Condensed consolidated interim financial statements of

Flow Beverage Corp.

For the three and six months ended April 30, 2025 and 2024 (unaudited) (expressed in Canadian dollars)

(unaudited) (expressed in Canadian dollars)

See Basis of preparation and going concern – Note 2

Flow Beverage Corp.
Condensed consolidated interim statements of financial position

As at	Notes	April 30, 2025 $	October 31, 2024 $
ASSETS
Current assets
Cash		732,106	8,607,678
Trade and other receivables	3	7,452,784	7,305,214
Inventories	4	5,962,817	6,562,300
Prepaid expenses and deposits	5	5,354,143	11,078,658
		19,501,850	33,553,850
Non-current assets
Other receivables		301,167	903,500
Right-of-use assets, net	6	38,622,934	32,857,094
Property and equipment, net	7	10,019,134	9,869,435
Intangible assets, net		418,791	447,946
TOTAL ASSETS		68,863,876	77,631,825
LIABILITIES
Current liabilities
Trade and other payables		26,070,465	27,393,147
Deferred revenue	14	4,290,974	4,209,059
Lease obligations	6	3,800,593	3,465,830
Borrowings	8	45,743,382	24,035,653
Convertible debt	9	4,794,603	—
		84,700,017	59,103,689
Non-current liabilities
Lease obligations	6	33,764,729	27,869,162
Borrowings	8	2,782,998	22,888,508
Convertible debt	9	—	2,575,702
Other non-current liabilities		2,674	25,589
		121,250,418	112,462,650
SHAREHOLDERS' EQUITY
Share capital	10	107,983,077	106,908,904
Warrants	11	2,497,675	2,465,596
Contributed surplus	12	179,923,668	179,898,478
Foreign currency translation reserve		1,464,551	1,283,244
Deficit		(344,255,513)	(325,387,047)
		(52,386,542)	(34,830,825)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		68,863,876	77,631,825
Contingencies	15
Subsequent events	19

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Signed "Nicholas Reichenbach", Director

Signed "Stephen A. Smith", Director

(unaudited) (expressed in Canadian dollars, except number of shares)

Flow Beverage Corp.
Condensed consolidated interim statements of loss and comprehensive loss
(unaudited) (expressed in Canadian dollars, except number of shares)

	Three months ended April 30			Six months ended April 30
	Notes	2025 $	2024 $	2025 $	2024 $
Net revenue	14	10,040,460	12,054,530	21,478,684	20,322,339
Cost of revenue	4	7,758,626	8,712,814	16,771,050	18,238,142
Gross profit		2,281,834	3,341,716	4,707,634	2,084,197
Operating expenses
Sales and marketing		430,070	1,554,983	831,369	2,871,964
General and administrative		2,940,739	2,900,732	5,392,923	7,783,128
Salaries and benefits		2,799,007	2,640,987	5,448,149	4,944,157
Amortization and depreciation	6, 7	400,011	422,224	808,724	2,217,433
Share-based compensation	12	(24,828)	510,845	975,228	2,052,641
		6,544,999	8,029,771	13,456,393	19,869,323
Loss before the following		(4,263,165)	(4,688,055)	(8,748,759)	(17,785,126)
Other income		(15,762)	(838)	(22,441)	(47,096)
Finance expense, net	8, 17	3,025,066	2,126,601	5,944,954	4,801,136
Foreign exchange (gain) loss		(197,339)	(947)	163,057	92,484
Restructuring and other costs	18	202,678	298,640	424,021	395,741
Gain on option revaluation	12	(11,571)	(83,018)	(22,914)	(57,770)
Loss (gain) on debt modification and other	8	3,195,789	—	3,633,030	(576,309)
Net loss for the period		(10,462,026)	(7,028,493)	(18,868,466)	(22,393,312)
Other comprehensive income
Exchange gain on translation of foreign operations		121,783	339,234	181,307	1,293,543
Comprehensive loss for the period		(10,340,243)	(6,689,259)	(18,687,159)	(21,099,769)
Loss per share – basic and diluted	13	$ (0.12)	$ (0.10)	$ (0.22)	$ (0.33)
Weighted average number of shares outstanding – basic and diluted	13	86,436,195	69,815,209	84,401,734	63,531,532

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

(unaudited) (expressed in Canadian dollars, except number of shares)

Flow Beverage Corp.
Condensed consolidated interim statements of changes in shareholders' equity
For the six months ended April 30, 2025, and 2024

	Share capital		Warrants $	Contributed surplus $	Foreign currency translation reserve $	Deficit $	Total $
	#	$
Balance as at October 31, 2023	57,051,539	100,397,703	1,803,990	179,131,835	91,133	(287,135,733)	(5,711,072)
Share issuance – Tranche 1 (Note 10,12)	6,473,000	1,800,871	—	—	—	—	1,800,871
Share issuance – Tranche 2 (Note 10,12)	5,577,000	1,551,584	—	—	—	—	1,551,584
Shares issued for advisory agreements (Note 12)	1,117,711	312,100	—	—	—	—	312,100
Share issuance on RSU release (Note 10,12)	1,673,586	517,962		(517,962)	—	—	—
Warrants issued (Note 11)	—	—	661,606	—	—	—	661,606
Share-based compensation (Note 12)	—	—	—	2,052,641	—	—	2,052,641
Comprehensive loss	—	—	—	—	1,293,543	(22,393,312)	(21,099,769)
Balance as at April 30, 2024	71,892,836	104,580,220	2,465,596	180,666,514	1,384,676	(309,529,045)	(20,432,039)
Balance as at October 31, 2024	80,794,527	106,908,904	2,465,596	179,898,478	1,283,244	(325,387,047)	(34,830,825)
Shares issued for advisory agreements (Note 10,12)	532,560	77,417	—	—	—	—	77,417
RSUs issued for advisory agreements (Note 12)	—	—	—	4,666	—	—	4,666
Share issuance on RSU release (Note 10,12)	5,385,140	996,756	—	(996,756)	—	—	—
Conversion feature	—	—	—	42,052	—	—	42,052
Warrants issued (Note 11)	—	—	32,079		—	—	32,079
Share-based compensation (Note 12)	—	—	—	975,228	—	—	975,228
Comprehensive loss	—	—	—	—	181,307	(18,868,466)	(18,687,159)
Balance as at April 30, 2025	86,712,227	107,983,077	2,497,675	179,923,668	1,464,551	(344,255,513)	(52,386,542)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Flow Beverage Corp.

