Flow Beverage Corp. — Interim / Quarterly Report 2021

Mar 2, 2021

RG ONE CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS THREE AND SIX MONTHS ENDED DECEMBER 31, 2020

RG One Corp. Management's Discussion and Analysis For the Three and Six Months Ended December 31, 2020 Discussion dated: February 28, 2021

Introduction

The following management’s discussion and analysis (“ MD&A ”) of the financial condition and results of the operations of RG One Corp. (“ RG One ” or the “ Company ”) constitutes management’s review of the factors that affected the Company’s financial and operating performance for the three and six months ended December 31, 2020. This MD&A was written to comply with the requirements of National Instrument 51-102 – Continuous Disclosure Obligations. This discussion should be read in conjunction with the unaudited condensed interim financial statements for the three and six months ended December 31, 2020, and the audited annual June 30, 2020 financial statements together with the notes thereto. Results are reported in Canadian dollars, unless otherwise noted. The Company’s financial statements and the financial information contained in this MD&A are prepared in accordance with International Financial Reporting Standards (“ IFRS ”) as issued by the International Accounting Standards Board (“ IASB ”) and interpretations of the IFRS Interpretations Committee. Information contained herein is presented as of February 28, 2021, unless otherwise indicated.

Further information about the Company and its operations can be obtained from the offices of the Company or from www.sedar.com .

Cautionary Note Regarding Forward-Looking Information

This MD&A contains certain forward-looking information and forward-looking statements, as defined in applicable securities laws (collectively referred to herein as “ forward-looking statements ”). These statements relate to future events or the Company’s future performance. All statements other than statements of historical fact are forwardlooking statements. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “continues”, “forecasts”, “projects”, “predicts”, “intends”, “anticipates” or “believes”, or variations of, or the negatives of, such words and phrases, or statements that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in such forward-looking statements. The forwardlooking statements in this MD&A speak only as of the date of this MD&A or as of the date specified in such statement. The following table outlines certain significant forward-looking statements contained in this MD&A and provides the material assumptions used to develop such forward-looking statements and material risk factors that could cause actual results to differ materially from the forward- looking statements.

Forward-looking statements	Assumptions	Risk factors
The Company’s ability to meet its working capital needs at the current level for the twelve month period ending December 31, 2021.	The operating activities of the Company for the twelve month period ending December 31, 2021, and the costs associated therewith, will be consistent with the Company’s current expectations; debt and equity markets, exchange and interest rates and other applicable economic conditions are favourable to the Company.	Changes in debt and equity markets; timing and availability of external financing on acceptable terms; increases in costs; regulatory compliance and changes in regulatory compliance and other local legislation and regulation; interest rate and exchange rate fluctuations; changes in economic conditions.

Inherent in forward-looking statements are risks, uncertainties and other factors beyond the Company’s ability to predict or control. Please also make reference to those risk factors referenced in the “Risk Factors” section below. Readers are cautioned that the above chart does not contain an exhaustive list of the factors or assumptions that may affect the forward-looking statements, and that the assumptions underlying such statements may prove to be incorrect. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this MD&A.

RG One Corp. Management's Discussion and Analysis For the Three and Six Months Ended December 31, 2020 Discussion dated: February 28, 2021

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from any of its future results, performance or achievements expressed or implied by forward-looking statements. All forward-looking statements herein are qualified by this cautionary statement. Accordingly, readers should not place undue reliance on forwardlooking statements. The Company undertakes no obligation to update publicly or otherwise revise any forwardlooking statements whether as a result of new information or future events or otherwise, except as may be required by law. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements, unless required by law.

Description of Business

The Company was incorporated under the Business Corporations Act (Ontario) on September 26, 2014 and to date there have been limited operations. The registered office of the Company is located at 25 Adelaide Street East, Suite 1900, Toronto, Ontario, M5C 3A1, Canada. The Company's financial year end is June 30.

The Company was initially classified as a Capital Pool Company as defined in Policy 2.4 of the TSX Venture Exchange (the “Exchange”). On February 17, 2015, the Company filed a prospectus and applied to the Exchange to list its common shares under the TSX Venture Capital Pool Company Program. The Company refiled a final prospectus dated August 20, 2015 and an amendment to the final prospectus dated November 18, 2015. On February 20, 2016, the prospectus offering lapsed without closing and the Company withdrew its application to list on the Exchange and is no longer classified as a Capital Pool Company.

