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Flower One Announces Successful Closing of Over-Subscribed $5.75 Million Public Offering of Equity Units and Successful Closing of $2.37 Million Non-Brokered Financing

·8 mins read

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./

TORONTO, Sept. 18, 2020 /CNW/ - Flower One Holdings Inc. ("Flower One" or the "Company") (CSE: FONE) (OTCQX: FLOOF) (FSE: F11), today announced the closing of its previously announced public offering (the "Offering") of equity units of the Company (the "Equity Units") for aggregate gross proceeds of $5,750,000, which includes the proceeds from the full exercise of the Over-Allotment Option (as defined below). In connection with the Offering, the Company issued a total of 23,000,000 Equity Units at a price of $0.25 per Equity Unit (the "Offering Price"). Concurrently with the Offering, the Company has also completed a non-brokered financing of 9,497,000 Equity Units for additional gross proceeds to the Company of $2,374,250 (the "Concurrent Offering"). All amounts are in Canadian dollars.

Flower One Holdings Inc. Logo (CNW Group/Flower One Holdings Inc.)
Flower One Holdings Inc. Logo (CNW Group/Flower One Holdings Inc.)

As part of the Offering, the Underwriters (as defined below) have been granted an over-allotment option (the "Over-Allotment Option") for up to 30 days after the closing of the Offering, exercisable, in whole or in part at any time and from time to time, to increase the size of the Offering by up to 15% in Equity Units (and/or the components thereof) on the same terms and conditions of the Offering. Pursuant to the Offering, the Company is pleased to announce additional gross proceeds of $750,000 from the full exercise of the Over-Allotment Option, representing an additional 3,000,000 Equity Units.

The Offering was completed pursuant to an underwriting agreement (the "Underwriting Agreement") dated September 14, 2020 with Canaccord Genuity Corp., as lead underwriter and sole bookrunner ("Canaccord"), and Roth Canada, ULC (together with the Canaccord, the "Underwriters").

The net proceeds received by the Company from the Offering and the Concurrent Offering are intended to be used for working capital and general corporate purposes.

Each Equity Unit consists of one common share of the Company (a "Common Share") and one Common Share purchase warrant (a "Warrant"). Each Warrant is exercisable into one Common Share (each a "Warrant Share") for a period of 36 months from the closing of the Offering at an exercise price of $0.36, subject to adjustment in certain events.

Pursuant to the terms of the Underwriting Agreement, the Company paid the Underwriters a cash commission equal to 6.0% of the gross proceeds of the Offering, and issued to the Underwriters 1,380,000 non-transferable warrants (the "Broker Warrants") of the Company, each such Broker Warrant exercisable into a Common Share (each a "Broker Warrant Share") at an exercise price of $0.36 at any time up to September 18, 2023.

The Company also announced that it has entered into an advisory agreement with Canaccord pursuant to which Canaccord will provide certain fiscal advisory services to the Company, in exchange for which the Company has issued 600,000 advisory warrants (the "Advisory Warrants") of the Company, each such Advisory Warrant exercisable into a Common Share (each, an "Advisory Warrant Share") at an exercise price of $0.36 at any time up to September 18, 2023. Under applicable securities laws, the Advisory Warrants and the Advisory Warrant Shares are subject to a hold period until January 19, 2021.

The Common Shares and the Warrants have been approved for listing with the CSE under symbols "FONE" and "FONE.WT.B", respectively and are expected to begin trading on or about September 18, 2020. The Warrant Shares, the Broker Warrant Shares and the Advisory Warrant Shares will be listed with the CSE upon issuance.

No securities regulatory authority has either approved or disapproved of the contents of this press release. The Equity Units, Common Shares, Warrants and the common shares issued on exercise of the Warrants have not been and nor will they be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws. Accordingly, the securities described herein may not be offered or sold within the "United States" or to, or for the account or benefit of, a person in the "United States" or a "U.S. person" (as such terms are defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of Flower One in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Flower One Holdings Inc.

Flower One is the largest cannabis cultivator, producer, and full-service brand fulfillment partner in the state of Nevada. By combining more than 20 years of greenhouse operational excellence with best-in-class cannabis operators, Flower One offers consistent, reliable, and scalable fulfillment to a growing number of industry-leading cannabis brands. Flower One's flagship 400,000 square-foot greenhouse and 55,000 square-foot production facility is used for large scale cannabis cultivation, processing, and manufacturing. Flower One also operates a second facility in North Las Vegas, with 25,000 square-feet of indoor cultivation and production capacity. Flower One produces a wide range of products ranging from wholesale flower, full-spectrum oils, and distillates to finished consumer packaged goods including flower, pre-rolls, concentrates, edibles, and topicals for the top-performing brands in cannabis. The Company's common shares are traded on the Canadian Securities Exchange under the Company's symbol "FONE", in the United States on the OTCQX Best Market under the symbol "FLOOF" and on the Frankfurt Stock Exchange under the symbol "F11". For more information, visit: https://flowerone.com.

Forward Looking Statements

Statements in this press release that are not statements of historical or current fact constitute "forward-looking information" within the meaning of Canadian securities laws and "forward-looking statements" within the meaning of United States securities laws (collectively, "forward-looking statements"). Such forward-looking statements involve known and unknown risks, uncertainties, and other unknown factors that could cause the actual results of the Company to be materially different from historical results or from any future actual results expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms "believes," "belief," "expects," "intends," "anticipates," "potential," "should," "may," "will," "plans," "continue" or other similar expressions to be uncertain and forward-looking.

Forward-looking statements may include, without limitation, the listing of the Warrants, and the Warrant Shares of the Company issuable upon the exercise of the Warrants on the CSE; the use of proceeds; the Company's leadership as a cannabis cultivator, producer, innovator and full-service brand fulfillment partner; the Company's ability to offer consistent, reliable and scalable fulfilment to a growing number of industry-leading brand partners; and the production of a wide range of products for the nation's top-performing brands..

The Company is indirectly involved in the manufacture, possession, use, sale and distribution of cannabis in the recreational and medicinal cannabis marketplaces in the United States through its subsidiary Cana Nevada Corp. Local state laws where Cana Nevada Corp. operates permit such activities; however, these activities are currently illegal under United States federal law. Additional information regarding this and other risks and uncertainties relating to the Company's business are contained under the heading "Risk Factors" in the Company's Annual Information Form dated June 23, 2020 (the "Annual Information Form") and the Company's Prospectus Supplement dated September 14, 2020, both filed on its issuer profile on SEDAR at www.sedar.com.

The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement, the "Cautionary Statement regarding Forward-Looking Information" section contained in the Annual Information Form and the Prospectus Supplement. All forward-looking statements in this press release are made as of the date of this press release. The forward-looking statements contained herein are also subject generally to assumptions and risks and uncertainties that are described from time to time in the Company's public securities filings with the Canadian securities commissions, including the Company's Annual Information Form and the Prospectus Supplement.

Although Flower One has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended, including, but not limited to: dependence on obtaining regulatory approvals; investing in target companies or projects that are engaged in activities currently considered illegal under United States federal law; changes in laws; limited operating history; reliance on management; requirements for additional financing; competition; hindering market growth and state adoption due to inconsistent public opinion and perception of the medical-use and adult-use marijuana industry and; regulatory or political change.

Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this release. Flower One disclaims and does not undertake any intention or obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

NEITHER THE CANADIAN SECURITIES EXCHANGE NOR THEIR REGULATIONS SERVICES PROVIDER HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

SOURCE Flower One Holdings Inc.

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