Condensed consolidated interim statements of cash flows

(unaudited) (expressed in Canadian dollars)

For the six months ended April 30	2025	2024
	$	$
Net loss for the period	(18,868,466)	(22,393,312)
Adjustments to reconcile net loss to net cash used in operating activities
Unrealized foreign exchange loss	312,499	743,621
Amortization and depreciation	2,216,293	2,469,127
Share-based compensation	975,228	2,052,641
Finance expense, net	5,944,954	4,801,136
Loss on sale of equipment	—	36,449
Loss on debt modification and other	3,633,030	—
Gain on option revaluation	(22,914)	—
Other non-cash items	50,000	(1,040,210)
	(5,759,376)	(13,330,548)
Changes in non-cash working capital items:
Trade and other receivables	(127,740)	1,707,405
Prepaid expenses	714,593	(2,561,081)
Inventories	907,799	3,360,240
Trade and other payables	2,198,807	(1,941,798)
Deferred revenue	87,078	3,105,959
Cash flows used in operating activities	(1,978,839)	(9,659,823)
Purchase of equipment	(577,169)	(540,635)
Proceeds from sale of equipment	—	54,984
Cash flows used in investing activities	(577,169)	(485,651)
Proceeds from borrowings	2,163,740	7,238,800
Repayment of borrowings	(1,567,426)	(2,622,279)
Repayment of interest	(2,981,448)	—
Proceeds from issuance of common shares	—	3,352,454
Payment of lease obligations	(2,934,430)	(2,622,489)
Cash flows (used in) provided by financing activities	(5,319,564)	5,346,486
Net change in cash during the period	(7,875,572)	(4,798,988)
Cash, beginning of the period	8,607,678	6,494,733
Cash, end of the period	732,106	1,695,745

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

FLOW BEVERAGE CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three and six months ended April 30, 2025 and 2024

(unaudited) (expressed in Canadian dollars, except share amounts)

1 Nature of business

Flow Beverage Corp. (the "Company" or "Flow"), formerly RG One Corp. ("RG One") up to the completion of the amalgamation, as defined below, is engaged in the business of extraction, value-added packaging and sale of water in Canada and the United States.

The Company was incorporated on October 30, 2014, under the Canada Business Corporations Act ("CBCA"). The Company's registered office is 155 Industrial Parkway South, Unit 7-10, Aurora, Ontario, Canada, L4G 3G6.

On April 7, 2021, Flow Water Inc. ("Flow Water") entered into a Business Combination Agreement with RG One and RG One Subco Inc. ("RG One Subco"), a wholly owned subsidiary of RG One formed solely for the purpose of completing the amalgamation, pursuant to which Flow Water and RG One Subco agreed to amalgamate in accordance with the provisions of the CBCA (the "Amalgamation").

2 Basis of preparation

Statement of compliance

These unaudited condensed consolidated interim financial statements ("Financial Statements") have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting. The disclosures contained in these Financial Statements do not include all of the requirements of International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") for annual financial statements. These Financial Statements should be read in conjunction with the annual consolidated financial statements for the year ended October 31, 2024, which have been prepared in accordance with IFRS. These Financial Statements are based on accounting policies as described in Note 3 of the 2024 annual consolidated financial statements, except for the adoptions of new standards effective November 1, 2024.

These Financial Statements were approved and authorized for issuance by the Board of Directors of the Company on June 16, 2025.

The Financial Statements include the accounts of the Company and its wholly owned subsidiaries as of April 30, 2025: Flow Water Inc. (Canada), Flow Beverages Inc. (US), 2446692 Ontario Limited (Canada), and Flow Glow Beverages Inc. (Canada).

Going concern

The Company's Financial Statements were prepared on a going concern basis. The going concern basis assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The Financial Statements do not include any adjustments to the amounts and classification of assets and liabilities that would be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.

As at April 30, 2025, the Company has an accumulated deficit of $344.3 million, and for the six months ended April 30, 2025, a net loss of $18.9 million and cash flows used in operating activities of $2.0 million. Whether, and when, the Company can attain profitability and positive cash flows from operations is subject to material uncertainty. The application of the going concern assumption is dependent upon the Company's ability to generate future profitable operations, obtaining financing and maintaining compliance with debt covenants. The Company will also seek to improve its results from operations and cash flows by prioritizing higher margin channels and reducing operating costs by streamlining its operations and support functions. The Company will need to raise additional capital to fund its planned operations and meet its obligations. While the Company has been successful in obtaining financing to date and believes it will be able to obtain sufficient funds in the future and ultimately achieve profitability and positive cash flows from operations, there can be no assurance that the Company will achieve profitability and be able to do so on terms favourable for the Company. The above events and conditions indicate there is a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern.

Use of estimates and judgments

The preparation of these Financial Statements in conformity with IFRS requires management to make estimates, judgments and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities as at the date of the Financial Statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates.

FLOW BEVERAGE CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three and six months ended April 30, 2025 and 2024

(unaudited) (expressed in Canadian dollars, except share amounts)

Estimates are based on management's best knowledge of current events and actions the Company may undertake in the future. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Co-packing revenue

The Company enters into co-packing agreements with customers. The Company is required to make estimates regarding the total number of units to be delivered under the contract. The Company also makes estimates regarding the total consideration to which the Company expects to be entitled in exchange for the services provided. The total consideration to which the Company expects to be entitled can vary based on estimates regarding penalties for minimum purchase commitments, total expected units to be delivered and pricing discounts. Revenue is recognized to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

New standards, amendments and interpretations adopted by the Company

International Accounting Standard 1, Presentation of Financial Statements ("IAS 1")

In January 2020, the IASB issued Classification of Liabilities as Current or Non-current (Amendments to IAS 1). The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the consolidated statements of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity.

The amendments are effective for annual periods beginning on or after January 1, 2024. The amendments did not have an impact on the Financial Statements.

New standards, amendments and interpretations not yet adopted by the Company

Amendments to IFRS 9 and IFRS 7, Classification and Measurement of Financial Instruments

In May 2024, the IASB issued amendments to IFRS 9, Financial Instruments ("IFRS 9") and IFRS 7, Financial Instruments: Disclosures ("IFRS 7"), relating to the classification and measurement requirements of financial instruments recognized within those standards. These amendments clarify that a financial liability is to be derecognized on the "settlement date" and introduces an accounting policy to derecognize financial liabilities settled through an electronic payment system before the settlement date if certain conditions are met; clarify how to assess the contractual cash flow characteristics of financial assets that include "environmental, social and governance"- linked features and other similar contingent features; clarify the treatment of non-recourse assets and contractually linked instruments; and require additional disclosures for financial assets and liabilities with contractual terms that reference a contingent event and equity instruments classified at fair value through other comprehensive income. These amendments will be effective for annual periods beginning on or after January 1, 2026 and will be applied retrospectively with an adjustment to opening retained earnings. Prior periods will not be required to be restated and can only be restated without using hindsight. Entities can early adopt the amendments that relate to the classification of financial assets plus the related disclosures and can apply other amendments subsequently. The Company does not expect material impacts from these amendments on its annual Financial Statements.

Issuance of IFRS 18, Presentation and Disclosure in Financial Statements ("IFRS 18")

In April 2024, the IASB issued IFRS 18, which will replace IAS 1. The issuance introduces new categories and subtotals in the consolidated statements of loss and comprehensive loss, requires disclosure of management-defined performance measures, and includes new requirements for the location, aggregation and disaggregation of financial information. The new standard will require the classification of all income and expenses within the consolidated statements of loss and comprehensive loss into one of five categories: operating, investing, financing, income taxes and discontinued operations. In addition, entities will be required to present subtotals and totals for "operating profit or loss", "profit or loss before financing and incomes taxes" and "profit or loss"; introduce the concept of a management-defined performance measure ("MPM"), which it defines as a subtotal of income and expenses that an entity uses in public communications outside financial statements, to communicate management's view of an aspect of the financial performance of the entity. The standard will require the disclosure of information about an entity's MPMs, including how the measure is calculated and reconciled to the most comparable subtotal specified by IFRS; and introduce a principle for determining the location of information based on identified "roles" of the primary financial statements and the notes as well as require aggregation and disaggregation of information with reference to similar and dissimilar

FLOW BEVERAGE CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three and six months ended April 30, 2025 and 2024
(unaudited) (expressed in Canadian dollars, except share amounts)

characteristics. IFRS 18 will be effective for annual periods beginning on or after January 1, 2027, and will apply retrospectively. Early adoption is permitted and must be disclosed. The Company is in the process of evaluating the impact of this standard on its annual Financial Statements.

