The Fresh Factory Announces Closing of First Tranche of Private Placement

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

CAROL STREAM, IL / ACCESSWIRE / February 6, 2023 / The Fresh Factory B.C. Ltd. (CSE:FRSH)(FRA:Q4Z) ("The Fresh Factory" or the "Company"), a mission-driven company for fresh, clean-label, and better-for-you food and beverage brands, is pleased to announce the completion of the first tranche of its previously announced non-brokered private placement pursuant to which the Company issued an aggregate of: (i) 41,666 subordinate voting shares ("Subordinate Voting Shares") in the capital of the Company at a price of US$0.60 (approximately C$0.80) per Subordinate Voting Share; and (ii) 5,832 proportionate voting shares ("Proportionate Voting Shares") in the capital of the Company at a price of US$60.00 (approximately C$80.00) per Proportionate Voting Share, for total gross proceeds of US$374,919.60 (approximately C$498,643) (the "Offering"). The Company has received firm commitments for additional subscriptions totaling approximately US$1,625,080 (approximately C$$2,161,357) and anticipates closing on such amounts, together with any additional funds of up to a maximum aggregate amount of US$3,000,000 (approximately C$4,000,000) of securities in a subsequent tranche of the Offering in March 2023.

Bill Besenhofer, Chief Executive Officer and co-founder of The Fresh Factory, commented: "With the successful closing of this initial tranche of our non-brokered private placement, we are thrilled to have the additional capital to fuel the rapid growth of our business. We plan to use the proceeds to bolster our working capital position and upgrade our existing facility to support our expansion plans. We are confident that these strategic investments will position the Company for long-term success as we accelerate our growth plans to meet consumer demand for fresh, clean-label products."

The proceeds from the Offering are intended to be used to fund the growth and development of its business, including upgrades to its existing facility, and for general corporate and working capital purposes.

Each Proportionate Voting Share issued pursuant to the Offering has a restricted right to convert into 100 Subordinate Voting Shares, subject to adjustments for certain customary corporate changes. The ability to convert the Proportionate Voting Shares is subject to a restriction that the aggregate number of Subordinate Voting Shares and Proportionate Voting Shares held of record, directly or indirectly, by residents of the United States may not exceed 40% (subject to increase to 50% in the sole and unfettered discretion of the board of directors of the Company) of the aggregate number of Subordinate Voting Shares and Proportionate Voting Shares issued and outstanding after giving effect to such conversions, and to a restriction on beneficial ownership of Subordinate Voting Shares exceeding certain levels, in order for the Company to maintain its status as a "foreign private issuer" (as determined in accordance with Rule 3b-4 under the U.S. Exchange Act). The Subordinate Voting Shares are listed and posted for trading on the Canadian Securities Exchange under the symbol "FRSH". The Proportionate Voting Shares are not listed or posted for trading on any stock exchange.

Nathan Laurell and Lindsay Levin, each a director of the Company, acquired 3,333 Proportionate Voting Shares and 833 Proportionate Voting Shares pursuant to the Offering, respectively. Participation by each of Mr. Laurell and Ms. Levin in the Offering was considered a "related party transaction" pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company was exempt from the requirements to obtain a formal valuation or minority shareholder approval in connection with the participation of Mr. Laurell and Ms. Levin in the Offering in reliance of sections 5.5(b) and 5.7(1)(b) of MI 61-101. A material change report will be filed in connection with the participation of Mr. Laurell and Ms. Levin in the Offering less than 21 days in advance of the closing of the Offering, which the Company deemed reasonable in the circumstances so as to be able to avail itself of potential financing opportunities and complete the Offering in an expeditious manner.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended (the "1933 Act") and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act, as amended, and applicable state securities laws.

About The Fresh Factory B.C. Ltd.
The Fresh Factory is a vertically integrated company focused on accelerating the growth of the fresh, clean-label, plant-based food and beverage brands of tomorrow. The Fresh Factory owns or partners with emerging brands in the plant-based space to develop, manufacture, and sell products made from fresh produce and recognizable ingredients. It operates from its centrally located manufacturing facility near Chicago, serving customers across the US. As a public-benefits corporation, The Fresh Factory is ESG-focused, driven to make a lighter, greener impact on the environment and a stronger, positive impact on local communities and the food system as a whole. Learn more about The Fresh Factory at www.thefreshfactory.co and find The Fresh Factory on social media at Instagram, Twitter, and LinkedIn. To receive news and updates about The Fresh Factory, visit their website at www.thefreshfactory.co.

Contacts

Bill Besenhofer
CEO and Co-founder
1-877-495-1638
info@thefreshfactory.co

Alyssa Barry
Media and Investor Relations
1-877-495-1638
healthyinvestors@thefreshfactory.co

Forward-Looking Statements

This news release contains "forward-looking statements" or "forward-looking information" (collectively referred to hereafter as "forward-looking statements") within the meaning of applicable Canadian securities legislation. All statements that address activities, events, or developments that the Company expects or anticipates will, or may, occur in the future, including, but not limited to, statements about the Offering, the use of proceeds from the Offering, the anticipated closing date or dates of subsequent tranches of the Offering, the receipt of all required regulatory approvals including the Company's objectives and goals conducted and proposed to be conducted at the Company's facilities, Company's new product offerings, its ability to execute on its goals, general macro and micro economic impacts of inflation on the business and operation of the Company, the timing pertaining to these goals and receipt of applicable consents and approvals, and Company's business prospects, future trends, plans, and strategies. In some cases, forward-looking statements are preceded by, followed by, or include words such as "may", "will," "would", "could", "should", "believes", "estimates", "projects", "potential", "expects", "plans", "intends", "proposes", "anticipates", "targeted", "continues", "forecasts", "designed", "goal", "anticipate" or the negative of those words or other similar or comparable words. Although the management of the Company believes that the assumptions made and the expectations represented by such statements are reasonable, there can be no assurance that a forward-looking statement herein will prove to be accurate. Forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated, or intended. Risks and uncertainties applicable to the Company, as well as trends identified by the Company affecting its industry, can be found in the final long-form prospectus of the Company dated November 10, 2021, and the Company's continuous disclosure record available on SEDAR atwww.sedar.com. Such cautionary statements qualify all forward-looking statements made in this news release. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law.

SOURCE: The Fresh Factory B.C. Ltd.