The Flowr Corporation (OTCPK:FLWPF) (TSX.V:FLWR) released its financial and operational results for the fourth quarter and fiscal year ended December 31, 2021, revealing net revenue for the full year 2021 totaled CA$12.35 million ($9.67 million) compared with CA$7.51 million in 2020, representing a 64% increase.
Q4 2021 Financial Highlights
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Consolidated net revenue during Q4 2021 was CA$3,801, 138% higher than the CA$1,600 earned in Q4 2020. Net revenue for Q4 2021 was the highest quarterly revenue recorded by the company since inception, contributed by increases in cannabis sales in Flowr Canada.
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Net loss was CA$63.86 million, compared to net loss of CA$99.75 million in Q4 2020.
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Adjusted EBITDA loss was CA$5.15 million compared to a loss of CA$5.38 million in Q4 2020.
Full Year 2021 Financial Highlights
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Net loss was CA$89.23 million compared to a net loss of CA$127.85 million in 2020.
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Adjusted EBITDA loss was CA$20 million compared to a loss of CA$18.67 million in 2020.
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During 2021, the company significantly reduced its long-term debt outstanding under its senior amended and restated credit agreement with a syndicate of lenders led by ATB Financial by a total of CA$12.82 million, bringing the principal amount outstanding to CA$5.7 million at the end of 2021 from CA$18.53 million at December 31, 2020.
Holigen Sale
On April 19, 2022, the company, through its wholly-owned subsidiary HHL, entered into a share purchase agreement 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 interests in HL for aggregate consideration of approximately CA$35 million.
Pursuant to the terms of the purchase agreement, the company has agreed to sell HL to the purchaser for total consideration payable of approximately CA$35 million consisting of:
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CA$3.75 million in cash.
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1.9 million common shares in the capital of Akanda which closed at U.S.$10.30 per share on April 19, 2022.
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The indirect assumption by Akanda of RPK’s indebtedness of approximately CA$5.1 million.
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At least CA$0.8 million of interim funding to Holigen which has already been received by Flowr. If the purchase agreement does not close on or prior to May 31, 2022, the interim funding will be repaid to Akanda by the delivery of medical cannabis from Holigen at a price of €2.00 (CA$2.72) per gram or in cash, at the discretion of Flowr. In connection with the transaction, Holigen will pay an advisory fee equal to 7% of the purchase price, 50% of which is payable in cash and 50% of which is payable in consideration shares.
In addition, Akanda agreed to subscribe for $1 million of common shares in the capital of Flowr at a price per share of CA$0.07 per share. The consideration shares are subject to a customary six-month lockup.
The Holigen Sale closed on April 29, 2022 upon receiving the necessary approvals and satisfaction of other closing conditions.
Management Changes
John Chou has resigned from his position as CFO for medical reasons. Mike Willetts has been appointed interim CFO of the company effective immediately. Willetts is an experienced business executive with over 25 years of experience in financial leadership and is currently the CFO of GetSwift Technologies Limited (OTCPK:GTSWF) and Forward Water Technologies Corp.
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