3 Trade and other receivables

	April 30, 2025	October 31, 2024
	$	$
Trade receivables, net	4,543,254	3,937,102
Accrued and other receivables	2,563,602	2,336,590
Harmonized sales tax receivables	345,928	1,031,522
Total	7,452,784	7,305,214

4 Inventories

	April 30, 2025	October 31, 2024
	$	$
Finished goods	3,146,264	2,623,317
Raw materials	3,690,557	4,551,927
	6,836,821	7,175,243
Allowance	(874,004)	(612,943)
Total	5,962,817	6,562,300

The amount of inventories recognized as cost of revenue during the three and six months ended April 30, 2025 is $7,088,378 and $14,396,773 (2024 – $6,745,581 and $13,294,875). As at April 30, 2025, the Company recognized an inventory provision of $874,004 (October 31, 2024 – $612,943). In addition, the Company recorded $114,051 (2024 – $605,430) of inventory write-downs during the quarter, which are recognized within cost of revenue on the condensed consolidated interim statements of loss and comprehensive loss.

The ending inventory balance as at April 30, 2025, includes $459,372 (2024 – $nil) related to co-pack inventory for which possession has not yet transferred to the customer.

5 Prepaid expenses and deposits

Prepaid expenses primarily consist of deferred amounts related to lease deposits and sponsorship agreements. As at April 30, 2025, prepaid and deferred expenses total $1,800,815 (October 31, 2024 – $1,763,464).

As at April 30, 2025, the Company recorded deposits of $3,553,328 primarily related to the purchase and installation of equipment at the Aurora facility (October 31, 2024 – $9,315,194).

FLOW BEVERAGE CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three and six months ended April 30, 2025 and 2024
(unaudited) (expressed in Canadian dollars, except share amounts)

6 Right-of-use assets and lease obligations

The Company's right-of-use assets by asset class are as follows:

Cost	Equipment $	Plant and warehouse $	Vehicles $	Premises $	Total $
Balance, October 31, 2023	—	—	294,635	547,681	842,316
Additions	6,299,122	20,249,660	—	—	26,548,782
Completed leases	—	(1,403,175)	(294,635)	(547,681)	(2,245,491)
Transfers from assets held for sale	9,155,262	6,665,030	—	—	15,820,292
Balance, October 31, 2024	15,454,384	25,511,515	—	—	40,965,899
Additions	7,760,165	—	116,573	—	7,876,738
Balance, April 30, 2025	23,214,549	25,511,515	116,573	—	48,842,637
Accumulated amortization
Balance, October 31, 2023	—	—	250,585	475,094	725,679
Completed leases	—	(1,403,175)	(294,636)	(547,681)	(2,245,492)
Amortization	1,683,435	1,350,487	44,051	72,587	3,150,560
Transfers from assets held for sale	2,986,810	3,491,248	—	—	6,478,058
Balance, October 31, 2024	4,670,245	3,438,560	—	—	8,108,805
Amortization	1,063,856	1,042,637	4,405	—	2,110,898
Balance, April 30, 2025	5,734,101	4,481,197	4,405	—	10,219,703
Net book value
Balance, October 31, 2024	10,784,139	22,072,955	—	—	32,857,094
Balance, April 30, 2025	17,480,448	21,030,318	112,168	—	38,622,934

The Company's lease obligations are as follows:

	April 30, 2025	October 31, 2024
	$	$
Balance – Beginning of period	31,334,992	136,784
Additions	7,876,738	26,548,782
Interest accretion	1,288,022	1,373,887
Lease payments	(2,934,430)	(3,309,357)
Transfers out of held for sale	—	6,584,896
Balance – End of period	37,565,322	31,334,992
Current	3,800,593	3,465,830
Non-current	33,764,729	27,869,162

7 Property and equipment

The Company's property and equipment by asset class are as follows:

Cost	Land $	Equipment $	Furniture and fixtures $	Leasehold improvements $	Construction in progress $	Total $
Balance, October 31, 2023	5,106,796	515,702	63,954	222,066	—	5,908,516
Additions	—	601,559	55,905	160,935	138,656	957,055
Disposals	—	(86,476)	(28,647)	(211,766)	—	(326,889)
Transfers from assets held for sale	—	6,420,737	4,633	1,756,220	—	8,181,590
Effects of foreign exchange	11,872	(1,019)	—	—	—	10,853
Balance, October 31, 2024	5,118,668	7,450,503	95,845	1,927,455	138,656	14,731,127
Additions	—	83,915	—	14,500	478,754	577,169
Effects of foreign exchange	(27,437)	(1,665)	—	—	—	(29,102)
Balance, April 30, 2025	5,091,231	7,532,753	95,845	1,941,955	617,410	15,279,194
Accumulated depreciation
Balance, October 31, 2023	—	51,886	47,235	92,690	—	191,811
Disposals	—	(68,647)	(28,647)	(209,888)	—	(307,182)
Depreciation	—	1,316,633	16,920	235,811	—	1,569,364
Transfers from assets held for sale	—	3,020,809	2,534	384,904	—	3,408,247
Effects of foreign exchange	—	(548)	—	—	—	(548)
Balance, October 31, 2024	—	4,320,133	38,042	503,517	—	4,861,692
Depreciation	—	337,986	5,780	56,258	—	400,024
Effects of foreign exchange	—	(1,656)	—	—	—	(1,656)
Balance, April 30, 2025	—	4,656,463	43,822	559,775	—	5,260,060
Net book value
Balance, October 31, 2024	5,118,668	3,130,370	57,803	1,423,938	138,656	9,869,435
Balance, April 30, 2025	5,091,231	2,876,290	52,023	1,382,180	617,410	10,019,134

8 Borrowings
The following table presents the borrowings for the Company:

	April 30, 2025	October 31, 2024
	$	$
Seawright Mineral Springs Loan [a]	26,095	34,838
Debt Round [b]	11,174,001	5,604,684
NFS Leasing Canada Ltd. – Senior Term Loan [c]	12,207,009	802,617
NFS Leasing Canada Ltd. – Delayed Draw Term Loan [c]	4,344,738	394,156
NFS Leasing Canada Ltd. – Second Amendment Term Loan [c]	7,288,458	4,493,250
NFS Leasing Canada Ltd. – Interim Financing Agreement [c]	1,957,498	7,532,950
NFS Leasing Canada Ltd. – Bridge Short-Term Note [c]	—	997,500
NFS Leasing Canada Ltd. – Amended and restated Term Note [c]	443,266	—
RI Flow LLC - Short-Term Loan [d]	4,302,317	4,175,658
Export Development Canada Loan [e]	4,000,000	—
Total current	45,743,382	24,035,653
Seawright Mineral Springs Loan [a]	1,773,583	1,791,340
Debt Round [b]	—	4,883,697
NFS Leasing Canada Ltd. – Senior Term Loan [c]	—	12,009,954
NFS Leasing Canada Ltd. – Delayed Draw Term Loan [c]	—	4,203,517
NFS Leasing Canada Ltd. – Amended and restated Term Note [c]	1,009,415	—
Total non-current	2,782,998	22,888,508
Total	48,526,380	46,924,161

[a] Seawright Mineral Springs Loan

In April 2019, the Company acquired a 144-acre spring in Virginia from Seawright Mineral Springs Limited ("Seawright"). The Company obtained financing in 2019 with Seawright for the purchase of the spring. The loan accrues interest at 6.25%, and matured on October 31, 2023 with a principal balance of USD $1,440,000 (CAD $1,913,184) with repayment terms consisting of 60 consecutive monthly blended instalments of interest and principal in the amount of USD $9,497 (CAD $12,590) beginning in June 2019. The loan is secured by a first lien on the spring and land.

