The Flowr Corporation Announces Fourth Quarter and Full

Highlights:

• In 2021, the Company generated gross income of roughly $14.nine million and generated gross income of $four.three million all the way through the fourth quarter.
• During the 12 months, the Company bought 6,627,052 grams of dried hashish flower, an building up of 372% as in comparison to the prior 12 months.
• The Company has expanded in structure sizes past is signature three.five gram jars to incorporate 7 gram and 14 gram luggage.
• Flowr introduced BC Dog Walkers in Ontario, British Columbia, and Alberta. The BC Dog Walkers spotlight the Company’s talent to react to client call for and produce novel codecs to marketplace.
• Flowr exported its first cargo of clinical hashish from Kelowna, British Columbia to Israel in December 2021 valued at $825,000, which has spread out an import income channel for the Company.
• In 2021, the Company repaid roughly $15.6 million in general indebtedness and had $five.7 million of primary exceptional pursuant to its senior secured facility with ATB Financial on the finish of the 12 months. The Company expects to totally pay off its senior credit score facility with the proceeds of sure non-core asset gross sales.

Key Subsequent Events:

• KRS Sale – Company entered into an settlement to promote its passion within the KRS R&D facility to Hawthorne for an mixture acquire worth of $16 million.
• Holigen Sale – During the second one quarter of 2022, Flowr finished the sale of Holigen Limited for mixture attention of over $35 million. The attention used to be constituted of: (i) roughly $three,750,000 in coins; (ii) 1,900,000 not unusual stocks within the capital of Akanda Corp.; (iii) the oblique assumption by means of Akanda of indebtedness of roughly $five,100,000; and (iv) $1,234,000 of intervening time investment to Holigen.
• New Genetics – Flowr has presented a number of high-THC traces, together with BC Clementine Crush, BC Lemon Ice, BC Spiced Grape and BC Mango Melon OG.
• Non-Core Asset Sales – The Company is within the technique of monetizing different non-core property, which it expects to lead to roughly $three million to $four million in coins proceeds.

TORONTO, May 20, 2022 (GLOBE NEWSWIRE) — The Flowr Corporation (TSX.V: FLWR; OTC: FLWPF) (“Flowr” or the “Company”) herein pronounces its monetary and operational effects for the fourth quarter and financial 12 months ended December 31, 2021. All monetary data on this information unencumber is reported in 1000’s (‘$000s) of Canadian greenbacks and represents effects from proceeding operations, until in a different way indicated.

Tom Flow, Interim Chief Executive Officer of Flowr commented:

“2021 used to be a pivotal 12 months for Flowr as we renewed our focal point on keeping up our standing as a top rate hashish manufacturer and making the important adjustments to our trade operations to achieve profitability. The Company made vital development against this goal, as we proceed to take the important steps to cut back prices and pressure revenues. In This autumn 2021, we accomplished new information in gross and web income at $four.four million and $three.nine million, respectively, contributed by means of our up to now introduced process of introducing thrilling new genetics and codecs, bettering our retail penetration, and solidifying our international elegance operations out of the K1 facility.

Operationally, the K1 facility has been now absolutely operational since the second one part of 2021 and every develop room is being applied to make sure our mounted prices are being unfold out over a better selection of manufacturing grams. We have larger our product choices considerably with the release and luck of Strawnana, Sour Sis, BC Dog Walkers, and in 2022 presented a number of new thrilling traces together with BC Clementine Crush, BC Lemon Ice, BC Spiced Grape and BC Mango Melon OG, with extra deliberate for the remainder of 2022. We have additionally noticed vital expansion in retail penetration throughout our core markets with retailer distribution smartly over 50%.

Financially, we’ve got strived to fortify our monetary place by means of decreasing prices, dropping non-core property and licenses, considerably decreasing general indebtedness, and elevating further fairness capital. The sale of the KRS R&D facility and Holigen as up to now introduced will additional cut back the Company’s indebtedness to roughly $10 million, together with $five.7 million underneath the senior credit score facility and $five million of convertible debentures, with additional paydowns to the senior credit score facility anticipated in the second one quarter. The Company has lowered SG&A bills every quarter because the finish of 2020 with This autumn 2021 SG&A 16% less than the similar length in 2020.

