/NOT FOR DISTRIBUTION TO UNITED
STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES/
VANCOUVER, BC, Nov. 19, 2021 /CNW/ - Freshlocal Solutions
Inc. (TSX: LOCL) (OTC: FLOCF) ("Freshlocal" or the "Company") is
pleased to announce a brokered private placement of up to
$12,100,000 aggregate principal
amount of convertible debenture units (the "Convertible Debenture
Units") at a price of $1,000 per
Convertible Debenture Unit (the "Offering"). The Offering is
being led by Desjardins Securities Inc. (the "Agent") and Cormark
Securities Inc as co-agent on a best effort basis. Each Convertible
Debenture Unit will be comprised of (i) one 8% subordinated
unsecured convertible debenture of the Company in a principal
amount of $1,000 (collectively, the
"Convertible Debentures"), which will be convertible into common
shares of the Company (each a "Common Share") at a conversion price
of $1.90 per Common Share, subject to
adjustment in certain events (the "Conversion Price") and maturing
on December 31, 2024 (the "Maturity
Date"); and (ii) 263 common share purchase warrants of the Company
(the "Warrants"). Each Warrant will entitle the holder thereof to
purchase one Common Share at a price of $1.25 per share until the Maturity Date. The
Company has granted the Agent an option (the "Agent's Option") to
sell an additional $1,815,000 in
Convertible Debenture Units under the Offering for total gross
proceeds of $13,915,000 (expected to
be exercised in full).
The Company intends to use the net proceeds of the Offering for
working capital, repayment of debt and/or general corporate
purposes. The Convertible Debentures will be unsecured obligations
of the Company and rank pari passu in right of payment of
principal and interest with all other previously existing unsecured
subordinated indebtedness of the Company.
In relation to the Company's debt facility with SVB that was
originally announced on May 19, 2021,
and the Company's breach of certain financial covenants of the
facility as disclosed on August 17,
2021, the private placement is expected to meet a required
condition of a forbearance agreement between the Company and SVB
that is currently under negotiation. There can be no assurance that
such an agreement will be reached, and further updates in this
regard will be disclosed when appropriate in accordance with
applicable securities laws.
The Convertible Debentures will bear interest at a rate of 8.0%
per annum from the date of issue, payable semi-annually in arrears
in cash on June 30 and December 31 of each year. The Convertible
Debentures will be convertible at the holder's option into Common
Shares at any time prior to the close of business on the earlier of
the Maturity Date and the business day immediately preceding the
date fixed for redemption of the Convertible Debentures at the
Conversion Price, being a ratio of 526.32 Common Shares per
$1,000 principal amount of
Convertible Debentures. Holders converting their Convertible
Debentures will receive accrued and unpaid interest thereon to the
date of conversion.
The Convertible Debentures may be prepaid in cash for an amount
equal to 105% of the principal amount plus accrued interest at any
time on a date that is 24 months following the Closing Date (as
defined below) on not greater than 60 days' and not less than 30
days' notice, provided that the Company elects to prepay the then
outstanding aggregate amount of Convertible Debentures
outstanding.
Closing of the Offering is expected to occur on or about
November 26, 2021 or such other date
to be mutually agreed upon between the Company and Agent (the
"Closing Date").
The Offering is subject to regulatory approval, including that
of the Toronto Stock Exchange.
Insiders and related parties of the Company may acquire
Convertible Debenture Units under the Offering. Such participation
may be considered to be "related party transactions" within the
meaning of Multilateral Instrument 61-101 Protection of Minority
Security Holders in Special Transactions ("MI 61-101"). The
Company intends to rely on the exemptions from the formal valuation
and minority shareholder approval requirements of MI 61-101 in
respect of related party participation in the Offering as neither
the fair market value (as determined under MI 61-101) of the
subject matter of, nor the fair market value of the consideration
for the Offering, insofar as it involves interested parties, is
expected to exceed 25% of the Company's market capitalization. In
the event of participation of any director of the Company, such
director shall disclose such participation and shall abstain from
voting on the approval by the board of directors of the Company.
The Company will not file a material change report 21 days prior to
the Closing Date because details will not be settled until shortly
prior to the Closing Date and the Company intends to complete the
Offering as soon as commercially possible.
This news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities of the Company in
the United States nor shall there
be any offer, solicitation or sale of the Convertible Debenture
Units in any state or other jurisdiction in which such an offer,
solicitation or sale would be unlawful. The Debenture Units
described in this news release (and any common shares of the
Company issued upon the conversion, redemption or maturity of the
Convertible Debenture Units) have not been and will not be
registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act"), or the securities laws of any
state and may not be offered, sold or delivered in the United States absent registration or an
applicable exemption from the registration requirements under the
U.S. Securities Act and applicable U.S. state or other
jurisdictions' securities laws.
About Freshlocal Solutions Inc.
Freshlocal Solutions Inc. is a Vancouver-based company that is building a
leadership position in the provision of end-to-end grocery
e-commerce solutions. The Company operates two primary businesses,
FoodX and eGrocery, both of which support its corporate mission to
leverage innovation and technology to create a sustainable and
profitable food system for all. Food-X Technologies Inc. ("FoodX")
is Freshlocal's scalable end-to-end SaaS-based eGrocery Management
Solution (eGMS) which is designed to meet the needs of large and
small grocery retailers while providing profitable unit economics.
The FoodX eGMS is the culmination of over 20 years of experience in
online grocery and the company's proven track record of delivering
efficiently, sustainably and profitably. The Company's consumer
eGrocery business has expanded into one of Canada's largest online grocery companies,
with a focus on delivering fresh, local, organic produce and
groceries, along with exceptional customer experiences. Freshlocal
serves the main urban markets in Alberta and British
Columbia through its brick-and-mortar store locations
operating under the Blush Lane and Be Fresh banners and through
SPUD.ca, the Company's award-winning online marketplace eGrocery
platform. Freshlocal's common shares are listed on the Toronto
Stock Exchange under the symbol "LOCL". Please visit
www.freshlocalsolutions.com.
Notice on Forward Looking Information
Certain statements contained in this press release may be deemed
"forward–looking statements" or "forward–looking information"
within the meaning of applicable Canadian and U.S. securities laws.
Words such as "may", "will", "would", "could", "expect", "believe",
"plan", "anticipate", "intend", "estimate", "continue", or the
negative or comparable terminology, as well as terms usually used
in the future and the conditional, are intended to identify
forward– looking statements. Forward-looking statements should
not be read as guarantees of future performance or results, and
will not necessarily be accurate indications of whether, or the
times at or by which, such future performance will be achieved. No
assurance can be given that any events anticipated by the
forward– looking statements or information will transpire or
occur, including, but not limited, to the closing of the Offering
and the timing thereof, the size of the Offering, the use of
proceeds of the Offering and any exercise of the Agent's Option.
Forward-looking information is based on information available at
the time and/or management's good-faith belief with respect to
future events and are subject to known or unknown risks,
uncertainties, assumptions and other unpredictable factors, many of
which are beyond Freshlocal's control. These risks, uncertainties
and assumptions include, but are not limited to, the failure to
satisfy any of the conditions to the completion of the Offering and
those risks described under "Risk Factors" in Freshlocal's Filing
Statement dated April 9, 2021, a copy
of which is available on SEDAR at www.sedar.com and could cause
actual events or results to differ materially from those projected
in any forward-looking statements. Freshlocal does not intend, nor
does Freshlocal undertake any obligation, to update or revise any
forward-looking information contained in this news release to
reflect subsequent information, events or circumstances or
otherwise, except if required by applicable laws.
SOURCE Freshlocal Solutions Inc.