Mr. Nicholas Reichenbach reports

FLOW BEVERAGE CORP. ENTERS INTO MANUFACTURING AGREEMENT WITH BEATBOX, WITH THE POTENTIAL TO DELIVER UP TO $115 MILLION IN REVENUE THROUGHOUT THE 5-YEAR TERM

Flow Beverage Corp. has entered into a manufacturing agreement with BeatBox Beverage, known as the world's tastiest party punch, whereby Flow will manufacture and package BeatBox's innovative line of Party Punch alcoholic beverages. The agreement has a term of five years, with commitments for BeatBox to purchase certain minimum annual volumes which, in the aggregate, equate to approximately $115-million in revenue over the life of the agreement. Additionally, the agreement has a take-or-pay provision requiring that BeatBox pay Flow the equivalent of 85 per cent of the value of the difference between the applicable minimum annual volume and the actual volume purchased during the relevant 12-month period.

The production is expected to commence between May and July, 2024, and is subject to Flow achieving certain preproduction requirements, including Flow making modifications to and retrofitting its Aurora production facility, while also obtaining the necessary governmental permits and authorizations. To help fulfill its commitment to the new partnership between Flow and BeatBox, to support growth in its co-packing operations generally, and as required for production to commence and take-or-pay commitments to come into force under the agreement, Flow will be installing a new TetraPak production line dedicated to alcohol production at its Aurora production facility. Under the terms of the agreement, BeatBox will be responsible for compliance with all legal and regulatory obligations in connection with the marketing, distribution and commercialization of the alcohol-based products.

Nicholas Reichenbach, founder and chief executive officer of Flow, stated: "We are highly aligned with the team at BeatBox with our shared commitment to sustainable operations and we look forward to a long-term partnership. This is a significant agreement for Flow as we are meaningfully increasing our co-packaging operations, expanding the capacity of our Aurora production facility and diversifying our co-packing services to include alcoholic beverages. We believe that this agreement also directly supports the valuation of our Aurora production facility as we continue to consider options for its divestiture."

Founded in 2012, BeatBox products are located in over 83,000 stores across North America. The world's tastiest punch is available in nine nostalgic wine-based or malt-based flavours and contains low sugar, low carbs and low calories, all while delivering an 11.1 per cent alcohol by volume "punch." BeatBox is committed to ecofriendly operations through its alignment with CarbonBetter and Plastic Neutral and as a recent B Corp. certified company.

Aimy Steadman, co-founder and chief operating officer of BeatBox, states: "BeatBox is experiencing rapid growth as a leading alcohol brand utilizing Tetra Pak's 500-millilitre packaging. We are pleased to announce our strategic partnership with Flow, which will bolster our production capacity throughout 2024 and beyond. This collaboration reflects our shared commitment to sustainability, as evidenced by both of our companies holding B Corp. certification. Through this partnership, we remain dedicated to reshaping the ready-to-drink category in accordance with our distinct BeatBox Way corporate values."

Equipment financing and senior secured loan

NFS Leasing Canada Ltd., a committed partner in growth, has extended its support to Flow by providing equipment financing for up to $11.4-million. This financing allows Flow to add a fourth production line and increase capacity for the Aurora production facility. In addition, for general corporate purposes, Flow has entered into an interim loan financing agreement in the form of a $5-million senior secured loan with NFS with a maturity date of May 13, 2024, which bears interest at the rate of 2 per cent per month.

About Flow Beverage Corp.

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-per-cent 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 millilitres to one 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.

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