The Company’s principal business is to identify and evaluate potential acquisitions of businesses. The Company’s continuing operations, as intended, are dependent on its ability to secure equity financing with which it intends to identify, evaluate and negotiate an acquisition or business, or an interest therein.

Highlights

On November 15, 2019, 994,000 warrants with an exercise price of $0.01 expired unexercised.

RG One Corp. Management's Discussion and Analysis For the Three and Six Months Ended December 31, 2020 Discussion dated: February 28, 2021

Summary of Quarterly Results

Period	Revenue ($)	Profit or (Loss)	Profit or (Loss)	Total assets ($)
		Total ($)	Basic and diluted loss per share(1) ($)
October 1, 2020 to December 31, 2020	Nil	(21,620)	(0.00)	28,025
July 1, 2020 to September 30, 2020	Nil	(27,839)	(0.00)	37,062
April 1, 2020 to June 30, 2020	Nil	(20,023)	(0.00)	45,899
January 1, 2020 to March 31, 2020	Nil	(19,576)	(0.00)	50,898
October 1, 2019 to December 31, 2019	Nil	(35,800)	(0.00)	54,849
July 1, 2019 to September 30, 2019	Nil	(19,225)	(0.00)	74,129
April 1, 2019 to June 30, 2019	Nil	(19,474)	(0.00)	77,588
January 1, 2019 to March 31, 2019	Nil	(20,152)	(0.00)	82,693
October 1, 2018 to December 31, 2018	Nil	(25,610)	(0.00)	90,709

1. Per share amounts are rounded to the nearest cent, therefore aggregating quarterly amounts may not reconcile to year-to-date per share amounts.

Three Months Ended December 31, 2020 vs Three Months Ended December 31, 2019

The three months ended December 31, 2020 reported a loss of $21,620 compared to $35,800 for the three months ended December 31, 2019. The reported loss for the three months ended December 31, 2020 consists of professional fees of $Nil (three months ended December 31, 2019 - $8,990), consulting charges of $15,750 (three months ended December 31, 2019 - $15,750) and office and administrative of $5,870 (three months ended December 31, 2019 - $11,060).

Six Months Ended December 31, 2020 vs Six Months Ended December 31, 2019

The six months ended December 31, 2020 reported a loss of $49,459 compared to $55,025 for the six months ended December 31, 2019. The reported loss for the six months ended December 31, 2020 consists of professional fees of $5,187 six months ended December 31, 2019 - $8,990), consulting charges of $31,500 six months ended December 31, 2019 - $31,500) and general and administrative of $12,772 (six months ended December 31, 2019 - $14,535)

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RG One Corp. Management's Discussion and Analysis For the Three and Six Months Ended December 31, 2020 Discussion dated: February 28, 2021

Liquidity

At December 31, 2020, the Company had negative working capital of $122,632 (June 30, 2020 - $73,173). The Company manages its capital structure and makes adjustments to it, based on available funds to the Company. Management believes the Company’s working capital is sufficient for the Company to meet its ongoing obligations.

Off-Balance Sheet Arrangements

As of the date of this filing, the Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of the Company including, without limitation, such considerations as liquidity and capital resources that have not previously been discussed.

Proposed Transaction

On December 21, 2020, the Company announced that it had entered into a ltter of intent (the "LOI") with Flow Water Inc. ("Flow") which outlines the general terms and conditions of a proposed transaction (the "Proposed Transaction"). In accordance with the terms of the LOI, it is anticipated that the Company will establish a whollyowned 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-cornered 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 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.

RG One Corp. Management's Discussion and Analysis For the Three and Six Months Ended December 31, 2020 Discussion dated: February 28, 2021

Related Party Transactions

Related parties include the Board of Directors, close family members and enterprises which are controlled by these individuals as well as certain persons performing similar functions.

Names	Three Months Ended December 31, 2020 ($)	Three Months Ended December 31, 2019 ($)
Consulting fees charged by companies controlled by officers and directors of the Company	15,750	15,750
Names	Six Months Ended December 31, 2020 ($)	Six Months Ended December 31, 2019 ($)
Consulting fees charged by companies controlled by officers and directors of the Company	31,500	31,500

During the three and six months ended December 31, 2020, consulting fees of $15,750 and $31,500 respectively (three and six months ended December 31, 2019 - $15,750 and $31,500 respectively) were charged by companies controlled by directors of the Company. As at December 31, 2020, $142,933 (June 30, 2020 - $111,433) is included in accounts payable and accrued liabilities with respect to the fees. These amounts are unsecured, non-interest bearing, with no fixed terms of repayment.

