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Avant Brands Inc. (OTCQX:AVTBF) (TSX:AVNT)(FRA:1BU0) provided a corporate update.
On December 8, 2022, the company announced that Avant Brands K1 Inc., an entity of which Avant owns 50% of the issued and outstanding shares, was the successful bidder to purchase The Flowr Group (Okanagan) Inc., including its 80,000 square-foot production facility in Kelowna, BC . On December 19, 2022, the company announced it has entered into a binding share purchase agreement to acquire the remaining 50% equity stake of 3PL Ventures Inc. for its flagship production facility in Vernon, BC.
The Flowr Facility remains fully operational and is expected to increase Avant's production capabilities by approximately 60%. The company expects to make certain modifications to production processes at the Flowr Facility throughout the 2023 fiscal year to align with Avant's cultivation methodologies in order to continue striving to produce the premium quality products that its customers demand.
The acquisition of the remaining 50% of 3PL will provide Avant's wholly owned subsidiary, GreenTec Holdings Ltd., with full ownership of the 3PL Facility, which is expected to generate meaningful cash flows over the course of the 2023 fiscal year. With the buyout of the non-controlling interest in 3PL, the company will eliminate the shareholder loan of approximately $12.0 million owing to the non-controlling shareholder, F-20 Developments Corp., which, in accordance with the terms of the shareholders agreement for 3PL, had first priority to receive the majority of 3PL's operating free cash flow in order to repay this shareholder loan.
Fiscal 2023 Strategic Objectives and Outlook
Upon closing of the acquisitions of Flowr Okanagan and 3PL, Avant's strategic objectives and outlook for the 2023 year include:
Increasing production through the Flowr Facility and the 3PL Facility;
Implementing modifications to the Flowr Facility to facilitate production of Avant cannabis flower;
Fulfilling all provincial government purchase orders and export demand;
Exploring new global markets for exporting product, leveraging the company's reputation in existing markets, such as Israel and Australia;
Launching new cultivars from Avant's extensive library of genetics;
Continuing to explore contract growing or acquisition opportunities to the extent that the acquisition of Flowr Okanagan does not completely fulfill unmet customer demand;
Cash and Liquidity
As of November 30, 2022, the company had approximately $7 million in cash and no interest-bearing debt on the balance sheet.
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