The Flowr Corporation (TSX.V: FLWR; OTC: FLWPF) (“Flowr” or the
“Company”) today announced that it has closed a second tranche of
its previously announced non-brokered private placement. The second
tranche closing consisted of the issuance of 1,538 Units (as
defined below) for gross proceeds of CAD$1,538,000 (the “Second
Tranche Offering”). The Second Tranche Offering is in addition to
the CAD$20,041,000 in gross proceeds that the Company closed on
April 27, 2020, bringing the total gross proceeds from both
tranches to CAD$21,579,000.
Executive Departures
The Company also announced today that its Chief
Legal Officer Francesco Tallarico and its Chief People Officer
Ashley Thomson are leaving the Company to pursue opportunities
outside of the cannabis industry. Vinay Tolia, CEO said “On behalf
of the Board and the Company, I want to thank Francesco and Ashley
for their contributions to Flowr and wish them success in their
next ventures. Francesco has been an integral part of our
leadership team from when we first went public in 2018. He immersed
himself in the industry and has been involved in everything from
regulatory, M&A, and capital raising. Ashley has been a key
member of our executive leadership team guiding the Company through
a substantial increase in headcount, implementing best in class
corporate structures to enable Flowr to scale efficiently globally
and has been integral to creating our corporate culture.”
Andrew Teehan, Flowr’s Deputy General Counsel
will assume the Interim General Counsel role to ensure a smooth
transition, after the departure of Mr. Tallarico in late June 2020.
Andrew joined Flowr in early 2019 after having been VP Legal
Affairs at Concordia International and having practiced corporate
and securities law at Cox & Palmer and Fasken Martineau
DuMoulin.
Ms. Thomson will be leaving the Company in early
June 2020.
Additional Information about the
Offering.
The Second Tranche Offering consists of units of
the Company (the “Units”) at a price of CAD$1,000.00 per Unit. Each
Unit consists of one subordinated secured debenture of the Company
(each, a “Debenture”), convertible into 1,724 common shares of the
Company (“Common Shares”) at a conversion price of $0.58 and 1,724
Common Share purchase warrants (each, a “Warrant”) with an exercise
price of $0.76.
Each Debenture is comprised of CAD$1,000.00
principal amount of convertible debentures of the Company. The
Debentures will bear interest at a rate of 10.0% per annum from
April 27, 2020, calculated semi-annually in arrears on June 30 and
December 31 of each year. Interest will, subject to TSX Venture
Exchange (“TSXV”) approval, be paid annually in Common Shares and
paid on December 31 of each year, with the last interest payment to
be paid on the fourth anniversary of April 27, 2020 (the “Maturity
Date”). Subject to TSXV approval, the conversion price with respect
to the Common Shares issued as payment in kind on account of
interest shall be the market price of the Common Shares on the
business day immediately prior to the conversion date of such
interest payment. Notwithstanding the foregoing, in the event that
the TSXV does not approve the payment of interest in Common Shares
for any particular interest payment period, such interest shall
instead be paid in cash pursuant to the debenture indenture entered
into between the Company and the debentureholders.
The Debentures will be convertible into Common
Shares at the option of the debentureholder at any time and from
time to time prior to the Maturity Date upon such holder providing
five (5) business days’ notice to the Company. The conversion price
with respect to the Common Shares issued upon conversion of
Debentures is $0.58 per Common Share. Debentureholders converting
their Debentures will be entitled to receive accrued and unpaid
interest thereon for the period from and including the date of
the latest interest payment date, to and including the date of
conversion.
Any outstanding principal amount of the
Debentures not converted prior to the Maturity Date will be repaid
by the Company, at the election of the holders of the Debentures,
in cash or Common Shares on the Maturity Date.
Each Warrant entitles the holder thereof to
acquire one Common Share (each, a “Warrant Share”) at an exercise
price of $0.76 per Warrant Share (the “Exercise Price”) for a
period of 36 months from April 27, 2020 (the “Expiry Date”). Any
Warrants not exercised prior to the Expiry Date shall be deemed to
be void and of no further force and effect.
