- The Firm has closed its strategic acquisition of Terrace International, creating an entity with a robust stability sheet and international footprint.
- The Board of Administrators and shareholder base now contains former founders of MedReleaf Corp., ICC Labs Inc. and Bedrocan Canada Inc.
- Concurrently, by way of legal responsibility administration, the Firm is anticipated to attain significant debt discount and amendments to the Firm’s senior credit score facility earlier than the tip of 2020.
- As a part of the transaction, 9,266,538 widespread shares and 9,266,538 warrants of Flowr held by Terrace International had been cancelled leading to a major lower to the issued and excellent share capital.
- Total indebtedness anticipated to be decreased by roughly $16.4 million upon completion of the conversion of the Firm’s subordinated convertible debentures.
- Beforehand introduced three way partnership with Terrace International in Portugal, will develop into wholly-owned by Flowr, unlocking extra worth throughout the E.U.
- The Firm expects roughly $2 million per yr in synergies.
TORONTO, Dec. 24, 2020 (GLOBE NEWSWIRE) — The Flowr Company (TSX.V: FLWR; OTC: FLWPF) (“Flowr” or the “Firm”) is happy to announce the closing of its strategic acquisition of Terrace International Inc. (TSXV: TRCE) (“Terrace International”) a multi-country operator led by skilled hashish entrepreneurs targeted on the event and acquisition of worldwide hashish belongings (the “Acquisition”).
“We’re very happy to have the ability to shut the strategic acquisition of Terrace International. The closing of the Acquisition ought to enable Flowr to thrive within the international hashish trade over the long run. We have now been working with the Terrace International group since April 2020 on our European three way partnership and collectively we’re higher outfitted to develop our enterprise in Canada and overseas,” commented Steven Klein, Chairman and Chief Strategist of Flowr. “The Terrace International group share an analogous imaginative and prescient, values and have a excessive diploma of inside possession like Flowr does. The way forward for our group certainly seems to be very shiny.”
“Terrace International was based by a bunch of hashish entrepreneurs who’ve constructed and exited a number of hashish companies, together with MedReleaf Corp., ICC Labs Inc. and Bedrocan Canada Inc. We noticed a possibility in Flowr to enter the market on the proper time on the cusp of great progress within the retail and shopper aspect of the trade. We had been interested in Flowr due to its state-of-the-art amenities in Kelowna and Portugal, its skilled administration group and founder base in addition to its strategic partnership with Hawthorne/Scotts to deliver to life the world’s first R&D facility devoted to hashish analysis,” commented Stephen Arbib, Director and Co-Founding father of Terrace International. “We see our re-entry within the Canadian market benefiting from second mover benefit. Companies that may thrive now should accomplish that on execution. We imagine Flowr’s deal with the premium excessive THC phase is the appropriate technique and one which has already been rewarded available in the market as evidenced by sort journal’s current recognition of Flowr’s BC Pink Kush as the highest indica pressure in Canada in 2020.”
The Transaction was affected by the use of a court docket accredited plan of association below the Enterprise Firms Act (Ontario) (the “Association”). Beneath the phrases of the Transaction, every shareholder of Terrace International (“Terrace International Shareholder”) obtained 0.4973 of a Flowr Share per Terrace International share ensuing within the issuance of 144,558,919 widespread shares within the capital of Flowr for an mixture buy value of roughly $60 million.
Stability Sheet Power
As of closing of the Transaction, the mixed Firm has $23.2 million of money on its stability sheet which is anticipated for use to assist model constructing, out of doors develop operations, and pursue strategic alternatives and investments that maximize shareholder worth. As well as, the Firm cancelled 9,266,538 widespread shares and 9,266,538 warrants held by Terrace International and expects annual synergies to quantity to roughly $2 million per yr.
Legal responsibility Administration
“The Acquisition of Terrace International allowed the Firm to work constructively with its senior lenders and its debentureholders to considerably enhance our total credit score place. We have now obtained an excessive amount of flexibility with respect to our monetary covenants and anticipate to scale back the principal quantity of the Firm’s convertible debentures by roughly $16.4 million. These vital adjustments together with the money infusion from Terrace International will enable administration to deal with operational ends in 2021,” commented Irina Hossu, Chief Monetary Officer of the Firm. “Flowr is in a a lot better monetary place in the present day than it was previous to this Acquisition as we now have complete financial institution debt and convertible debentures of $31.7 million. We want to thank our senior lenders and debentureholders for working with us to enhance the monetary place of Flowr.”
