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RG One Corp. and Flow Water Inc. Enter into Letter of Intent for a Business Combination

Newsfile Corp.
·7 min read

Toronto, Ontario--(Newsfile Corp. - December 21, 2020) - RG One Corp. ("RG One" or the "Company") and Flow Water Inc. ("Flow") are pleased to announce that they have entered into a letter of intent ("LOI") to complete a going-public transaction in Canada for Flow (the "Proposed Transaction").

Introduced in 2015, Flow Alkaline Spring Water™ is a premium water wellness brand, sold throughout North America. Flow's naturally alkaline spring water is offered in a range of flavors, and because of its unique origins contains naturally occurring electrolytes, essential minerals, and an alkaline pH. As part of its innovation into functional beverages, Flow has recently introduced a new line of collagen-infused waters.

Flow is dedicated to sustainability and is a B-Corp Certified company. Founded by serial entrepreneur Nicholas Reichenbach, Flow was based on the belief that naturally sourced spring water is one of the best forms of hydration, and that it should be delivered in an eco-friendly package designed to have a low carbon footprint. All Flow products are carefully sourced from its protected springs and packaged in a Tetra Pak plant-fiber based carton, made from up to 75 percent renewable resources.

Flow Alkaline Spring Water™ is available at over 20,000 retailers across the United States and Canada including Whole Foods Market, Loblaws, Sobeys, Metro, Rexall, Farm Boy, Sprouts Farmers Market, CVS, Safeway, Wegmans, Harris Teeter, Walmart, Giant Eagle, Bristol Farms, Raley's, Vitamin Shoppe, and Duane Reade.

In accordance with the terms of the LOI, it is anticipated that the Company will establish a wholly-owned subsidiary which will amalgamate with Flow, following which the resulting amalgamated entity will continue to carry on the business of Flow as a wholly-owned subsidiary of the Company by way of a "three-corned amalgamation or by way of plan of arrangement. For convenience, Flow, as it will exist after completion of the Proposed Transaction, is sometimes referred to as the "Resulting Issuer".

The closing of the Proposed Transaction is subject to the receipt of all necessary regulatory and third-party consents and approvals, including without limitation, the listing of the common shares of the Resulting Issuer (the "Resulting Issuer Shares") on the Toronto Stock Exchange (the "Exchange"). Following completion of the Proposed Transaction, it is anticipated that the Company will be listed on the Exchange under the name "Flow Water Inc."

In connection with completion of the Proposed Transaction, Flow intends to complete a brokered private placement financing (the "Financing"), led by Stifel Nicolaus Canada Inc. ("Stifel GMP"), of subscription receipts (the "Subscription Receipts") to accredited investors, priced in the context of the market, for aggregate gross proceeds of a minimum of CAD$25,000,000 (not including any over-allotment option granted to Stifel GMP) (the "Subscription Receipt Financing"). Proceeds of the Subscription Receipt Financing will be held in escrow pending completion of the Proposed Transaction. Immediately prior to completion of the Proposed Transaction, the Subscription Receipts will automatically be converted into Resulting Issuer Shares and warrants to purchase Resulting Issuer Shares. In addition, Flow intends to undertake an arm's length non-brokered private placement of approximately CDN$13,000,000 of units (the "Non-Brokered Financing" and together with the "Subscription Receipt Financing", the "Financings").

In accordance with the terms of the Proposed Transaction, it is contemplated that: (i) the Company will consolidate (the "Consolidation") its common share capital at a consolidation ratio to be announced in a subsequent news release; and (ii) the holders of common shares of Flow (including those investors in the Financings) will receive one post-Consolidation common share of the Company in exchange for each outstanding common share of Flow. Following completion of the Proposed Transaction, the securityholders of Flow (including those investors in the Financings) will hold a significant majority of the outstanding post-Consolidation common shares of the Resulting Issuer.

If required, a meeting of RG One shareholders will be held prior to the closing of the Proposed Transaction to obtain shareholder approval for (i) the Proposed Transaction; (ii) the Consolidation; (iii) continuation of RG One into the federal jurisdiction of Canada; (iv) the amendment to its articles to create classes of subordinate voting shares and multiple voting shares; and (v) the changing of the name of RG One to "Flow Water Inc.", or such other name jointly agreed to by RG One and Flow.

Closing of the Proposed Transaction is subject to a number of conditions including completion of satisfactory due diligence, entering into of a definitive agreement, completion of the Subsequent Receipt Financing, approval of the Exchange and satisfaction of other closing conditions as are customary in transactions of this nature. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

A comprehensive news release with further particulars relating to the Proposed Transaction will follow in accordance with the policies of the Exchange. Readers are encouraged to review the disclosure documents which will be prepared by the Company in connection with the Proposed Transaction and which will be made available under the Company's profile on SEDAR.

RG One and Flow will provide further details in respect of the Proposed Transaction including a summary of financial information and the Financings in due course once available by way of press release. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

For more information regarding RG One Corp. please contact:
Isaac Maresky, President & Chief Executive Officer, imaresky@gcapital.ca

For more information regarding Flow Water Inc., please contact:
ICR, Inc.: Investors: Ashley.DeSimone@icrinc.com or Media: Cory.Ziskind@icrinc.com

Forward-Looking Information

This news release contains certain forward-looking statements that reflect the current views and/or expectations of management of RG One and Flow with respect to performance, business and future events, including but not limited to express or implied statements and assumptions regarding the intention of RG One and Flow to negotiate for or complete the Proposed Transaction and the Financings. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business and the industry and markets in which RG One and Flow operate. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. In particular, there is no guarantee that the parties will successfully negotiate and enter into the Definitive Agreement or complete the Proposed Transaction contemplated herein, that RG One's due diligence will be satisfactory or that RG One will obtain any required shareholder or regulatory approvals, including the listing of the Resulting Issuer Shares on an Exchange. Accordingly, readers should not place undue reliance on forward-looking statements and information, which are qualified in their entirety by this cautionary statement. Neither of RG One nor Flow undertakes any obligation to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable securities law.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. Not for distribution to U.S. newswire services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws.

All information contained in this press release with respect to Flow, its business and proposed corporate reorganization and financing was supplied by Flow for inclusion herein. RG One has not conducted due diligence on the information provided and does not assume any responsibility for the accuracy or completeness of such information.

Trading in the securities of RG One should be considered highly speculative. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/70771