Ms. Margot Micallef reports
GABRIELLA'S KITCHEN ANNOUNCES CLOSING OF PREVIOUSLY ANNOUNCED UPSIZED $20MM PRIVATE PLACEMENT
Further to Gabriella's Kitchen Inc.'s May 3, 2019, and June 5, 2019, press releases, the company has closed its upsized brokered private placement offering led by GMP Securities LP, pursuant to which the company issued approximately 66,666,733 units of the company at a price of 30 cents per unit for aggregate gross proceeds of approximately $20-million.
Margot Micallef, founder and chief executive officer of Gabriella's Kitchen, commented: "I'm pleased with the robust reception our offering received in the market, and I'm very happy with the quality of investors we have attracted. We now have all the pieces in place to continue and enhance our exponential growth and to build GABY into a dominant consumer packaged goods player in the cannabis and hemp products space."
Each unit consists of one common share and one-half common share purchase warrant of the company. Each whole warrant will be exercisable to acquire one common share at an exercise price of 38 cents per share, subject to adjustment in certain events, for a period of two years following June 12, 2019, provided, however, that if, after the first six months following the closing date, the volume-weighted average trading price of the common shares on the Canadian Securities Exchange is equal to or greater than 55 cents for any five consecutive trading day period, the company may, upon providing written notice to the holders of warrants, accelerate the expiry date of the warrants to the date that is no less than 30 days following the date of such written notice.
All securities issued in connection with the offering are subject to a four-month-and-one-day hold period from the closing date, in accordance with applicable securities laws. The company intends to use the net proceeds from the offering for capital expenditures, potential acquisitions, brand and sales investment, working capital and general corporate purposes.
In connection with the offering, the agents received an aggregate cash commission equal to approximated 4.5 per cent of the gross proceeds of the offering and broker warrants to purchase up to 3,087,473 units at a price per unit that is equal to the offering price for a period of 24 months following the closing date. The company also issued to certain consultants and advisers warrants to purchase up to 1,435,161 units at a price per unit that is equal to the offering price for a period of 24 months following the closing date.
Mitch Baruchowitz, managing partner of Merida Capital Partners, commented: "Merida was deeply impressed by GABY's understanding of granular aspects of their manufacturing and distribution verticals, and find the combination of a broad family of branded products and wellness-related research and product capabilities a compelling value proposition. We are excited to have the opportunity to be a significant investor in this round."
Ms. Micallef and Barbara Feit, chief financial officer of the company, and certain other directors, officers and other insiders of the company who are related parties, pursuant to Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions, participated in the offering. Therefore, the offering constituted a related party transaction within the meaning of MI 61-101. In its consideration and approval of the offering, the board of directors of the company determined that the offering was exempt from the formal valuation and minority approval requirements of MI 61-101 on the basis that the fair market value of the offering to related parties did not exceed 25 per cent of the market capitalization of the company, in accordance with sections 5.5 and 5.7 of MI 61-101.
About Gabriella's Kitchen Inc.
The company is a United States-focused cannabis wellness company holding a manufacturing licence and will hold a distribution licence issued by the California Bureau of Cannabis Control upon closing of the Sonoma acquisition. With these licences, its existing infrastructure of major retailers and an extensive broker and distribution network, the company is positioned to service mainstream grocery with cannabidiol-infused products, as well as licensed cannabis retailers with cannabidiol-infused and tetrahydrocannabinol-infused edible and wellness products.
Ms. Micallef and her sister Gabriella co-founded Gabriella's Kitchen, a wellness company, after Gabriella received a dire cancer diagnosis, which spurred the sisters to prolong Gabriella's life through a holistic approach to health. Today, Gabriella's Kitchen is a wellness company with its own manufacturing infrastructure and a diverse range of products that use cannabis to address a variety of dietary and health concerns.
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