General Assembly Holdings Limited (the “Company” or “GA Pizza”), an innovative, premium consumer packaged goods brand dedicated to making delicious pizzas available to everyone, everywhere, is reiterating a press release published on August 29, 2022 that announced a change to its board of directors (the “Board”), a strategic financing and a production facility move.
The Company announced the appointment of Glen Keleher to the Board. Mr. Keleher brings over 20 years of operational experience in multiple manufacturing industries and has extensive experience reducing production costs while providing better quality products. Mr. Keleher has successfully led two manufacturing companies from start up through to successful exit. Equipped with a business degree from Brock University and a Lean Executive designation from the Michigan Manufacturing Technology Center, Mr. Keleher has acted as an advisor to some of Canada’s most exciting startups, guiding them to create meaningful strategic plans and coaching them to achieve their desired results. Mr. Keleher replaces Nicholas Reichenbach, who has resigned from the Board to pursue other interests. The Company would like to thank Mr. Reichenbach for his extensive contributions. Mr. Keleher’s appointment remains subject to approval of the TSX Venture Exchange (the “TSXV”).
The Company also announced that it has entered into loan arrangements with certain lenders (each, a “Lender”) whereby, subject to the receipt of TSXV approval, the Lenders will advance to the Company an aggregate of $2,000,000 (the “Loans”).
The Loans shall mature, with all Loans and any accrued and unpaid interest thereon repayable, on the one-year anniversary of issuance (the “Maturity Date”). The Loans will be secured by a fixed and floating charge on the Company’s assets, pursuant to the terms of a general security agreement, and bear interest at the simple rate of 18% per annum. The Company shall be entitled to prepay any portion of the Loan or any accrued and unpaid interest thereon, in whole or in part, at its discretion at any time prior to the Maturity Date without any bonus or penalty. No monitoring fee will be payable in connection with the Loans.
In connection with the Loans, subject to TSXV approval, the Company has also agreed to issue to the Lenders, as loan bonuses, 1,739,130 common shares of the Company (“Bonus Shares”) at a deemed price of $0.23 per Bonus Share.
The Company will use the Loan proceeds for working capital and general corporate purposes.
In connection with the Loans and as an inducement to Timothy Nye, who previously made certain loans to the Company in the amount of $2,000,000 as disclosed in the news releases of the Company dated November 5, 2021 and December 31, 2021 (the “Nye Loans”), making Loans to the Company in the principal amount of $1,750,000, subject to TSXV approval, the Company also proposes to amend the expiry date of the Nye Loans to the Maturity Date, cancel an aggregate of 2,578,153 common share loan bonus warrants previously issued to Mr. Nye in connection with the Nye Loans, and issue 2,578,153 new common share warrants to Mr. Nye (the “Replacement Warrants”). Each Replacement Warrant will be exercisable to acquire one common share of the Company until the Maturity Date at an exercise price of $0.23.
The Replacement Warrants and the Bonus Shares are subject to a four-month and one day hold period pursuant to applicable Canadian securities laws.
The Company also announced that it has terminated its current master production facility lease and will be moving its frozen pizza operations to a new 12,610 square foot facility located in Mississauga, Ontario (“Pacific Circle”) pursuant to the terms of a 5-year lease. Pacific Circle better services the needs of the Company and its growth strategy. The Company has built up sufficient inventory to cover all retail partners’ demand requirements and no disruptions to the business are anticipated. Production in Pacific Circle is expected to commence in the fourth quarter of 2022.
“The move to Pacific Circle will help facilitate a large reduction in both our fixed cost base and the variable costs of producing each pizza,” said CEO Ali Khan Lalani. “The facility, a former frozen foods manufacturing facility, just happened to come up for lease and brings with it all the production capabilities and strategic location required to help us improve our margin structure and ensure the Company’s long-term success.”
The Company also announced that it has issued an aggregate of 400,000 restricted share units (the “RSUs”) to directors of the Company pursuant to the Company’s Fixed Equity Incentive Plan dated May 2, 2022. 320,000 of the RSUs were granted to independent directors and 80,000 of the RSUs were granted to a non-independent director in connection with such director’s consulting services engagement with the Company. The RSUs vest as to 100% on the one-year anniversary of the date of grant.