Amendment to Seawright Mineral Springs Loan

In September 2023, the Company amended the terms of the Seawright Mineral Springs Loan ("Seawright Loan"). The amendments include an extension of the maturity date from October 1, 2023 to October 1, 2026 and an increase to the interest rate from 6.25% per annum to 9.25% per annum with repayment terms consisting of 36 consecutive monthly blended instalments of interest and principal in the amount of USD $11,440 (CAD $15,920).

As part of the Seawright Loan amendments, the Company issued 180,187 subordinate voting shares ("SVS") purchase warrants, each warrant providing Seawright with the option or right to purchase one SVS at an exercise price of USD $0.36 (CAD $0.50) until September 30, 2028.

The loan is recorded at amortized cost and accounted for using the effective interest rate method. During the three and six months ended April 30, 2025, the Company incurred USD $29,095 (CAD $42,882) and USD $59,277 (CAD $84,238) of interest expense in connection with the amended Seawright Loan (2024 – USD $29,805 (CAD $40,838) and USD $49,945 (CAD $67,256)).

FLOW BEVERAGE CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three and six months ended April 30, 2025 and 2024
(unaudited) (expressed in Canadian dollars, except share amounts)

[b] Debt Round

During the year ended October 31, 2020, the Company issued debt ("2020 Debt") to individual holders along with the issuance of warrants. The Company issued $9,476,000 of debt and incurred cash transaction costs of $48,270 and finder's fees of $343,200, which were settled through the issuance of stock options. The warrants gave the warrant holder the right to purchase SVS. The Company issued 189,520 warrants at an exercise price of $6.75 per warrant and 189,520 warrants at an exercise price of $10.00 per warrant for up to two years from the issuance date. These warrants expired in October 2022. The debt was accounted for at amortized cost using the effective interest rate method. The effective interest rate applicable to this loan was approximately 13%. The debt accrued interest at a rate of 10% and matured in February 2022.

On February 28, 2022, the Company issued $9,476,000 in principal amount of debt ("2022 Debt") and issued 8,536,942 warrants ("Series C Warrants") in settlement of the 2020 Debt on maturity to the 2020 Debt holders.

The 2022 Debt had an initial maturity date of February 29, 2024 and accrued interest at 12% per annum, payable monthly. In addition, the 2022 Debt included an interest rate adjustment clause (the "Interest Adjustment") whereby the Company was obligated to pay additional interest, on a non-compounding basis, at the rate of 12% per annum at maturity of the 2022 Debt in the event the closing price of the Company's SVS is not equal to or greater than $1.28 for any 10 consecutive trading days between March 1, 2022 and February 29, 2024, and provided that the Series C Warrants remained unexercised.

The Series C Warrants have an exercise price of $1.11 with an expiration date of February 28, 2025. The expiry date of the Series C Warrants may be accelerated by the Company if, after the issue date, the volume weighted average price of the Company's SVS is at a price equal to or greater than $1.28 for a period of 10 consecutive trading days. The new expiry date would be the date that is not less than 20 days following the date upon which the Company issues notices to all holders of the Series C Warrants.

The Company determined that the Interest Adjustment met the definition of an embedded derivative that was required to be separated as it was not closely related to the host debt instrument. Therefore, the Interest Adjustment was separated from the 2022 Debt and was accounted for as a financial liability measured at fair value through profit and loss.

The 2022 Debt was classified as a financial liability at amortized cost and was accounted for using the effective interest rate method. The Series C Warrants were classified as equity and not remeasured subsequent to initial recognition.

There were no transaction costs incurred.

2022 Debt Amendment

In September 2023, the Company amended the 2022 Debt such that the maturity date was extended to February 1, 2026 and the interest rate increased from 12% per annum to 14% per annum. All of the 8,536,942 Series C Warrants previously issued to the debenture holders were cancelled, and 3,790,400 warrants ("Series D Warrants") were issued for every $1,000 principal amount of the debenture at an exercise price of $0.50 such that the number of Series D Warrants issued equals 20% warrant coverage. Each Series D Warrant will expire on February 1, 2026, and was subsequently issued in Q1 2024. The amended agreement cancelled the Interest Adjustment embedded derivative liability.

The amendment was treated as an extinguishment under IFRS 9, with a gain on extinguishment of $2,141,531 recognized in the consolidated statements of loss and comprehensive loss for the year ended October 31, 2023.

The fair value of the 2022 Debt amendment at the time of issuance was calculated as $8,377,815 based on the discounted cash flows for the 2022 Debt amendment assuming a 19% discount rate, which was the estimated rate for a similar instrument without warrants issued as part of the transaction. The fair value of the warrants issued was $454,849.

During the three and six months ended April 30, 2025, the Company incurred $271,727 and $764,153 of interest expense (2024 – $408,732 and $1,117,320). During the fiscal year ended October 31, 2024, the debt was further amended to revise the principal balance and related interest payments. The change was treated as a loan modification, with a gain on modification of $620,361 recognized within loss (gain) on debt modification and other in the statements of condensed consolidated interim loss and comprehensive loss.

FLOW BEVERAGE CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three and six months ended April 30, 2025 and 2024
(unaudited) (expressed in Canadian dollars, except share amounts)

On November 1, 2024, the debt was further amended to defer principal and accrued interest payments to February 1, 2026 per the table below. The amendment was treated as a modification under IFRS 9, with a loss on modification of $620,361 recognized in the condensed consolidated interim statements of loss and comprehensive loss for the six months ended April 30, 2025.

The amended repayment of the principal and interest amounts are payable in arrears on the dates set in the table below:

Date	Interest $	Principal $	Balance outstanding $
1-Jun-24	—	—	10,329,619
1-Aug-24	—	—	10,329,619
1-Nov-24	334,386	—	10,329,619
1-Feb-25	364,508	—	10,329,619
1-May-25	364,508	—	10,329,619
1-Aug-25	364,508	—	10,329,619
1-Nov-25	1,218,127	6,456,012	3,873,607
1-Feb-26	136,691	3,873,607	—

The Debt Round as at April 30, 2025 is as follows:

	$
Balance, October 31, 2024	10,488,381
Add (less):
Interest and accretion	764,153
Payments	(698,894)
Loss on modification	620,361
Balance, April 30, 2025	11,174,001
Current	11,174,001
Non-current	—

[c] NFS Leasing Canada Ltd. Loans

Senior Term Loan

In December 2022, the Company entered into a 36-month senior secured term loan (the "Senior Term Loan") with NFS Leasing Canada Ltd. ("NFS") for up to $20,334,000. The Senior Term Loan is secured by a first priority lien on all Company assets. The Company initially drew $15,334,000 and had the ability, subject to certain conditions, to draw an additional $5,000,000 prior to the one-year anniversary of the initial draw. The Company also issued 3,066,880 Series D Warrants.

