Flow Water, Set To Debut On The Public Markets, Raising CAD$30 Million
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The Fastest-Growing Premium Water Brand in North America
TORONTO, Jan. 26, 2021 /CNW/ - Flow Water Inc. (the "Company" or "Flow®") and RG One Corp. ("RG One") are pleased to announce further information about their recently entered into letter of intent ("LOI") to complete a going-public transaction by way of a business combination (the "Transaction"). Upon completion of the Transaction, the combined entity (the "Resulting Issuer") will continue to carry on the business of Flow. The Company anticipates that the Transaction will be completed sometime in the first half of 2021. In addition, as part of the Transaction, the Company is looking to raise a minimum of CAD$65 million, of which CAD $30 million has been committed from existing shareholders as part of a non-brokered financing (the "Non-Brokered Financing"). The remainder of the financing will be raised through a brokered private placement of subscription receipts priced in the context of the market for aggregate gross proceeds of approximately CAD $35 million (the "Subscription Receipt Financing" and together with the Non-Brokered Financings, the "Financings").
Nicholas Reichenbach, Founder and CEO of Flow, stated "We are very pleased by the wave of enthusiasm we saw for our non-brokered private placement, which we ultimately upsized to CAD$30 million. In the wake of this incredible financing round, we are ready to pursue our listing on the Toronto Stock Exchange ("TSX"), which we view as the first step in our life as a public company. We believe that this committed capital along with our entrance into the public markets will accelerate our growth through expansion of our omni-channel retail distribution and continued product innovation, and further strengthen our brand and competitive positioning as we aggressively target the large and rapidly growing premium enhanced water and 'better-for-you' beverage markets, with our core premium alkaline mineral spring water, global award winning organic flavored waters, collagen infused spring water, and organic certified vitamin spring water infusions."
Reichenbach continued, "Flow was founded with a vision and purpose to inspire the wellness of the world with the power of water. In 2015, I saw an opportunity to utilize the abundant, beautiful water from my family's artesian spring in South Bruce County, Ontario, and inspire change toward more mindful consumption. I worked with Tetra Pak™ to innovate the most sustainable delivery system for our great-tasting mineral rich natural spring water, and designed an eco-friendly pack to elevate the consumer hydration experience. Today, Flow has sparked a movement driven by our amazing water's unique quality and taste that's switching droves of customers away from unsustainable formats, which are often filled with cheap, artificially-enhanced tap water. With around 17.5 million avid consumers and growing, some 35 celebrity influencers in entertainment and sports, 250+ brand ambassadors, and hundreds of passionate shareholders and investors, the Flow family is growing exponentially. To meet market demand, we now have two vertically integrated manufacturing facilities in key North American markets that can reach customers wherever they are, sustainably and efficiently. The Flow movement is also driven by our best-in-class innovation that raises the bar and drives category growth, while building a brand that is loved because it aligns with our customer's values for convenient yet sustainable products, exceptional taste, high-quality ingredients, and functional wellness benefits. Flow is now the fastest growing premium enhanced water brand in all North American channels. We are investing vertically in sales and marketing to further accelerate penetration and grow our already thriving e-commerce business. Our goal is to become the number-one wellness beverage brand in in the world, and we have a clear path and highly skilled team to achieve this. We've demonstrated consistent quarter over quarter growth, grew revenue to approximately CAD $30 million in 2020, and are over 95% CAGR since 2018."
Sustainability and protecting natural resources are central to the Company's purpose, and Reichenbach says, "As Mother Earth is Flow's biggest shareholder, ESG performance is at the forefront of our mission." The Company always strives to increase sustainability throughout its value chain, for example, innovating toward 100% renewable-resource-based packaging in the next few years, and using renewable energy in its facilities.
Flow is launching a 2021 spring and summer campaign featuring a host of celebrity investors including Shawn Mendes, NBA superstar Russell Westbrook, and Taboo from the Black Eyed Peas. Their goal is to drive mass awareness of Flow's mission and vision and inspire the Flow movement across social media and marketing platforms, and reach consumers in all channels.
Flow has established direct sales relationships with most of the largest grocery, drug store, and convenience chains in North America. Flow also works with national distributors and brokers to further expand the retail channel, specifically Acosta in North America, UNFI in North America, KeHe in North America, Purity Life in Canada, Neal Brothers Foods in Ontario, and ColdHaus in Ontario, BC, and Quebec. In 2021 Flow is adding Core-Mark in Canada to service new listings in gas and convenience chains nationally.
