The Fresh Factory Announces Closing of US$3 Million Non-Brokered Private Placement and Increase Funds Under Existing Credit Facility

Executive Summary

• The Fresh Factory B.C. Ltd. completed a non‑brokered private placement of 26,087 proportionate voting shares at US $115.00 (≈C $160) per share, raising approximately US $3 million (≈C $4.16 million).
• Insiders purchased 8,258 of the shares; the transaction relied on exemptions under MI 61‑101 and did not require a material change report prior to closing.
• The company’s existing three‑year revolving asset‑based credit facility with Mitsubishi HC Capital America Inc. was increased from US $4 million to US $5 million, providing additional liquidity for growth initiatives.

Key Details

• Private Placement
• Shares sold: 26,087 proportionate voting shares (each convertible into 100 subordinate voting shares).
• Price per share: US $115.00 (≈C $160).
• Gross proceeds: ~US $3,000,000 (≈C $4.16 million).
• Use of proceeds: finance growth and development, upgrade existing facilities, general corporate and working capital purposes.

• Closing subject to TSXV approval.

• Insider Participation

• Directors/insiders purchased a total of 8,258 proportionate voting shares.

• Treated as related‑party transactions under MI 61‑101; exemptions applied for valuation (≤25% market cap) and minority shareholder approval.

• Conversion Restrictions

• Aggregate subordinate & proportionate voting shares held by U.S. residents may not exceed 40% of the post‑conversion total (board may raise to 50%).

• Aim is to maintain “foreign private issuer” status under U.S. Exchange Act Rule 3b‑4.

• Credit Facility Amendment

• Existing facility: US $4 million three‑year revolving asset‑based loan with Mitsubishi HC Capital America Inc. (announced Sep 12, 2025).
• Amendment increases available funds to US $5 million; no other terms changed.

Notable Quotes

• Bill Besenhofer, CEO & Co‑Founder: “The successful completion of this private placement and the increased credit facility give us the financial flexibility to accelerate our growth strategy, upgrade our manufacturing capabilities, and continue delivering better‑for‑you food products to consumers.”