FRII Freshii Inc

Freshii Inc. (TSX: FRII) (“Freshii” or the “Company”) today announced that it has filed and is in the process of mailing the Management Information Circular and related materials for the special meeting of Freshii’s shareholders, which will be held virtually at 9:00 a.m. (Toronto time) on February 8, 2023 via live audio webcast as more particularly set out in the meeting materials.

At the meeting, shareholders will be asked to consider the previously announced plan of arrangement pursuant to which Foodtastic Inc. will acquire all of the issued and outstanding Class A subordinate voting shares and Class B multiple voting shares in the capital of Freshii and such other business as may properly come before the meeting or any adjournment or postponement thereof.

The Circular and related meeting materials are available on SEDAR under Freshii’s profile at www.sedar.com. Freshii will be mailing copies of the Circular and related meeting materials to shareholders of record as at January 9, 2023.

The Arrangement

As previously announced by Freshii on December 19, 2022, Freshii and Foodtastic entered into a definitive arrangement agreement pursuant to which Foodtastic has agreed to acquire all of the issued and outstanding Freshii shares at a price of $2.30 in cash per share, regardless of class.

This transaction will be implemented by way of a statutory plan of arrangement involving Freshii and Foodtastic under the Business Corporations Act (Ontario) (the “arrangement”). The arrangement is subject to approval of the Ontario Superior Court of Justice (Commercial List) as well as by Freshii shareholders at the meeting as described further below.

The arrangement is anticipated to be completed by the end of February 2023 subject to obtaining the approval of the Freshii shareholders and the Court, as well as the satisfaction or waiver of other customary closing conditions.

Court Approval

Freshii is also pleased to announce that on January 12, 2023, the Court granted an interim order that, among other things, authorized Freshii to call and hold the meeting to approve the arrangement. The hearing date for the application to the Court for the final order approving the arrangement has been scheduled for February 14, 2023.

Approval of the Arrangement by Shareholders

In order to become effective, the arrangement must be approved by an affirmative vote of at least: (a) two-thirds (66⅔%) of the votes cast by Freshii shareholders present in person (virtually) or represented by proxy at the meeting and entitled to vote thereat, and (b) a simple majority (50%+1) of the votes on the resolution approving the arrangement by holders of Freshii’s Class A subordinate voting shares and Class B multiple voting shares (voting separately as a class) present in person (virtually) or represented by proxy at the meeting, excluding the votes cast by shareholders that are required to be excluded pursuant to Multilateral Instrument 61-101 Protection of Minority Shareholders for purposes of the arrangement. It is currently expected that approximately 1.5% of the Class A subordinate voting shares will be excluded from that vote, and that none of the Class B multiple voting shares will be excluded.

The votes of all Freshii shareholders are important regardless of the number of shares held. Freshii encourages shareholders to read the Circular and related meeting materials in detail. Copies of these meeting materials are available under Freshii’s profile on SEDAR at www.sedar.com.

For details on how to vote, shareholders should refer to the Circular and related meeting materials.

* YOUR VOTE IS IMPORTANT *

The Board of Directors of Freshii UNANIMOUSLY RECOMMENDS that shareholders vote FOR the resolution approving the Arrangement.

Reasons for the Arrangement

The Freshii board of directors and the special committee of independent directors made their respective determinations based on a range of factors, in consultation with their financial and legal advisors, including, among others:

• the significant premium being offered under the arrangement and the certainty of value and immediate liquidity provided to shareholders by the arrangement;
• the fact that a special committee of independent directors of Freshii oversaw a process involving discussions with multiple potential interested parties and the negotiation with an arm’s length third party that has resulted in the arrangement; and
• their conclusion that the value of the consideration under the arrangement offered greater and more certain value to shareholders than was available under the other proposals received by Freshii from potential interested parties in the process, or from continuing to operate the company on a standalone basis.

Further information on the background of the transaction and a summary of the reasons, risks and other factors considered by the special committee, and by the board in making its recommendation that shareholders vote FOR the resolution approving the arrangement, are described in more detail on pages 25 to 38 of the Circular.

Shareholder Questions and Assistance

Shareholders with questions regarding the virtual meeting portal or requiring assistance accessing the meeting website can contact TSX Trust Company at 1-866-600-5869 or tsxtis@tmx.com.