The Senior Term Loan bears interest at 14% per annum, payable monthly for the first six months. After the first six months, payments of $284,045 comprising principal and interest are payable monthly, with the remaining principal balance due at maturity. The maturity date of the loan is February 1, 2026.

The Series D Warrants had an original exercise price of $0.50 with an expiration date of December 30, 2032. During the year ended October 31, 2024, the exercise price of the Series D Warrants was amended to $0.40. The expiry date of the Series D Warrants may be accelerated by the Company if, after the issue date, the volume weighted average price of the Company's SVS is at a price equal to or greater than $1.75 for a period of 10 consecutive trading days. The new expiry date would be the date that is not less than 20 days following the date upon which the Company issues notices to all holders of the Series D Warrants.

During the three and six months ended April 30, 2025, the Company incurred $661,805 and $1,098,711 of interest expense (2024 – $671,068 and $1,365,717).

The Senior Term Loan as at April 30, 2025 is as follows:

	$
Balance, October 31, 2024	12,812,571
Add (less):
Interest and accretion	1,098,711
Payments	(1,704,273)
Balance, April 30, 2025	12,207,009
Current	12,207,009
Non-current	—

Delayed Draw Term Loan

On June 30, 2023, the Company drew down the remaining $5,000,000 under the Senior Term Loan (the "Delayed Draw Term Loan").

The Delayed Draw Term Loan is for a 36-month term and bears interest at a rate of 14.75% per annum.

The Company also issued 1,000,000 warrants (the "Series E Warrants") to acquire SVS of the Company. The Series E Warrants had an original exercise price of $0.50 with an expiration date of June 30, 2033. During the year ended October 31, 2024, the exercise price of the Series E Warrants was amended to $0.40. The expiry date of the Series E Warrants may be accelerated by the Company if, after the issue date, the volume weighted average price of the Company's SVS is at a price equal to or greater than $1.75 for a period of 10 consecutive trading days. The new expiry date would be the date that is not less than 20 days following the date upon which the Company issues notices to all holders of the Series E Warrants.

The fair value of the Delayed Draw Term Loan at the time of issuance was calculated as $4,783,176 based on the discounted cash flows for the Delayed Draw Term Loan assuming a 16.75% discount rate, which was the estimated rate for a similar instrument without warrants issued as part of the transaction. The Delayed Draw Term Loan was classified as a financial liability at amortized cost and is accounted for using the effective interest rate method. Cash transaction expenses were $nil.

During the three and six months ended April 30, 2025, the Company incurred $189,611 and $314,790 of interest expense (2024 – $214,824 and $435,840).

The Delayed Draw Term Loan as at April 30, 2025 is as follows:

	$
Balance, October 31, 2024	4,597,673
Add (less):
Interest and accretion	314,790
Payments	(567,725)
Balance, April 30, 2025	4,344,738
Current	4,344,738
Non-current	—

Second Amendment Term Loan

On November 15, 2023, the Company drew $5,150,000 under the Second Amendment Term Loan. The Company received gross proceeds of $5,000,000.

The Second Amendment Term Loan is for a period of five years and bears interest at a rate of 14% per annum. Repayment will occur in 54 consecutive monthly instalments of principal and interest, following a six-month finance-fee-only period. The finance-fee-only period requires six monthly payments of $103,000 per month paid in advance, and due the first day following the funding of the loan.

The Company also issued 2,060,000 warrants ("Series F Warrants") to acquire SVS of the Company. The Series F Warrants have an exercise price of $0.40 with an expiration date of November 15, 2033. During the year ended October 31, 2024, the number of Series F Warrants was further amended to 1,278,500.

The fair value of the Second Amendment Term Loan at the time of issuance was calculated as $4,693,243 based on the discounted cash flows assuming a 16% discount rate, which was the estimated rate for a similar instrument without warrants issued as part of the transaction. The Second Amendment Term Loan was classified as a financial liability at amortized cost and is accounted for using the effective interest rate method. The Second Amendment Term Loan agreement provides for prepayment of the entire principal balance together with all unpaid interest and finance fees that would have been due through February 28, 2025. As prepayment did not occur on or before February 28, 2025, the loan continuation fee in the amount of $3,000,000 was fully earned and accrued.

During the three and six months ended April 30, 2025, the Company incurred $368,680 and $639,116 of interest expense (2024 – $428,227 and $801,217).

On February 24, 2025, the Second Amendment Term Loan was further amended to amend the payment date of the continuation fee which became due effective February 28, 2025, to be payable July 1, 2025, with the maturity date of the loan remaining November 1, 2028. The amendment was treated as an extinguishment under IFRS 9, with a loss on extinguishment of $2,980,591 recognized in the condensed consolidated interim statements of loss and comprehensive loss for the three and six months ended April 30, 2025.

The Second Amendment Term Loan as at April 30, 2025 is as follows:

	$
Balance, October 31, 2024	4,493,250
Add (less):
Loss on extinguishment	2,980,591
Amendment fee	(50,000)
Interest and accretion	639,116
Payments	(774,499)
Balance, April 30, 2025	7,288,458
Current	7,288,458
Non-current	—

The Senior Term Loan, the Delayed Draw Term Loan, and the Second Amendment Term Loan contain certain covenants, measured quarterly, based on minimum liquidity values. As at April 30, 2025, in anticipation of not being in compliance with the covenants, the Company obtained from the lender an agreement to waive the Company's compliance with the covenants solely for the fiscal quarter ending April 30, 2025.

As at April 30, 2025, the Company was not in compliance with certain covenants under the NFS Loan Agreement, including those related to aged payables and the timely notification of proceedings. A waiver of these covenant breaches was obtained from the lender subsequent to the end of the reporting period.

Interim Financing Agreement ("IFA")

On December 1, 2023, the Company entered into a second IFA with NFS for financing of $5,597,000 exclusive of tax for certain alcohol production equipment to be purchased by the Company from Simmtech Process Engineering Ltd. On November 1, 2024, upon delivery and acceptance of the equipment, the IFA with NFS matured and was converted to an 84-month financing lease for the purchase of the Tetra Pak equipment with the amount financed of $5,597,000 exclusive of tax. During the three and six months ended April 30, 2025, the Company incurred $nil of interest expense (2024 – $45,941 and $64,794) in connection with the second IFA.

On June 14, 2024, the Company entered into a third IFA with NFS for advances up to $2,192,106 exclusive of tax in connection with the purchase and installation of equipment at the Aurora facility. Upon delivery and acceptance by the Company of the equipment, the IFA will convert to an 84-month financing lease. As at April 30, 2025, $1,957,498 had been advanced pursuant to this agreement, and is recorded within prepaid expenses and deposits. During the three and six months ended April 30, 2025, the Company incurred $66,823 and $144,491 of interest expense (2024 – $nil) in connection with the third IFA.

FLOW BEVERAGE CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three and six months ended April 30, 2025 and 2024
(unaudited) (expressed in Canadian dollars, except share amounts)

Bridge Short-Term Note

On August 30, 2024, Flow obtained financing from NFS in the amount of $997,500, maturing on December 1, 2024. The loan bears interest at a rate of 3% per month. Repayment will occur in four consecutive monthly instalments of interest. The outstanding principal and any accrued interest and fees are payable on the maturity date.

On December 31, 2024, the terms of the Bridge Short-Term Note were amended to be paid in monthly payments of $56,876 over a period of 36 months at a rate of 18% and a principal balance of $1,573,247, which represents the outstanding principal and interest owing at the time of the amendment, and a $500,000 term loan amendment fee that was previously accrued as a short-term payable (the "Amended and restated Term Note").

