Vancouver, B.C. – March 11, 2021 – Nabati Foods Global Inc. (“Nabati Global” or the “Company”), is pleased to announce that it has completed the acquisition (the “Transaction”) of all of the issued and outstanding securities of Nabati Foods Inc. (“Nabati”) pursuant to the terms of a share exchange agreement dated January 19, 2021, as amended (the “Share Exchange Agreement”) among the Company, Nabati and the shareholders of Nabati.
The Company is also pleased to announce that it has completed a brokered private placement of special warrants of the Company (the “Special Warrants”), at a price per Special Warrant of $0.50 (the “Issue Price”), and issued an aggregate 15,461,000 Special Warrants (including over-allotment option) for total gross proceeds of $7,730,500 (the “Offering”). The Offering was conducted by Mackie Research Capital Corporation as sole bookrunner and lead agent on a commercially reasonable “best efforts” private placement basis.
The Offering is being carried out by the Company prior to making an application to obtain a listing on the Canadian Stock Exchange. There can be no assurance that the Company will successfully achieve a listing as planned. The net proceeds of the Offering will be used to fund the Company’s proposed go-public transaction as well as for Nabati’s business development, working capital, plant expansion, and to purchase equipment to expand production capacity and develop new product lines.
“We are very pleased with the interest we have received. Our team has put in the legwork to build a company with the highest quality plant-based products, and that commitment to quality is starting to pay off, with demand exploding over the past year,” said Nabati CEO, Ahmad Yehya. “This financing puts Nabati in an even more robust position to expand our production capacity to meet growing demand from grocery, foodservice, and industrial customers, while also supporting product development and innovation.”
Nabati is an Edmonton-based food technology company offering healthy, plant-based products that are currently sold throughout North America. All products are certified gluten-free, dairy-free, egg-free, refined sugar-free, all-natural (non-GMO), certified kosher, and certified vegan. Its product lines currently include dairy-free cheesecakes, cheese alternatives, and plant-based meats including “chicken” and “fish” burgers.
“The Company is in a secure place and teeing up for an impressive 2021 and beyond with this private placement being the latest leading indicator,” said the Nabati Executive Chairman, Don Robinson, who formerly served as CEO and President of Mars Canada. “We look forward to expanding the Company’s footprint throughout North America and eventually into Europe, commensurate with the demonstrated interest from investors and customers.”
Pursuant to the terms of the Share Exchange Agreement, in consideration for the Transaction, the Company issued an aggregate of 14,000,000 common shares of the Company (the “Consideration Shares”) to the shareholders of Nabati at a deemed price of $0.50 per Consideration Share. In addition, the Company has assumed all obligations of Nabati in connection with certain outstanding convertible notes in the aggregate principal amount of $2,349,508.02, which notes entitle the holders thereof to acquire approximately 6,712,880 common shares at a price of $0.35 per share representing a 30% discount to the Issue Price and 3,356,440 common share purchase warrants with an exercise price of $0.625 per warrant representing a 25% premium to the Issue Price.
Each Special Warrant shall be automatically exercisable, for no additional consideration, into common shares of the Company (each a “Share”), on the date that is the earlier of: (i) the third business day following the date on which the Company obtains a receipt from the applicable securities regulatory authorities (the “Securities Commissions”) for a (final) prospectus qualifying distribution of the Shares underlying the Special Warrants (the “Qualifying Prospectus”), and (ii) the date that is four months and one day after the closing of the Offering (being July 10, 2021).
In connection with the Offering, the Company paid cash fees in the amount of $529,813.55, and issued a total of 863,320 broker warrants and advisory warrants (together, the “Compensation Warrants”). Each Compensation Warrant is exercisable to purchase one Share, at $0.50 per Share, until March 9, 2023.
The Company will use its commercially reasonable efforts to obtain a receipt from the Securities Commissions for the Qualifying Prospectus within 120 days of the closing of the Offering (not including the date of closing), provided, however, that there is no assurance that a Qualifying Prospectus will be filed or that a receipt therefor will be issued by the Securities Commissions prior to the expiry of the statutory four-month hold period.
Prior to the receipt of the Qualifying Prospectus and the automatic exercise of the Special Warrants, the securities issued under the Offering will be subject to an indefinite hold period under applicable securities laws.