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The Flowr Corporation (FLWR.V)
Chart Events
Performance Outlook
| Previous Close | 0.2650 |
| Open | 0.2750 |
| Bid | 0.2650 x 0 |
| Ask | 0.2700 x 0 |
| Day's Range | 0.2650 - 0.2750 |
| 52 Week Range | 0.2600 - 0.7200 |
| Volume | 61,033 |
| Avg. Volume | 641,227 |
| Market Cap | 97.677M |
| Beta (5Y Monthly) | N/A |
| PE Ratio (TTM) | N/A |
| EPS (TTM) | -0.9500 |
| Earnings Date | Apr 28, 2021 |
| Forward Dividend & Yield | N/A (N/A) |
| Ex-Dividend Date | N/A |
| 1y Target Est | 0.88 |
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- GlobeNewswire
The Flowr Corporation Announces Fourth Quarter and Full Year 2020 Results
TORONTO, April 28, 2021 (GLOBE NEWSWIRE) -- The Flowr Corporation (TSX.V: FLWR; OTC: FLWPF) (“Flowr” or the “Company”) herein announces its financial and operational results for the fourth quarter and fiscal year ended December 31, 2020. “2020 was very much a transitional year for the Company where we successfully completed our ambitious capital expenditure programs in Canada and Portugal. In the second quarter of 2020, the last grow room at the 85,000 sq. ft. facility in Kelowna, known as the K1 facility, was commissioned. In the fourth quarter of 2020, we completed the build out of the Aljustrel and Sintra facilities in Portugal, which included the largest known outdoor medical cannabis harvest in the European Union. In addition, the R&D facility in partnership with Hawthorne Canada Limited (“Hawthorne”) was commissioned in the fourth quarter of 2020. Now that these state-of-the-art facilities are built out and the Company has the financial capacity to ramp up operations, we are planning to have 2021 see us reach our true potential,” commented Steve Klein, Chair of the Company. “The first quarter has seen us move quickly to refocus the business on our Canadian and E.U. operations. We were able to raise additional capital in the quarter and are now well funded to pursue our operations. We are also pleased to have been able to add Darryl Brooker to the team as our new Chief Executive Officer commencing in May 2021 and have made additional key operational hires. Flowr is well-positioned in 2021 from a financial and leadership perspective to take advantage of our unique assets in Canada and Portugal.” “We continue to be very excited about Portugal and the E.U. opportunity given the recent developments in Portugal. Medical cannabis is now being sold in pharmacies in Portugal, which we believe is a watershed moment for cannabis in the E.U.,” commented Pauric Duffy, Managing Director, Holigen Holdings Limited (“Holigen”). “With the acquisition of Terrace Global Inc. (“Terrace”) we consolidated our joint venture in Portugal and have approximately 2,700 kilograms of high THC dry flower biomass from the operations that we expect to sell in the second quarter. In addition, we are moving forward with several tolling arrangements and our strategic warehousing agreement with Tilray Inc. (“Tilray”) has given us our first revenue out of the E.U. We continue to believe that Holigen is a very unique asset for us in the E.U. where we now have seen another country beyond Germany open up its medical cannabis market.” Key financial and operating highlights in the fourth quarter and full year 2020: The Company generated gross revenue of approximately $2.1 million in the fourth quarter, and recorded its first revenues from its European operations.Full year gross revenue was $9.4 million and represents a 15% increase compared to the prior year.Net revenue in the fourth quarter of 2020 was $1.6 million, and $7.54 million on an annual basis which is a 44% increase as compared to annual 2019.During the quarter, the Company sold 311 kilograms of dried flower an increase of 44% as compared to the same period in 2019. 70% of product sold in the fourth quarter was the Company’s flagship BC Pink Kush strain. Total annual dried flower sales were 1,405 kilograms.The average Flowr branded gross price per gram less excise in the fourth quarter was $6.91 which continues to reflect the Company’s positioning in the premium segment. The Company did not experience price erosion versus 2019.The Company also transitioned to an innovative glass jar packaging for its dried flower sales, further differentiating itself in the ultra premium and premium segment.Normalized cash cost per gram in Canada was $3.84 in the fourth quarter, an increase versus the third quarter due to lower production volume.SG&A and transaction costs of $5.5 million in the fourth quarter of 2020 were $2.0 million higher than in the third quarter of 2020 due to professional fees to close the Terrace acquisition and other one-time expenses. 