You could place it as a BasicEntity, and enable the Pickable option (meaning you can pick it up). Then place a SimpleLight, change the projector texture to something resembling a flashlight, change the radius, colour, etc. to the desired values, then link the light to the flashlight. This will allow the player to pick up the flashlight and shine the light around. However, using this technique doesn't provide much flexibility in regards to how the character holds the light, which direction the flashlight is pointing, etc.
If my way does not work, I'd recommend following a simple weapon tut and then link the SimpleLight to the weapon once it's ready to be used.
Best of luck