The Firm’s excellent convertible debenture is anticipated to be decreased by roughly $16.4 million upon completion of the early conversion of debentures by these debentureholders who elected to train their early conversion proper to transform their debentures into Flowr shares (“Early Conversion Alternative”). The Firm believes the mixture discount of roughly $16.4 million in debt will enhance its monetary profile and outlook. Upon completion of the debenture conversion, Flowr’s complete principal quantities of financial institution debt and convertible debentures will probably be decreased from $48.1 million to $31.7 million, with $19.1 million representing a secured mortgage facility towards the Kelowna-1 facility.
To align with its marketing strategy, and with assist from its senior lenders, the Firm has made sure amendments to its credit score facility (the “ATB Facility”) with its lending syndicate led by ATB Monetary. These amendments embrace, amongst others, (i) a requirement for the Firm to take care of sure minimal quantities of money in permitted accounts, (ii) a Senior Debt to Tangible Web Value requirement and (iii) a Complete Leverage Ratio and glued cost requirement.
Administration and Board Modifications
In 2021, Vinay Tolia, Chief Government Officer of Flowr, will probably be stepping down from his position as Chief Government Officer and will probably be relocating to america for private causes. He’ll stick with the Firm by way of the tip of February to make sure a clean transition. Mr. Tolia will stay on the Board of Administrators. The present President of Flowr, Lance Emanuel, will lead the Firm as Interim Chief Government Officer.
“Whereas we’re unhappy to see Vinay head dwelling, on behalf of myself and the Board of Administrators, I want to thank him for his years of service and dedication in constructing the corporate. Our very proficient President, Lance Emanuel, has spent the previous two plus years doing nice issues for the corporate, and we’re lucky to have the administration depth and experience to make sure a clean transition,” commented Steve Klein, Chairman and Chief Strategist of Flowr.
Lance Emanuel joined Flowr in January 2019. Lance has been constructing seed and early-stage firms into multi-million-dollar enterprises whereas overseeing essential features of enterprise operations in extremely regulated markets for greater than a decade. He has a wealth of expertise within the administration of gross sales, advertising and marketing, product administration, R&D, know-how, authorized, compliance and regulatory affairs in addition to in procuring each debt and fairness financing and creating giant scale strategic partnerships. He holds a BBA, with distinction, from the College of Michigan’s Ross Faculty of Enterprise and a Juris Physician from the Benjamin N. Cardozo Faculty of Legislation in New York Metropolis.
The Firm is happy to announce new appointments to the Board of Administrators which embrace Jörg Cieslok, Michael Galego, Vincent Gasparro and Joanne Lee. As well as, Stephen Arbib, Jonathan Goldman and Francisco Ortiz von Bismarck have been appointed as observers to the Board of Administrators. The Board of Administrators will proceed to be led by present Chairman of the Board & Chief Strategist, Steve Klein. These new appointees be part of the next administrators: Steve Klein (Chair), Vinay Tolia, Thomas Circulation, Don Duet and Maurice Levesque.
The biographies of the brand new administrators are set out under:
- Jörg Cieslok is an govt with few friends on the planet of out-of-home media. Recognized for his trade foresight, out-of-the-box considering, and gross sales and advertising and marketing technique, Mr. Cieslok has modified the panorama of out-of-home media in Canada over the course of a 30-year profession. By embracing creativity and innovation, he takes promoting campaigns from conceptual concepts to award-winning experiential media placements. Jörg was the recipient of the celebrated 2017 CVCA Non-public Fairness deal of the yr award for the sale of Cieslok Media to Bell Media.
