Goodfood Market Corp. ("Goodfood" or the "Company") (TSX: FOOD), a
leading online grocery company in Canada, is pleased to announce
that it has entered into an agreement with Desjardins Capital
Markets and National Bank Financial Inc., as co-lead underwriters
and joint bookrunners, together with a syndicate of underwriters
(collectively, the “Underwriters”), pursuant to which the
Underwriters have agreed to purchase for resale, on a bought deal
basis, $30,000,000 aggregate principal amount of convertible
unsecured debentures of the Company (the “Debentures”) at a price
of $1,000 per Debenture (the “Offering”). The Debentures will have
a coupon of 5.75% per annum, and a conversion price of $4.60 per
Goodfood common share (a "Common Share"). The Company has granted
the Underwriters an over-allotment option to purchase up to an
additional $4,500,000 aggregate principal amount of Debentures on
the same terms, exercisable in whole or in part at any time up to
the 30
th day following the closing of the
Offering.
The net proceeds from the Offering will be used
to accelerate the scaling of Goodfood’s on-demand grocery and meal
solutions network, through the signing of multiple incremental new
micro-fulfillment centers leases, fund their required capital
expenditures as well as their initial start-up and expenses, and
for general corporate purposes.
“We are thrilled to bring forward on-demand
micro fulfilment centers roll-out through the opening of a total of
20-plus facilities by the end of calendar 2022 initially planned
for Fiscal 2023. The significant acceleration of our on-demand
strategy will enable Goodfood to gain outsized market share of the
rapidly growing online grocery market, accelerating our growth
profile. This faster roll out will also serve to accelerate our
positive margin improvement trajectory as we build density and
economies of scale in our operating and marketing investments,”
said Jonathan Ferrari, Chief Executive Officer of Goodfood. “Over
the past 18 months, we have consistently focused on increasing
Goodfood’s delivery speed and product selection to increase our
shoppers’ flexibility, while consistently elevating our customers’
value proposition to meaningfully drive further online grocery
penetration in Canada’s $140-billion grocery market,” concluded Mr.
Ferrari.
The Debentures will mature and be repayable on
March 31, 2027 (the "Maturity Date") and will accrue interest at
the rate of 5.75% per annum, payable semi-annually in arrears on
March 31 and September 30 of each year (each an "Interest Payment
Date"), with the first such payment to be made on September 30,
2022. The Company will have the option to satisfy its obligation to
repay the principal amount of the Debentures, in whole or in part,
due on the Maturity Date upon at least 40 days and not more than 60
days prior notice, by delivering that number of freely tradable
Common Shares obtained by dividing the principal amount of the
Debentures by 95% of the volume weighted average trading price of
the Common Shares on the Toronto Stock Exchange (the "TSX") for the
20 consecutive trading days ending on the fifth trading day
preceding the Maturity Date.
At the holder's option, the Debentures will be
convertible into Common Shares at any time prior to the close of
business on the earlier of the business day immediately preceding
(i) the Maturity Date, or (ii) if called for redemption, the date
fixed for redemption by the Company, at a conversion price of $4.60
per Common Share, subject to adjustment in certain events (the
"Conversion Price"). This represents a conversion rate of
approximately 217.3913 Common Shares for each $1,000 principal
amount of Debentures, subject to the operation of certain
anti-dilution provisions expected to be contained in the indenture
under which the Debentures are issued. Holders who convert their
Debentures will receive accrued and unpaid interest for the period
from the date of the last Interest Payment Date prior to the date
of conversion to the date of conversion. In addition to the
foregoing, in the event of a change of control of the Company,
subject to certain terms and conditions, holders of Debentures will
be entitled to convert their Debentures and, subject to certain
limitations, receive, in addition to the number of Common Shares
they would otherwise be entitled to receive, an additional number
of Common Shares per $1,000 principal amount of Debentures.
The Debentures will be direct, subordinated
unsecured obligations of the Company, subordinated to any senior
indebtedness of the Company, including the Company's revolving
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 Debentures will not be redeemable by the
Company prior to March 31, 2025. On or after March 31, 2025 and
prior to March 31, 2026, the Debentures will be redeemable by the
Company, in whole or in part, from time to time, on not more than
60 days and not less than 30 days prior notice at a redemption
price equal to their principal amount plus accrued and unpaid
interest, if any, provided that the volume weighted average trading
price of the Common Shares on the TSX for the 20 consecutive
trading days prior to the date on which notice of redemption is
provided is not less than 125% of the Conversion Price. On or after
March 31, 2026 and prior to the Maturity Date, the Debentures will
be redeemable by the Company, in whole or in part, from time to
time, on not more than 60 days and not less than 30 days prior
notice at a redemption price equal to their principal amount plus
accrued and unpaid interest, if any. Subject to certain conditions,
the Company will have the option to satisfy its obligation to repay
the principal amount of the Debentures, in whole or in part, due
upon redemption, by delivering that number of freely tradable
Common Shares obtained by dividing the principal amount of the
Debentures by 95% of the volume weighted average trading price of
the Common Shares on the TSX for the 20 consecutive trading days
ending on the fifth trading day preceding the date of
redemption.
