Flow Beverage Corp. Announces Approvals For Amendments to Unsecured Debentures

Rhea-AI Summary

Flow Beverage Corp. (OTCQX:FLWBF) has obtained approvals to amend its unsecured debentures of $9,476,000 due on February 28, 2022. The amendments extend the maturity date to February 29, 2024 and increase the interest rate from 10% to 12% per annum. Additionally, Series C Warrants will be issued, providing 100% warrant coverage. The amendments are supported by over 75% of the debenture holders and will be formally communicated to them. Flow operates in North America, focusing on sustainably sourced alkaline spring water.

Positive

• Amendment of debentures allows for extended maturity date to February 29, 2024.
• Increase in interest rate from 10% to 12% provides better financial terms for the company.
• Conditional approval from the Toronto Stock Exchange and consent from over 75% of debenture holders indicates strong support.

Negative

• The extension of maturity may indicate cash flow challenges, requiring reliance on debt restructuring.
• Increasing interest payments could lead to higher financial strain if revenues do not improve.

TORONTO--(BUSINESS WIRE)-- Flow Beverage Corp. (TSX:FLOW; OTCQX:FLWBF) (the “Company” or “Flow”), is pleased to announce that it has received the requisite approvals to amend Flow’s $9,476,000 of unsecured debentures maturing on February 28, 2022 (the "Debentures").

Flow has received the conditional approval of The Toronto Stock Exchange (“TSX”) and consent of holders representing over 75% of the outstanding principal amount of the Debentures to amend the Debentures as follows (collectively, the “Amendments”):

• extend the maturity date of the Debentures to February 29, 2024 (the “Maturity Date”);
• amend the interest payment clause to provide for the payment of interest at a rate of 12% per annum (as opposed to 10% per annum);
• issue a fixed number of Series C Warrants for every $1,000 principal amount of Debenture at an exercise price equal to the weighted average price (“VWAP”) of the Company’s Subordinate Voting Shares (“SVS”) on the TSX for the five trading days prior to March 1, 2022 (the “Extension Date”) such that the number of Series “C” Warrants issued equals 100% warrant coverage. Each Series “C” Warrant will be exercisable into SVS at an exercise price equal to the 5-day VWAP and will expire February 28, 2025;
• provide for the acceleration of the Series C Warrants if, after the Maturity Date, the closing price of the SVS on the TSX is equal to or greater than 115% of the 5-day VWAP for a period of 10 consecutive trading days; and
• provide for an interest rate adjustment of an additional 12% per annum calculated from March 1, 2022 to the Maturity Date if, on the Maturity Date (i) the closing price of the SVS on the TSX from March 1, 2022 to the Maturity Date was not equal to or greater than 115% of the VWAP for 10 consecutive trading days; and (ii) the Series C Warrants remain unexercised.

The Company will be providing formal notice of the Amendments to all holders of the Debentures.

About Flow

Flow is one of the fastest-growing premium water companies in North America. Founded in 2014, Flow’s mission since day one has been to reduce environmental impacts by providing sustainably sourced naturally alkaline spring water in a sustainable, 100% recyclable and up to 75% renewable, plant-based pack. Today, the brand is B-Corp Certified with a best-in-class score of 126.5, offering a diversified line of health and wellness-oriented beverage products: original naturally alkaline spring water, award-winning organic flavours, and collagen-infused flavours in sizes ranging from 330-ml to 1-litre. All products contain naturally occurring electrolytes and essential minerals and support Flow’s overarching purpose to “bring wellness to the world through the positive power of water.” Flow beverage products are available online at flowhydration.com and are sold at over 24,650 stores across North America.

For more information on Flow, please visit Flow’s investor relations site at: investors.flowhydration.com.

Cautionary Statement

This press release may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation. Such forward-looking statements include, but are not limited to, information with respect to our objectives and the strategies for achieving those objectives, as well as information with respect to our beliefs, plans, expectations, anticipations, estimates and intentions. Forward-looking statements are typically identified by the use of words such as “may”, “would”, “should”, “could”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe”, or “continue”, although not all forward-looking statements contain these words. Forward-looking statements are provided for the purposes of assisting the reader in understanding Flow and its business, operations, prospects, and risks at a point in time in the context of historical and possible future developments, and the reader is therefore cautioned that such information may not be appropriate for other purposes. Forward-looking statements are based on assumptions and are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking statements. Those risks and uncertainties include the following: impact and spread of COVID-19; ability to achieve and manage growth; failure to expand sales capabilities; changes in consumer preferences; criticism of packaged water; maintain brand image and product quality; constrained or unavailable spring water sources; inability to package products; increased competition; accurately estimating demand; maintaining relationships with distributors and vendors; changing retail landscape; incorrect product design or development; product information misrepresentation; revenues derived entirely from packaged beverages; increases in costs or shortages of materials; fluctuation of quarterly operating results; no assurance of profitability; fluctuations in foreign currency; changes in government regulation; contamination or recalls of ingredients or end products; loss of intellectual property rights; litigation; future tax rates; catastrophic events; climate change; seasonal business; dependence on key information systems and third-party service providers; ability to securely maintain confidential information; maintaining and upgrading information technology systems; conflict of interest; dual class share structure; potential volatility of share price; no assurance of active market for shares; lack of dividends; global financial condition; publication of inaccurate or unfavourable research and reports; operating history; and management and conflict of interests. Consequently, all of the forward-looking statements contained herein are qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that we anticipate will be realized or, even if substantially realized, that they will have the expected consequences or effects on our business, financial condition, or results of operation. Unless otherwise noted or the context otherwise indicates, the forward looking. statements contained herein are provided as of the date hereof, and we do not undertake to update or amend such forward-looking statements whether as a result of new information, future events or otherwise, except as may be required by applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220208005568/en/

Devan Pennell, Chief Financial Officer

1-844-356-9426

investors@flowhydration.com



US investors:

Lynne Collier

Lynne.collier@icrinc.com



Canadian investors:

Marc Charbin

investors@flowhydration.com



Media:

Natasha Koifman

nk@nkpr.net

Source: Flow Beverage Corp.

FAQ

What are the amendments to Flow Beverage Corp's debentures announced in February 2022?

Flow Beverage Corp has amended its unsecured debentures to extend the maturity date to February 29, 2024 and increase the interest rate from 10% to 12% per annum.

How much is Flow Beverage Corp's total amount of unsecured debentures?

Flow Beverage Corp's total amount of unsecured debentures is $9,476,000.

What is the interest rate adjustment for Flow Beverage Corp's debentures?

The interest rate for Flow Beverage Corp's debentures has been increased from 10% to 12% per annum.

What percentage of debenture holders approved the amendments for Flow Beverage Corp?

Over 75% of the outstanding principal amount of the debentures approved the amendments.

When is the new maturity date for Flow Beverage Corp's debentures?

The new maturity date for Flow Beverage Corp's debentures is February 29, 2024.