Goodfood: completes million investment to bolster balance sheet

Montreal / CA. (gfc) Goodfood Market Corporation, a leading Canadian online meal solutions company, is pleased to announce that it has closed an offering of USD 12,675,000 aggregate principal amount of 12.5 percent convertible unsecured subordinated debentures of the Company due February 06, 2028, at a price of USD 1,000 per USD 1,000 principal amount of Debentures, by way of non-brokered private placement. The total investment consists of USD 10 million from Investissement Québec and USD 2.675 million from management, Board members and existing shareholders.

«We are pleased to partner with Investissement Québec to bolster Goodfood’s balance sheet and achieve our path to profitability and positive cash flows. With the capital raised, we will continue to execute the final steps of our profitable growth plan and deliver more delicious Goodfood products to Canadians,» said Jonathan Ferrari, Chief Executive Officer of Goodfood. «As our target cost structure is now nearly in place, we are transitioning our focus to growing the Goodfood brand in Quebec and across the country and we are thrilled to count on a partner such as Investissement Québec in our next growth phase. We are also proud to highlight the commitment of our management team, board and existing shareholders who are participating in this financing to the tune of USD 2.675 million,» concluded Ferrari.

«Investissement Québec is proud to support innovative Québec companies like Goodfood in order to propel their growth,» says Bicha Ngo, Senior Executive Vice-President, Private Equity, Investissement Québec.

The Debentures will be convertible at the holder’s option into Goodfood common shares (the «Common Shares») at a conversion price of USD 0.75 per Common Share. The Debentures will bear interest at a rate of 12.5 percent per annum. The interest portion for the period commencing on the issuance date and ending in February 2025 will be capitalized semi-annually and convertible at a price equal to the volume weighted average trading price of the Common Shares on the TSX for the five (5) consecutive trading days ending on the date on which such interest portion becomes due, plus a premium of 50 percent. As of February 6 2025 and until the Maturity Date, the interest portion will be payable semi-annually in cash. As of February 6 2026, Goodfood may repurchase the non-converted portion of a Debenture at an amount of the principal and accrued interest plus an amount providing the holder with an internal rate of return (IRR) equal to 18 percent for the period during which such Debenture will have been outstanding. The holders may require a repurchase on the same terms upon a change of control of the Company.

The Debentures will be direct, subordinated unsecured obligations of the Company, subordinated to any senior indebtedness of the Company, including the Company’s credit facility, and ranking equally with one another and with all other existing and future subordinated unsecured indebtedness of the Company to the extent subordinated on the same terms. The Company intends to use the net proceeds from the Offering to complete Project Blue Ocean initiatives and for general corporate purposes.

Jonathan Ferrari, Neil Cuggy, John Khabbaz and Donald Olds, all directors and/or officers of the Company, have purchased, indirectly, an aggregate of USD 2,425,000 principal amount of Debentures under the Offering. Their participation is considered to be a «related party transaction» as defined in Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions. The participation of such insiders is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the securities issued to such insiders nor the consideration for such securities exceeds 25 percent of the Company’s market capitalization. The Company did not file a material change report 21 days prior to closing of the Offering as the details of the participation of insiders of the Company in the Offering had not been confirmed at that time. The Offering, including the insiders’ participation therein, has been approved by the board of directors of the Company. Hamnett Hill, former director of the Company, and President of edo Capital is also participating with an investment of USD 250,000.

The Debentures offered, and the Common Shares issuable on conversion, redemption or maturity thereof, have not and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the 1933 Act. This press release does not constitute an offer to sell or a solicitation of any offer to buy Debentures or Common Shares in the United States.