CLIFFORD L. RUCKER PROVIDES UPDATE ABOUT HOLDINGS OF FLOW BEVERAGE CORP.
This press release is issued pursuant to Multilateral Instrument 62-104 – Take-Over Bids and Issuer Bids and National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues.
TORONTO, July 3, 2025 /CNW/ – This press release is being made by Clifford L. Rucker (“Mr. Rucker“) to report information concerning holdings of RI Flow LLC (the “Investor“), NFS Leasing Canada Ltd. (“NFS Canada“), NFS Capital, LLC (“NFS“) and Mr. Rucker in Flow Beverage Corp. (the “Issuer” or “Flow“). The Investor is directly owned by Mr. Rucker. NFS Canada is a wholly owned subsidiary of NFS and NFS is directly owned by Mr. Rucker.
On June 4, 2025, the Issuer announced that it had entered into a secured convertible loan agreement with the Investor (the “Convertible Loan Agreement“) pursuant to which the Investor agreed to advance a convertible loan of up to $6,000,000 to the Issuer (the “Convertible Loan“). The Convertible Loan bears interest at an annual rate of 15% and the principal balance and accrued interest (collectively the “Outstanding Balance“) of the Convertible Loan are convertible into subordinate voting shares (“SVS“) of the Issuer at a conversion price of $0.065 per share, entitling the Investor to convert up to 114,115,385 SVS, assuming that all Tranches (as defined below) of the Convertible Loan are advanced. The Investor is only permitted to convert the Outstanding Balance, (i) on or after June 2, 2026, (ii) upon and following a change of control of the Issuer or (iii) upon a divestiture of the Issuer’s packaging facility in Aurora, Ontario and related operations (the “Conversion Eligibility Date“).
As of the date of this press release, the first (the “First Tranche“) and second (the “Second Tranche“) of three tranches have been advanced to Flow in accordance with the terms of the Convertible Loan Agreement. The third tranche (the “Third Tranche“, and together with the First Tranche and Second Tranche, the “Tranches“) is expected to be advanced on or about August 1, 2025. Each Tranche has been, or is expected to be, in the principal amount of $2,000,000. The Investor’s obligation to fund the Third Tranche is subject to the Issuer achieving a certain revenue milestone. Accordingly, there can be no assurance that the Third Tranche will be advanced.
Current Holdings
Prior to the date of this press release, the Investor owned, and Mr. Rucker beneficially owned or exercised control or direction over 12,050,000 SVS, and held the right to convert the Outstanding Balance into up to 38,038,462 SVS. NFS Canada also owned, and Mr. Rucker and NFS beneficially owned or exercised control or direction over, warrants exercisable into 5,345,380 SVS (the “Warrants“).
Collectively, these holdings represented:
- On an undiluted basis: 14.31% of the issued and outstanding SVS, a 13.34% equity interest in the Issuer, and 8.29% of the voting rights attached to all of the Issuer’s outstanding voting securities; and
- On a partially diluted basis (assuming exercise of the outstanding Warrants and conversion of the Outstanding Balance): 43.44% of the issued and outstanding SVS, a 41.46% equity interest in the Issuer, and 29.38% of the voting rights attached to all of the Issuer’s outstanding voting securities.
The forgoing percentages are calculated based on 84,226,014 SVS and 6,106,566 multiple voting shares (“MVS“) issued and outstanding.
Second Tranche of the Convertible Loan
As of the date of this press release, the Issuer has met the conditions for funding as set out in the Convertible Loan Agreement and the Second Tranche has been advanced to the Issuer. As such, the Investor now owns, and Mr. Rucker beneficially owns, or has control or direction over 12,050,000 SVS and, after the Conversion Eligibility Date, will hold the right to convert the Outstanding Balance into up to 76,076,923 SVS. In addition, NFS Canada owns, and Mr. Rucker and NFS beneficially own or exercise control or direction over, warrants exercisable into 5,345,380 SVS.
Collectively, these holdings represent:
- On an undiluted basis: 14.31% of the issued and outstanding SVS, a 13.34% equity interest in the Issuer, and 8.29% of the voting rights attached to all of the Issuer’s outstanding voting securities; and
- On a partially diluted basis (assuming exercise of the outstanding Warrants and conversion of the Outstanding Balance): 56.43% of the issued and outstanding SVS, a 54.42% equity interest in the Issuer, and 41.23% of the voting rights attached to all of the Issuer’s outstanding voting securities.
The forgoing percentages are calculated based on 84,226,014 SVS and 6,106,566 MVS issued and outstanding an undiluted basis.
Third Tranche of the Convertible Loan
Assuming the Third Tranche is advanced to the Issuer, the Investor will own, and Mr. Rucker will beneficially own, or have control or direction over, 12,050,000 SVS and, after the Conversion Eligibility Date, will hold the right to convert the Outstanding Balance into up to 114,115,385 SVS. In addition, NFS Canada will own, and Mr. Rucker and NFS will beneficially own or exercise control or direction over, warrants exercisable into 5,345,380 SVS.
Collectively, these holdings will represent:
- On an undiluted basis: 14.31% of the issued and outstanding SVS, a 13.34% equity interest in the Issuer, and 8.29% of the voting rights attached to all of the Issuer’s outstanding voting securities; and
- On a partially diluted basis (assuming exercise of the outstanding Warrants and conversion of the Outstanding Balance): 64.57% of the issued and outstanding SVS, a 62.69% equity interest in the Issuer, and 49.67% of the voting rights attached to all of the Issuer’s outstanding voting securities.
The forgoing percentages are calculated based on 84,226,014 SVS and 6,106,566 MVS issued and outstanding an undiluted basis.
Full Conversion of the Convertible Loan
Assuming that the Third Tranche is advanced to the Issuer and that the Outstanding Balance is fully converted into 114,115,385 SVS following the Conversion Eligibility Date, the Investor will own, and Mr. Rucker will beneficially own, or have control or direction over 126,165,385 SVS. In addition, NFS Canada will own, and Mr. Rucker and NFS will beneficially own, or have control or direction over, warrants convertible into 5,345,380 SVS.
Collectively, these holdings will represent:
- On an undiluted basis: 63.61% of the issued and outstanding SVS, 61.71% equity interest in the Issuer, and 48.64% of the voting rights attached to all of the Issuer’s outstanding voting securities; and
- On a partially diluted basis (assuming exercise of the outstanding Warrants and the Conversion of the Outstanding Balance): 64.57% of the issued and outstanding SVS, 62.69% equity interest in the Issuer and 49.67% of the voting rights attached to all of the Issuer’s outstanding voting securities.
The forgoing percentages are calculated based on 84,226,014 SVS and 6,106,566 MVS issued and outstanding an undiluted basis.
This Report references interest accruing on the principal balance of the Convertible Loan, which compounds on an annual basis from June 4, 2025, until the indefeasible payment thereof in full.
Other Information
The Investor and its affiliates may, from time to time, acquire additional securities of the Issuer and/or dispose of such securities as the Investor deems appropriate based upon market conditions, general economic and industry conditions, the trading price of the SVS, the Issuer’s business, financial condition or prospects, and/or other relevant factors
The Issuer head office is located at 155 Industrial Parkway South, Unit 7-10, Aurora, Ontario L4G 3G6, the Investor and Mr. Rucker are located at 500 Cummings Center, Suite 6050, Beverly, MA 01915.
A copy of the report filed under applicable Canadian securities laws by the Investor in connection with the transactions referred to in this press release may be obtained from the Investor via email: legal@ruckerinv.com or telephone (978) 338-6250.
SOURCE Clifford L. Rucker