During the three and six months ended April 30, 2025, the Company incurred $70,418 and $185,660 of interest expense (2024 – $nil) in connection with Bridge Short-Term Note.

[d] RI Flow LLC Short-Term Loan

On October 31, 2024, the Company entered into a short-term loan with RI Flow LLC, a related party of the Company, in the amount of USD $3,000,000 (CAD $4,174,800). The loan matures six months from closing, bears interest at 15% annually and is secured against the Company's assets. Repayment will occur in six consecutive monthly payments of interest, with principal due on maturity. Variable interest is payable monthly in arrears, based on a percentage of co-pack unit sales.

On April 29, 2025, the RI Flow LLC Short-Term Loan was amended to extend the maturity date to October 31, 2025.

During the three and six months ended April 30, 2025, the Company incurred $165,034 and $327,865 of interest expense and $226,162 and $384,206 of variable interest expense (2024 – $nil).

[e] Export Development Canada Loan

On February 28, 2025, the Company obtained a letter of credit with JPMorgan Chase Bank ("JPMorgan") in the amount of $4,000,000, expiring on February 28, 2026. The beneficiary of the line of credit was Tetra Pak Canada Inc. ("Tetra Pak"), and the line of credit was guaranteed by Export Development Canada ("EDC"). During the three and six months ended April 30, 2025, Tetra Pak drew down on the line of credit for a total of $4,000,000. Per the recourse demand letter dated May 16, 2025, EDC made payments to JPMorgan of $2,739,308 on April 14, 2025, and $1,260,692 on April 24, 2025. The Company is required to reimburse EDC for a total of $4,000,000. Interest will accrue from May 8, 2025, until the date of final payment at a rate of 8.5% per annum.

During the three and six months ended April 30, 2025, the Company incurred $nil of interest expense (2024 – $nil) in connection with the EDC loan.

9 Convertible debt

BeatBox Beverages subscription agreement

On October 31, 2024, BeatBox Beverages ("BeatBox") and Flow entered into a binding subscription agreement whereby BeatBox purchased a USD $2,000,000 (CAD $2,802,443) convertible note, due October 29, 2029, secured against the assets of Flow (the "Note"). The Note bears interest at the rate of 10% per annum from the Closing Date, payable quarterly in arrears on the last day of each of fiscal quarter of Flow, and is convertible, at BeatBox's option and at any time after the Closing Date, into SVS of Flow at a conversion price of $1.00.

The Company calculated the fair value of the liability portion of the convertible debenture using a discount rate of 12% with the difference between the fair value and the proceeds being ascribed to the conversion feature. The fair value of the liability portion was calculated to be $2,575,702, resulting in $226,741 being allocated to the conversion feature, which was recognized in contributed surplus. The balance of the convertible debenture outstanding as at April 30, 2025 was $2,591,404 (October 31, 2024 – nil).

During the three and six months ended April 30, 2025, the Company incurred $76,744 and $155,824 of interest expense (2024 – $nil) in connection with the convertible note.

Non-brokered private placement

On December 31, 2024, the Company announced the closing of the first tranche of a non-brokered private placement offering (the "Private Placement") of unsecured convertible debenture units of the Company (collectively, the "Convertible Debenture Units"), in which it issued and sold 172.992 Convertible Debenture Units at a price of CAD $10,000 per Convertible Debenture Unit for gross proceeds of USD $1,200,000 (CAD $1,729,920). The maturity date of the convertible debenture is December 31, 2027.

The Company calculated the fair value of the liability portion of the convertible debenture using a discount rate of 12% with the difference between the fair value and the proceeds being ascribed to the conversion feature. The fair value of the liability portion was calculated to be $1,696,299, resulting in $33,621 being allocated to the conversion feature, which was recognized in contributed surplus.

On February 5, 2025, the Company announced the closing of the second tranche of the Private Placement of Convertible Debenture Units, in which it issued and sold 43.382 Convertible Debenture Units at a price of CAD $10,000 per Convertible Debenture Unit for gross proceeds of USD $300,000 (CAD $433,820). The maturity date of the convertible debenture is February 5, 2028.

The Company calculated the fair value of the liability portion of the convertible debenture, using a discount rate of 12% with the difference between the fair value and the proceeds being ascribed to the conversion feature. The fair value of the liability portion was calculated to be $425,389, resulting in $8,431 being allocated to the conversion feature, which was recognized in contributed surplus. The balance of the convertible debentures outstanding as at April 30, 2025 was $2,203,199 (October 31, 2024 – nil).

During the three and six months ended April 30, 2025, the Company incurred $64,481 and $81,511 of interest expense (2024 – nil) in connection with the convertible note.

10 Share capital

Authorized

The Company has authorized capital of an unlimited number of multiple voting shares, voting at 10 votes per share, and an unlimited number of SVS, voting at one vote per share. Prior to the Amalgamation, Flow Water completed a share consolidation on a five-to-one basis for all issued and outstanding Class A common shares and Class B common shares.

Issued and outstanding

	Multiple Voting Shares		Subordinate Voting Shares		Total
	#	$	#	$	$
Balance, October 31, 2023	6,214,566	1	50,836,973	100,397,702	100,397,703
Shares issued for Private Placement – Tranche 1	-	-	6,473,000	1,800,871	1,800,871
Shares issued for Private Placement – Tranche 2	-	-	5,577,000	1,551,584	1,551,584
Shares issued for advisory agreements	-	-	1,117,711	312,100	312,100
Share issuance on RSU release	-	-	1,673,586	517,962	517,962
Common share exchange	(108,000)	-	108,000	-	-
Balance, April 30, 2024	6,106,566	1	65,786,270	104,580,219	104,580,220
Balance, October 31, 2024	6,106,566	1	74,687,961	106,908,903	106,908,904
Shares issued for advisory agreements [a]	—	—	532,560	77,417	77,417
Share issuance on RSU release	—	—	5,385,140	996,756	996,756
Balance, April 30, 2025	6,106,566	1	80,605,661	107,983,076	107,983,077

[a] During the six months ended April 30, 2025, the Company issued 532,560 SVS of the Company to advisors of the Company for services valued at $77,417.

11 Warrants

The Company issued warrants to accompany certain SVS, debt round and convertible debt. Each warrant is exercisable at the option of the holder for one SVS. The changes in the number of warrants during the six months ended April 30, 2025 and 2024 were as follows:

	Number of warrants	Weighted average exercise price
	#	$
Balance, October 31, 2023	4,497,067	0.85
Granted during the period	5,850,400	0.46
Cancelled during the period	(781,500)	0.40
Balance, April 30, 2024	9,565,967	0.61
	Number of warrants	Weighted average exercise price
---	---	---
	#	$
Balance, October 31, 2024	9,565,967	0.61
Granted during the period	1,055,472	0.41
Balance, April 30, 2025	10,621,439	0.59

On December 31, 2024, as part of the Private Placement, the Company issued 843,855 warrants, which have an exercise price of $0.41 and an expiry date of December 31, 2027. On February 5, 2025, as part of the Private

FLOW BEVERAGE CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three and six months ended April 30, 2025 and 2024
(unaudited) (expressed in Canadian dollars, except share amounts)

Placement, the Company issued 211,617 warrants, which have an exercise price of $0.41 and an expiry date of February 5, 2028.