2020 annual SG&A expenses and transaction costs of $19.5 million were 12.6% lower than fiscal 2019.The Company completed the acquisition of Terrace thereby improving the financial position of the Company by consolidating $18.9 million in cash (net of transaction costs), without any material increase to liabilities. In connection with the Terrace acquisition, Flowr completed an early conversion of $16.64 million of subordinated convertible debentures and negotiated further covenant flexibility with its senior lending syndicate.During the fourth quarter of 2020, Flowr completed the first floor of the R&D facility, in partnership with Hawthorne, a wholly-owned subsidiary of The Scotts Miracle-Gro Company. The R&D facility is North America’s first dedicated cannabis R&D facility focused on cultivation techniques and systems.Holigen, in partnership with Terrace, operated the largest known outdoor medical cannabis operation in the E.U. yielding more than 2,700 kilograms of medical cannabis biomass which is in the process of being sold. Subsequent financial and operational highlights post end of the fourth quarter: On April 15, 2021, Flowr announced the appointment of Darryl Brooker as Chief Executive Officer of the Company. Darryl brings an extensive track record of building regulated CPG businesses in Canada with a hands-on approach to management. The Company is also pleased to announce that Bonnie Donovan has joined the Kelowna team as Vice-President, Operations. Bonnie is a senior operations and logistics professional with leadership experience in manufacturing operations, logistics, contract management and finance. Bonnie was previously with such companies as AB InBev and Canopy Growth Corp.Flowr shipped its first commercial order into Quebec in January 2021.In January 2021, Flowr launched its newest strain to market, BC Black Cherry. The first lot of BC Black Cherry contained more than 24% THC and more than 3% terpenes.In January 2021, Flowr won three awards at the ADCANN Awards 2020 including the coveted Brand of The Year award. The annual awards, which are voted on by the public, exist to celebrate the best marketing and advertising across Canada’s growing cannabis industry. Alongside the Brand of The Year Award, Flowr also won Campaign of the Year.On March 16, 2021, the Company closed its previously announced bought deal short form prospectus offering for gross proceeds of $15.9 million including the partial exercise of the over-allotment option.On April 13, 2021, the Company announced its filing of a final short form base shelf prospectus (the “Final Shelf Prospectus”), pursuant to which the Company is able to offer and issue up to $100,000,000 of common shares, preferred shares, debt securities, subscription receipts and warrants, or any combination thereof, at prices, and on terms to be determined based on market conditions at the time of the offering and as set out in an accompanying prospectus supplement, during the 25-month period that the Final Shelf Prospectus remains effective.On April 14, 2021, the Company announced the results of a strategic review process designed to: (i) reduce corporate overhead and headcount; (ii) dispose of non-core assets, including duplicative licenses in the E.U.; and (iii) implement further cost savings strategies with a view to preserving cash and cash equivalents.On April 28, 2021, the Company entered into an agreement with Rodeo Capital Limited (a member of the Redfield Group of companies) to sell TCann Pty Ltd. for AUD$500,000 representing the Company’s exit from the Australian medical cannabis market and ending any further operating or capital expenditures in Australia. Hyperion Capital Inc. advised the Company with respect to the transaction. FOURTH QUARTER AND FULL YEAR 2020 RESULTS The following table summarizes the Company’s key financial and operational results: In thousands of CAD dollars, Three months ended Year ended (except loss per share and grams harvested) December 31, December 31, 2020 2019 2020 2019 Grams harvested - K1* 1,195,260 665,325 4,336,240 1,851,895 Grams harvested - Flowr Forest** — 3,323,669 — 3,323,669 Grams sold 311,308 215,761 1,405,495 993,387 Gross revenue 2,066 1,589 9,441 8,231 Net revenue*** 1,600 51 7,513 5,205 Cost of sales 2,904 2,685 11,468 7,609 Impairment of inventory 842 5,303 3,517 5,303 Gross (loss) profit before fair value adjustments (2,146) (7,937) (7,472) (7,707)SG&A 4,614 6,616 18,614 21,670 Share-based compensation 396 2,767 3,020 11,803 Transaction and listing costs 917 686 917 686 Restructuring costs — — 726 — Impairment of assets 83,979 — 83,979 — Net loss (99,750) (27,292) (127,855) (36,967)Basic and diluted loss per share (0.62) (0.12) (0.94) (0.30)Cash used in investing activities 20,524 (14,584) 6,241 (61,742)Cash from financing activities 1,469 16,737 28,720 79,110 * Excludes trim** Excludes trim, includes 1,904,662g dry gram equivalent of fresh frozen cannabis calculated based on the historical drying loss*** Net of excise tax, sales return and concessions. For a full discussion of Flowr’s operational and financial results for the twelve months ended December 31, 2020, please refer to the Company’s fourth quarter 2020 Management’s Discussion & Analysis and Consolidated Financial Statements, which have been filed on SEDAR. CONFERENCE CALL AND WEBCAST The Company will host a conference call and webcast to review these results today at 5:30 p.m. Eastern Time. Conference call and live webcast details are as follows: Webcast: flowrcorp.com/investors/events-and-presentationsOnline registration: http://www.directeventreg.com/registration/event/8493169Conference call and webcast replay details are as follows: Toll Free: 1-800-585-8367Toll/International: 1-416-621-4642Passcode: 8493169Webcast: flowrcorp.com/investors The replay of the conference call will be available through midnight on Friday, May 7, 2021. About The Flowr Corporation The Flowr Corporation is a Toronto-headquartered cannabis company with operations in Canada and Europe. 