The Flowr Corporation announces that its subsidiary, The Flowr Canada Holdings ULC, has entered into a binding agreement (the “Acquisition Agreement”) with Avant Brands K1 Inc, formerly, 1000343100 Ontario Inc. (the “Purchaser”) pursuant to which the Purchaser will acquire all of the shares of The Flowr Group (Okanagan) Inc. (“Flowr Okanagan”), and certain other assets of the Company, comprising substantially all of the assets of the Company, for total consideration of $5,115,000 plus the amount of the Closing DIP Loan and the Assumed Liabilities (as those terms are defined in the Acquisition Agreement) (the “Transaction”). The Transaction is the result of the sale and investment solicitation process (the “SISP”) conducted under the Company’s previously announced proceedings (“CCAA Proceedings”) commenced in the Ontario Superior Court of Justice (Commercial List) (the “Court”) under the Companies’ Creditors Arrangement Act (Canada) (“CCAA”).
As previously announced, the Purchaser has acted as the Company’s interim lender to fund the CCAA Proceedings and other working capital requirements (in such capacity, the “DIP Lender”), and also acted as the stalking horse bidder under the SISP (in such capacity, the “Stalking Horse Bidder”). The Purchaser is 50% owned by Avant Brands Inc. (“Avant”), another licensed producer of cannabis based in Kelowna.
The purchase price set out in the Acquisition Agreement is equal to: (a) $4,015,000; plus (b) common shares in the capital of Avant with a value of $1,100,000 (the “Avant Shares”) based on the deemed price per Avant Share calculated as the volume weighted average price per Avant Share on the Toronto Stock Exchange for the 10 consecutive trading days preceding the close of trading on the trading day before the Closing Date (as defined in the Acquisition Agreement) discounted by 15% (the “Avant Share Consideration”); plus (c) the amount of the Closing DIP Loan; plus (d) the value of the Assumed Liabilities, subject to certain adjustments (collectively, the “Purchase Price”). The Avant Shares will be freely tradeable.
The Purchase Price will be satisfied through: (a) a credit bid of the amounts advanced by the Purchaser in its capacity as DIP Lender, including the Closing DIP Loan (collectively, the “Credit Bid”); (b) the Avant Share Consideration; (c) an amount in cash equal to the Purchase Price less the Credit Bid, and the Avant Share Consideration, a portion of which may be payable in non-cash consideration in certain circumstances; and (d) the assumption of the Assumed Liabilities.
The Company will seek approval of the Transaction from the Court on or about December 16, 2022. The Transaction is subject to, among other things, the Court granting an approval and vesting order and the Transaction receiving the approval of other regulatory authorities. The Transaction is anticipated to close following the receipt of all such approvals.
About The Flowr Corporation
The Flowr Corporation is a Canadian cannabis company with its operating campus, located in Kelowna, British Columbia. 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.