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The Flowr Corporation closes C$20 million private placement led by management and insiders

Management and insiders will continue to own around 59% of shares as chairman Steve Klein and CEO Vinay Tolia commit C$10 million

The Flowr Corporation -
Flowr has the option to increase the offering by C$5 million to raise a total of C$25 million

The Flowr Corporation (CVE:FLWR) (OTCMKTS:FLWPF) closed a C$20 million private placement backed strongly by management and insiders.

The medical cannabis company’s chairman Steve Klein and CEO Vinay Tolia led the offering with commitments of more than C$10 million and management and insiders will continue to own around 59% of shares after the financing closes.

Flowr has the option to increase the offering by C$5 million to raise a total of C$25 million, it told shareholders on Monday.

READ: The Flowr Corporation to raise C$20 million in management-led private placement

“Despite the challenging capital markets environment, we are extremely fortunate to close on this financing and to have continued support from management and insiders who have been instrumental in Flowr’s founding, strategic direction and financing since inception,” said Vinay Tolia, Flowr’s CEO.

“This capital is expected to enable Flowr to become cash flow positive in H2 2020 as we build on our focus of delivering premium dry flower to the Canadian marketplace driven by our flagship product BC Pink Kush and other high THC strains we will be launching imminently. Future revenue growth is expected to be further enhanced with contributions from Holigen given the recent receipt of our EU GMP license in Portugal.” 

The offering consisted of units of Flowr priced at C$1,000 per unit, each consisting of one subordinated secured debenture that is convertible to 1,724 Flowr shares priced at C$0.58 and an equal number of warrants priced at C$0.76.

Each debenture is comprised of C$1,000 principal amount of convertible debentures of the company, bearing an interest rate of 10% per year starting on April 27 and calculated semi-annually in arrears June 30 and December 31. Interest will be paid annually in shares each year on December 31, with the last interest payment on the four-year anniversary of the offering’s closing date.

The conversion price of the shares issued as payment in kind will be the market price of the shares on the business day immediately preceding the conversion date of such interest payment.

The debt-to-shares plan is subject to TSX Venture Exchange approval. Interest will be paid in cash if approval is not received.

Debentures will be convertible to shares at the holder’s discretion with a conversion price of C$0.58 per share.

Each warrant entitles the holder to acquire one share of Flowr at a price of C$0.76 for a 36-month period following the closing date.

AltaCorp Capital Inc is participating in the offering and will receive a C$150,000 fee in connection with its role in the placement.

Shares of Flowr headed north in Toronto on Monday, up 3% at C$0.68 in early morning trading.

Contact Angela at [email protected]

Follow her on Twitter @AHarmantas

Quick facts: The Flowr Corporation

Price: 0.46 CAD

TSX-V:FLWR
Market: TSX-V
Market Cap: $60.2 m
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