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The Flowr Corporation enters into agreement for the sale of The Flowr Group (Okanagan) Inc.

(Globe Newswire) Toronto — The Flowr Corporation’s subsidiary, The Flowr Canada Holdings ULC, has entered into a binding agreement with Avant Brands K1 Inc, formerly, 1000343100 Ontario Inc. pursuant to which the purchaser will acquire all of the shares of The Flowr Group (Okanagan) Inc., and certain other assets of the company, comprising substantially all of the assets of the company, for total consideration of $5,115,000 plus the amount of the closing DIP loan and the assumed liabilities.

The transaction is the result of the sale and investment solicitation process conducted under the company’s previously announced proceedings commenced in the Ontario Superior Court of Justice under the companies’ Creditors Arrangement Act Canada (CCAA).

As previously announced, the purchaser has acted as the company’s interim lender to fund the CCAA proceedings and other working capital requirements, and also acted as the stalking horse bidder under the SISP. The purchaser is 50 per cent owned by Avant Brands Inc., another licensed producer of cannabis based in Kelowna.

The purchase price set out in the acquisition agreement is equal to: (a) $4,015,000; plus (b) common shares in the capital of Avant with a value of $1,100,000 based on the deemed price per Avant Share calculated as the volume weighted average price per Avant Share on the Toronto Stock Exchange for the 10 consecutive trading days preceding the close of trading on the trading day before the closing date discounted by 15 per cent; plus (c) the amount of the closing DIP loan; plus (d) the value of the assumed liabilities, subject to certain adjustments. The Avant Shares will be freely tradable.

The purchase price will be satisfied through: (a) a credit bid of the amounts advanced by the purchaser in its capacity as DIP lender, including the closing DIP loan; (b) the Avant share consideration; (c) an amount in cash equal to the purchase price less the credit bid, and the Avant share consideration, a portion of which may be payable in non-cash consideration in certain circumstances; and (d) the assumption of the assumed liabilities.

The company will seek approval of the transaction from the court on or about December 16, 2022. The transaction is subject to, among other things, the court granting an approval and vesting order and the transaction receiving the approval of other regulatory authorities. The transaction is anticipated to close following the receipt of all such approvals.