The FLOWR Corporation Closes Oversubscribed $C36 Million Subscription Receipt Offering in Step Toward Chat List

The FLOWR Corporation Closes Oversubscribed $C36 Million Subscription Receipt Offering in Step Toward Share List

The Flowr Corporation is pleased to announce that it has closed its offering of subscription receipts of Flowr, which was oversubscribed and raised about $C36 million.   The offering is a further step toward finishing the Company’s previously announced plan to effect a reverse takeover of The Needle Capital Corp., which is anticipated to occur on or before September 10.   Additional detail on the offering is below.

Flowr, through its subsidiaries, is a cannabis firm and Health Canada Licensed Producer that offers quality cannabis under the FlowrRx brand in the Canadian market that is medicinal.   The Company has agreements with several provinces to provide its Flowr brand premium cannabis available in retail channels following recreational use in Canada’s anticipated legalization.

The use of proceeds from the offering will be financing Flowr & rsquo’s buildout;s 85,000 square foot Kelowna, BC cultivation facility.   The Kelowna facility, which is currently approximately 20% complete, is being constructed systems which are anticipated to enable Flowr to develop ultra-clean, premium quality cannabis and with high yields and using proprietary designs.   Flowr expects the facility to reach full capacity in 2019, targeted to be in excess of 12,000 kilograms annually. The Company is also constructing a 50,000 square foot research and development facility integrated into its Kelowna campus and financed through an exclusive alliance with the Hawthorne Gardening subsidiary of The Scotts Miracle-Gro Company (NYSE: SMG).

“Completing this oversubscribed offering is another exciting milestone on Flowr’s journey to creating the finest cannabis experience in the world as well as an acknowledgement of investors’ belief in our business model,” said Vinay Tolia, Flowr’s incoming Chief Executive Officer.   These funds will enable us to scale operations and provide patients and consumers with rsquo & Flowr, & ldquo; Coming on the heels of obtaining our Health Canada sales permit;s clean, consistent, premium-quality merchandise in the medicinal and markets. ”

In aggregate, 13,807,734 Subscription Receipts were sold under the Offering at a subscription cost of $2.60 per Subscription Receipt for aggregate gross proceeds of $35,900,104.   The Offering was comprised of a brokered and a non-brokered financing. The Subscription Receipts sold as part of the brokered financing were offered pursuant to the terms of an agency agreement dated August 28, 2018 among the Company, Needle, Clarus Securities Inc. and Eight Capital (the “Co-Lead Agents”-RRB- on behalf of a syndicate of agents (together with all the Co-Lead Agents, the “Agents”-RRB-.   All proceeds from the sale of the Subscription Receipts, less 50% of the commissions payable to the Agents and the Agents’ expenditures (the “Escrowed Funds”-RRB-, are placed in escrow pending the satisfaction of the Escrow Release Conditions (as defined below).

The Subscription Receipts were issued pursuant to a subscription receipt agreement (the “Subscription Receipt Agreement”-RRB- among the Company, the Co-Agents, on behalf of the Agents and Computershare Trust Company of Canada, as subscription receipt agent.

Upon satisfaction or waiver of all conditions precedent to the proposed business combination transaction (the “Transaction”-RRB- between the Company and Needle whereby Needle and Flowr will effect a trade that will result in a reverse takeover of Needle from the shareholders of Flowr to ultimately form the resulting issuer (the “Resulting Issuer”-RRB-, and the satisfaction of other customary conditions (the “Escrow Release Conditions”-RRB-, each Subscription Receipt issued will be automatically converted into one (1) common share of Flowr (“Flowr Share”-RRB- with no further consideration on the part of the buyer.   Subject to applicable laws and the policies of the TSX Venture Exchange (the “Exchange”-RRB-, it’s expected that, upon completion of the Transaction, every Flowr Share issued pursuant to the Offering will be exchangeable into one (1) freely tradable common share of the Resulting Issuer (“Resulting Issuer Share”-RRB-.

Needle and the Organization are working to complete

In consideration of the services provided by the Agents in connection with the Offering, the Company has paid the Agents a cash commission equal to 6% of the gross proceeds of the Offering (and reduced to 3 percent on the president’s record orders and 1% to the direct order) (“Agents’ Commission”-RRB- and has issued the Agents broker warrants (the “Broker Warrants”-RRB- equal to 3 percent of the total Subscription Receipts offered in the Offering (and reduced to 1.5% on the president’s record orders).   Considering that the Escrow Release Conditions are satisfied, each Broker Warrant will entitle the holder thereof to purchase one Resulting Issuer Share at an exercise price of $2.60 per share for a period of 24 months after the closing of the Offering.

The Company has placed 50 percent of the Agents’ Commission in escrow, subject to the satisfaction or completion of the Escrow Release Conditions whereupon the Flowr Shares underlying the Subscription Receipts will be issued to the purchasers and the Escrowed Funds will be paid to Flowr and the remainder of the Agents’ Commission will be paid to the Agents.

Upon completion of the Transaction, it’s intended that the net proceeds from the Offering will be used for capacity expansion, marketing initiatives, facility expansion, working capital and general corporate purposes.

All securities of Flowr issued pursuant to the Offering are subject to a hold period ending on the later of: (a) August 28, 2018; or (b) the date which Flowr becomes a reporting issuer pursuant to applicable securities laws.

Further Information

There can be no guarantee that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction might not be complete or accurate and shouldn’t be relied upon. Trading in the securities of Flowr should be considered highly speculative.

About The Needle Capital Corp..

The Needle Capital Corp. is a CPC. The principal business activity of the Company is to identify and assess opportunities for acquisition of assets or business. The Company was incorporated on June 1, 2016, and is headquartered in Calgary, Alberta.

About The Flowr Corporation

Flowr, through its subsidiaries, is a cannabis firm focused on the science of cannabis.   With head offices in Markham, ON and manufacturing in Kelowna, B.C., Flowr builds and works large-scale, GMP compliant farming facilities utilizing their own patented growing systems. Flowr’s investment in research and development ensures that its master growers are able to supply constant medicinal cannabis to patients. With a line of premium quality cannabis products for the upcoming adult-use market, Flowr is also well positioned Having a sense of craftsmanship and a spirit of innovation.

Website: flowr.ca

SOURCE

Published at Tue, 04 Sep 2018 18:00:59 +0000

Posted in: News

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