As up to now introduced, we’ve got closed the sale of Holigen for what we consider to be beneficial phrases for Flowr shareholders. The Company undertook a strong sale procedure and used to be ready to transact upon a deal that gave Flowr an important sum of money on ultimate to solidify its steadiness sheet and likewise keep the upside associated with our European operations. We nonetheless consider the European marketplace is at the cusp of regulatory alternate and we consider that Holigen will have the ability to make the most of the ones alternatives with the capital and superb control group from Akanda.

Although we didn’t achieve our complete goals for 2021, we’re inspired by means of the sure steps we’ve got taken to place Flowr in 2022. Through the more than a few adjustments which were applied, we consider Flowr is in a greater place to appreciate its complete doable and ship effects. The following couple of quarters will likely be an exhilarating time for Flowr because the Company takes the remaining steps against profitability.”

SELECTED FINANCIAL AND OPERATIONAL RESULTS

The following desk summarizes the Company’s key monetary and operational effects:

^{(1) Gross income web of excise tax, provision for returns and concessions.}

Financial Results (introduced in $000s)

• Consolidated gross income for This autumn 2021 amounted to $four,292, representing a 108% building up when compared with $2,066 in This autumn 2020. Consolidated web income all the way through This autumn 2021 used to be $three,801, 138% upper than the $1,600 earned in This autumn 2020. Both gross income and web income for This autumn 2021 had been the very best quarterly income recorded by means of the Company since inception, contributed by means of will increase in hashish gross sales in Flowr Canada.
• Net income from Flowr Canada all the way through This autumn 2021 amounted to $three,679 when compared with $1,533 in the similar length of 2020, whilst income earned by means of Holigen used to be $122 all the way through This autumn 2021 when compared with $67 in the similar length 2020. Net income from Flowr Canada in This autumn 2021 used to be a brand new report and the 3rd immediately quarter of income expansion, being 61%, 88%, and four% upper than the web income for Q3, Q2, and Q1 2021 respectively. The building up in income from Flowr Canada used to be contributed by means of upper grams of goods bought all the way through This autumn 2021 and the advent of the brand new pressure BC Strawnana and a brand new structure of pre-rolls, partly offset by means of a lower in reasonable costs.
• Full 12 months gross income for 2021 amounted to $14,957 when compared with $nine,441 in 2020, representing a 58% building up. Net income for the total 12 months 2021 totaled $12,348 when compared with $7,513 in 2020, representing a 64% building up.
• Net income from Holigen associated with tolling provider income earned in Portugal, which amounted to $122 all the way through This autumn 2021 and $712 for the total 12 months 2021, when compared with $67 for a similar respective classes in 2020.
• SG&A bills for This autumn 2021 additional declined to $three,900 when compared with $four,614 in This autumn 2020, representing a 15% relief. SG&A bills for the total 12 months 2021 used to be $16,327, 12% less than the $18,613 recorded for the total 12 months 2020. Since the tip of 2020, Flowr has considerably lowered SG&A bills every quarter, reflecting the associated fee relief measures the Company applied all the way through 2021.
• Cost of gross sales for This autumn 2021 used to be $five,262 when compared with $2,904 for This autumn 2020. The building up in price of gross sales resulted from a considerably upper quantity of hashish bought all the way through the present quarter at 1,407 kilograms when compared with 311 kilograms bought all the way through This autumn 2020. Cost of gross sales for the total 12 months 2021 used to be $22,zero64 when compared with $11,468 for 2020 basically because of the considerably upper quantity of hashish bought.
• The Company recorded impairment fees totaling $57,096 in This autumn 2021 when compared with $83,979 in This autumn 2020. For Flowr Canada, the Company recorded $24,552 of impairment in opposition to goodwill, $1,350 in opposition to intangible property, and $14,498 in opposition to assets, plant and kit. For Holigen, an impairment rate of $four,661 used to be recorded in opposition to intangible property and an impairment rate of $four,289 used to be recorded in opposition to assets, plant and kit.
• Net loss due to shareholders of the Company totaled $61,277 for This autumn 2021 when compared with a lack of $100,454 for This autumn 2020. Net loss due to shareholders of the Company for the total 12 months 2021 used to be $85,532 when compared with $125,621 for 2020. The alternate in web loss for used to be basically because of upper income, decrease SG&A bills, decrease impairment fees, reversal on share-based repayment, partly offset by means of upper depreciation and amortization, loss on disposal of subsidiary, upper different bills, and decrease source of revenue tax restoration.
• During 2021, the Company considerably lowered its long-term debt exceptional underneath its senior amended and restated credit score settlement (“ARCA”) with a syndicate of lenders led by means of ATB Financial (“ATB Financial”) by means of a complete of $12,828, bringing the primary quantity exceptional to $five,705 on the finish of 2021 from $18,533 at December 31, 2020.
• In Q1 2021, the Company closed a purchased deal brief shape prospectus providing (the “Bought Deal”) for gross proceeds of $15.nine million together with the partial workout of the over-allotment possibility ($14.four million web proceeds after charges and transaction prices). In reference to the Offering, the Company issued 31,127,453 gadgets (the “Unit”) at a value of $zero.51 in keeping with Unit (the “Issue Price”), with every Unit consisting of 1 not unusual percentage within the capital of Flowr (every a “Common Share”) and one complete Common Share acquire warrant of the Company (every entire warrant, a “Warrant”). Each Warrant is exercisable to procure one Common Share at an workout worth of $zero.64 in keeping with Common Share for a length of 2 years from March 16, 2021 (the “Closing Date”).
• During Q3 2021, Flowr closed two non-public placement financings for general gross proceeds of $7,564,000 and issued 36,zero19,047 gadgets (“Units”) of the Company at a value of $zero.21 in keeping with Unit, with every Unit consisting of 1 Common Share and one Common Share acquire warrant which entitles the warrant holder thereof to procure one Common Share at an workout worth of $zero.26 in keeping with percentage any time for a length of 42 months from the ultimate date.

