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.
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 and award-winning organic 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 at retailers in Canada and the United States, and online at flowhydration.com.
For more information on Flow, please visit Flow’s investor relations site at: investors.flowhydration.com.
About BeatBox
BeatBox is the "Original Party Punch", offering fun and nostalgic flavors in a sustainable and resealable package. With a deep passion for live music, its community of super fans, and creating fun, BeatBox has become the brand that’s bringing the party to the alcohol industry.
The journey began in 2012 in the live music capital of the world, Austin, TX, and the energy was contagious. So much so that BeatBox secured the largest investment in Shark Tank history from Mark Cuban, who “invested in BeatBox because at heart I'm a 25-year-old and saw that this is going to be a party phenomenon.”
BeatBox quickly built a team of beverage leaders helping to define a new category of "Party Punch." BeatBox has an impressive roster of investors from the music and entertainment industry, including Mark Cuban, Rob Dyrdek, Party Favor, Louis The Child, Good Times Ahead, and many more.
BeatBox has become one of the fastest growing brands in the alcohol industry and the drink of choice for Millennial and Gen Z drinkers. Its passion for music, and connection to its consumers, has also made it the fastest growing and most engaged alcohol brand on social media. Like Mark said, “This is a company that sells fun, and if anyone ever asks what this brand is all about, tell them that "BeatBox Brings the Party!"
For more information on BeatBox, please visit BeatBox’s website at: beatboxbeverages.com.
Forward-Looking Statements
This press release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws (“Forward-Looking Statements”). The Forward-Looking Statements contained in this press release relate to future events or Flow’s future plans, operations, strategy, performance or financial position and are based on Flow’s current expectations, estimates, projections, beliefs and assumptions. Such Forward-Looking Statements have been made by Flow in light of the information available to it at the time the statements were made and reflect its experience and perception of historical trends. All statements and information other than historical fact may be forward‐looking statements. Such Forward‐Looking Statements are often, but not always, identified by the use of words such as “may”, “would”, “should”, “could”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe”, “continue”, “expect”, “believe”, “anticipate”, “estimate”, “will”, “potential”, “proposed” and other similar words and expressions.
Forward-Looking Statements are based on certain expectations and assumptions and are subject to known and unknown risks and uncertainties and other factors, many of which are beyond Flow’s control, that could cause actual events, results, performance and achievements to differ materially from those anticipated in these Forward-Looking Statements. 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 should not be read as guarantees of future performance or results. Readers are cautioned not to place undue reliance on these Forward-Looking Statements, which speak only as of the date of this press release. Unless otherwise noted or the context otherwise indicates, the Forward-Looking Statements contained herein are provided as of the date hereof, and the Company disclaims any intention or obligation, except to the extent required by law, to update or revise any Forward-Looking Statements as a result of new information or future events, or for any other reason.
The following press release should be read in conjunction with the management’s discussion and analysis (“MD&A”) and consolidated financial statements and notes thereto as at and for the three- and six-months ended April 30, 2024. Additional information about Flow is available on the Company’s profile on SEDAR at www.sedar.com, including the Company’s Annual Information Form for the year ended October 31, 2023 dated January 29, 2024.