The following table is a summary of the Company's warrants outstanding as at April 30, 2025:

Expiration date	Instruments outstanding #	Weighted average exercise price $
January 5, 2027	250,000	6.75
December 30, 2032	3,066,880	0.40
June 30, 2033	1,000,000	0.40
September 30, 2028	180,187	0.50
November 15, 2033	1,278,500	0.40
February 1, 2026	3,790,400	0.50
December 31, 2027	843,855	0.41
February 5, 2028	211,617	0.41
	10,621,439	0.59

The following table is a summary of the Company's warrants outstanding as at April 30, 2024:

Expiration date	Instruments outstanding #	Weighted average exercise price $
January 5, 2027	250,000	6.75
December 30, 2032	3,066,880	0.40
June 30, 2033	1,000,000	0.40
September 30, 2028	180,187	0.50
November 15, 2033	1,278,500	0.40
February 1, 2026	3,790,400	0.50
	9,565,967	0.61

12 Share-based compensation

[a] Deferred Share Units

The Company granted Deferred Share Units ("DSUs") to members of the Board of Directors as part of their compensation in accordance with the Company's Omnibus Incentive Plan, as defined below.

The changes in the number of DSUs during the six months ended April 31, 2025 and 2024 were as follows:

	DSUs #
Balance, October 31, 2023	666,349
Granted during the period	1,082,603
Balance, April 30, 2024	1,748,952
Balance, October 31, 2024	2,153,477
Granted during the period	1,565,494
Balance, April 30, 2025	3,718,971

The Company recognized expenses of $78,000 and $156,000 in share-based compensation expense for the three and six months ended April 30, 2025 (2024 – $59,250 and $59,250), related to DSUs issued during the period.

During the six months ended April 30, 2025, conditional DSU grants of nil (2024 – 531,307) were made to members of the Board of Directors. An expense related to conditional DSU grants of $nil for the six months ended April 30, 2025 (2024 – $59,250) is recognized in the condensed consolidated interim statements of loss and comprehensive loss.

[b] Restricted Share Units

On December 31, 2020, the Board of Directors approved a Restricted Share Unit Plan ("RSU Plan") for the Company. The RSU Plan provides for the issuance of RSUs to retain qualified personnel, employees, advisors and contractors in order to align their interests with those of the Company's shareholders. Vested RSUs are settled with SVS.

FLOW BEVERAGE CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three and six months ended April 30, 2025 and 2024
(unaudited) (expressed in Canadian dollars, except share amounts)

During the three and six months ended April 30, 2025, the Company recorded $1,231 and $4,517 of share-based compensation expense associated with the vested portion of the RSUs (2024 – $360,689 and $583,804). During the year ended October 31, 2023, the Board of Directors conditionally approved grants of 7,720,450 RSUs to various members of senior management, of which 692,479 were forfeited. A total of 2,342,657 units (2024 – 2,342,654) were granted in connection with these conditional grants during the six months ended April 30, 2025.

During the year ended October 31, 2024, the Board of Directors conditionally approved grants of 14,656,858 RSUs to various members of senior management, of which 508,803 were forfeited. A total of 1,253,358 units (2024 – 1,340,973 units) were granted in connection with these conditional grants during the six months ended April 30, 2025.

During the six months ended April 30, 2025, the Board of Directors conditionally approved grants of 28,421,912 (2024 – 14,278,234) to various members of management, of which 2,038,103 were forfeited. The RSUs will be conditionally granted, subject to availability under the Company's Omnibus Incentive Plan. The estimated fair value may be revised in the subsequent reporting periods based on the final grant date fair value of the equity instruments awarded. A total of 3,962,412 units (2024 – nil) were granted in connection with these conditional grants during six months ended April 30, 2025. An expense related to conditional RSU grants of ($104,080) and $814,711 (2024 – $90,906 and $1,350,337) is recognized in the condensed consolidated interim statements of loss and comprehensive loss for the three and six months ended April 30, 2025. A total of 32,481,977 conditional RSUs were outstanding as at April 30, 2025 (October 31, 2024 – 13,734,854).

The changes in the number of RSUs during the six months ended April 30, 2025 and 2024 (excluding conditional RSUs) are as follows:

| | RSUs

|

| --- | --- |
| Balance, October 31, 2023 | 2,237,767 |
| Granted during the period | 4,376,106 |
| Forfeited during the period | (115,413) |
| Share issuance on RSU release | (1,673,586) |
| Balance, April 30, 2024 | 4,824,874 |
| Balance, October 31, 2024 | 1,679,119 |
| Granted during the period | 8,024,329 |
| Forfeited during the period | (125,394) |
| Share issuance on RSU release | (5,917,701) |
| Balance, April 30, 2025 | 3,660,353 |

[c] Share options

In connection with the Amalgamation, the Company adopted an omnibus incentive plan (the "Omnibus Incentive Plan"), which allows for the Board of Directors to grant long-term equity-based awards, including SVS purchase options, RSUs and DSUs to the eligible directors, officers, employees and consultants of the Company and its subsidiaries in accordance with the terms of the Omnibus Incentive Plan. The Company's Governance, Human Resources and Compensation Committee makes recommendations to the Board of Directors in respect of matters relating to the Omnibus Incentive Plan. The Board of Directors has the discretion and authority to determine, among other things, the vesting schedule of share options and the settlement periods of RSUs or DSUs issued under the Omnibus Incentive Plan.

The maximum number of SVS reserved and available for grant and issuance pursuant to the Omnibus Incentive Plan shall not exceed 15% of the total issued and outstanding SVS on a non-diluted basis.

During the three and six months ended April 30, 2025, the Company recorded $nil (2024 – $nil) of share-based compensation associated with the vested portion of the share options issued under the Legacy Option Plan and the Omnibus Incentive Plan.

The share-based compensation plan is deemed to be cash-settled, and as such, it is classified as a liability and revalued at each reporting period with any changes in fair value included in the condensed consolidated interim statements of loss and comprehensive loss. The change in fair value of the plan during the six months ended April 30, 2025 was a gain of $22,914 (2024 – $55,770).

FLOW BEVERAGE CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three and six months ended April 30, 2025 and 2024
(unaudited) (expressed in Canadian dollars, except share amounts)

The changes in the number of share options during the six months ended April 30, 2025 and 2024 were as follows:

	Number of options #	2025 Weighted average exercise price $	Number of options #	2024 Weighted average exercise price $
Options outstanding, beginning of period	1,486,778	5.22	1,486,778	5.22
Options outstanding – April 30	1,486,778	5.22	1,486,778	5.22
Options exercisable – April 30	1,486,778	5.22	1,486,778	5.22

No options were granted during the six months ended April 30, 2025 and 2024.