Operational Updates

• During 2021, Flowr accomplished complete operation in all 20 develop rooms on the K1 facility and stepped forward the THC stage by means of a mean of +three.nine% and constantly larger the output of vegetation at excessive THC ranges.
• Flowr effectively presented a brand new structure of pre-rolls trademarked Dog Walkers which began supply in This autumn 2021. These zero.35g pre-rolls are packaged in an cutting edge tin pack of 7 pre-rolls and feature been indexed in British Columbia, Alberta, and Ontario. The preliminary release in British Columbia of the Dog Walkers bought out in not up to two weeks.
• During This autumn 2021 the Company presented its high-THC pressure BC Strawnana with a mean THC of 26.2%, which used to be approved for list in Ontario, British Columbia, Alberta, and Saskatchewan.
• Over 50 new and unique genetics were trialed since Q2 2021. Three of those new traces were authorized for product list in Q1 of 2022, considerably increasing the Company’s product portfolio. These further listings will proceed Flowr’s push to provide shoppers differentiated unique genetics, with excessive THC, excessive terpene contents, robust sensory profiles and top rate high quality buds.
• In December 2021 the Company finished its first cargo of top rate dried hashish vegetation from Canada to Israel, as a part of the up to now introduced world provide settlement (the “Supply Agreement”) with Focus Medical Herbs Ltd. (“Focus Medical”), an organization which IM Cannabis Corp. (NASDAQ: IMCC) (CSE:IMCC) (“IMC”) has an unique industrial settlement with in Israel. The first cargo consisted of top rate hashish throughout two traces for a complete of $825,000. The cargo represents the Company’s debut into the Israeli marketplace and the primary vital world export.
• In December 2021, the Company effectively closed the up to now introduced sale of unused commercial land situated in Kelowna, BC for gross sale worth of $6.three million in coins, together with $five.three million paid on ultimate and an additional $1.zero million coins receivable inside of six months upon pride of sure prerequisites. Pursuant to the credit score settlement with a syndicate of senior lenders led by means of ATB Financial (the “Credit Facility”), the Company made an early primary compensation of $three million against the Credit Facility the use of proceeds from the land sale, decreasing the primary quantity exceptional to $five.7 million by means of the tip of 2021. In change for the $three million paydown, ATB Financial proceeded to unencumber its safety over Holigen Holdings Limited (“Holigen”).
• Holigen’s indoor facility in Sintra, Portugal used to be absolutely operational with all develop rooms planted and generating E.U. GMP clinical hashish all the way through This autumn 2021. The BC Black Cherry and BC Strawnana traces from Flowr were in manufacturing with the primary harvest going down in January 2022.

