The Flowr Corporation Announces Formation of Strategic Review Committee and Corporate Update with Refocused Business Strategy - Seite 2

Toronto Office

The Company has made the strategic decision to close the Toronto office and move most key management personnel positions to Kelowna. The Company is in the process of sub-leasing its Toronto office. The Company has successfully implemented remote working – as a result, all remaining Toronto employees will continue to work remotely.

Fenwick Sublease

The Company has made the strategic decision to sub-sublease approximately 75% of its multiuse facility located in Kelowna, along with the outdoor space under its lease. The Company will continue to use a portion of the building for dock warehousing needs and expects the subleases of the remaining areas to result in annualized cash flow savings of up to approximately $500,000 per year.

Non-Core Assets and Operations

Sale of Non-Core Assets

The Strategic Review Committee has identified approximately 4 acres of industrial land in Kelowna that is non-core to the business and currently vacant. The Company has initiated the sale of non-core land and expects gross proceeds of between $4-5 million from the sale. In addition, the Company is in the process of selling large-scale extraction manufacturing equipment and expects gross proceeds from sale to be approximately $1 million. Lastly, the Company owns approximately 6 hectares of industrial land in Aljustrel, Portugal. The Company has yet to determine whether to sell this land; however, the fair market value is expected to be in excess of $1 million.

Sale of Non-Core Licenses

The Company will be exiting all non-core jurisdictions, including Australia, Uruguay and Spain. To that end, the Company has entered into an agreement to sell Terra Nova Business Holdings Inc., an indirect wholly-owned subsidiary, which holds a pre-license authorizing it to construct a medical cannabis greenhouse facility in Portugal. The purchaser of Terra Nova has assumed all of the obligations of Terra Nova and allowed for Flowr to regain a 10% equity interest in the event certain milestone occur. In addition, Flowr has terminated the call option agreement between Terrace Global Inc. (“Terrace”), a wholly-owned subsidiary, and Inception Investment Corp., such that Terrace will no longer seek to acquire an equity interest in the recreational cannabis business in Uruguay. Flowr has also sold Oransur, S.A., an indirect wholly-owned subsidiary, which was a hemp operator in Uruguay. Under the terms of the agreement, Flowr will be allowed to regain a 10% equity interest in the event certain milestones occur.