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 that is awaiting licensing from Health Canada. 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 Portugal. 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:Lance EmanuelPresident and Interim CEO CONTACT INFORMATION: INVESTORS & MEDIA:Irina HossuChief Financial OfficerIrina.hossu@flowr.ca Forward-Looking Information: Certain statements made in this press release may constitute “forward-looking information”, “future oriented financial information” or “financial outlooks” (collectively, “forward-looking information”) within the meaning of applicable securities laws. Forward-looking information may relate to anticipated events or results including, but not limited to: the Company’s expectation that it will build on its achievements as it continues to invest in sales and marketing; the Company’s expectations for sales of product in Quebec; Flowr servicing the global medical cannabis market and operating GMP facilities in Portugal; Flowr’s business, production and products; Flowr’s plans to provide premium quality cannabis to adult use recreational and medical markets; EU-GMP certification opening the medicinal cannabis opportunity for the Company in global markets; the Company being well positioned to distribute EU-GMP compliant product into underserviced markets; Flowr’s ability to realize revenue from the Company’s European operations within the anticipated timeframe or at all; Flowr’s ability to establish sales and distribution channels in Europe to deliver medicinal cannabis to underserviced markets; expectations with respect to the anticipated timing for harvests, propagation, completion of construction and installation of extraction infrastructure at the Company’s Sintra facility; the Company being unable to commence GMP packaging and commercial sales within the anticipated timeframe or at all; Flowr’s ability to service the global medical cannabis market and/or operate GMP-designed manufacturing facilities in Portugal; the addition of a new chief executive officer commencing in May, 2021; the sale of medical cannabis in pharmacies in Portugal representing a watershed moment for cannabis in the E.U.; the Company’s ability to complete offering(s) of its securities under the Final Shelf Prospectus; the expected impact of the strategic review decisions on the Company; the actual costs of savings from the Company’s restructuring initiatives, including with respect to its workforce; the Company’s plans to divest its interests in certain of its subsidiaries; the Company’s ability to obtain licensing from Health Canada and other regulatory authorities with respect to its properties and facilities; future legislative and regulatory developments in Canada and elsewhere; the cannabis industry in Canada generally; the ability of Flowr to implement its business strategies; and the ability of Flowr to produce or sell premium quality cannabis. Particularly, information regarding our expectations of future results, targets, performance achievements, prospects or opportunities is forward-looking information. Often, but not always, forward-looking statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “believe”, “estimate”, “plan”, “could”, “should”, “would”, “outlook”, “forecast”, “anticipate”, “foresee”, “continue” or the negative of these terms or variations of them or similar terminology. Forward-looking information is current as of the date it is made and is based on reasonable estimates and assumptions made by us at the relevant time in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate and reasonable in the circumstances. To the extent any forward-looking information in this press release constitutes “future oriented financial information” or “financial outlooks”, within the meaning of applicable securities laws, the purpose of such information being provided is to demonstrate the potential of the Company and readers are cautioned that this information may not be appropriate for any other purpose. However, we do not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws in Canada. There can be no assurance that such estimates and assumptions will prove to be correct. Many factors could cause our actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking information as discussed in the “Risk Factors” section of the Company’s 2020 Annual Information Form dated April 28, 2021 (the “AIF”). A copy of the AIF and the Company’s other publicly filed documents can be accessed under the Company’s profile on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com. The Company cautions that the list of risk factors and uncertainties described in the AIF is not exhaustive and other factors could also adversely affect its results. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such information. 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.
