TORONTO — Red White & Bloom Brands Inc. completed a series of transactions designed to significantly reduce potential shareholder dilution, lower debt carrying costs, refocus operations on profitable growth initiatives, and facilitate the filing of its financial statements through the filing of a Management Cease Trade Order (“MCTO”).
Successful Completion of Debt Restructuring
The Company’s Board of Directors and Executive Management, in collaboration with a majority of its strategic lenders, successfully completed a comprehensive restructuring of approximately C$145 million of issued and outstanding debt, as part of a larger debt renewal program, through the entering into of various debenture and note amending agreements with such lenders with all applicable amended terms effective as of the respective renewal dates.
The restructuring of the aforementioned debt accomplished the following:
- Eliminated the potential dilution of 198 million common shares1, representing 42.1% of the issued and outstanding common shares, through the removal of debenture conversion rights.
- Extended maturity dates for restructured debt to November 2026 (C$33 million) with the balance of the restructured debt ($112 million) extended through to September 2027.
- Deferred all cash interest and principal payments for the restructured debt until their new respective maturity dates.
- Achieved principal reductions of $5 million and annualized interest expense savings of $2.5 million associated with the restructured debt.
Full financial statement disclosure regarding the debt renewal and applicable restructuring will be included in the Company’s interim financial statements for the first quarter ending March 31, 2025, expected to be filed on or before May 30, 2025.
Granting of Management Cease Trade Order
Due to unforeseen delays in completing its fiscal year-end audit, the Company had not filed its audited annual financial statements, management’s discussion and analysis, and related CEO and CFO certifications for the fiscal year ended December 31, 2024 by the prescribed deadline of April 30, 2025, as required under National Instrument 51-102 – Continuous Disclosure Obligations.
The delay is primarily the result of the expanded scope of audit procedures required to address the complexity of certain transactions and the restatement of comparative financial information for prior periods. The restatement was initiated following comments received during a review conducted by the Canadian Public Accountability Board (CPAB) of the Company’s auditor.
The Company expects to file the Annual Filings on or before May 30, 2025.
The British Columbia Securities Commission has granted an MCTO under National Policy 12-203 – Management Cease Trade Orders. Pursuant to the MCTO, the Chief Executive Officer, President, and Chief Financial Officer of the Company may not trade in securities of the Company until such time as the Annual Filings have been filed and the MCTO has been revoked. The MCTO does not affect the ability of the general investing public to trade in the Company’s common shares.
The Company intends to comply with the provisions of the alternative information guidelines as set out in NP 12-203 by issuing bi-weekly default status reports by way of news release until the Annual Filings are filed. These updates will include information regarding the progress of the Annual Filings and any material changes to the Company’s business, if any.
About Red White & Bloom Brands Inc.
Red White & Bloom Brands is a multi-jurisdictional cannabis operator and house of premium brands operating in the United States, Canada and select international jurisdictions. The Company is predominantly focusing its investments on major U.S. markets, including California, Florida, Missouri, Michigan, and Ohio in addition to Canadian and international markets.
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