Fire & Flower Holdings Corp. (TSX: FAF) announced today that Circle K owner Alimentation Couche-Tard (TSX: ATD), through its wholly-owned indirect subsidiary 2707031 Ontario Inc., plans to exercise the outstanding warrants held labeled Series A-3. The latter has delivered in escrow the exercise notice and gross proceeds of $9.8 million pertaining to the exercise of the warrants.
Per the warrant certificate dated September 16, 2020, 2707031 Ontario can exercise the warrants to purchase 10,505,779 Fire & Flower common shares at $0.93 per share. This translates to an additional 2.45% ownership stake in Fire & Flower.
Combining this with the current 66,328,421 common shares held by Alimentation Couche-Tard and its subsidiary 2707031 Ontario, the exercise of warrants will bring the total stake owned by Alimentation Couche-Tard to 22.35%.
2707031 Ontario also holds $2.7 million of 8.0% convertible debentures and share purchase warrants. Should all these be converted to Fire & Flower common shares, Alimentation Couche-Tard will see equity ownership of the firm increase to 50.1% on a fully diluted basis.
The firms are now working to obtain Competition Act clearance which terminates the applicable waiting period to close the transaction. Without this, the release of gross proceeds from escrow and issuance of shares is expected to happen within two days of expiration dated September 1, 2021.
Fire & Flower Holdings last traded at $1.04 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.