Key Events Subsequent to December 31, 2021

• In February 2022 the Company entered into an settlement to promote its passion within the KRS R&D facility (the “KRS Facility”) to Hawthorne Canada Limited (“Hawthorne”) for an mixture acquire worth of $16 million (the “KRS Sale”), to be paid as follows: (i) an preliminary coins cost of $three.zero million; (ii) complete extinguishment of the primary quantity exceptional underneath the present mortgage settlement between Flowr and Hawthorne for the development of the KRS Facility on ultimate at roughly $12 million; and (iii) the steadiness of the acquisition worth of roughly $1.zero million paid in coins upon ultimate. The KRS Sale is predicted to near in Q2 2022 and is topic to sure ultimate prerequisites.
• Flowr has additional larger its product choices 2022 with the release and luck of BC Clementine Crush, BC Lemon Ice, BC Spiced Grape and BC Mango Melon OG, and an additional seven new SKU’s to be presented in Q2 2022 around the provinces of Ontario, Quebec, British Columbia, Alberta and Saskatchewan. For the 12 months 2022 up to now, the BC Strawnana Dog Walker pre-rolls used to be the highest ranked SKU and represented roughly 20% marketplace percentage in Ontario in that measurement/worth class (zero.30 to zero.35 grams at above $10/gram), and continues to turn robust traction within the provinces of British Colombia and Alberta.
• The Company has proven vital expansion in retail penetration throughout its core markets. In Ontario, over 65% of retail outlets recently lift no less than one Flowr product, representing vital expansion from underneath 50% in August 2021. Across our different primary markets, retailer distribution of Flowr merchandise has grown from roughly 30% to over 60% and from roughly 27% to over 55% in British Colombia and Alberta, respectfully.
• On April 19, 2022, the Company, thru its wholly-owned subsidiary HHL, entered right into a percentage acquire settlement (the “Purchase Agreement”) with Akanda Corp. (NASDAQ: AKAN) (“Akanda”) and Cannahealth Limited (the “Purchaser”), a wholly-owned subsidiary of Akanda. Pursuant to the Purchase Agreement, the Purchaser will gain from HHL (the “Holigen Sale”) all of pursuits in HL (together with HL’s wholly owned subsidiary RPK) for mixture attention of roughly $35 million.

Pursuant to the phrases of the Purchase Agreement, the Company has agreed to promote HL to the Purchaser for general attention payable of roughly $35 million (the “Purchase Price”) consisting of: (i) $three,750,000 in coins; (ii) 1,900,000 not unusual stocks within the capital of Akanda (the “Consideration Shares”) which closed at U.S.$10.30 in keeping with percentage on April 19, 2022; (iii) the oblique assumption by means of Akanda of RPK’s indebtedness of roughly $five.1 million; and (iv) no less than $zero.eight million of intervening time investment to Holigen which has already been won by means of Flowr. If the Purchase Agreement does now not shut on or previous to May 31, 2022, the intervening time investment will likely be repaid to Akanda by means of the supply of clinical hashish from Holigen at a value of €2.00 ($2.72) in keeping with gram or in coins, on the discretion of Flowr. In reference to the Transaction, Holigen can pay an advisory charge equivalent to 7% of the Purchase Price, 50% of which is payable in coins and 50% of which is payable in Consideration Shares.