About Freshii

Since 2005, Freshii has established a healthy food focused franchised restaurant concept which currently operates 343 locations in North America and internationally. All but one of Freshii’s stores are franchised. In recent years, the Company has further expanded their omni-channel footprint in the adjacent health and wellness business lines, including in consumer-packaged goods, nutritional supplements, and ecommerce retail, following the acquisition of a majority interest in a leading Canadian online health and wellness product retailer, Natura Market. Freshii’s consumer-packaged goods retail partners include, among others, Walmart Canada, Shell Gas and Convenience Stations, ONroute, and Air Canada. Further information is available at www.freshii.com.

About Foodtastic

Foodtastic is a leading franchisor of restaurant brands in Canada. Including the recently announced acquisitions of Quesada and Freshii, Foodtastic’s Canadian system exceeds 1,200 restaurants and $950 million in sales. Foodtastic is rapidly growing internationally, with over 150 restaurants outside of Canada.

Foodtastic’s brands include Second Cup, Pita Pit, Milestones, Fionn MacCool’s, Shoeless Joe’s, Au Coq, La Belle et La Boeuf, and Monza.

Forward Looking Information

Certain statements included in this press release may constitute “forward-looking statements” within the meaning of applicable Canadian securities legislation. More particularly and without limitation, this press release contains forward-looking statements and information regarding whether the arrangement will be completed, the anticipated benefits of the proposed transaction for Freshii, its franchisees, shareholders and other stakeholders, and the anticipated timing of the special meeting and of the completion of the arrangement. Use of words such as “will,” “expect,” or other words of similar effect may indicate “forward-looking statements.” Except as may be required by Canadian securities laws, Freshii does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements, by their very nature, are subject to numerous risks and uncertainties and are based on several assumptions which give rise to the possibility that actual results could differ materially from Freshii’s expectations expressed in or implied by such forward-looking statements and that the objectives, plans, strategic priorities and business outlook may not be achieved. As a result, Freshii cannot guarantee that any forward-looking statements will materialize, or if any of them do, what benefits Freshii will derive from them.

In respect of forward-looking statements and information concerning the anticipated benefits and timing of the completion of the proposed transaction, Freshii has provided such statements and information in reliance on certain assumptions that it believes are reasonable at this time, including assumptions as to the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary court and shareholder approvals; the ability of the parties to satisfy, in a timely manner, the other conditions for the completion of the arrangement, and other expectations and assumptions concerning the proposed transaction. The anticipated dates indicated may change for a number of reasons, including the necessary court and shareholder approvals or the ability of the Board to consider and approve, subject to compliance by Freshii of its obligations under the arrangement agreement, a superior proposal for Freshii. Although Freshii believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct, that the proposed transaction will be completed or that it will be completed on the terms and conditions contemplated in this press release. Accordingly, investors and others are cautioned that undue reliance should not be placed on any forward-looking statements.

Risks and uncertainties inherent in the nature of the proposed transaction include, without limitation, the failure of the parties to obtain the necessary shareholder and court approvals or to otherwise satisfy the conditions for the completion of the arrangement; failure of the parties to obtain such approvals or satisfy such conditions in a timely manner; Foodtastic’s ability to draw down the financing as contemplated by its credit agreement; significant transaction costs or unknown liabilities; the ability of the Board to consider and approve, subject to compliance by Freshii with its obligations under the arrangement agreement, a superior proposal for Freshii; the failure to realize the expected benefits of the arrangement; and general economic conditions. Failure to obtain the necessary shareholder and court approvals, or the failure of the parties to otherwise satisfy the conditions for the completion of the arrangement or to complete the arrangement could mean that the arrangement may not be completed on the proposed terms, on the anticipated timelines or at all. In addition, if the arrangement is not completed, and Freshii continues as an independent entity, there are risks that the announcement of the arrangement and the dedication of substantial resources by Freshii to the completion of the arrangement could have an impact on its business and strategic relationships, including with future and prospective employees, customers, suppliers and franchisees and other business partners, operating results and activities in general, and could have a material adverse effect on its current and future operations, financial condition and prospects. Consequently, Freshii cautions readers not to place undue reliance on the forward-looking statements and information contained in this press release. Freshii does not intend, and disclaims any obligation, except as required by law, to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Contact

Investor Relations

ir@freshii.com

1.866.337.4265