The Flowr Corporation (TSXV:FLWR, OTCQB:FLWPF) (the “Company” or “Flowr”) is pleased to announce that it has closed its previously announced short form prospectus offering (the “Offering”) of units of the Company (the “Offered Units”). A total of 10,610,000 Offered Units, consisting of one common share and one half of one common share purchase warrant, have been issued at a price of C$4.10 per Offered Unit, for aggregate gross proceeds of $43,501,000.
Each whole warrant will be exercisable to acquire one common share (a “Warrant Share”) for a period of 24 months following the closing of the Offering at an exercise price of $5.00 per Warrant Share. In the event that the volume weighted average trading price of the common shares for ten (10) consecutive trading days exceeds $6.15, the Company has the right to accelerate the expiry date of the Warrants upon not less than fifteen (15) trading days’ notice, or such longer period as the TSXV Venture Exchange (the “TSXV”) may require. The TSXV has conditionally approved the listing of the Warrants, subject to standard listing conditions. The Warrants are expected to commence trading on or about August 12, 2019.
The Offered Units were sold pursuant to an underwriting agreement with a syndicate of underwriters led by GMP Securities L.P., and included BMO Capital Markets, AltaCorp Capital Inc., Clarus Securities Inc., and Sprott Capital Partners L.P.
The Company has granted the underwriters an option (the “Over Allotment Option”) to purchase up to an additional 1,591,500 Offered Units on the same terms and conditions, exercisable at any time, in whole or in part, for a period of 30 days following the closing of the Offering for over-allotment and market stabilization purposes. In the event the Over-Allotment Option is exercised in full, the aggregate gross proceeds of the Offering will be $50,026,150.
The net proceeds of the Offering are expected to be used to fund, in part, Flowr’s acquisition of the approximately 80% equity interest of Holigen Holdings Limited (“Holigen”) that it does not already own, working capital required for the construction and development of certain of Holigen’s and the Company’s cultivation and production facilities, and for general corporate purposes. In the event that the closing of the acquisition of Holigen does not occur, the net proceeds from the Offering (including any proceeds from the exercise of the Over-Allotment Option) will be used to fund the Company’s working capital, including construction and development of the Company’s facilities and for general corporate purposes.
The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.
About the Flowr Corporation
Flowr, through its subsidiaries, holds cannabis production and sales licenses granted by Health Canada. With a head office in Toronto and a production facility in Kelowna, BC, Flowr builds and operates large-scale, GMP-designed cultivation facilities utilizing its own growing systems. Flowr expects to provide premium-quality cannabis to the adult-use recreational market and the medicinal market.
On behalf of The Flowr Corporation:
CEO and Director
Vice President, Communications & Public Relations
(877) 356-9726 ext. 1526
Head of Capital Markets
(877) 356-9726 ext. 1520
Forward-Looking Information and Statements
This press release contains “forward-looking information” within the meaning of Canadian Securities laws, which may include but is not limited to: Flowr’s use of the net proceeds from the Offering; Flowr’s business, production and products and Flowr’s plans to provide premium quality cannabis to adult use recreational and medical markets. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “is expected”, “expects”, “scheduled”, “intends”, “contemplates”, “anticipates”, “believes”, “proposes” or variations (including negative and grammatical variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Such information and statements are based on the current expectations of Flowr’s management and are based on assumptions and subject to risks and uncertainties. Although Flowr’s management believes that the assumptions underlying such information and statements are reasonable, they may prove to be incorrect. The forward-looking events and circumstances discussed in this press release may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting Flowr, including risks relating to: the failure to complete the acquisition of Holigen; the construction and development of Holigen’s and the Company’s cultivation and production facilities; general economic and stock market conditions; adverse industry events; loss of markets; future legislative and regulatory developments in Canada and elsewhere; the cannabis industry in Canada generally; the ability of Flowr to implement its business strategies; Flowr’s inability to produce or sell premium quality cannabis, risks and uncertainties detailed from time to time in Flowr’s filings with the Canadian Securities Administrators; and many other factors beyond the control of Flowr.
Although Flowr has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information or statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking information or statement can be guaranteed. Except as required by applicable securities laws, forward-looking information and statements speak only as of the date on which they are made and Flowr undertakes no obligation to publicly update or revise any forward-looking information or statements, whether as a result of new information, future events or otherwise. When considering such forward-looking information and statements, readers should keep in mind the risk factors and other cautionary statements in Flowr’s Annual Information Form dated April 3, 2019 (the “AIF”) and filed with the applicable securities regulatory authorities in Canada. The risk factors and other factors noted in the AIF could cause actual events or results to differ materially from those described in any forward-looking information or statements.
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