TORONTO, - Global Food and Ingredients Ltd. (TSXV: PEAS) (OTCQX: PEASF) ("GFI" or the "Company"), announced today that it has completed the previously announced sale of certain assets ("Purchased Assets") of its subsidiary, GFI Brands Inc., as they relate to the division of Yofiit, a premium plant-based milk and snack food operation ("Yofiit") to 14901100 Canada Inc., a corporation controlled by Marie Amazan and Felix Amazan, the former owners (the "Purchasers" and such transaction, the "Transaction").
In accordance with the asset purchase agreement ("APA") dated May 1, 2023 between GFI and the Purchasers, the aggregate purchase price of $2,978,000 for the Purchased Assets (the "Purchase Price") was satisfied by: (i) the issuance by the Purchasers of a note in the principal amount of $2,700,000 in favour of GFI (the "Note"); and (ii) the Share Repurchase Amount (as defined below).
Details of the Transaction
In accordance with the terms of the Note, the Purchasers will have an interest holiday period until the day that is 18 months from the closing (the "Interest Holiday Period"), following which the Note will bear interest at 10% per annum on any outstanding amounts. If any principal amount owning under the Note remains outstanding following the Interest Holiday Period, the Company will be entitled a royalty of the Purchaser's quarterly sales, with the royalty percentage adjusted according to the outstanding amount owing under the Note. The Note will mature 36 months from closing and be secured against the Purchased Assets, inventory of the business and other assets of the Purchasers pursuant to a general security agreement entered into between the parties.
In addition, the parties executed an inventory purchase agreement whereby the Yofiit products will continue to be held by GFI at closing and sold to the Purchasers over a period of six months following closing.
Simultaneously with the closing of the Transaction, GFI entered into a share purchase agreement with Marie Amazan and Felix Amazan to repurchase for cancellation an aggregate of 1,000,000 shares in the capital of GFI ("Shares" and such repurchase, the "Share Repurchase"), on a non-cash basis for a deemed aggregate purchase price of $278,000 (the "Share Repurchase Amount").
The Transaction constitutes a "related party transaction" of GFI, within the meaning of Multilateral Instrument 61-101 – Protections of Minority Security Holders in Special Transactions ("MI 61-101") as Marie Amazon is the co-founder and President of YoFiit. The Company determined that the Transaction is exempt from the formal valuation and minority approval requirements of MI 61-101 in reliance of the exemptions set forth in sections 5.5(a) and 5.7(1)(a) of MI 61-101, respectively.
Source : Newswire.ca