RG One Corp. Provides Update Regarding Annual and Special Meeting of Shareholders and Business Combination with Flow Water Inc

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Toronto, Ontario–(Newsfile Corp. – April 30, 2021) – RG One Corp. (“RG One” or the “Company” or upon completion of the Proposed Transaction, the “Resulting Issuer“) is pleased to announce that the Company and Flow Water Inc. (“Flow“) have entered into a business combination agreement dated April 7, 2021 (the “Business Combination Agreement“), which supersedes the prior binding letter of intent between the Company and Flow, to complete a going-public transaction in Canada for Flow (the “Proposed Transaction“).

The Company would like to remind all eligible shareholders (collectively, the “Shareholders“) of the Company that the deadline to vote their common shares (“Common Shares“) in advance of the annual and special meeting (the “Meeting“) of Shareholders is 10:00 a.m. (Toronto time) on May 5, 2021. The Meeting will be held in virtual format on May 7, 2021 at 10:00 a.m. (Toronto time) to approve a number of matters related to the Proposed Transaction originally announced December 21, 2020.

Shareholders are encouraged to review and consider the information circular in connection with the Meeting (the “Circular“). A copy of the Circular, the Business Combination Agreement and all other meeting materials is available on SEDAR at www.sedar.com under the Company’s profile.

The directors and management of the Company recommend that Shareholders vote in favour of all matters put forward at the Meeting.

At the Meeting, the Company will be seeking approval of Shareholders for, among other things, (i) the consolidation of the Company’s common shares on the basis of 404.84:1 (the “Consolidation“); (ii) continuation of RG One into the federal jurisdiction of Canada (the “Continuance“); (iii) the amendment of the Company’s articles (the “Articles Amendment“) to create classes of subordinate voting shares (“Subordinate Voting Shares“) and multiple voting shares (“Multiple Voting Shares“); and (iv) the changing of the name of RG One to “Flow Beverage Corp.”, or such other name jointly agreed to by RG One and Flow (the “Name Change“). Shareholders are not required to approve the Business Combination Agreement.

Closing of the Proposed Transaction is now anticipated to occur in mid-June, 2021, subject to the receipt of applicable regulatory approvals and the satisfaction of certain other closing conditions customary in transactions of this nature, including, without limitation, approval of the Toronto Stock Exchange.

Additional Information on the Business Combination Agreement

Pursuant to the terms of the Business Combination Agreement, the Company will acquire all of the issued and outstanding Class A Shares of Flow (the “Class A Shares“) and Class B Shares of Flow (the “Class B Shares“) by way of a three-cornered amalgamation between the Company, RG One Subco Inc. (“Subco“) and Flow. As a result of the Proposed Transaction, Flow and Subco will amalgamate to form amalco (“Amalco“), with Amalco becoming a wholly-owned subsidiary of the Company. Assuming the Proposed Transaction becomes effective, Flow shareholders will receive: (i) one Multiple Voting Share (each a “Resulting Issuer Multiple Voting Share“) for each one Class A Share held; and (ii) one Subordinate Voting Share (each a “Resulting Issuer Subordinate Voting Share“) for each one Class B Share held.

Pursuant to the terms of the Business Combination Agreement, at the effective time of the Proposed Transaction (the “Effective Time“):

(a) Subco and Flow will amalgamate and continue as Amalco under the name “Flow Water Inc.” or such similar name as may be accepted by the relevant regulatory authorities and approved by the board of directors and Shareholders;

(b) each outstanding Class A Share (except for Class A Shares held by holders that have validly exercised their dissent rights) shall be exchanged for one fully paid and non-assessable Resulting Issuer Multiple Voting Share;

(c) each outstanding Class B Share (except for Class B Shares held by holders that have validly exercised their dissent rights) shall be exchanged for one fully paid and non-assessable Resulting Issuer Subordinate Voting Share;

(d) pursuant to the terms of the existing stock option plan of Flow, each outstanding stock option of Flow (each a “Flow Option“) will entitle the holder of such Flow Option to receive upon exercise of a Flow Option that number of Resulting Issuer Subordinate Voting Shares that such Flow Option holder would be entitled to had the holder of the Flow Option exercised the Flow Option immediately prior to the Effective Time;

