operational locations, along with nine pending locations.
The withdrawn forecast in terms of locations being operational also resulted in the company disclosing that it has withdrawn its forecast of cash flow positive operations within the first half of the fiscal year, which was evidently disclosed previously in the firms third quarter financial results.
Fire and Flower Holdings last traded at $0.80 on the TSX.
Information for this briefing was found via Sedar and Fire and Flower Holdings. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
