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nother PP startedJuly 26, 2019 THE FLOWR CORPORATION

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Sam Dan Member Level  Friday, 07/26/19 05:49:07 PM
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nother PP startedJuly 26, 2019 THE FLOWR CORPORATION $43,501,000 10,610,000 Units Price: $4.10 per Unit This short form prospectus (the “Prospectus”) of The Flowr Corporation (“Flowr”, the “Corporation”, “we”, “us”, “our” and similar terms) qualifies the distribution of 10,610,000 units of the Corporation (the “Units”) at a price of $4.10 per Unit (the “Offering Price”) for gross proceeds of $43,501,000 (the “Offering”). Each Unit is comprised of one common share in the capital of the Corporation (a “Common Share”, and each Common Share comprising part of a Unit, a “Unit Share”) and one half of one Common Share purchase warrant (each whole such warrant, a “Warrant”), with each Warrant entitling the holder thereof to purchase one additional Common Share (each, a “Warrant Share”) at a price of $5.00 per Warrant Share at any time on or before 5:00 p.m. (Toronto time) on the date that is 24 months following the date of closing of the Offering (the “Expiry Date”), subject to adjustment in certain events. In the event that the volume weighted average trading price of the Common Shares on the TSX Venture Exchange (“TSX.V”) exceeds $6.15 for ten consecutive trading days, the Corporation shall have the right to accelerate the expiry date of the Warrants upon not less than 15 trading days’ notice. The Offering is being made pursuant to an underwriting agreement (the “Underwriting Agreement”) dated July 26, 2019 among the Corporation and GMP Securities L.P., as lead underwriter and sole bookrunner (the “Lead Underwriter”), BMO Nesbitt Burns Inc., AltaCorp Capital Inc., Clarus Securities Inc. and Sprott Capital Partners LP (collectively, the “Underwriters” and, individually, each an “Underwriter”). The Warrants will be governed by a warrant indenture (the “Warrant Indenture”) to be entered into on or before the Closing Date between the Corporation and Computershare Trust Company of Canada, as warrant agent (the “Warrant Agent”).See “Plan of Distribution”. The issued and outstanding Common Shares are listed and posted for trading on the TSX.V under the symbol “FLWR”. On July 19, 2019, the last trading day prior to the announcement of the Offering, the closing price of the Common Shares on the TSX.V was $4.82. On July 25, 2019, the last trading day prior to the date of this Prospectus, the closing price of the Common Shares on the TSX.V was $4.11. The Corporation has applied to list the Unit Shares, the Warrants and the Warrant Shares as well as any securities issued pursuant to the exercise of the Over-Allotment Option (as defined below) on the TSX.V. Listing on the TSX.V is subject to the Corporation fulfilling all of the listing requirements of the TSX.V.
The Units are being offered to the public in all of the provinces of Canada except Québec, and on a private placement basis in the United States in an offering exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws. The Underwriters, as principals, conditionally offer the Units, subject to prior sale, if, as and when issued by the Corporation and accepted by the Underwriters in accordance with the conditions contained in the Underwriting Agreement referred to under “Plan of Distribution”, subject to the approval of certain Canadian legal matters on behalf of the Corporation by Fasken Martineau DuMoulin LLP and on behalf of the Underwriters by Borden Ladner Gervais LLP. Subscriptions for the Units will be received subject to rejection or allotment, in whole or in part, and the Underwriters reserve the right to close the subscription books at any time without notice. Closing of the Offering is expected to take place on or about August 8, 2019 or such other date as may be agreed upon by the Corporation and the Lead Underwriter, but in any event, not later than 42 days after the date of the receipt for the (final) short form prospectus (the “Closing Date”). In connection with the Offering, and subject to applicable laws, the Underwriters may over allot or effect transactions that are intended to stabilize or maintain the market price of the Common Shares at levels other than that which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time. See “Plan of Distribution”. After the Underwriters have made reasonable efforts to sell the Units at the Offering Price, the Underwriters may decrease the Offering Price for the Units and may further change the Offering Price from time to time to amounts no greater than the Offering Price. In the event the Offering Price of the Units is reduced, the compensation received by the Underwriters will be decreased by the amount that the aggregate price paid by the purchasers for the Units is less than the gross proceeds paid by the Underwriters for the Units. Any such reduction will not affect the proceeds received by the Corporation. It is anticipated that the Units will be delivered under the book-based system through CDS Clearing and Depository Services Inc. (“CDS”) or its nominee and deposited in electronic form, or will otherwise be delivered to the Underwriters, registered as directed by the Lead Underwriter, on the Closing Date. Except in limited circumstances, a purchaser of Units will receive only a customer confirmation from the registered dealer from or through which the Units are purchased and who is a CDS depository service participant. CDS will record the CDS participants who hold the Units on behalf of owners who have purchased the Units in accordance with the book-based system. No definitive certificates will be issued unless specifically requested or required. Notwithstanding the foregoing, Units issued to qualified institutional buyers (as defined in Rule 144A under the U.S. Securities Act, “Qualified Institutional Buyers”) will be issued in definitive certificated form. See “Plan of Distribution”. An investment in the Units is speculative and involves a high degree of risk and should only be made by persons who can afford the total loss of their investment. A prospective purchaser should therefore review this Prospectus and the documents incorporated by reference herein in their entirety and carefully consider the risk factors described under the section “Risk Factors” in this Prospectus, prior to investing in the Units. See “Caution Regarding ForwardLooking Statements” and “Risk Factors”. There is currently no market through which the Warrants may be sold and purchasers may not be able to resell the Warrants purchased under this Prospectus. This may affect the pricing of the Warrants in the secondary market, the transparency and availability of trading prices, the liquidity of the Warrants and the extent of issuer regulation. See “Risk Factors”. Prospective purchasers are advised to consult their own tax advisors regarding the application of Canadian federal income tax laws to their particular circumstances, as well as any other provincial, foreign and other tax consequences of acquiring, holding or disposing of the Units. Prospective investors should be aware that the acquisition of the Units may have tax consequences in Canada. Such tax consequences for investors may not be described fully herein. The Corporation does not have, and until federally legal does not intend to engage in, any direct, indirect or ancillary involvement in the United States cannabis industry (as described in CSA Staff Notice 51-352 (Revised) Issuers with U.S. Marijuana-Related Activities). The registered and head office of the Corporation is located at 461 King Street West, Floor 2, Toronto, Ontario M5V 1K4.

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