The Flowr Corporation (OTC: FLWPF) raised C$20 million in a non-brokered private placement with the option to upsize the amount to C$25 million. The company said it expects to use the proceeds for general working capital purposes.
Chairman & Chief Strategist Steve Klein and Chief Executive Officer Vinay Tolia are leading the offering with commitments in excess of $10 million. Management and insiders will continue to own approximately 58% of the shares of the company post financing on a fully diluted basis (including equity incentives).
“Despite the challenging capital markets environment, we are extremely fortunate to announce 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 as all of our 20 grow rooms in our Kelowna 1 facility will soon be in harvest cycles. We expect to continue to achieve premium price points in the market with our optimized library of high THC strains. Future revenue growth will be further enhanced with contributions from Holigen given the recent receipt of our EU GMP license in Portugal.”
Flowr also noted that it will release its fourth-quarter earnings after the close on Wednesday, April 29th, 2020 and will host a conference call to review results on Wednesday, April 29th, 2020 at 5:30pm ET.
In addition, certain directors, officers, employees and executives of Flowr, including Chairman & Chief Strategist Steve Klein, Chief Executive Officer Vinay Tolia, Founder and Managing Partner Thomas Flow, Managing Director, Europe Pauric Duffy and Managing Director, Australia & Asia Pacific Peter Comerford who currently collectively control approximately 58% of the Company have agreed to voluntary lock-up agreements in connection with the closing of the Offering whereby all shares held by these shareholders will be subject to restrictions on sale until released under the terms of the Lock-Up Agreements on the 12-month anniversary of the closing date of the Offering.