In addition, Akanda agreed to subscribe for $1 million of not unusual stocks within the capital of Flowr (the “Private Placement”) at a value in keeping with percentage of $zero.07 in keeping with percentage. The Consideration Shares are topic to a standard six-month lockup.

The Holigen Sale closed on April 29, 2022 upon receiving the important approvals and pride of different ultimate prerequisites.

• As of December 31, 2021, the Company is in compliance with the senior debt to tangible web value ratio and the minimal coins covenants. The Company used to be now not in compliance with the minimal EBITDA covenant for the fourth quarter of 2021, the primary time the covenant used to be examined. On May 20, 2022, the Company and its Senior Lenders led by means of ATB Financial entered right into a 2d modification to the ARCA (the “Second Amendment”), which integrated extension of the minimal EBITDA covenant and sure amendments to different monetary covenants, compensation phrases, and equipped the Company with consent to finish its sale of the KRS Facility. Pursuant to the Second Amendment, the Company will continue to make repayments in mixture of $2,five million. Upon ultimate of the sale of the KRS Facility, underneath the phrases of the Second Amendment, the Company will make any other $1.zero million compensation, bringing the primary steadiness owing right down to $1.6 million. 
• The Company has lately indexed on the market 17 acres of agricultural assets situated adjoining to the K1 Facility (“Flowr Forest”). As a non-core asset, the Company believes it is going to have the ability to promote Flowr Forest for proceeds of between $three million to $four million, which will likely be used to fortify the monetary place and dealing capital of the Company.
• Effective straight away, John Chou has resigned from his place as Chief Financial Officer for clinical causes. Mike Willetts has been appointed Interim Chief Financial Officer of the Company efficient straight away. Mr. Willetts is an skilled trade government with over 25 years of revel in in monetary management and is recently the Chief Financial Officer of GetSwift Technologies Limited and Forward Water Technologies Corp. The Company wish to want Mr. Chou the entire best possible along with his long run endeavours.

Adjusted EBITDA (Non-IFRS Measure)

Adjusted EBITDA is outlined as web loss, plus (minus) source of revenue taxes (restoration), plus (minus) passion source of revenue (expense) together with finance prices, plus depreciation and amortization, plus share-based repayment, plus (minus) non-cash honest worth changes on organic property and stock bought, plus restructuring and transaction prices, plus (minus) loss (achieve) on investments, plus impairment fees, and plus (minus) abnormal or non-recurring pieces. Management believes this measure supplies helpful data as this is a repeatedly used measure within the capital markets and as this is a shut proxy for repeatable coins utilized by operations.

For a complete dialogue of Flowr’s operational and monetary effects for the 12 months ended December 31, 2021, please confer with the Company’s Management’s Discussion & Analysis and Consolidated Financial Statements for the 12 months ended December 31, 2021, which were filed on SEDAR.

About The Flowr Corporation

The Flowr Corporation is a Canadian hashish corporate with operations in Canada and the European Union. Its Canadian working campus, situated in Kelowna, British Columbia. Flowr goals to improve bettering results thru accountable hashish use and, as a longtime knowledgeable in hashish cultivation, strives to be the logo of selection for shoppers and sufferers in search of the highest-quality craftsmanship and product consistency throughout a portfolio of differentiated hashish merchandise.

For additional info, please talk over with flowrcorp.com or apply Flowr on Twitter: @FlowrCanada and ConnectedIn: The Flowr Corporation.

