Mr. David Hanna reports

GFI ANNOUNCES CLOSING OF THE INVESTMENTS IN ITS PET FOOD DIVISION AND A NEW 3-YEAR COMMITTED CREDIT FACILITY

Global Food and Ingredients Ltd. has completed the previously announced transactions to raise $3.45-million through an investment in equity and a new debt facility of up to $10.0-million in its pet food division, Big Sky Milling Inc., as well as a further injection of $500,000 in the company's core ingredients division by 35 Oak Holdings Ltd.

Concurrent with the closing of the transactions, the company's core ingredients business, operated through Global Food's subsidiary Global Food and Ingredients Inc., entered into a new $20-million asset-based credit facility to finance the day-to-day working capital requirements of the core ingredients business. The proceeds from the transactions and ABL facility will be used by the company's core ingredients division to strengthen the company's balance sheet through the refinancing and repayment of existing loans and unlock liquidity to invest in further growth of the operation.

The proceeds drawn from the ABL facility, coupled with a portion of the proceeds from the transactions, will be used to repay the company's existing asset-based lending facility.

"We are very pleased to announce the closing of the pet food transaction and the refinancing being offered by our new lender," said David Hanna, chief executive officer. "The transactions will help meet the capital needs in our core ingredients business, and this refinancing will significantly improve our flexibility and strengthen our balance sheet, positioning GFI to realize on continued growth opportunities."

ABL facility

The ABL facility replaces the company's previous credit facility and is committed for three years, maturing Feb. 1, 2027. The ABL facility is secured by a first-ranking interest in the company's core ingredients' accounts receivable and inventory. The ABL facility will immediately unlock approximately $2-million to $3-million in additional capital, which will be used to realize on growth opportunities. The ABL facility will bear interest at an annual rate that is equal to the one-month Canadian dollar offered rate plus 4 per cent, subject to a minimum interest rate of 8.38 per cent during the term of the facility. Further details regarding the terms of the ABL facility will be made available under the company's SEDAR+ profile.

Pet food transaction

Under the pet food transaction, the company transferred all of the assets and liabilities associated with the pet food ingredients business to Big Sky, a subsidiary of the company. As part of the pet food transaction, the company raised $3.45-million through the sale of common shares of Big Sky to 35 Oak, representing an ownership stake of 49.9 per cent.

In addition to the subscription proceeds, Big Sky entered into a two-year committed $10.0-million credit facility consisting of two tranches, including a revolving credit facility of up to $5.0-million and a term loan in the amount of $5.0-million from the lender, 35 Oak. The pet food loans bear interest at a rate of Canadian prime rate plus 3.80 per cent and are secured by all of the assets of Big Sky. The pet food loans include a 2.0-per-cent commitment fee payable over the term.

As consideration for providing the pet food loans, the company issued 35 Oak non-transferable warrants to purchase an aggregate of 3.25 million common shares of the company, each warrant entitling 35 Oak to acquire one common share at an exercise price of 20 cents per share for a period of two years following the date of issuance.

Subordinated loan

Concurrent with the close of the pet food transaction, the company entered into a $500,000 subordinated loan with 35 Oak. The subordinated loan will have a term of one year from the date of issuance, accrue interest at a rate of 15 per cent per annum and be payable in full at maturity. The subordinated loan includes a 3.0-per-cent commitment fee payable at disbursement and is secured by a general security agreement over all of the assets of the company's core ingredients division, subordinated to the company's senior lenders.

The transactions constituted related-party transactions of Global Food, within the meaning of Multilateral Instrument 61-101 (Protections of Minority Security Holders in Special Transactions) as 35 Oak is a shareholder of the company. The company determined that the transactions are exempt from the formal valuation and minority approval requirements of MI 61-101 in reliance of the exemptions set forth in sections 5.5(e) and 5.7(1)(c) of MI 61-101, respectively, as the transactions are supported by a control person of the company in the circumstances described in Section 5.5(e) of MI 61-101.

About Global Food and Ingredients Ltd.

Global Food is a fast-growing Canadian plant-based food and ingredient company, connecting the local farm to the global supply chain for peas, beans, lentils, chickpeas and other high protein specialty crops. Global Food's vision is to become a vertically integrated farm-to-fork plant-based company providing traceable, locally sourced, healthy and sustainable food and ingredients. Global Food is organized into four primary business lines: core ingredients, value-added ingredients, plant-based pet food ingredients and downstream products. Headquartered in Toronto, Global Food buys directly from its extensive network of farmers, processes its products locally at its four wholly owned processing facilities in Western Canada and ships to 37 countries across the world.

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