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Holigen Holdings Limited wholly-owned subsidiary of The Flowr Corporation (OTC:FLWPF)(TSXV:FLWR), has entered into a share purchase agreement dated April 19, 2022 with Akanda Corp. (NASDAQ:AKAN) and Cannahealth Limited, a wholly-owned subsidiary of Akanda.
Pursuant to the purchase agreement, the purchaser will acquire from HHL all of issued and outstanding shares of Holigen Limited, an indirect wholly-owned subsidiary of the company, together with certain inter-company receivables for aggregate consideration of approximately CA$35 million ($27.98 million). The company’s wholly-owned subsidiary, HHL, indirectly owns all of the issued and outstanding shares of RPK Biopharma Unipessoal, Lda., which owns and operates the E.U. GMP facility located in Sintra, Portugal, and the outdoor medical facility located in Aljustrel, Portugal.
Pursuant to the terms of the purchase agreement, Holigen has agreed to sell Holigen to the purchaser for total consideration payable of approximately CA$35 million consisting of:
CA$3.75 million in cash;
1.9 million common shares in the capital of Akanda currently valued at $10.30 based on the closing price of the consideration shares on April 19, 2022;
The indirect assumption by Akanda of RPK’s indebtedness of approximately CA$5.1 million;
And at least CA$0.83 million of interim funding to Holigen which has already been received by Flowr. In addition, Akanda has agreed to subscribe for CA$1 million of common shares in the capital of Flowr at a price per share of CA$0.07 per share, subject to the approval of the TSX Venture Exchange.
As part of the transaction, Flowr has agreed to provide transition services to Akanda and Holigen for a period of at least 90 days after the closing of the transaction.
At the closing of the transaction, which is expected to be in the second quarter of 2022, Flowr expects to be able to reduce its existing senior indebtedness to CA$2.6 million and have more than CA$25 million in cash and marketable securities. Since December 2020, Flowr has been able to retire more than CA$50 million in aggregate indebtedness.
Photo: Courtesy of Sharon McCutcheon on Unsplash
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