The Debentures will rank subordinate to any and
all current secured indebtedness and senior to any and all current
and future unsecured indebtedness of the Company and any and all
future secured indebtedness of the Company.
All securities issued under the Second Tranche
Offering are subject to the customary four-month hold period and
may not be traded before October 4, 2020. In addition, securities
issued to subscribers in the United States will be subject to a
hold period under the U.S. Securities Act of 1933, as amended (the
"1933 Act") and can only be resold in strict compliance with the
applicable exemptions from the registration requirements of the
1933 Act.
The Second Tranche Offering remains subject to
the final acceptance of the TSXV.
About The Flowr Corporation
The Flowr Corporation is a Toronto-headquartered
cannabis company with operations in Canada, Europe, and Australia.
Its Canadian operating campus, located in Kelowna, BC, includes a
purpose-built, GMP-designed indoor cultivation facility; an outdoor
and greenhouse cultivation site; and a state-of-the-art R&D
facility. From this campus, Flowr produces recreational and
medicinal products. Internationally, Flowr intends to service the
global medical cannabis market through its subsidiary Holigen,
which has a license for cannabis cultivation in Portugal and
operates GMP licensed facilities in both Portugal and
Australia.
Flowr aims to support improving outcomes through
responsible cannabis use and, as an established expert in cannabis
cultivation, strives to be the brand of choice for consumers and
patients seeking the highest-quality craftsmanship and product
consistency across a portfolio of differentiated cannabis
products.
For more information, please visit flowrcorp.com
or follow Flowr on Twitter: @FlowrCanada and LinkedIn: The Flowr
Corporation.
On behalf of The Flowr Corporation:Vinay
ToliaCEO and Director
CONTACT INFORMATION:
INVESTORS & MEDIA:Thierry ElmalehHead of Capital
Markets(877) 356-9726 ext. 1528thierry@flowr.ca
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: the anticipated timelines for
Mr. Tallarico and Ms. Thomson leaving the Company; conversion of
the Debentures into Common Shares; the calculation of interest on
the Debentures and dates for payment thereof; the conversion price
for Common Shares issued as payment in kind on account of interest
on the Debentures, and TSXV approval thereof; payments of interest
on the Debentures being made in cash; the repayment of any
outstanding principal under the Debentures in cash or Common Shares
on the Maturity Date; the terms of the Warrants; the ranking of the
Debentures with respect to future indebtedness of the Company; the
applicable hold periods and restrictions on resale for the
securities issued under the Offering; receipt of conditional final
approval from the TSXV for the Offering Flowr servicing the global
medical cannabis market and operating GMP-designed manufacturing
facilities in Portugal and Australia; Flowr supporting improving
outcomes through responsible cannabis use and striving to be the
brand of choice for consumers and patients seeking highest-quality
craftmanship and product consistency; and Flowr’s business,
production and products. 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
Company being unable to use the proceeds of the Second Tranche
Offering as intended; the inability of the Company to make interest
payments on the Debentures on the scheduled dates for payment, or
at all; the inability of the Company to repay any outstanding
principal under the Debentures on the Maturity Date; the inability
of the Company to receive TSXV approval to make interest payments
on the Debentures in kind by issuing Common Shares; the inability
of the Company to incur any future indebtedness; the Company not
receiving final approval from the TSXV for the Second Tranche
Offering Flowr being unable to service the global medical cannabis
market and/or operate GMP-designed manufacturing facilities in
Portugal and Australia; Flowr being unable to support improving
outcomes through responsible cannabis use and/or striving to be the
brand of choice for consumers and patients seeking highest-quality
craftmanship and product consistency; the construction and
development of 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; the
Company’s inability to raise capital or have the liquidity to
operate or advance its strategic initiatives 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 29, 2020 (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.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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