Committed C$20 million revolving line of credit and C$50 million term loan
Facility provides financial flexibility to support Very Good's growth and expansion initiatives
Vancouver, British Columbia--(Newsfile Corp. - June 7, 2021) - The Very Good Food Company Inc. (TSXV: VERY) (OTCQB: VRYYF) (FSE: 0SI) ("VERY GOOD" or the "Company"), a leading plant-based food technology company, is pleased to announce that it has entered into a loan agreement (the "Loan Agreement") for a senior secured credit facility (the "Credit Facility") with Waygar Capital Inc. ("Waygar Capital" or the "Lender"), as agent for Ninepoint Canadian Senior Debt Master Fund L.P. ("Ninepoint Partners"). The Credit Facility consists of a C$20 million revolving line of credit and a C$50 million term loan.
VERY GOOD will use the Credit Facility for working capital, general corporate purposes, acquisitions, and in the case of the term loan component of the Credit Facility, to support the purchase of equipment at its production facilities.
Financing Highlights
- C$70 million Credit Facility comprises a C$20 million revolving line of credit and C$50 million senior secured asset backed term loan. Interest payments only on drawdowns and repayment upon maturity.
- Accelerated growth by funding, in part, the commissioning of VERY GOOD's facility in California, estimated to be C$30-50 million, for the purpose of scaling new and existing products already in the market with proven demand.
- Access to significant liquidity and financial flexibility to continue to support VERY GOOD's eCommerce sales growth strategy in the US and its launch into Europe as well as assist with the Company's working capital requirements.
- Competitive market terms with minimal dilutive effect, including a single digit interest rate, consistent with VERY GOOD's commitment to generating shareholder value.
- Strategic business partnership with a leading institutional lender, Waygar Capital, representing Ninepoint Partners, indicating strong confidence in VERY GOOD's management team, product portfolio and long-term strategy.
- Financial partner interested in continuing to scale financing as VERY GOOD executes on its strategic growth objectives including entering into new markets, launching new products and targeting potential M&A opportunities.
"The closing of this Credit Facility is a key milestone and a testament of our ability to access favorable financing while diversifying our capital structure and we are very pleased to have the Waygar Capital team as a partner as we execute on our growth strategy", said Mitchell Scott, CEO. "This Credit Facility provides us with funding to establish our operations in the US and will be used, in part, for the build-out of our California facility. We are pleased that Waygar Capital believes and supports our Company's mission, products and strategy to want to be part of our future success."
"We are very pleased to be in a position to support VERY GOOD's strategic priorities and future success", said Wayne R. Ehgoetz, President and CEO of Waygar Capital. "Our experience in providing both operating and term debt facilities to companies in various life cycles enables us to deliver solutions that not only strengthen but complement most capital structures now and in the future. We look forward to our partnership with VERY GOOD's exceptional management team as they execute their exciting growth and M&A strategy."
Loan Agreement Terms
All amounts drawn under the Credit Facility will pay interest at a rate of 9.95% per annum on the unpaid principal amount of outstanding advances and will be repaid in full upon maturity and is secured by a first-priority security interest on substantially all of the Company's assets. The Credit Facility will become due on June 7, 2023, subject to VERY GOOD's option to extend the maturity date for an additional 12 months on terms and conditions to be mutually agreed to between the Company and the Lender.
In connection with the Loan Agreement, VERY GOOD will issue 225,000 common share purchase warrants (each a "Warrant") to the Lender subject to receiving approval of the TSX Venture Exchange. Each Warrant will be exercisable for one common share of the Company, at a price of C$5.62 for a period of 60 months from the date of issuance. The Warrants will be subject to a hold period of four months and one day from issuance.
Atlas Capital Partners. ("Atlas"), a global merchant banking firm based in New York, acted as exclusive financial advisor to VERY GOOD in respect of the financing. Atlas is focused on investing, advising and partnering with leading companies in select industries. Please visit www.atlascps.com to learn more.
About The Very Good Food Company Inc.
The Very Good Food Company Inc. is an emerging plant-based food technology company that produces plant-based meat and other food products that are delicious while maintaining a wholesome nutritional profile. To date we have developed a core product line under The Very Good Butchers brand.
OUR MISSION IS LOFTY, BADASS BUT BEAUTIFULLY SIMPLE: GET MILLIONS TO RETHINK THEIR FOOD CHOICES WHILE HELPING THEM DO THE WORLD A WORLD OF GOOD. BY OFFERING PLANT-BASED FOOD OPTIONS SO DELICIOUS AND NUTRITIOUS, WE'RE HELPING THIS KIND OF DIET BECOME THE NORM.
About Waygar Capital Inc.
Waygar Capital Inc. is a Toronto-based asset-based lender experienced in providing creative financing solutions for middle-market companies. Waygar Capital partners with companies in various life cycles that are unable to access traditional bank financing. Waygar Capital focuses on the integrity of the ownership and management team as well as the quality of the assets pledged as collateral. Waygar Capital acts as a Fund Advisor to the Ninepoint Canadian Senior Debt Fund which provides asset-based credit facilities to diversified industries across Canada. Learn more at www.waygarcapital.com.
Forward-Looking Information
This news release contains forward-looking information for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Any such forward-looking information may be identified by words such as "proposed", "expects", "intends", "may", "will", and similar expressions. Forward looking information contained or referred to in this news release includes statements relating to: the use of proceeds from the Credit Facility, the expected benefits VERY GOOD expects to derive from the Credit Facility including funding for its M&A strategy, and the issuance of the Warrants. Forward-looking information is based on a number of factors and assumptions which have been used to develop such information, but which may prove to be incorrect including, but not limited to, material assumptions with respect to the continued strong demand for VERY GOOD's products, the continued production capacity ramp-up, the availability of sufficient financing on reasonable terms to fund the Company's capital requirements and the ability to obtain necessary equipment, production inputs and labour. Although the Company believes that the expectations reflected in such forward-looking information are reasonable, undue reliance should not be placed on forward-looking information because VERY GOOD can give no assurance that such expectations will prove to be correct. Risks and uncertainties that could cause actual results, performance or achievements of VERY GOOD to differ materially from those expressed or implied in such forward-looking information include, among others, negative cash flow and future financing requirements to sustain and grow operations, limited history of operations and revenues and no history of earnings or dividends, expansion of facilities, competition, availability of raw materials, dependence on senior management and key personnel, general business risk and liability, regulation of the food industry, change in laws, regulations and guidelines, compliance with laws, unfavourable publicity or consumer perception, product liability and product recalls, risks related to intellectual property, difficulties with forecasts, management of growth and litigation, as well as the impact of, uncertainties and risks associated with the ongoing COVID-19 pandemic, many of which are beyond the control of VERY GOOD. For a more comprehensive discussion of the risks faced by VERY GOOD, please refer to VERY GOOD's most recent Management's Discussion & Analysis filed with Canadian securities regulatory authorities at www.sedar.com. The forward-looking information in this news release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available. Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, VERY GOOD disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. The forward-looking information contained in this news release is expressly qualified by this cautionary statement.
The TSX Venture Exchange has neither approved nor disapproved the contents of this news release. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Investor Contact
The Very Good Food Company
Mitchell Scott
Kevan Matheson
Corporate Communications and Investor Relations
Email: invest@verygoodbutchers.com
Phone: +1 855-472-9841
Phil Carlson / Erika Kay
KCSA Strategic Communications
Email: VERY@kcsa.com
Phone: 212-896-1233
Media Contact
Anne Donohoe
KCSA Strategic Communications
Email: VERY@kcsa.com
Phone: 212-896-1265
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