Fire & Flower Holdings Corp. announces completion of its qualifying transaction

TORONTO, Feb. 13, 2019 /CNW/ - Fire & Flower Holdings Corp. (formerly Cinaport Acquisition Corp. II) (the "Company") (CPQ.P: TSX-V) is pleased to announce that it has completed its previously announced qualifying transaction (the "Transaction") with Fire & Flower Inc. ("Fire & Flower") as well as the conversion of the subscription receipts (the "Subscription Receipts") issued in connection with Fire & Flower's previously announced $36.5 million private placement offering (the "Offering") co-led by GMP Securities L.P. and AltaCorp Capital Inc.

The Transaction, which constitutes the Company's "Qualifying Transaction" (as such term is defined in Policy 2.4 of the TSX Venture Exchange (the "TSXV") Corporate Finance Manual), was completed by way of a three-cornered amalgamation, pursuant to which 11048449 Canada Inc., a wholly owned subsidiary of the Company, amalgamated with Fire & Flower to form a newly amalgamated company ("Amalco"), which now holds Fire & Flower's assets as a wholly-owned subsidiary of the Company. Amalco shall operate under the name "Fire & Flower Inc.".

In connection with the Transaction, Fire & Flower and the Company have satisfied the escrow release conditions of the Offering. The escrowed funds, net of the outstanding cash commission and expenses payable to the agents (equal to approximately $1,000,000), has been released to and as directed by the Company.

In connection with the Transaction, the Company: (a) consolidated its issued and outstanding common shares on a 10.64814815 to 1 basis (the "Consolidation"); (b) changed its name to "Fire & Flower Holdings Corp."; (c) continued the Company into the federal jurisdiction of Canada under the Canada Business Corporations Act; (d) adopted new By-Law No. 1 and By-Law No. 2; (e) adopted a new stock option plan; (f) amended the Company's articles to grant the Company certain redemption rights with respect to the common shares of the Company in order to facilitate compliance with applicable licensing regulations; and (g) appointed UHY McGovern Hurley LLP as the new auditors of the Company.

Pursuant to the Transaction, the Company acquired all of the outstanding shares of Fire & Flower and issued one common share of the Company to Fire & Flower's shareholders in exchange for each common share of Fire & Flower so acquired (aggregate of 100,988,153 common shares).

Upon completion of the Transaction (after giving effect to the conversion of the Subscription Receipts), the Company has 102,434,413 shares issued and outstanding, with approximately 98.59% held by former Fire & Flower shareholders and approximately 1.41% held by former Cinaport shareholders, on an undiluted basis. Additionally, the Company has: (a) $5,800,000 principal amount of non-interest bearing unsecured convertible debentures; and (b) $20,000,000 principal amount of 8.0% unsecured convertible debentures, issued and outstanding.

The Company has received conditional approval for the Transaction from the TSXV and its common shares are expected to commence trading on the TSXV under the ticker symbol "FAF" at the commencement of trading on Tuesday, February 19, 2019.

Following closing of the Transaction, the incumbent directors and officers of the Company (other than Donald Wright and Avininder Grewal in their capacity as directors) tendered their resignations and the board of directors of the Company is now comprised of the following individuals: Trevor Fencott, Harvey Shapiro, Norman Inkster, Sharon Ranson, Donald Wright and Avininder Grewal. In addition, (a) Trevor Fencott has been appointed as the Chief Executive Officer, President and Corporate Secretary; (b) Harvey Shapiro has been appointed as executive director; (c) Nadia Vattovaz has been appointed as Chief Financial Officer; and (d) Mike Vioncek has been appointed as Chief Operating Officer.

Full details of the Transaction and certain other matters are set out in the filing statement of the Company dated February 6, 2019 (the "Filing Statement"). A copy of the Filing Statement can be found under the Company's SEDAR profile on SEDAR at www.sedar.com.

Conversion of Fire & Flower Subscription Receipts and Escrow Release

As previously announced, Fire & Flower completed the Offering for gross proceeds of $36,500,001. In connection with the closing of the Transaction, the 24,333,334 Subscription Receipts issued pursuant to the Offering were automatically converted into 24,333,334 common shares of Fire & Flower. Pursuant to the Transaction, each common share of Fire & Flower has been exchanged for one common share of the Company.

The Offering was co-led by GMP Securities L.P. and AltaCorp Capital Inc. as joint bookrunners.

Options

In addition, the board of director of the Company has also approved the granting of 1,795,000 options (the "Options") to certain directors, officers, employees and advisors of the Company, including: (i) 500,000 Options to Nadia Vattovaz (Chief Financial Officer); (ii) 30,000 Options to Norman Inkster (director); (iii) 30,000 Options to Sharon Ranson (director); (iv) 30,000 Options to Donald Wright (director); and (v) 30,000 Options to Avininder Grewal (director). Subject to compliance with the policies of the TSXV, such Options are exercisable at a price of $1.50 per share for a period of five years.

About Fire & Flower Holdings Corp.

The Company, through its wholly-owned subsidiary Fire & Flower, is an independent retail chain that offers cannabis products and accessories to the adult-use market in provinces where the sale of cannabis by private retailers is legal under: (a) An Act respecting cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other Acts (the "Cannabis Act") which came into effect on October 17, 2018; and (b) applicable provincial regimes for regulating the sale of cannabis by licensed private retailers. Fire & Flower was founded by leading legal cannabis entrepreneurs in Canada, with significant combined experience in launching premium, successful businesses with extensive experience in the legal cannabis space.

Fire & Flower has obtained provincial licences to operate seven cannabis retail stores in Alberta, and two cannabis retail stores in Saskatchewan, and a wholesale cannabis supply business in Saskatchewan, and is pursuing additional licences to operate stores in British Columbia, Alberta, Saskatchewan, Manitoba and Ontario.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to and the business and operations of the Company. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: final approval of the TSXV of the Transaction, compliance with extensive government regulation, the general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; the results of operations and such other matters as set out in the Filing Statement available on the Company's profile on SEDAR at www.sedar.com. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Investors are cautioned that forward-looking information is not based on historical facts but instead reflects management's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Company believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Fire & Flower Inc.

Nathan Mison, Vice President, Government and Stakeholder Relations, E-mail: [email protected]