PAURIC DUFFY AND PETER COMERFORD ANNOUNCE CONVERSION OF PREFERRED SHARES OF THE FLOWR CORPORATION

TORONTO, April 03, 2020 (GLOBE NEWSWIRE) -- Pauric Duffy (“PD”) and Peter Comerford (“PC”) announce today that certain Series 1 voting convertible redeemable preferred shares (the “Preferred Shares”) in the capital of The Flowr Corporation (“Flowr” or the “Issuer”) have been converted into Common Shares (as defined below). PD and PC previously acquired, through DFT Trading Limited (“Pauric Holdco”) and Pleiades Trading Ltd. (“Peter Holdco”), respectively, indirect ownership of an aggregate of 32,632,545 Preferred Shares (the “Consideration Shares”) as partial consideration for the sale of their respective interests in Holigen Holdings Limited (“Holigen”). The sale of Holigen to Flowr (the “Acquisition”) was completed pursuant to a share purchase agreement dated June 24, 2019, as amended, between Flowr (as purchaser), Pauric Holdco and Peter Holdco (together, the “Vendors”) (as vendors), and Pleiades Holdings Ltd. (“Peter Topco”), DFT Holdings Limited (“Pauric Topco”), PC and PD (as guarantors) (the “SPA”). In connection with the SPA, the Vendors entered into a share conversion agreement with Flowr (the “Conversion Agreement”) that sets out the process for, and conditions to, conversion of the Consideration Shares into common shares of the Issuer (“Common Shares”). This press release is being issued pursuant to Canadian early warning requirements.

On April 1, 2020, pursuant to the terms of the Conversion Agreement, 7.5% of the Consideration Shares (the “Converted Shares”) converted to Common Shares (the “Conversion”) in connection with the deemed completion of the Portugal Planting Milestone (Sintra) (as such term is defined in the Conversion Agreement).

The Converted Shares, being 2,447,441 Preferred Shares, immediately prior to the Conversion, represent approximately 19% of the issued and outstanding Preferred Shares on a non-diluted basis.

Together, immediately following the Conversion, PD and PC (including, for certainty their joint actors) will beneficially own, and have control and direction over 10,605,578 Preferred Shares, representing all of the issued and outstanding Preferred Shares.

No consideration will be paid or received in connection with the Conversion.

The conversion of the Converted Shares will be for investment purposes. The Preferred Shares are subject to the terms of escrow agreements dated as of the date of closing of the Acquisition, in each case, among the applicable Vendor, Flowr and The Laurel Hill Advisory Group Company, as escrow agent, (the “Escrow Agreements”). In addition, in connection with the closing of the Acquisition, each Vendor has entered into a lock-up agreement with Flowr (collectively, the “Vendor Lock-Up Agreements”), the Vendors have entered into the Conversion Agreement and PD has entered into a governance agreement with Pauric Holdco and Flowr (the “Governance Agreement”). Subject to the terms of the SPA, the Escrow Agreements, the Vendor Lock-Up Agreements, the Conversion Agreement and the Governance Agreement, PD, PC and their respective joint actors may, from time to time and at any time, acquire, as applicable, additional Preferred Shares and/or Common Shares and/or other equity, debt or other securities or instruments of Flowr in the open market or otherwise, as applicable, and reserve the right to dispose of any or all of the Preferred Shares and/or Common Shares in the open market or otherwise at any time and from time to time, and to engage in similar transactions with respect to the Preferred Shares and/or Common Shares, the whole depending on market conditions, the business and prospects of Flowr and other relevant factors, including compliance with applicable securities laws and the terms of the relevant agreements described herein.