Fresh Factory arranges $4-million (U.S.) credit line

Executive Summary

• The Fresh Factory B.C. Ltd. has secured a $4 million USD three-year revolving asset-based lending facility with Mitsubishi HC Capital America Inc.
• The facility is secured against the company's unencumbered assets and provides funds to its U.S. operating subsidiaries for working capital and general corporate purposes.
• The company expects operational revenue will be sufficient to service and repay the facility by maturity, with specific fee structures and interest rates defined in the agreement.

Key Details

• Facility Amount: $4 million USD (approximately $5.5 million CAD).
• Lender: Mitsubishi HC Capital America Inc. (arm's-length party).
• Term: Three-year revolving facility.
• Interest Rate: Prime plus 1.00% per annum, payable monthly.
• Use of Proceeds: Working capital and general corporate purposes.
• Security: Secured against the company's unencumbered assets.
• Unused Portion Fee: 0.45% per annum, payable monthly on any unused portion.
• Exit Fee: 2.00% of the facility if paid off within the first year, subject to reduction in subsequent years.
• Closing/Annual Fees: $60,000 fee upon closing; $15,000 fee at each annual anniversary date thereafter.
• Repayment Expectation: The company expects future revenue generated through operations to be sufficient to service and fully repay the facility on or before its maturity date.

Notable Quotes

• "This facility provides us with additional financial flexibility to accelerate our growth plans," said Bill Besenhofer, chief executive officer and co-founder of The Fresh Factory. "We're excited to build on our momentum, continue investing in our operations and expand our reach as we deliver fresh, clean-label and better-for-you products."