- Minimum total revenue under contract increased to $213 million, from $115 million
- Flow to add two production lines at its Aurora production facility
- BeatBox has committed to purchase from Flow, a USD$2 million convertible note at a conversion price of $1.00
TORONTO--(BUSINESS WIRE)--Flow Beverage Corp. (TSX:FLOW; OTCQX:FLWBF) (“Flow”) today announced that it has amended the terms of its manufacturing agreement (the “Agreement”) with BeatBox Beverages (“BeatBox”), first announced on November 16, 2023. Pursuant to the terms of the amending agreement, the term (the “Term”) of the Agreement has been extended from five years to six and the minimum total revenue over the Term have increased to $213 million, an increase from minimum total revenue of $115 million over the original five-year term under the Agreement.
Due to the increased production capacity requirements, over the next 12 months, Flow expects to add two production lines at its Aurora production facility. This expansion is to satisfy the increased demand for co-manufacturing from BeatBox, in addition to other co-manufacturing agreements recently announced and to accommodate anticipated growth in the Flow brand.
In connection with having amended the Agreement, BeatBox and Flow entered into a binding subscription agreement whereby BeatBox has irrevocably committed to purchase from Flow, at a date not later than October 31, 2024 (the “Closing Date”), a USD$2 million convertible note secured against the assets of Flow (the “Note”). The Note would bear interest at the rate of 10% per annum from the Closing Date, payable quarterly in arrears on the last day of each of fiscal quarter of Flow, and be convertible, at BeatBox’s option and at any time after the Closing Date, into subordinate voting shares of Flow at a conversion price of $1.00. Issuance of the Note remains subject to approval by the Toronto Stock Exchange.
“We are thrilled to be expanding our relationship with BeatBox by helping them scale in a sustainable way. Our co-pack operation has achieved a number of milestones in the past year, which include welcoming new partners, adding a fourth production line and upgrading the Aurora production facility to produce alcoholic beverages. As a result, we are well positioned to meet our profitability and cash flow goals for fiscal 2024 and, most importantly, doing it in a way that aligns with our environmental and socially conscious values,” said Nicholas Reichenbach, Founder and CEO of Flow.
Founded in 2012, BeatBox is now one of the top-growing and top-selling ready-to-drink (RTD) alcohol brands in the United States, with availability in over 110,000 stores across all 50 states. BeatBox’s “Party Punch” offers consumers fourteen nostalgic wine-based or malt-based flavours that are crafted to be low in sugar, carbs and calories, all while delivering 11.1% ABV “punch.” BeatBox is also dedicated to sustainability, partnering with Carbon Better and Plastic Neutral initiatives, and recently achieving B Corp Certification for its eco-friendly business practices.
“As we continue our industry-leading growth, we are excited to expand our partnership with Flow, securing our capacity needs well into the future, and doing so with a partner that shares our commitment to environmental and social responsibility. Our mission is to make the world more fun while doing right by our people and the planet, and this milestone is a significant step towards achieving that,” says Co-Founder and CEO of BeatBox, Justin Fenchel.
Contacts
Trent MacDonald, Chief Financial Officer
1-844-356-9426
investors@flowhydration.com
Investors:
Marc Charbin
investors@flowhydration.com
Media:
Natasha Koifman
nk@nkpr.net