The Debentures will be offered in all of the
provinces of Canada, by way of short form prospectus and in certain
other jurisdictions as may be agreed by the Underwriters and the
Company. The Offering is expected to close on or about February 11,
2022 and is subject to certain conditions including, but not
limited to, the receipt of all necessary approvals and consents,
including the approval of the TSX.
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 (the "1933 Act"), 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.
ABOUT GOODFOOD
Goodfood (TSX: FOOD) is a leading online grocery
company in Canada, delivering fresh meal solutions and grocery
items that make it easy for customers from across Canada to enjoy
delicious meals at home every day. Goodfood’s vision is to be in
every kitchen every day by enabling customers to complete their
grocery shopping and meal planning in minutes and to receive their
order in as little as 30 minutes. Goodfood customers have access to
a unique selection of online products as well as exclusive pricing
made possible by its direct-to-consumer infrastructures and
technology that eliminate food waste and costly retail overhead.
The Company’s main production facility and administrative offices
are based in Montreal, Québec, with additional production
facilities located in the provinces of Québec, Ontario, Alberta,
and British Columbia.
FORWARD LOOKING
INFORMATION:
This press release contains “forward-looking
information” within the meaning of applicable Canadian securities
legislation. Such forward-looking information includes, but is not
limited to, information with respect to our objectives and the
strategies to achieve these objectives, as well as information with
respect to our beliefs, plans, expectations, anticipations,
assumptions, estimates and intentions, including, without
limitation, statements concerning the anticipated terms of, use of
net proceeds from and closing date of, the Offering. This
forward-looking information is identified by the use of terms and
phrases such as “may”, “would”, “should”, “could”, “expect”,
“intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe”,
and “continue”, as well as the negative of these terms and similar
terminology, including references to assumptions, although not all
forward-looking information contains these terms and phrases.
Forward-looking information is provided for the purposes of
assisting the reader in understanding the Company and its business,
operations, prospects and risks at a point in time in the context
of historical trends, current condition and possible future
developments and therefore the reader is cautioned that such
information may not be appropriate for other purposes.
Forward-looking information is based upon a
number of assumptions and is subject to a number of risks and
uncertainties, many of which are beyond our control, which could
cause actual results to differ materially from those that are
disclosed in, or implied by, such forward-looking information.
These risks and uncertainties include, but are not limited to, the
risks related to the Offering, including the risks related to the
receipt of all regulatory approvals, and the following risk factors
which are discussed in greater detail under “Risk Factors” in the
Company’s Annual Information Form for the year ended August 31,
2021 available on SEDAR at www.sedar.com: limited operating
history, negative operating cash flow, food industry, COVID-19
pandemic as well as the impact of the vaccine rollout, quality
control and health concerns, regulatory compliance, regulation of
the industry, public safety issues, product recalls, damage to
Goodfood’s reputation, transportation disruptions, storage and
delivery of perishable foods, product liability, unionization
activities, consolidation trends, ownership and protection of
intellectual property, evolving industry, reliance on management,
failure to attract or retain key employees which may impact the
Company’s ability to effectively operate and meet its financial
goals, factors which may prevent realization of growth targets,
inability to effectively react to changing consumer trends,
competition, availability and quality of raw materials,
environmental and employee health and safety regulations, the
inability of the Company’s IT infrastructure to support the
requirements of the Company’s business, online security breaches,
disruptions and denial of service attacks, reliance on data
centers, open source license compliance, future capital
requirements, operating risk and insurance coverage, management of
growth, limited number of products, conflicts of interest,
litigation, catastrophic events, risks associated with payments
from customers and third parties, being accused of infringing
intellectual property rights of others and, climate change and
environmental risks. This is not an exhaustive list of risks that
may affect the Company’s forward-looking statements. Other risks
not presently known to the Company or that the Company believes are
not significant could also cause actual results to differ
materially from those expressed in its forward-looking statements.
Although the forward-looking information contained herein is based
upon what we believe are reasonable assumptions, readers are
cautioned against placing undue reliance on this information since
actual results may vary from the forward-looking information.
Certain assumptions were made in preparing the forward-looking
information concerning the availability of capital resources,
business performance, market conditions, and customer demand. In
addition, information and expectations set forth herein are subject
to and could change materially in relation to developments
regarding the duration and severity of the COVID-19 pandemic as
well as the impact of the vaccine rollout and its impact on product
demand, labour mobility, supply chain continuity and other elements
beyond our control. Consequently, all of the forward-looking
information contained herein is qualified by the foregoing
cautionary statements, and there can be no guarantee that the
results or developments that we anticipate will be realized or,
even if substantially realized, that they will have the expected
consequences or effects on our business, financial condition or
results of operation. Unless otherwise noted or the context
otherwise indicates, the forward-looking information contained
herein is provided as of the date hereof, and we do not undertake
to update or amend such forward-looking information whether as a
result of new information, future events or otherwise, except as
may be required by applicable law.
FURTHER INFORMATION:
InvestorsJonathan RoiterChief Financial
OfficerPhone: (855) 515-5191Email: ir@makegoodfood.ca |
MediaRoslane AouameurVice President, Corporate
DevelopmentPhone: (855) 515-5191Email: media@makegoodfood.ca |
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