- Michael Galego is an govt, lawyer and company director with in depth M&A and company finance expertise. Mr. Galego is at the moment CEO of Apolo Capital Advisory Corp. and sits on the board of administrators of a number of private and non-private firms. Mr. Galego was a co-founder and director of ICC Labs Inc. and was integral in its sale to Aurora Hashish Inc. in November 2018. Mr. Galego was a co-founder, director and Chief Authorized Officer of Terrace International. Mr. Galego is a lawyer by coaching with greater than fourteen years of M&A and company finance expertise. His earlier authorized expertise contains being Basic Counsel, Secretary and Managing Director of Acasta Enterprises Inc., Deputy Basic Counsel and Secretary of Pacific Exploration & Manufacturing Corp. and Basic Counsel and Secretary of CGX Vitality Inc. Mr. Galego started his authorized profession as an affiliate within the enterprise legislation division of Osler, Hoskin & Harcourt LLP. Mr. Galego additionally beforehand served as Chief Government Officer of the Agricultural Division of the Stronach Group. Mr. Galego is a member of the TSX Enterprise Alternate (“TSXV”) Ontario Advisory Committee offering recommendation and proposals to the TSXV on coverage, operational and strategic points prone to have a major influence on the general public enterprise capital market. Mr. Galego is at the moment on the board of administrators of Waterfront Toronto (www.waterfrontoronto.ca), which is the advocate and steward of Toronto’s waterfront revitalization mission. Mr. Galego has additionally been energetic in various charitable organizations and has served as a director of the Canadian Liver Basis (www.liver.ca) and the Trillium Present of Life Community (www.giftoflife.on.ca). Mr. Galego is a graduate of York College (Hons. B.A.) and the College of Windsor (LL.B). In 2013, he was acknowledged by Lexpert as one among Canada’s “High 40 below 40” main attorneys. In 2015, Mr. Galego attended Harvard Enterprise Faculty’s Excessive Potentials Management Program after being nominated by Pacific E&P.
- Vincent Gasparro is at the moment the Managing Director, Company Growth & Clear Vitality Finance, at Vancity Group Funding Financial institution. From November 2018 to March 2020, he was the Principal Secretary within the Workplace of the Mayor of Toronto the place he had particular public coverage tasks together with issues associated to Toronto Hydro, Toronto Parking Authority, Toronto International, Toronto Group Housing, CreateTo and the Toronto Police Service. Previous to that, Mr. Gasparro had varied roles in personal fairness with Lynx Fairness Ltd. and associates thereof, and from 2003 to 2006, served as Particular Assistant within the Workplace of the Prime Minister of Canada. Mr. Gasparro has a BA from York College, an MSc from the London Faculty of Economics and an MBA from the Villanova Faculty of Enterprise in Philadelphia. He at the moment sits on the board of Terrace International Inc. and has beforehand served on the board of administrators and was Chair of the Funding Advisory Committee of Toronto Group Housing Company.
- Joanne Lee is a seasoned enterprise govt with sturdy Operations, Logistics and Procurement experience, underpinned by in depth monetary and M&A expertise. She has held key roles within the Healthcare, Shopper Packaging, Polymer and Chemical sectors. As a confirmed organizational change chief, Ms. Lee has led groups by way of difficult turnarounds in addition to vital enterprise enhancements which have led to elevated profitability. Ms. Lee joined Premier Candle Company (PCC) in 2009 as Basic Supervisor main the company’s largest division. Immediately, as the corporate’s CEO, Ms. Lee oversees all firm features and divisions, offering each operational and strategic management. Her steering has led to sustained prime and bottom-line progress, and has positioned PCC as a North American trade chief identified for its high quality and progressive capabilities. Previous to becoming a member of Premier Candle Company Joanne spent a number of years with Bayer Inc, the place she progressed by way of roles of accelerating accountability together with VP, Head of Controlling, VP Enterprise Partnering & Operations, VP Company Controlling, Enterprise Planning & Evaluation. Ms. Lee has demonstrated the flexibility to attain outcomes, resolve advanced points, search and develop enterprise alternatives. Ms. Lee additionally held a wonderful monitor document for main quite a few M&A tasks. Ms. Lee is acknowledged as a artistic and excellent chief in organizational growth. She has been acknowledged with many management awards, and has been twice nominated for the RBC Canadian Ladies Entrepreneur Award. Ms. Lee graduated from College of Ryerson and majored in Finance and Accounting.
“The Firm want to thank Karen Basian, Pauric Duffy, Dr. Lyle Oberg and David Miller for all of their laborious work and dedication as members of our Board of Administrators because the Firm’s founding and who’ve been instrumental in serving to Flowr develop into the worldwide hashish firm it’s in the present day,” commented Steve Klein, Chairman and Chief Strategist of Flowr. “We additionally need to welcome our new Board members, Jörg, Michael, Vince and Joanne, to the Firm. Their numerous expertise and experience will serve us effectively as we embark on the subsequent chapter in our evolution,” added Mr. Klein.
