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TORONTO, Sept. 14, 2020 – Flower One Holdings Inc. (“Flower One”) (CSE: FONE) (OTCQX: FLOOF) is pleased to announce that in connection with its previously announced overnight marketed offering of equity units (the “Equity Units”) of the Company, the Company and Canaccord Genuity Corp. (“Canaccord”), as lead underwriter and sole bookrunner, and Roth Canada, ULC (together with Canaccord, the “Underwriters”), have entered into an underwriting agreement dated September 14, 2029 (the “Underwriting Agreement”). Pursuant to the Underwriting Agreement, the Underwriters have agreed to purchase, on an underwritten basis, 20,000,000 Equity Units at a price of C$0.25 per Equity Unit for aggregate gross proceeds to the Company of $5,000,000 (the “Offering”). Concurrently with the Offering, the Company will also complete a non-brokered financing of up to 10,000,000 Equity Units for additional gross proceeds to the Company of up to $2,500,000 (the “Concurrent Offering”). All amounts are in Canadian dollars.

Each Equity Unit will consist of one common share of the Company (a “Common Share”) and one Common Share purchase warrant (a “Warrant”). Each Warrant will be exercisable into one Common Share for a period of 36 months from the closing of the Offering at an exercise price of C$0.36, subject to adjustment in certain events.


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The Company has also granted the Underwriters an option (the “Over-Allotment Option”) to cover over-allotments and for market stabilization purposes, exercisable at any time up to 30 days subsequent to the closing of the Offering, to increase the size of the Offering by up to 15% in Equity Units (or the components thereof) on the same terms and conditions of the Offering, exercisable in whole or in part. In the event that the Over-Allotment Option is exercised in full, the aggregate gross proceeds of the Offering to the Company will be $5,750,000.

Pursuant to the terms of the Underwriting Agreement, the Underwriters will be paid a cash commission equal to 6% of the gross proceeds of the Offering (including any gross proceeds raised on exercise of the Over-Allotment Option). As additional consideration, at the Closing (as defined below) of the Offering, the Underwriters will be issued non-transferable warrants (the “Broker Warrants”) of the Company to purchase such number of Common Shares as is equal to 6% of the aggregate Units sold under the Offering (including any Units sold on the exercise of the Over-Allotment Option), with each such Broker Warrant exercisable into a Common Share at an exercise price of C$0.36 any time up to 36 months from the Closing.

The Company has filed today on SEDAR a prospectus supplement to its short form base shelf prospectus dated October 22, 2019 (the “Prospectus Supplement”) in connection with the Offering with the securities regulatory authorities in each of the provinces of Canada, other than Québec, and the Underwriting Agreement.

The net proceeds from the Offering and the Concurrent Offering will be used for working capital and general corporate purposes.

The Company will use commercially reasonable efforts to obtain the necessary approvals to list the Warrants and the Common Shares issuable upon exercise of the Warrants on the Canadian Securities Exchange (the “CSE”).

The closing of the Offering is expected to occur on or about the week of September 18, 2020 (the “Closing”) and is subject to a number of conditions including all necessary corporate and regulatory approvals.

Copies of the base shelf prospectus and the Prospectus Supplement will be available on SEDAR at www.sedar.com.

No securities regulatory authority has either approved or disapproved of the contents of this press release. The Equity Units, Common Shares, Warrants and the common shares issued on exercise of the Warrants have not been and nor will they be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws. Accordingly, the securities described herein may not be offered or sold within the “United States” or to, or for the account or benefit of, a person in the “United States” or a “U.S. person” (as such terms are defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of Flower One in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Flower One Holdings Inc.

Flower One is the largest cannabis cultivator, producer, and full-service brand fulfillment partner in the state of Nevada. By combining more than 20 years of greenhouse operational excellence with best-in-class cannabis operators, Flower One offers consistent, reliable, and scalable fulfillment to a growing number of industry-leading cannabis brands. Flower One’s flagship 400,000 square-foot greenhouse and 55,000 square-foot production facility is used for large scale cannabis cultivation, processing, and manufacturing. Flower One also owns and operates a second production facility in Las Vegas, with 25,000 square-feet of indoor cultivation and a commercial kitchen that will produce several of the nation’s top-performing edible brands. Flower One produces a wide range of products ranging from wholesale flower, full-spectrum oils, and distillates to finished consumer packaged goods including flower, pre-rolls, concentrates, edibles, and topicals for the top-performing brands in cannabis. The Company’s common shares are traded on the Canadian Securities Exchange under the Company’s symbol “FONE”, in the United States on the OTCQX Best Market under the symbol “FLOOF” and on the Frankfurt Stock Exchange under the symbol “F11”. For more information, visit: https://flowerone.com.

Forward-Looking Statements

Statements in this press release that are not statements of historical or current fact constitute “forward-looking information” within the meaning of Canadian securities laws and “forward-looking statements” within the meaning of United States securities laws (collectively, “forward-looking statements”). Such forward-looking statements involve known and unknown risks, uncertainties, and other unknown factors that could cause the actual results of the Company to be materially different from historical results or from any future actual results expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms “believes,” “belief,” “expects,” “intends,” “anticipates,” “potential,” “should,” “may,” “will,” “plans,” “continue” or other similar expressions to be uncertain and forward-looking.

Forward-looking statements may include, without limitation, statements relating to the Company’s ability to close the Offering and the Concurrent Offering or to list the Warrants on the CSE; the Company’s leadership as a cannabis cultivator, producer, innovator and full-service brand fulfillment partner; the Company’s ability to offer consistent, reliable and scalable fulfilment to a growing number of industry-leading brand partners; and the production of a wide range of products for the nation’s top-performing brands.

The Company is indirectly involved in the manufacture, possession, use, sale and distribution of cannabis in the recreational and medicinal cannabis marketplaces in the United States through its subsidiary Cana Nevada Corp. Local state laws where Cana Nevada Corp. operates permit such activities; however, these activities are currently illegal under United States federal law. Additional information regarding this and other risks and uncertainties relating to the Company’s business are contained under the heading “Risk Factors” in the Company’s Annual Information Form dated June 23, 2020 (the “Annual Information Form”) filed on its issuer profile on SEDAR at www.sedar.com.

The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement, the “Cautionary Statement regarding Forward-Looking Information” section contained in the Annual Information Form. All forward-looking statements in this press release are made as of the date of this press release. The forward-looking statements contained herein are also subject generally to assumptions and risks and uncertainties that are described from time to time in the Company’s public securities filings with the Canadian securities commissions, including the Company’s Annual Information Form.

Although Flower One has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended, including, but not limited to: dependence on obtaining regulatory approvals; investing in target companies or projects that are engaged in activities currently considered illegal under United States federal law; changes in laws; limited operating history; reliance on management; requirements for additional financing; competition; hindering market growth and state adoption due to inconsistent public opinion and perception of the medical-use and adult-use marijuana industry and; regulatory or political change.

Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this release. Flower One Holdings disclaims and does not undertake any intention or obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

NEITHER THE CANADIAN SECURITIES EXCHANGE NOR THEIR REGULATIONS SERVICES PROVIDER HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

SOURCE Flower One Holdings Inc.

Flower One Files Prospectus Supplement for $5 Million Offering of Equity Units and Announces Concurrent Non-Brokered Financing of up to $2.5 Million

For further information: Flower One, Ken Villazor, President and CEO, (416) 200-7641; Investor Relations, Canada, NATIONAL Public Relations, (416) 848-9835; United States, ADDO Investor Relations, (310) 829-5400, [email protected]