Mr. Paul Dowdall reports

FLOW BEVERAGE CORP. ENTERS INTO SUPPORT AGREEMENT WITH NFS LEASING CANADA INC. AND RI FLOW LLC

Flow Beverage Corp. and its subsidiaries entered into a support agreement with NFS Leasing Canada Inc. and RI Flow LLC whereby the ownership of Flow's business will be transitioned to the lenders or their designee through a structured foreclosure to be implemented pursuant to receivership proceedings commenced before the Ontario Superior Court of Justice (Commercial List). The lenders have agreed to provide bridge financing to the company while the restructuring transaction is implemented, which will permit the company's business to operate in the ordinary course.

The support agreement follows an exhaustive strategic review conducted under the supervision of a special committee of independent directors, which considered all alternatives in the circumstances to address the company's liquidity challenges. The special committee had previously engaged Origin Merchant Partners as financial adviser to assist with the exploration of such alternatives.

Pursuant to the support agreement, the key elements of the restructuring transaction are as follows:

• The lenders or their assignee (NewCo) will accept substantially all of the assets of the company and its subsidiaries in full satisfaction and extinguishment of their indebtedness;
• NewCo will offer employment to certain of Flow's current employees;
• Certain other existing indebtedness will remain with Flow which will result in NewCo operating the business with an improved and deleveraged balance sheet;
• The receiver will be authorized to consent to the restructuring transaction, including the foreclosure, on behalf of the company and its subsidiaries;
• Following the completion of the restructuring transaction, the company and its subsidiaries and their remaining assets and liabilities will be wound-down under the supervision of the receiver and the court pursuant to proceedings commenced under the Bankruptcy and Insolvency Act (Canada).

We seek Safe Harbor.