Advisors and Counsel
ATB Capital Markets Inc. acted because the unique monetary advisor to Flowr and offered an impartial Equity Opinion to the Flowr Board of Administrators. Fasken Martineau DuMoulin LLP acted as authorized counsel to Flowr. Hyperion Capital Inc. acted because the unique monetary advisor to Terrace International. Wildeboer Dellelce LLP acted as authorized counsel to Terrace International. Norton Rose Fulbright Canada LLP acted as authorized counsel to the Board of Administrators of Terrace International.
About The Flowr Company
The Flowr Company is a Toronto-headquartered hashish firm with operations in Canada, Europe, and Australia. Its Canadian working campus, situated in Kelowna, BC, features a purpose-built, GMP-designed indoor cultivation facility; an outside and greenhouse cultivation web site; and a state-of-the-art R&D facility. From this campus, Flowr produces leisure and medicinal merchandise. Internationally, Flowr intends to service the worldwide medical hashish market by way of its subsidiary Holigen, which has a license for hashish cultivation in Portugal and operates GMP licensed amenities in each Portugal and Australia. In 2020, Flowr’s BC Pink Kush was acknowledged as the highest indica pressure in Canada by sort journal.
Flowr goals to assist enhancing outcomes by way of accountable hashish use and, as a longtime knowledgeable in hashish cultivation, strives to be the model of selection for customers and sufferers in search of the highest-quality craftsmanship and product consistency throughout a portfolio of differentiated hashish merchandise.
For extra info, please go to flowrcorp.com or comply with Flowr on Twitter: @FlowrCanada and LinkedIn: The Flowr Company.
On behalf of The Flowr Company:
INVESTORS & MEDIA:
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(877) 356-9726 ext. 1528
Ahead-Trying Info and Statements
This press launch accommodates “forward-looking info” throughout the that means of Canadian securities legal guidelines, which can embrace however is just not restricted to statements made regarding: the Firm’s monetary place, administration of liabilities, completion of the early conversion of the debentures, total debt discount, energy of the Firm’s stability sheet, statements with respect to new administration and board members and Flowr’s positioning within the international hashish house. Typically, however not all the time, forward-looking info will be recognized by way of phrases akin to “plans”, “is anticipated”, “expects”, “scheduled”, “intends”, “contemplates”, “anticipates”, “believes”, “proposes” or variations (together with destructive and grammatical variations) of such phrases and phrases, or state that sure actions, occasions or outcomes “might”, “may”, “would”, “may” or “will” be taken, happen or be achieved. Such info and statements are based mostly on the present expectations of Flowr’s administration and are based mostly on assumptions and topic to dangers and uncertainties. Though Flowr’s administration believes that the assumptions underlying such info and statements are cheap, they could show to be incorrect. The forward-looking occasions and circumstances mentioned on this press launch might not happen by sure specified dates or in any respect and will differ materially on account of identified and unknown threat elements and uncertainties affecting Flowr, together with dangers referring to: completion of the early conversion of the debentures; the issuance of Flowr shares upon conversion of the debentures; total debt discount; common financial and inventory market situations; adversarial trade occasions; lack of markets; future legislative and regulatory developments in Canada and elsewhere; the hashish trade in Canada typically; the flexibility of Flowr to implement its enterprise methods; Flowr’s incapability to provide or promote premium high quality hashish, dangers and uncertainties detailed occasionally in Flowr’s filings with the Canadian Securities Directors; the Firm’s incapability to boost capital or have the liquidity to function or advance its strategic initiatives and plenty of different elements past the management of Flowr.
Though Flowr has tried to establish vital elements that might trigger precise actions, occasions or outcomes to vary materially from these described in forward-looking info or statements, there could also be different elements that trigger actions, occasions or outcomes to vary from these anticipated, estimated or supposed. No forward-looking info or assertion will be assured. Besides as required by relevant securities legal guidelines, forward-looking info and statements communicate solely as of the date on which they’re made and Flowr undertakes no obligation to publicly replace or revise any forward-looking info or statements, whether or not on account of new info, future occasions or in any other case. When contemplating such forward-looking info and statements, readers ought to be mindful the chance elements and different cautionary statements in Flowr’s Annual Info Kind dated April 29, 2020 (the “AIF”) and filed with the relevant securities regulatory authorities in Canada. The danger elements and different elements famous within the AIF may trigger precise occasions or outcomes to vary materially from these described in any forward-looking info or statements.
Neither TSX Enterprise Alternate nor its Regulation Companies Supplier (as that time period is outlined in insurance policies of the TSX Enterprise Alternate) accepts accountability for the adequacy or accuracy of this launch.