The Flowr Corporation Announces Update on Strategic Acquisition of Terrace Global

Published: December 15, 2020

The Flowr Corporation Announces Update on Strategic Acquisition of Terrace Global

The Flowr Corporation provided an update with respect to the strategic acquisition of Terrace Global Inc. previously announced on October 20, 2020. Pursuant to the terms of the arrangement agreement between Flowr and Terrace Global dated October 19, 2020, as amended, Flowr will acquire all of the issued and outstanding common shares in the capital of Terrace Global in exchange for 0.4973 of a Flowr common share (each a “Common Share”) per common share of Terrace Global (the Transaction). The Transaction is expected to close on or about December 22, 2020. The Transaction has been conditionally approved by the TSX Venture Exchange (TSXV). Final approval of the TSXV for the Transaction is subject to the Company fulfilling all of the requirements of the TSXV.

Terrace Global Shareholder Vote

Holders of 68% of the issued and outstanding common shares in the capital of Terrace Global have entered into support agreements and have agreed to vote in favor of the Transaction. As of the date hereof, Terrace Global has received proxies voting in favor of the Transaction representing approximately 58% of its issued and outstanding common shares. To be effective, the Transaction must be approved by a resolution passed at the Terrace Global Special Meeting by not less than two-thirds (66 2/3%) of the votes validly cast by shareholders of Terrace Global, present in person or by proxy at the meeting of Terrace Global shareholders (the “Terrace Meeting”), and if applicable, also by a simple majority of the votes validly cast by “minority” shareholders, present in person or by proxy at the meeting, being such shareholders as are required to be excluded in determining such “majority of the minority” approval pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. The Terrace Meeting is expected to be held on December 16, 2020.

Early Conversion Opportunity of Convertible Debentures

The Company announces that the previously disclosed amendments (the “Debenture Amendments”) to its 10.0% subordinated secured convertible debentures due April 27, 2024 in the aggregate principal amount of $21,579,000 (the “Debentures”) have been approved by the requisite majority of the holders of Debentures (the “Debentureholders”) and that Debentureholders have the opportunity (the “Early Conversion Opportunity”) to elect until December 21, 2020 to convert all, and not less than all, of their Debentures for Common Shares . For more information regarding the Early Conversion Opportunity, please refer to the Company’s material change report dated November 26, 2020, which is available online under the Company’s profile on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com. Copies of the Notice to Debentureholders are also available by contacting the Company at the contact information below.

The Flowr Corporation is a Toronto-headquartered cannabis company with operations in Canada, Europe, and Australia.  Its Canadian operating campus, located in Kelowna, BC, includes a purpose-built, GMP-designed indoor cultivation facility; an outdoor and greenhouse cultivation site; and a state-of-the-art R&D facility. From this campus, Flowr produces recreational and medicinal products.  Internationally, Flowr intends to service the global medical cannabis market through its subsidiary Holigen, which has a license for cannabis cultivation in Portugal and operates GMP licensed facilities in both Portugal and Australia. For more information, please visit flowrcorp.com

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