- GlobeNewswire
The Flowr Corporation Announces Appointment of Darryl Brooker as Chief Executive Officer and Noel Biderman to the Board of Directors
Highlights: Seasoned CPG executive Darryl Brooker appointed Chief Executive Officer of Flowr.Noel Biderman, international executive and marketing specialist, has joined the Board of Directors of Flowr. TORONTO, April 15, 2021 (GLOBE NEWSWIRE) -- The Flowr Corporation (TSX.V: FLWR; OTC: FLWPF) (“Flowr” or the “Company”) announces the appointment of Darryl Brooker as Chief Executive Officer of the Company and the appointment of Noel Biderman to the Board of Directors of the Company. CEO Appointment Prior to joining the Company, beginning in January 2018, Mr. Brooker served as the President of Mission Hill Family Estate (Mark Anthony Group), a Kelowna-based winery. From February 2017 to January 2018, Mr. Brooker was the General Manager of Mission Hill Family Estate, having previously acted as Vice President of Winemaking from July 2015 to February 2017. Mr. Brooker has extensive experience in senior roles, also having acted as Vice President of Winemaking and Operations at CedarCreek Estate Winery from May 2010 to July 2015, and as Senior Winemaker at Andrew Peller Limited from April 2005 to May 2010. Mr. Brooker is a graduate of the Wine Executive Program at University of California Davis (2018), having previously earned a graduate diploma in wine business management at the University of Adelaide, Australia (2003) and a Bachelor of Applied Science, Wine Science at Charles Sturt University, Australia (2001). Mr. Brooker currently serves as a Board Member and Vice Chair at each of British Columbia Wine Institute and Wine Growers Canada. “On behalf of the Board of Directors, we are very excited to have a seasoned CPG executive like Darryl joining our Company,” commented Steve Klein, Chair of the Board of Directors. “Darryl has an extensive track record of building regulated CPG businesses in Canada with a hands-on approach to management. In 2021, we expect Flowr to become focused keenly on maintaining its reputation as a leading premium cannabis brand as it progresses to profitability. Darryl will bring fiscal discipline, leadership and the type of mindset needed to succeed in the cannabis industry. Moreover, the parallels between the premium wine business and the premium cannabis business are well known, and Darryl’s career as an executive that started with grape cultivation, then wine production, before becoming a leader of organizations, gives Darryl a unique set of skills and experience to benefit Flowr’s business.” “Since the acquisition of Terrace Global Inc. in late December 2020, Flowr has made significant progress, becoming a financially conscious, consumer-focused company that is building a professional leadership team to manage and operate one of the most sophisticated cannabis facilities in the world. Within the first quarter of 2021, the Company has taken immediate steps to streamline its business and focus on what it does best – cultivate high end cannabis,” commented Steve Klein. “The Company has taken steps to shed non-core assets and bolster its balance sheet. In the first quarter, the Company raised approximately $16 million and is now in the process of selling more than $5 million of non-core assets while also shedding excess SG&A expenses related with its non-core business in Australia.” Darryl Brooker commented: “I am very excited to be joining the talented, award winning Flowr team. The state-of-the-art cultivation campus, located in Kelowna, British Columbia, in addition to the partnership with Hawthorne in creating north America’s first research and development facility focused on cannabis, uniquely positions the Company to expand market share in the premium dried flower category within Canada. In addition, Flowr’s presence in the European Union with its wholly-owned subsidiary, Holigen Holdings Limited, includes a fully certified E.U. GMP facility strategically located in Portugal to allow Flowr to expand in the emerging European market.” The Company also announces that Lance Emanuel tendered his resignation as President and Interim Chief Executive Officer of the Company, effective May 3, 2021, to pursue another opportunity in the United States. The Company would like to sincerely thank Lance for all of his contributions and services over the past years as President, and more recently, Interim Chief Executive Officer. The Company wishes Lance well in his next endeavour. Board of Directors Flowr is pleased to announce that Noel Biderman has joined the Board of Directors of the Company effective immediately. Mr. Biderman is an international CEO, founder, author, speaker and lecturer. Mr. Biderman has overseen companies in a number of different verticals, most recently in the legal technology and online dating