Flow Beverage Corp. (TSX:FLOW; OTCQX:FLWBF) announced today that NFS Leasing Canada Ltd. has advanced to the Company a $2 million senior secured business purpose loan pursuant to a term note and has entered into a binding term sheet for an additional senior secured term loan of up to $4 million. The Company also announced that it has entered into a binding term sheet with RI Flow LLC for a secured convertible loan of up to $6 million. NFS and RI Flow are existing senior secured lenders of the Company and are affiliated with Clifford L. Rucker, an insider of the Company.
Nicholas Reichenbach, Chairman and Chief Executive Officer of Flow, stated: “We are extremely pleased to have secured necessary funding from RI Flow and NFS to help the Company continue its path towards profitability, as it explores strategic alternatives. Our goal remains to grow the Flow brand while reducing costs and building a long-term and sustainable future for the Company.”
The NFS Term Note will mature on May 23, 2028, and bear interest at a rate of 15% per annum compounding annually. The NFS Term Loan, once issued, will mature three years from the date of issue and bear interest at 15% per annum. Both loans will be advanced in tranches subject to the Company’s achievement of certain monthly net revenue milestones.
The RI Flow Convertible Loan will be issued for up to $6 million and mature eighteen months from the date of issuance. The loan will bear interest at 15% per annum and beginning one year following issuance, RI Flow will have the right to convert the outstanding principal amount into subordinate voting shares at a conversion price of $0.065 per share.