(e) each restricted share unit of Flow outstanding immediately prior to the Effective Time shall be, and shall be deemed to be, disposed of in exchange for a Company restricted share unit issued by the Company to purchase Resulting Issuer Subordinate Voting Shares;

(f) each common share purchase warrant of Flow outstanding immediately prior to the Effective Time shall be, and shall be deemed to be, disposed of in exchange for a Company common share purchase warrant issued by the Resulting Issuer to purchase Resulting Issuer Subordinate Voting Shares;

(g) each compensation option of Flow issued in connection with the Flow subscription receipts outstanding immediately prior to the Effective Time shall be, and shall be deemed to be, disposed of in exchange for a Resulting Issuer compensation option to purchase Resulting Issuer Subordinate Voting Shares; and

(h) each outstanding share of Subco shall be exchanged for one fully paid and non-assessable share of Amalco.

Principal Conditions Precedent to the Completion of the Proposed Transaction

Pursuant to the terms of the Business Combination Agreement, the Proposed Transaction is subject to certain conditions precedent, including, among other things:

(a) receipt of all regulatory and third-party approvals, authorizations and consents as are required to be obtained by Flow or the Company in connection with the Proposed Transaction, including the approval of the Toronto Stock Exchange and any other applicable regulatory authorities;

(b) no Material Adverse Change (as such term is defined in the Business Combination Agreement) shall have occurred in the business, results of operations, assets, liabilities, financial condition or affairs of the Flow or the Company;

(c) the Shareholders shall have approved the matters set out in the Circular including the Consolidation, the Continuance, the Articles Amendment and Name Change in accordance with applicable law;

(d) the consolidation of Flow Shares on a 5:1 basis shall have been completed;

(e) there being no legal proceeding or regulatory actions or proceedings against any person to enjoin, restrict or prohibit the Proposed Transaction or which could reasonably be expected to result in a material adverse effect on the Company;

(f) there being no prohibition at law against completion of the Proposed Transaction; and

(g) the delivery of letters of resignation and release from the directors and officers of the Company.

The Consolidation

As noted above, the Consolidation ratio has been determined to be 404.84:1. The Consolidation ratio was determined based on arm’s length negotiations between the Company and Flow to attribute an aggregate value to the Common Shares of $1,000,000 based on the number of issued and outstanding shares of the Company as at the Effective Time.

In order to equalize the per-share price of the Common Shares and the per-share price of Flow’s common shares, so that the latter may be exchanged for the former on a 1:1 basis as part of the Proposed Transaction, the ratio was set at 404.84:1. The Company currently has 39,350,001 Common Shares issued and outstanding and an additional 9,721,430 Common Shares will be issued at the Effective Time, resulting in an aggregate of 49,071,431 Common Shares outstanding as at the Effective Time. The 9,721,430 are being issued pursuant to the terms of the Business Combination Agreement to eligible arm’s length finders in connection with their assistance on facilitating the Proposed Transaction.

Flow recently completed a brokered private placement of subscription receipts in the amount of $60,000,000 at a price of $1.65 per share (or $8.25 per share after the consolidation of the Flow shares on a 5:1 basis which will occur prior to the Effective Time), each subscription to be exchanged for one Resulting Issuer Subordinate Voting Share at the Effective Time. Given that the Company will have 49,071,431 Common Shares issued and outstanding as at the Effective Time and the value attributed to the Common Shares is $1,000,000, existing Shareholders of the Company will comprise a total of 121,212 of the Common Shares upon completion of the Proposed Transaction.

Upon completion of the Proposed Transaction (and assuming no exercise of any convertible securities of Flow to shares of Flow from the date of the Business Combination Agreement), the Company will have an aggregate of 6,214,569 Multiple Voting Shares and 34,111,375 Subordinate Voting Shares outstanding on a non-diluted basis. The existing Shareholders of the Company would hold 121,212 Resulting Issuer Subordinate Voting Shares of the 40,325,944 total issued and outstanding Resulting Issuer shares upon completion of the Proposed Transaction which would represent approximately 0.3% of all of the Resulting Issuer shares (and approximately 0.1% of the voting entitlement).

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. 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 complete the Proposed Transaction contemplated herein and that RG One will obtain any required shareholder or regulatory approvals. 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.

The Toronto Stock Exchange has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved of the contents of this press 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/82512