spaces, but in addition, in the IPTV, online real estate, and sports management arena. These companies have generated over a $1 billion in revenue and operate in over 50 countries and 20 different languages. The global marketing campaigns created by Mr. Biderman resulted in those services and websites becoming some of the most visited in the world. As a graduate of Osgoode Hall Law school, Mr. Biderman represented 47 professional athletes around the globe including in the NBA, NFL, as well as members of Canada’s Olympic team. Mr. Biderman’s literary publications include SmartCountry (fiction), Cheaters Prosper (International Best Seller), Adultropology (non-fiction), and he has appeared as a Speaker at TEDx and Big Think, as a lecturer at Yale University, and as a commentator on Bloomberg and CNBC. Effective immediately Vinay Tolia has resigned from the Board of Directors. 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:Irina HossuChief Financial Officer CONTACT INFORMATION: INVESTORS & MEDIA:Irina Hossu, Chief Financial OfficerIrina.hossu@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 statements made concerning: the implementation of innovative new glass jars for the Company’s dried flower products, and the impact thereof on Flowr’s product positioning; and high THC cultivar launches and the timing and formats thereof. 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: 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.
- GlobeNewswire
The Flowr Corporation Announces Formation of Strategic Review Committee and Corporate Update with Refocused Business Strategy
Highlights: Strategic Review Committee has commenced process of rightsizing headcount for immediate cost reductions, reducing annual operating expenses by approximately $2 million, excluding restructuring charges.The Company maintains a strong liquidity position with approximately $23.5 million in cash and cash equivalents as of March 31, 2021 with a $100 million base shelf prospectus available.Flowr has disposed of non-core licenses and operations in offshore jurisdictions.The Company expects approximately $5 million from non-core asset sales, including approximately 4 acres of industrial land located in Kelowna.The Company focused on being an ultra-premium and premium dry flower producer in Canada and the E.U. TORONTO, April 14, 2021 (GLOBE NEWSWIRE) -- The Flowr Corporation (TSX.V: FLWR; OTC: FLWPF) (“Flowr” or the “Company”) is pleased to announce the results of a strategic review process designed to improve the financial capacity of the Company and refocus the operations to the core business of the Company, which is to produce ultra-premium and premium dry flower for the Canadian and European markets. The Board of Directors of the Company appointed a Strategic Review Committee led by independent director Joanne Lee with a view to evaluating options for non-core assets and to develop a strategy for reducing SG&A expenses at the Company. “Since the start of the new year, the Strategic Review Committee has worked hard to make Flowr a leaner and more focused Company,” commented Steve Klein, Chair of the Board of Directors. “Within ninety days, the Company has made the decision to dispose of non-core assets and has been very creative in reducing cash outlays and started to right-size its headcount, all with a view to improving its balance sheet and driving towards profitability. This is hard work that we hope will pay off for all shareholders in the long-term.” Strategic Review The Strategic Review Committee was appointed by the Board of Directors with a view to: (i) reduce corporate overhead and headcount; (ii) dispose of non-core assets, including duplicative licenses in the E.U.; and (iii) implement further cost savings strategies with a view to preserving cash and cash equivalents. SG&A Review Headcount Reduction In the first quarter of 2021, the Strategic Review Committee identified corporate overhead reduction opportunities, resulting in SG&A reductions of approximately $2 million per year. The Company has also determined to have the majority of senior level executive positions relocate to its facilities in Kelowna, British Columbia with relocations expected in the second quarter of this year. Toronto Office The Company has made the strategic decision to close the Toronto office and move most key management personnel positions to Kelowna. The Company is in the process of sub-leasing its Toronto office. The Company has successfully implemented remote working – as a result, all remaining Toronto employees will continue to work remotely. Fenwick Sublease The Company has made the strategic decision to sub-sublease approximately 75% of its multiuse facility located in Kelowna, along with the outdoor space under its lease. The Company will continue to use a portion of the building for dock warehousing