Flow Beverage Corp. Secures up to $20 million from Senior Secured Debt Facility

Rhea-AI Summary

Flow Beverage Corp. (TSX:FLOW; OTCQX:FLWBF) has secured a 36-month senior secured term loan of up to CAD$20.3 million from NFS Leasing Canada Ltd. Initially, CAD$15.3 million has been drawn, with an option to access an additional CAD$5.0 million within the next year. The loan carries a 14% interest rate and includes share purchase warrants. The funds will be used to repay CAD$9.6 million in unsecured notes and support business growth. The Company recently strengthened its cash position through a CAD$17 million facility sale, enhancing its market prospects.

Positive

• Secured a 36-month loan of up to CAD$20.3 million, enhancing cash flow.
• Utilized CAD$17 million from the sale of the Verona packaging facility to improve financial health.
• Loan proceeds will help repay CAD$9.6 million in unsecured notes, improving financial stability.

Negative

• Loan bears a high interest rate of 14%, which could impact profitability.

TORONTO--(BUSINESS WIRE)-- Flow Beverage Corp. (TSX:FLOW; OTCQX:FLWBF) (“Flow” or the “Company”) today announced that it has entered into a 36-month senior secured term loan (the “Loan”) with NFS Leasing Canada Ltd. (“NFS”) of up to CAD$20.3 million. Flow has initially drawn CAD$15.3 million pursuant to the Loan and has the ability, subject to certain conditions, to draw an additional CAD$5.0 million prior to the one-year anniversary of the initial draw under the Loan.

The Loan bears interest at 14% per annum and has share purchase warrant coverage of 10% on any amounts drawn on the Loan. The warrants have a ten-year term, an exercise price of $0.50 per warrant and an accelerated expiry date if the weighted average trading price of subordinate voting shares of Flow trade at or above $1.75 for 10 consecutive trading days. Flow intends to use the Loan proceeds to repay CAD$9.6 million in unsecured notes, as well as to invest in the growth of the Flow brand, working capital and for general corporate purposes.

“Securing this financing significantly enhances Flow’s cash position, which was recently bolstered by CAD$17 million in net proceeds from the sale of the Verona packaging facility. Combined with recent contract wins in the food service sector, new activations with major global retailers, and continued strong trends in consumer preferences towards sustainable products, this facility further enables our progress toward profitable growth,” said Nicholas Reichenbach, Founder and CEO of Flow.

Canaccord Genuity acted as financial advisor to Flow with respect to the Loan.

About NFS

NFS Leasing (www.nfsleasing.com) is a privately-held North American leader in equipment finance with over 15 years of experience. NFS provides equipment financing and secured loans to small and middle market non-investment grade companies in the U.S. and Canada. NFS uses its own balance sheet capital and provides fast, flexible credit decisions.

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 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, collagen-infused and vitamin-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 36,000 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 unfavorable 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/20230103005147/en/

Trent MacDonald, Chief Financial Officer

1-844-356-9426

investors@flowhydration.com

Investors:

Marc Charbin

investors@flowhydration.com

Media:

Natasha Koifman

nk@nkpr.net

Source: Flow Beverage Corp.

FAQ

What is the purpose of Flow Beverage Corp.'s loan with NFS Leasing?

Flow Beverage Corp. intends to use the loan proceeds to repay CAD$9.6 million in unsecured notes, invest in growth opportunities, and improve working capital.

How much has Flow Beverage Corp. initially drawn from the loan?

Flow Beverage Corp. has initially drawn CAD$15.3 million from the CAD$20.3 million loan.

What is the interest rate for Flow Beverage Corp.'s loan from NFS Leasing?

The loan from NFS Leasing carries an interest rate of 14% per annum.

What are the share purchase warrant terms associated with Flow Beverage Corp.'s loan?

The loan includes share purchase warrants covering 10% of the loan amount, with an exercise price of $0.50 per warrant.

What recent actions have bolstered Flow Beverage Corp.'s cash position?

Flow Beverage Corp.'s cash position has been bolstered by CAD$17 million from the sale of its Verona packaging facility.