None of the Company’s major shareholders have different voting rights other than holders of the Company’s common shares.

Subsequent event

In February 2021, the Company completed a non-brokered private placement of 20,000,000 common shares for gross proceeds of $100,000.

Risk Factors

An investment in the securities of the Company is highly speculative and involves numerous and significant risks. Such investment should be undertaken only by investors whose financial resources are sufficient to enable them to assume these risks and who have no need for immediate liquidity in their investment. Prospective investors should carefully consider the risk factors that have affected, and which in the future are reasonably expected to affect, the Company and its financial position.

Investment in the Company must be regarded as highly speculative due to the proposed nature of the Company’s business and its present stage of development. The Company was only recently incorporated and has no active business or assets other than cash. It does not have a history of earnings, nor has it paid any dividends and will not generate earnings or pay dividends until at least after the completion of a transformational business transaction which is now uncertain. The investment in the Company is only suitable to investors who are prepared to rely entirely on the directors and management of the Company and can afford to risk the loss of their entire investment. The directors and officers of the Company will only devote part of their time and attention to the affairs of the Company and there are potential conflicts of interest to which some of the directors and officers of the Company will be subject in connection with the operations of the Company. There can be no assurance that an active and liquid market for the Company’s Common Shares will develop and an investor may find it difficult to resell the Common Shares. The Company has only limited funds with which to identify and evaluate possible transformational business transactions and there can be no assurance that the Company will be able to identify or complete a suitable transformational business transaction.

RG One Corp. Management's Discussion and Analysis For the Three and Six Months Ended December 31, 2020 Discussion dated: February 28, 2021

Future Changes in Accounting Policies

The following standards which may impact the Company have been issued but are not yet effective:

Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)

The IASB has published Classification of Liabilities as Current or Non-Current (Amendments to IAS 1) which clarifies the guidance on whether a liability should be classified as either current or non-current. The amendments:

• clarify that the classification of liabilities as current or non-current should only be based on rights that are in place "at the end of the reporting period"

• clarify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability

• make clear that settlement includes transfers to the counterparty of cash, equity instruments, other assets or services that result in extinguishment of the liability.

This amendment is effective for annual periods beginning on or after January 1, 2022. There is currently a proposal in place to extend effective date for annual periods beginning on or after January 1, 2023. Earlier application is permitted.

There are no other relevant IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company.

Financial Instruments

The Company's financial instruments consist of cash and accounts payable and accrued liabilities. Cash is measured at amortized cost. Accounts payable and accrued liabilities approximate fair value due to their relatively short term maturity. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

Capital Management

The Company's objective when managing capital is to maintain its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders.

The Company includes equity, comprised of share capital, warrants and deficit, in the definition of capital.

The Company's primary objective with respect to its capital management is to ensure that it has sufficient cash resources to fund the identification and evaluation of potential acquisitions. To secure the additional capital necessary to pursue these plans, the Company may attempt to raise additional funds through the issuance of equity or by securing strategic partners. The outcome of these activities is uncertain.

Outlook

For the immediate future, the Company intends to evaluate direct or indirect acquisitions of assets to complete a Qualifying Transaction. The Company continues to monitor its spending and will amend its plans based on business opportunities that may arise in the future.

Share Capital – Outstanding Share Data

As of the date of this MD&A, the Company had 39,350,001 issued and outstanding common shares.

RG One Corp. Management's Discussion and Analysis For the Three and Six Months Ended December 31, 2020 Discussion dated: February 28, 2021

Additional Disclosure for Venture Issuers without Significant Revenue

Consulting fees are comprised of the following:

Names	Three Months Ended December 31, 2020 ($)	Three Months Ended December 31, 2019 ($)
Fees charged by companies controlled by directors	15,750	15,750
Names	Six Months Ended December 31, 2020 ($)	Six Months Ended December 31, 2019 ($)
Fees charged by companies controlled by directors	31,500	31,500