needs and expects the subleases of the remaining areas to result in annualized cash flow savings of up to approximately $500,000 per year. Non-Core Assets and Operations Sale of Non-Core Assets The Strategic Review Committee has identified approximately 4 acres of industrial land in Kelowna that is non-core to the business and currently vacant. The Company has initiated the sale of non-core land and expects gross proceeds of between $4-5 million from the sale. In addition, the Company is in the process of selling large-scale extraction manufacturing equipment and expects gross proceeds from sale to be approximately $1 million. Lastly, the Company owns approximately 6 hectares of industrial land in Aljustrel, Portugal. The Company has yet to determine whether to sell this land; however, the fair market value is expected to be in excess of $1 million. Sale of Non-Core Licenses The Company will be exiting all non-core jurisdictions, including Australia, Uruguay and Spain. To that end, the Company has entered into an agreement to sell Terra Nova Business Holdings Inc., an indirect wholly-owned subsidiary, which holds a pre-license authorizing it to construct a medical cannabis greenhouse facility in Portugal. The purchaser of Terra Nova has assumed all of the obligations of Terra Nova and allowed for Flowr to regain a 10% equity interest in the event certain milestone occur. In addition, Flowr has terminated the call option agreement between Terrace Global Inc. (“Terrace”), a wholly-owned subsidiary, and Inception Investment Corp., such that Terrace will no longer seek to acquire an equity interest in the recreational cannabis business in Uruguay. Flowr has also sold Oransur, S.A., an indirect wholly-owned subsidiary, which was a hemp operator in Uruguay. Under the terms of the agreement, Flowr will be allowed to regain a 10% equity interest in the event certain milestones occur. The Company is also in the process of selling TCann Pty Ltd., the entity that holds its medical cannabis licenses in Australia. Upon completion this sale will represent the Company’s exit from the Australian medical cannabis market and there will be no further operating or capital expenses directed towards those operation post-closing. Overall, the exit or disposition of these businesses and assets are expected to save the Company approximately $1 million on an annual basis. Cash Preservation Initiatives Marketing Budget in Shares The Company’s marketing firm of record, Zerotrillion Ltd. (“Zerotrillion”), has agreed to accept $310,778 of its fees payable in common shares in the capital of the Company (the “Consideration Shares”) pursuant to a shares for services agreement (the “Shares for Services Agreement”). Pursuant to the Shares for Services Agreement, the Corporation proposes to issue, subject to the approval of the TSX Venture Exchange (“TSXV”), the Consideration Shares to the Consultant in lieu of cash as compensation for the Consultant’s provision of certain media consulting services, including advertising services, to the Corporation in accordance with the Shares for Services Agreement and the 2021 Creative Services Agreement appended thereto. The Consideration Shares will compensate the Consultant for its services to the Corporation between March 31, 2021 and March 31, 2022, and will be issued on a quarterly basis. The Consideration Shares will be issued at a deemed price per Consideration Share equal to the greater of: (i) $0.10; and (ii) the volume-weighted average trading price of the Consideration Shares on the TSXV on the last trading day of each fiscal quarter in which the Consulting Fee (as defined in the Shares for Services Agreement) was earned through the provision of services to the Corporation, less twenty-five percent (25%). In 2021, Flowr won three awards at the ADCANN Awards - including the coveted Brand of The Year award. The annual awards, which are voted on by the public, exist to celebrate the best marketing and advertising across Canada’s growing cannabis industry. Alongside the Brand of The Year Award, Flowr also won Campaign of the Year for their Rembrandt inspired BC Pink Kush Campaign which works with regulations of the cannabis industry to highlight Flowr’s approach by blending art and science. Zerotrillion, Flowr’s agency of record, was also recognized for its work building the Flowr brand and subsequent campaigns and was awarded Agency of The Year. RSUs for Salary and Director Fees In an effort to preserve cash and further alignment directors and employees with the Company, the Company has implemented a program whereby employees may take up to 20% of their base salary in restricted share units (“RSUs”). In addition, the Board of Directors has agreed to receive 50% of its director fees payable in RSUs. Other Balance Sheet Initiatives ATB Amendments On December 18, 