On behalf of The Flowr Corporation:

Tom Flow
Interim Chief Executive Officer

CONTACT INFORMATION:

INVESTORS & MEDIA:
buyers@flowrcorp.com

Forward-Looking Information:

Certain statements made on this press unencumber might represent “forward-looking information”, “future oriented financial information” or “financial outlooks” (jointly, “forward-looking data”) throughout the that means of acceptable securities regulations. Forward-looking data might relate to expected occasions or effects together with, however now not restricted to: the Company’s expectation that it is going to construct on its achievements because it continues to spend money on gross sales and advertising; the Company’s expectancies for gross sales of product in Quebec; Flowr servicing the worldwide clinical hashish marketplace and working GMP amenities in Portugal; Flowr’s trade, manufacturing and merchandise; Flowr’s plans to supply top rate high quality hashish to grownup use leisure and clinical markets; EU-GMP certification opening the medicinal hashish alternative for the Company in world markets; the Company being smartly located to distribute EU-GMP compliant product into underserviced markets; Flowr’s talent to appreciate income from the Company’s European operations throughout the expected time frame or in any respect; Flowr’s talent to ascertain gross sales and distribution channels in Europe to ship medicinal hashish to underserviced markets; expectancies with admire to the expected timing for harvests, propagation, finishing touch of building and set up of extraction infrastructure on the Company’s Sintra facility; the Company being not able to start GMP packaging and industrial gross sales throughout the expected time frame or in any respect; Flowr’s talent to provider the worldwide clinical hashish marketplace and/or perform GMP-designed production amenities in Portugal; the sale of clinical hashish in pharmacies in Portugal representing a watershed second for hashish within the E.U.; the Company’s talent to finish providing(s) of its securities underneath the Final Shelf Prospectus; the anticipated have an effect on of the strategic assessment selections at the Company; the true prices of financial savings from the Company’s restructuring projects, together with with admire to its personnel; the Company’s plans to divest its pursuits in sure of its subsidiaries; the Company’s talent to procure licensing from Health Canada and different regulatory government with admire to its houses and amenities; long run legislative and regulatory traits in Canada and somewhere else; the hashish trade in Canada most often; the power of Flowr to enforce its trade methods; and the power of Flowr to provide or promote top rate high quality hashish. Particularly, data referring to our expectancies of long run effects, goals, efficiency achievements, potentialities or alternatives is forward-looking data. Often, however now not all the time, forward-looking statements can also be recognized by way of forward-looking terminology similar to “may”, “will”, “expect”, “believe”, “estimate”, “plan”, “could”, “should”, “would”, “outlook”, “forecast”, “anticipate”, “foresee”, “continue” or the damaging of those phrases or diversifications of them or an identical terminology. Forward-looking data is present as of the date it’s made and is in response to cheap estimates and assumptions made by means of us on the related time in gentle of our revel in and belief of historic traits, present prerequisites and anticipated long run traits, in addition to different components that we consider are suitable and cheap within the cases. To the level any forward-looking data on this press unencumber constitutes “future oriented financial information” or “financial outlooks”, throughout the that means of acceptable securities regulations, the aim of such data being equipped is to exhibit the potential for the Company and readers are cautioned that this data is probably not suitable for another goal. However, we don’t adopt to replace this type of forward-looking data whether or not because of new data, long run occasions or in a different way, apart from as required underneath acceptable securities regulations in Canada. There can also be no assurance that such estimates and assumptions will end up to be right kind. Many components may motive our precise effects, stage of process, efficiency or achievements or long run occasions or traits to vary materially from the ones expressed or implied by means of the forward-looking data as mentioned within the “Risk Factors” segment of the Company’s 2020 Annual Information Form dated April 28, 2021 (the “AIF”). A duplicate of the AIF and the Company’s different publicly filed paperwork can also be accessed underneath the Company’s profile at the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com. The Company cautions that the listing of possibility components and uncertainties described within the AIF isn’t exhaustive and different components may additionally adversely impact its effects. Readers are instructed to imagine the hazards, uncertainties and assumptions in moderation in comparing the forward-looking data and are cautioned to not position undue reliance on such data.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that time period is outlined in insurance policies of the TSX Venture Exchange) accepts duty for the adequacy or accuracy of this unencumber.