The following table is a summary of the Company's share options outstanding as at April 30, 2025:

Options outstanding			Options exercisable
Exercise price $	Number outstanding #	Weighted average remaining contractual life (years) #	Weighted average exercise price $	Number exercisable #
1.50	138,667	1.68	1.50	138,667
2.50	392,884	1.68	2.50	392,884
5.00	5,000	1.68	5.00	5,000
6.55	209,243	1.68	6.55	209,243
6.60	115,593	1.68	6.60	115,593
6.65	49,062	1.68	6.65	49,062
6.70	22,742	1.68	6.70	22,742
6.75	349,737	1.68	6.75	349,737
6.85	5,000	1.68	6.85	5,000
6.95	10,000	1.68	6.95	10,000
7.00	76,000	1.68	7.00	76,000
8.25	112,850	1.68	8.25	112,850
5.22	1,486,778	1.68	5.22	1,486,778

The following table is a summary of the Company's share options outstanding as at April 30, 2024:

Options outstanding			Options exercisable
Exercise price $	Number outstanding #	Weighted average remaining contractual life (years) #	Weighted average exercise price $	Number exercisable #
1.50	138,667	2.68	1.50	138,667
2.50	392,884	2.68	2.50	392,884
5.00	5,000	2.68	5.00	5,000
6.55	209,243	2.68	6.55	209,243
6.60	115,593	2.68	6.60	115,593
6.65	49,062	2.68	6.65	49,062
6.70	22,742	2.68	6.70	22,742
6.75	349,737	2.68	6.75	349,737
6.85	5,000	2.68	6.85	5,000
6.95	10,000	2.68	6.95	10,000
7.00	76,000	2.68	7.00	76,000
8.25	112,850	2.68	8.25	112,850
5.22	1,486,778	2.68	5.22	1,486,778

FLOW BEVERAGE CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three and six months ended April 30, 2025 and 2024
(unaudited) (expressed in Canadian dollars, except share amounts)

13 Loss per share

Loss per share is calculated using the weighted average number of shares outstanding. The weighted average number of shares outstanding for the three and six months ended April 30, 2025 was 86,436,195 and 84,401,734 (2024 – 69,815,209 and 63,531,532).

For all periods presented, diluted loss per share equals basic loss per share due to the anti-dilutive effect of share options, RSU's, DSU's and warrants, given the Company was in a net loss position during those periods.

The outstanding number and type of securities that could potentially dilute basic net income per share in the future but would have decreased the loss per share (anti-dilutive) for the six months ended April 30, 2025 and 2024 presented are as follows:

	2025	2024
	#	#
Stock options	1,486,778	1,486,778
Restricted share units	3,660,353	4,824,874
Deferred share units	3,718,971	1,748,952
Warrants	10,621,439	9,565,967
	19,487,541	17,626,571

Conditional RSUs and DSUs of 32,481,977 and nil (2024 – 17,334,100 and nil), respectively, are excluded from the amounts above.

14 Disaggregation of revenue

The Company derives its revenue primarily from two main sources: the sale of packaged water and co-packing services.

The following table represents disaggregation of revenue for the three and six months ended April 30, 2025 and 2024:

	Three months ended April 30		Six months ended April 30
	2025	2024	2025	2024
	$	$	$	$
Packaged water	6,157,184	9,186,923	13,832,760	17,863,814
Co-packing services	6,862,123	5,033,979	12,158,112	6,710,272
Gross revenue	13,019,307	14,220,902	25,990,872	24,574,086
Less:
Discounts	(226,224)	(479,508)	(445,598)	(714,866)
Trade spend	(2,752,623)	(1,686,864)	(4,066,590)	(3,536,881)
Net revenue	10,040,460	12,054,530	21,478,684	20,322,339

Deferred revenue as of April 30, 2025, includes amounts related to prepayment of co-packing services.

15 Contingencies

In the ordinary course of business, from time to time, the Company is involved in various claims related to operations, rights, commercial, employment or other claims. Although such matters cannot be predicted with certainty, management does not consider the Company's exposure to these claims to be material to these Financial Statements.

16 Segmented information

The Company reports segment information based on internal reports used by the chief operating decision maker ("CODM") to make operating and resource decisions and to assess performance. The CODM is the Chief Executive Officer. The CODM makes decisions and assesses performance of the Company on a consolidated basis such that the Company is a single reportable operating segment.

FLOW BEVERAGE CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three and six months ended April 30, 2025 and 2024
(unaudited) (expressed in Canadian dollars, except share amounts)

The following tables present details on revenue for the three and six months ended April 30, 2025 and 2024:

	Three months ended April 30		Six months ended April 30
	2025	2024	2025	2024
	$	$	$	$
Canada	8,695,869	8,594,280	17,589,315	13,610,370
United States	1,344,591	3,460,250	3,889,369	6,711,969
Total	10,040,460	12,054,530	21,478,684	20,322,339

Property and equipment as at April 30, 2025 and 2024:

	2025	2024
	$	$
Canada	6,368,599	6,976,483
United States	3,650,535	3,638,534
Total	10,019,134	10,615,017

Right-of-use assets as at April 30, 2025 and 2024:

	2025	2024
	$	$
Canada	38,622,934	19,500,037
Total	38,622,934	19,500,037

17 Finance expense

Finance expense for the three and six months ended April 30, 2025 and 2024 consists of the following:

	Three months ended April 30		Six months ended April 30
	2025	2024	2025	2024
	$	$	$	$
Interest on lease obligations	627,364	276,772	1,288,023	701,872
Interest on borrowings	2,256,478	1,849,829	4,419,597	4,099,264
Interest on convertible debt	141,224	—	237,334	—
Total	3,025,066	2,126,601	5,944,954	4,801,136

18 Restructuring and other costs

During the three and six months ended April 30, 2025, the Company incurred restructuring and other costs of $202,678 and $424,021 (2024 – $298,640 and 395,741) primarily related to organizational and staff restructuring.

19 Subsequent events

Effective May 2025, the Company entered into a $2 million secured term note with NFS, bearing interest at 15% per annum, maturing May 23, 2028. Under the agreement, no payments are required for the first three months, followed by equal monthly installments over 33 months. This is a related party transaction.

On June 4, 2025, the Company closed secured term financing facilities with NFS of up to $4 million ("NFS Term Loan"). The NFS Term Loan will mature on a date that is three years from the date of issue and bears interest at a rate of 15% per annum. Under the agreement, no payments are required for the first three months, followed by equal monthly installments over 33 months. This is a related party transaction.

On June 4, 2025, the Company closed a secured convertible loan facility with RI Flow LLC of up to $6 million. The convertible facility bears interest at 15% per annum, matures in 18 months and includes a conversion option into SVS at CAD $0.065 per share after one year. This is a related party transaction.

AI assistant

Flow Beverage Corp. Interim / Quarterly Report 2025

47256_rns_2025-06-16_5b35219f-212c-409d-b469-0b8170cf4678.pdf

Flow Beverage Corp.

Condensed consolidated interim statements of cash flows

1 Nature of business

2 Basis of preparation

Statement of compliance

Going concern

Use of estimates and judgments

Co-packing revenue

New standards, amendments and interpretations adopted by the Company

New standards, amendments and interpretations not yet adopted by the Company

Delayed Draw Term Loan

Second Amendment Term Loan

Interim Financing Agreement ("IFA")

Non-brokered private placement

10 Share capital

Authorized

|

AI assistant

Flow Beverage Corp. — Interim / Quarterly Report 2025

47256_rns_2025-06-16_5b35219f-212c-409d-b469-0b8170cf4678.pdf

Flow Beverage Corp.

Condensed consolidated interim statements of cash flows

1 Nature of business

2 Basis of preparation

Statement of compliance

Going concern

Use of estimates and judgments

Co-packing revenue

New standards, amendments and interpretations adopted by the Company

New standards, amendments and interpretations not yet adopted by the Company

Delayed Draw Term Loan

Second Amendment Term Loan

Interim Financing Agreement ("IFA")

Non-brokered private placement

10 Share capital

Authorized

|

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Flow Beverage Corp. Interim / Quarterly Report 2025