2020, the Company entered into an Amending and Restated Credit Agreement (“ARCA”) with a syndicate of lenders led by ATB Financial. The ARCA provided for additional covenant flexibility for the Company such that the only financial covenants in place until the fourth quarter of 2021 are for the Corporation to maintain a senior debt to tangible net worth ratio of greater than 1.3:1 and a minimum cash on hand of $3.5 million. In addition, the ARCA allows for the Corporation to prepay the ARCA by $5 million above its principal repayments, at which point this covenant relief will be extended for an additional year and the maturity of the loan would be extended for an additional year. In addition, the ARCA provided for the following financing baskets available without lender pre-approval: (i) up to $2 million in respect of PMSI financing; (ii) up to $2.5 million in respect of accounts receivable factoring; and (iii) unlimited junior permitted indebtedness. Debenture Conversion On November 16, 2020, the Corporation announced completion of the early conversion of certain of its 10.0% subordinated secured convertible debentures due April 27, 2024 (the “Debentures”) pursuant to an early conversion opportunity (the “Early Conversion Opportunity”). Approximately $16.4 million aggregate principal amount of Debentures were converted under the Early Conversion Opportunity, resulting in the issuance of approximately 47.8 million Common Shares. Upon closing of the Early Conversion Opportunity, there were approximately $5 million aggregate principal amount of 10% Subordinated Debentures still outstanding. All such outstanding 10% Subordinated Debentures continue to be governed by the terms of the indenture between the Corporation and Computershare Trust Company of Canada dated April 27, 2020, as amended. $15.9 Million Bought Deal Financing On March 16, 2021, the Company closed a bought deal offering (the “Offering”). In connection with the Offering, the Company issued 31,127,453 units of the Company (the “Units”) at a price of $0.51 per Unit (the “Issue Price”) for aggregate gross proceeds to the Company of approximately $15.9 million, inclusive of the partial exercise of the over-allotment option. Each Unit consists of one Common Share and one full Common Share purchase warrant of the Company (each whole warrant, a “Warrant”). Each Warrant is exercisable to acquire one Common Share at an exercise price of $0.64 per Common Share for a period of two years from March 16, 2021 (the “Closing Date”). Following the partial exercise of the over-allotment option granted to the Underwriters, an additional 3,274,508 Units remain exercisable by the Underwriters at the Issue Price, in whole or in part, at any time for a period of thirty days from the Closing Date. The Underwriters were paid a cash commission equal to 7.0% of the gross proceeds of the Offering and received Unit purchase warrants of the Company (the “Underwriters’ Warrants”) equal to 6.0% of the number of Units sold under the Offering, with each Underwriters’ Warrant being exercisable to acquire one common share at the Issue Price for a period of 24 months from the Closing Date. The net proceeds of the Offering will be used for general corporate purposes. Base Shelf Prospectus On April 13, 2021, the Company announced that it filed a final short form base shelf prospectus (the “Final Shelf Prospectus”) with the securities commissions or similar authorities in each province of Canada. The Final Shelf Prospectus enables the Company to offer and issue up to $100,000,000 of common shares, preferred shares, debt securities, subscription receipts and warrants, or any combination thereof (collectively, the “Securities”). The Securities may be issued from time to time, separately or together, in amounts, at prices, and on terms to be determined based on market conditions at the time of the offering and as set out in an accompanying prospectus supplement, during the 25-month period that the Final Shelf Prospectus remains effective. The amount and timing of any future offerings will be based on the Company’s financial requirements and market conditions at that time. 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. In 2020, Flowr’s BC Pink Kush was recognized as the top indica strain in Canada by kind magazine. 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:Lance EmanuelPresident and Interim Chief Executive Officer CONTACT INFORMATION: INVESTORS & MEDIA:Irina HossuChief Financial Officeririna.hossu@flowr.ca Forward-Looking Information and Statements This press release contains “forward-looking information” within the meaning of Canadian securities laws. 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 inability to complete the sale of non-core assets described in this press release; 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.
