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.

SOURCE Flower One Holdings Inc.