The Flowr Corporation Closes on Second Tranche of Private Placement of Debenture Units and Announces Executive Departures
- Flowr closes on second tranche of non-brokered private placement of convertible debenture units for gross proceeds of $1,538,000
- Francesco Tallarico, Chief Legal Officer and Ashley Thomson, Chief People Officer, to leave the Company to pursue opportunities outside of the cannabis industry
TORONTO, June 03, 2020 (GLOBE NEWSWIRE) -- 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.
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:
CEO and Director
INVESTORS & MEDIA:
Head of Capital Markets
(877) 356-9726 ext. 1528
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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