Advisors and Transaction Details
Flow has engaged Stifel GMP, a subsidiary of Stifel Financial, to act as lead agent and book runner, as well as a syndicate of investment banks in connection with the Subscription Receipt Financing. The closing of the Transaction is subject to obtaining all necessary regulatory and third party consents and approvals, including the expected listing of the shares of the Resulting Issuer (the "Resulting Issuer Shares") on the TSX. The subscription receipts are proposed to be exchanged for Resulting Issuer Shares in connection with the Transaction.
Flow and RG One will provide further details in respect of the Transaction including a summary of the financial information and financings in due course once available, by press release. The Transaction terms as outlined in the LOI will be superseded by a definitive agreement (the "Definitive Agreement") to be signed by the parties. The Transaction and certain related matters require the approval of the shareholders of RG One and Flow prior to the closing of the Transaction. There can be no assurance that the Transaction will be completed as proposed or at all. Upon closing of the Transaction the combined entity is expected to be renamed "Flow Water" and each shareholder of Flow will exchange their shares in Flow for Resulting Issuer Shares. After completion of the Transaction, the company anticipates that Flow's management and board will be leading the combined entity. In addition, RG One intends to effect a private placement of common shares at a price of CAD $0.005 per share (on a pre-consolidated basis) for gross proceeds of up to CAD $100,000 to fund the interim expenses of RG One.
The TSX has in no way passed upon the merits of the Transaction and has neither approved nor disapproved of the contents of this press release.
About Flow®
Flow Water Inc. ("Flow Alkaline Spring Water™" or "Flow®") is a premium spring water company with a diversified line of wellness-oriented beverage products sold online and at retailers throughout North America. Flow's premium spring water is offered in original unflavored and a range of award-winning organic flavors, in sizes ranging from 330-ml to 1-liter. Due to its unique artesian spring sources, Flow products contain naturally occurring electrolytes and essential minerals, and its original and flavored water products have an alkaline pH. As part of its ongoing innovation into functional "better-for-you" beverages, Flow recently introduced a new line of collagen-infused waters with natural flavors, and certified organic flavored vitamin-infused waters.
Founded in 2015 by serial, mission-driven entrepreneur Nicholas Reichenbach, Flow is highly dedicated to sustainability and is a B-Corp Certified company with a purpose to "bring wellness to the world through the positive power of water." Reichenbach founded Flow believing that its spring water products should be packaged in up to 75% renewable-resource-based Tetra Pak™ cartons with sustainable operations, rather than the typically more unsustainable packaging and practices used across the beverage industry.
Flow beverage products are available online at flowhydration.com, and are sold at over 25,000 retailers across the United States and Canada, including Whole Foods Market, Loblaws, Sobeys, Metro, Shoppers Drug Mart, Farm Boy, Sprouts Farmers Market, Safeway, Wegmans, Harris Teeter, Walmart, Sam's Club, Giant Eagle, Bristol Farms, Raley's, Vitamin Shoppe, and Duane Reade, among others.
Follow Flow on social media: Instagram (https://www.instagram.com/flow/); Twitter (https://twitter.com/FlowHydration); and Facebook (facebook.com/FlowHydration).
Forward-Looking Information
This news release contains certain forward-looking statements that reflect the current views and/or expectations of management of RG One and Flow with respect to performance, business and future events, including but not limited to express or implied statements and assumptions regarding the intention of RG One and Flow to negotiate for or complete the Transaction and the Financings. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business and the industry and markets in which RG One and Flow operate. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. In particular, there is no guarantee that the parties will successfully negotiate and enter into the Definitive Agreement or complete the Transaction contemplated herein, that RG One's due diligence will be satisfactory or that RG One will obtain any required shareholder or regulatory approvals, including the listing of the Resulting Issuer Shares on the TSX. Accordingly, readers should not place undue reliance on forward-looking statements and information, which are qualified in their entirety by this cautionary statement. Neither of RG One nor Flow undertakes any obligation to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable securities law.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. Not for distribution to U.S. newswire services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws.
All information contained in this press release with respect to Flow, its business and Financings was supplied by Flow for inclusion herein. RG One has not conducted due diligence on the information provided and does not assume any responsibility for the accuracy or completeness of such information.
Neither the TSX nor its Regulation Services Provider (as that term is defined in policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Flow Water Inc.
For more information on Flow, please visit flowhydration.com, or contact in the US: ICR, Inc. - Investors: [email protected], and Media: [email protected]; and, in Canada: Natasha Koifman, [email protected], and Melissa Augimeri, [email protected]
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