Flower One Holdings Inc. (“
Flower One” or the
“
Company”) (CSE: FONE) (OTCQX: FLOOF) is pleased
to announce that it is commencing an overnight marketed offering
(the “
Offering”) of convertible debenture units
(the “
Debenture Units”) of the Company. In
connection with the Offering, the Company intends to file a
prospectus supplement (the “
Prospectus
Supplement”) to the Company’s short form base shelf
prospectus dated October 22, 2019 (the “
Shelf
Prospectus”), with the securities regulatory authorities
in each of the provinces of Canada, other than Québec. Each
Debenture Unit will consist of one 9.5% unsecured convertible
debenture due November 2022 (the “
Convertible
Debentures”) of the Company, and a number of common share
purchase warrants (the “
Warrants”) of the Company.
The total size of the Offering as well as
certain other terms of the Convertible Debentures and the
Warrants (including the number of Warrants per Debenture Units, the
term and the exercise price) will be determined in the context of
the market prior to the filing of the Prospectus Supplement.
The Offering is being led on a “best-efforts”
basis by Mackie Research Capital Corporation and Canaccord Genuity
Corp., as co-lead agents and joint bookrunners (collectively, the
“Lead Agents”), and on behalf of a syndicate of
agents (together with the Lead Agents, the
“Agents”).
The Company intends to use the net proceeds from
the Offering: (a) to advance and support the continued launch of
its Brand Partners’ products into the Nevada market; (b) for
working capital and general corporate purposes; and (c) to
accelerate the Company’s market entry plans for California.
The Company will also grant the Agents 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
Debenture Units (or the components thereof) on the same terms and
conditions of the Offering, exercisable in whole or in part.
Flower One will use commercially reasonable
efforts to obtain the necessary approvals to list the Convertible
Debentures, the Warrants, and the common shares of the Company
issuable upon conversion of the Convertible Debentures and the
exercise of the Warrants on the Canadian Securities Exchange (the
“CSE”).
Copies of the base shelf prospectus and, any
supplement thereto to be filed in connection with the Offering, can
be found on SEDAR at www.sedar.com.
The closing of the Offering is currently
expected to be on or about the week of November 11, 2019 and is
subject to certain conditions, including, but not limited to, the
receipt of all necessary regulatory approvals including the
approval of the CSE.
The Debentures Units (and the Convertible
Debentures and the Warrants forming part of the Debenture Units)
have not been and will not be registered under the United States
Securities Act of 1933, as amended (the “U.S. Securities
Act”), or any state securities laws, and may not be
offered or sold in the United States, or to or for the account or
benefit of, persons in the United States or U.S. Persons (as
defined in Regulation S under the U.S. Securities Act) absent
registration or an applicable exemption from the registration
requirements of the U.S. Securities Act and applicable U.S. state
securities laws. This press release shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there be
any sale of the Debenture Units 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 and
beverage 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, beverages, 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" and
in the United States on the OTCQX Best Market under the symbol
"FLOOF". 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, to gain access to further capital, to advance and
support the continued launch of its Brand Partners’ products into
the Nevada market, to accelerate the Company’s market entry plans
for California, or to list the Convertible Debentures, the
Warrants, and the common shares of the Company issuable upon
conversion of the Convertible Debentures and the exercise of the
Warrants on the CSE; the Company's leadership as a cannabis
cultivator, producer and full-service brand fulfillment partner;
the Company's ability to offer consistent, reliable and scalable
fulfilment to its brand partners; and the production of a wide
range of products including products of the top-performing edibles
and beverage brands in the United States.
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 Shelf Prospectus
dated September 27, 2019 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 Shelf
Prospectus. 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 Shelf
Prospectus.
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.
For further information: For Flower One
inquiries please contact: Flower One Holdings Inc., Ken Villazor,
President & CEO, 416.913.9642, info@flowerone.com; Flower One
investor relations inquiries: United States: ADDO Investor
Relations, 310.829.5400, ir@flowerone.com; Canada: NATIONAL Capital
Markets, 416.848.9835, ir@flowerone.com; Flower One media
inquiries: Natalie Martin, 604.738.2220,
flowerone@talkshopmedia.com; Cookies inquiries: Kayla Green,
415.794.5891, kayla@cookiescalifornia.com.
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