Flowr enters into a partnership agreement with Terrace Global to develop Flowr's outdoor operations in Aljustrel, Portugal
The parties expect Terrace Global to fund at least C$3 million under this Partnership
TORONTO, May 14, 2020 (GLOBE NEWSWIRE) -- The Flowr Corporation (tsx.v:FLWR) /zigman2/quotes/205237089/composite FLWPF -0.44% ("Flowr" or the "Company") announces it has entered into an Equity Line and Profit Sharing Agreement (the "Agreement" or "Partnership") with Terrace Global Inc. (tsx.v:TRCE) ("Terrace Global") a Canadian company focused on the development of international cannabis assets, whereby the two companies will work together to develop finished cannabis products for the European medicinal market. As part of the Partnership and under the terms of the Agreement, Terrace Global has agreed to fund the operations and certain capital expenditures at the Company's outdoor facility located in Aljustrel, Portugal in exchange for common shares and warrants in Flowr to be issued in certain intervals during 2020 and sharing of net proceeds from the sale of any medical cannabis products produced from the facility. The parties expect Terrace Global to fund at least C$3 million under this Partnership.
"We are very pleased to announce this partnership with Terrace Global who bring a great deal of global cannabis industry experience and expertise to the table which will help us further advance our efforts in commercializing our Holigen business as we embark on one of the first large scale outdoor cultivation projects of medicinal cannabis in Europe," said Vinay Tolia, Flowr's Chief Executive Officer. "There is an increased level of comfort in this partnership given prior successful ventures and working relationships with senior leadership of both Terrace Global and Flowr," added Mr. Tolia.
The Partnership allows for both companies to participate in the planting, growing, cultivation, harvesting and production of high-quality medical cannabis. The Agreement contemplates advancing the planting of up to 12 hectares of land at Aljustrel in 2020 to cultivate medicinal cannabis for the European market. The goal of the Partnership is to develop various strains suitable for the European medicinal market and planting mechanisms which will determine the most effective and efficient systems to grow cannabis outdoors in Portugal. Flowr recently exported to Portugal approximately 14,000 clones to support Holigen's 2020 planting season. The cultivars which were shipped include Flowr's flagship strain BC Pink Kush as well as BC Louis XII and BC Tahoe OG, which were strains successfully grown in Flowr's Canadian outdoor operation, Flowr Forest, and which will be launched in the Canadian recreational market soon as new products. All three of these strains have THC content in excess of 20%.
The Agreement provides for the establishment and approval of cultivation plans and operating budgets (collectively, the "Program") to be approved by Flowr and Terrace Global. Once approved, Terrace Global will provide Flowr with the full amount of funds required by such Program. It is expected that the Company will begin initial planting efforts in Aljustrel immediately. The products created under the terms of the Agreement will be sold by Flowr under the Holigen brand in Europe, and Terrace Global will share in 25% of the net proceeds of sales of such product, which percentage may be reduced to 20% in certain circumstances.
The common shares to be issued to Terrace Global in exchange for the funding of the Program will be issued at a price equal to the volume weighted average trading price of the common shares on the day prior to the day of such subscription less the maximum applicable discount available under the rules of the TSX Venture Exchange, subject in all circumstances to a minimum price of $0.52 per common share, as is determined by dividing the amount of the approved budget by such price. In addition, upon issuance of common shares under the Agreement, Terrace Global will be entitled to an equal number of whole warrants, with each warrant being exercisable to purchase one common share for a period of thirty-six (36) months at an exercise price equal to the greater of (a) $0.76 per common share and (b) the minimum exercise price permitted at that time under the rules of the TSX Venture Exchange. The transactions contemplated by the Agreement are subject to the approval of the TSXV.
In addition, Flowr also announced today that 75,000 incentive stock options (the "Options") and 50,000 restricted share units (the "RSUs") have been granted to an officer of the Company. The Options are exercisable at a price of $0.64. The Options and RSUs will vest in equal tranches of thirty-three and one-third percent (33�?"%) over a period of three years.
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.
About Terrace Global
Terrace is a Canadian company focused on the development and acquisition of international cannabis assets. Its single-minded goal is to unlock value in new jurisdictions. Terrace was created by a group of pioneers in the cannabis space who have come together to build a best in class portfolio of assets, across international markets. With decades of cross-continent relationships, the Terrace team is uniquely positioned to unlock value in new jurisdictions like no one else can.
For more information about Terrace Global, please visit terraceglobal.ca.
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: Terrace and Flowr developing finished cannabis products for the European medicinal market; Terrace's minimum funding commitment; the issuance of common shares and/or warrants to Terrace and the timing therefore; revenue sharing arrangements between Flowr and Terrace; Terrace's expertise helping Flowr advance its efforts to commercialize its Holigen business; Flowr and Terrace participating in the planting, growing, cultivation, harvesting and production of high-quality medical cannabis; up to 12 hectares of land being planted in 2020 to cultivate medical cannabis for the European market, and the timelines therefor; the goals of the Partnership; Flowr's intent to launch new products in the Canadian recreational market and the timelines therefor; the approval and funding of the Program; the sale of products created under the Agreement; the issue price for common shares to be issued to Terrace; the exercise price for warrants to be issued to Terrace; TSXV approval of the transactions contemplated by the Agreement; the exercise price of the Options; the vesting of Options and RSUs; 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: Terrace and Flowr being unable to develop finished cannabis products for the European medicinal market; Terrace's not satisfying its minimum funding commitment; the inability of Flowr to issue common shares and/or warrants to Terrace on the anticipated timeline, or at all; Terrace's expertise not helping Flowr advance its efforts to commercialize its Holigen business; Flowr and Terrace being unable to participate in the planting, growing, cultivation, harvesting and production of high-quality medical cannabis; Flowr and Terrace being unable to plant up to 12 hectares of land on the anticipated timeline, or at all; the parties being unable to achieve the goals of the Partnership; Flowr's being unable to launch new products in the Canadian recreational market on the anticipated timeline, or at all; the parties being unable to approve and fund the Program; Flowr being unable to sell the products created under the Agreement; the inability to obtain TSXV approval of the transactions contemplated by the Agreement; 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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