Flow Beverage Corp. entered into a 36-month senior secured term loan with NFS Leasing Canada Ltd. of up to CAD$20.3 million. Flow has initially drawn CAD$15.3 million pursuant to the Loan and has the ability, subject to certain conditions, to draw an additional CAD$5.0 million prior to the one-year anniversary of the initial draw under the Loan.
The Loan bears interest at 14% per annum and has share purchase warrant coverage of 10% on any amounts drawn on the Loan. The warrants have a ten-year term, an exercise price of $0.50 per warrant and an accelerated expiry date if the weighted average trading price of subordinate voting shares of Flow trade at or above $1.75 for 10 consecutive trading days. Flow intends to use the Loan proceeds to repay CAD$9.6 million in unsecured notes, as well as to invest in the growth of the Flow brand, working capital and for general corporate purposes.
“Securing this financing significantly enhances Flow’s cash position, which was recently bolstered by CAD$17 million in net proceeds from the sale of the Verona packaging facility. Combined with recent contract wins in the food service sector, new activations with major global retailers, and continued strong trends in consumer preferences towards sustainable products, this facility further enables our progress toward profitable growth,” said Nicholas Reichenbach, Founder and CEO of Flow.
Canaccord Genuity acted as financial advisor to Flow with respect to the Loan.