Gabriella’s Kitchen Inc. (“GABY” or the “Company”) (CSE: GABY), is pleased to announce that it has entered into an agreement with a syndicate of agents co-lead by GMP Securities L.P. and Haywood Securities Inc., and including Echelon Wealth Partners Inc., and Sprott Capital Partners (collectively, the “Agents“), pursuant to which the Company will issue on a marketed, “best efforts” private placement basis, up to C$10,000,000 of Units (the “Units“) of the Company at  a price of C$0.30 per Unit (the “Offering Price“) (the “Offering“). Each Unit will consist of one common share (a “Common Share“) and one-half common share purchase warrant of the Company (a “Warrant“).  Each full Warrant will be exercisable to acquire one Common Share (a “Warrant Share“) for a period of two years following the Closing Date (as hereinafter defined) of the Offering at an exercise price of C$0.38 per share, subject to adjustment in certain events.

Margot Micallef, Founder and CEO of GABY, stated, “The Offering will enable GABY to continue its aggressive growth trajectory and fulfill its acquisition strategy to acquire complimentary cannabis infused brands as well as its expansion plans to bring CBD products to market.  I am also pleased to announce I will be subscribing for $1,000,000 of the Offering personally.”

Pursuant to the terms of the offering, the Agents have been granted an option (the “Option“) to arrange for the sale, at the Offering Price, additional Units up to 25% of the Units sold under the Offering. The Option is exercisable by the Agents at any time up until 48 hours prior to the Closing Date.

The net proceeds from the Offering will be used for capital expenditures, potential acquisitions, brand and sales investment, working capital, and general corporate purposes.

Closing of the Offering is expected to occur on or about May 20, 2019 (the “Closing Date“). The Offering is in the form of a best efforts private placement pursuant to applicable exemptions from the prospectus requirements in all of the Provinces of Canada to “accredited investors” within the meaning of National Instrument 45-106. The Agents are also entitled to offer the Units for sale in the United States only to Qualified Institutional Buyers (within the meaning of Rule 144A) and/or Accredited Investors (within the meaning of Rule 501(a) of Regulation D) pursuant to available exemptions from the registration requirements of the Securities Act of 1933, as amended (the “United States Securities Act“), and in each case in compliance with the securities laws of the applicable States of the United States. The Agents may also offer the Units for sale outside Canada and the United States provided no prospectus offering or comparable obligation arises in such other jurisdiction.

This press release is not an offer of the securities for sale in the United States. The securities may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the United States Securities Act and applicable U.S. state securities laws. The Company will not make any public offering of the securities in the United  States.  The securities have not been and will not be registered under the U.S. Securities Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful.

The Company anticipates that a portion of the Units will be sold to the directors, officers, or other insiders of the Company, who are related parties of the Company pursuant to Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101“), therefore the Offering may constitute a “related party transaction” within the meaning of MI 61-101. In its consideration and approval of the Offering, the board of directors of the Company determined that the Offering will be exempt from the formal valuation and minority approval requirements of MI 61- 101 on the basis that the fair market value of the Offering to related parties is not expected to exceed 25% of the market capitalization of the Company, in accordance with Sections 5.5 and 5.7 of MI 61-101.

All securities issued under the Offering will be subject to a four month and one day hold period under applicable securities laws. The Offering is subject to a number of conditions, including, without limitation, receipt of all regulatory approvals, including but not limited to the approval of the Canadian Securities Exchange (the “CSE“).

SOURCE Gabriella’s Kitchen Inc.