Rapid Nutrition Successfully Completes Funding Agreement to Support Accelerated Global Growth

London, United Kingdom - Feb. 25, 2022Rapid Nutrition PLC (Euronext Growth: ALRPD, OTCQB: RPNRF), a natural wellness company focused on organic wholefood-based nutrition and science-based herbal products, today announces the signing of a financing commitment of up to EUR 30 million from Negma Group, a diversified investment group, with the goal of strengthening its balance sheet and supporting corporate growth initiatives and expansion of Rapid Nutrition globally.

“Executing on this strategy will further Rapid Nutrition’s growth in global markets and online, while supporting sustained worldwide demand for and interest in organic health and wellness products,” said Rapid Nutrition CEO Simon St. Ledger. “Our board continues to push the boundaries by supporting and leading through innovation in products, business development, partnerships and growth initiatives to strongly support a strong but sustainable growth forward, anchoring future earnings. This funding will also support the group’s investor relations initiatives and access to meaningful capital market services and liquidity, with our number-one priority being to enhance shareholder value.”

In particular, the additional funding will support increased demand on manufacturing as a result of new distribution agreements secured over the past year, expand its go-to market product innovation with a focus on the company’s patented anti-viral offering, and eliminate current loans to firm up the corporate balance sheet and remain well-capitalized leading into the next phase of worldwide growth and expansion. With ongoing demand for health, wellness and immunity products remaining in response to the global pandemic, Rapid Nutrition continues to grow distribution, partnerships and direct-to-consumer e-commerce options while implementing its ‘buy & build’ strategy for accelerated market penetration.

St. Ledger added that, “I’d like to thank all our investors and shareholders for their continued support and confidence in all our efforts. The successful completion of this financing reinforces our position in a rapidly growing sector, enabling us to grow faster, be more competitive and come out even stronger from the pandemic while also laying the foundation for future growth.”

The financing commitment will allow Rapid Nutrition to pursue strategic acquisitions as part of its accelerated growth strategy.

The deal was successfully completed, based on the current resolutions in place1. In consideration for the issuance of convertible notes, Negma Group has committed to invest up to EUR 30 million in tranches of up to EUR 2 million each over a period of 48 months. The principal amount of each tranche1 comes with warrants2 attached at a premium. Each tranche is, at Rapid Nutrition’s discretion, by way of a convertible note.

 

About Rapid Nutrition

Dedicated to the development and distribution of premium, science-based health and wellness brands across the globe, Rapid Nutrition shares a wealth of award-winning products with consumers who are passionate about innovations that are “made by nature, refined by science.” Rapid Nutrition’s first-class scientific team matches the experience of its management team to keep both the company and consumers on top of the latest industry trends and developments, while aligning with industry leaders worldwide to deliver effective supplements and solutions. Rapid Nutrition aims to be the supplier of choice globally by offering premium brands with the highest-quality ingredients to deliver maximum results.

For more information, please visit http://rnplc.com 

Investor Relations Contact:

ir@rnplc.com

 

 

Disclaimer

1. In accordance with the authority and  passing of resolution 5 & 6  at the Companies AGM held on the 13th May 2021, which such authorities shall expire at the conclusion of the next Annual General Meeting of the Company, unless previously renewed, varied or revoked. Capital Increases: In the event that the Company was to carry out such issues in the future, shareholders would accordingly have their percentage interest in the Company diluted. 2. In respect of any Tranche ninety percent (90%) of the lowest Daily VWAP over the period of fifteen (15) Trading Days immediately preceding the issuance of a Subscription Request for that Tranche. 3. For each tranche of the Convertible Bonds drawn by the Company, the Investor shall receive transferrable Warrants entitling them to purchase a number of shares in the Company equivalent to fifty percent (50%) of the value of the tranche, adjusted for the exercise premium, during a period of Five (5) years (subject to customary adjustments).

Main characteristics of the Convertible Bond (“CB”)

The Issuer and the Investor have agreed to enter into this Agreement pursuant to which the Investor will subscribe for up to 30,000 convertible loan notes, each such convertible loan note having a nominal value of EUR€1,000 (the "Convertible Notes"), to be subscribed for by the Investor in 16 or more tranches: a first tranche of an aggregated value of EUR €1,500,000 followed by a second tranche of EUR €500,000 once an equivalent amount of the first tranche has been converted, followed by subsequent tranches of up to EUR €2,000,000 each over the course of the Commitment Period (the "Total Commitment"). As a condition to the signature of this Agreement and the commitment of the Investor to subscribe for the Convertible Notes, the Share Lender has agreed to lend shares to the Investor for the term of the Agreement. The Issuer is fully aware that without such share loan, the Investor would never have (i) agreed to sign this Agreement; or (ii) committed to subscribe for Convertible Notes on the terms set out in the Agreement.  Furthermore, the Company has agreed to pay to the Investor a commitment fee during the agreement via the issuance of 1’500 convertible notes without any warrants attached. During the Commitment Period, neither the Investor nor any of its Affiliates may short sell any Shares or enter into any arrangement pursuant to which Shares are short sold on behalf of the Investor or any of its Affiliates.

"Conversion Period" means the period during which Conversion may be made according to the Instrument and being for each Note issued under a Tranche the period from the registration of the Notes and ending 48 months following the relevant Subscription Date (provided that the Conversion Period may be shortened as set out herein).

"Conversion Price" the higher of the par value of a Share and ninety percent (90%) of the lowest Daily VWAP as calculated by BBG for the share on the Euronext Growth Exchange over the Pricing Period.

“Coupon” the CB will bear no interest.

"Conversion Ratio" the Conversion Ratio shall be determined according to the following formula:

N = Vn / P, where:

N is the number of Conversion Shares to be issued;

Vn is the principal amount outstanding in respect of the Notes in Euro; and

P is the Conversion Price in Euro.

"Daily VWAP" means the daily Volume Weight Average Price ("VWAP") on Euronext Growth, in Euro (if the Ordinary Shares are traded on a European exchange other than the UK) as published by Bloomberg LP (or should Bloomberg cease to exist or publish it, by any other financial news and data service provider of reference publishing reliable data on the Shares, it being understood that the VWAP shall be calculated according to exactly the same methods as those used by Bloomberg), which is a trading benchmark calculated by dividing the total value trading (sum of price times trade size) on a Trading Day by the total volume (sum of trade sizes) of trades for that Trading Day taking into account every qualifying transaction. Depending on the condition codes of the transaction and the condition codes included in the Bloomberg defined VWAP calculation, a transaction may or may not be deemed qualifying. Historical values may also be adjusted on receipt of qualifying delayed trades"Directors"; the board of directors of the Company, or a duly authorised committee of that board, for the time being.

The subscription to any tranches is at the sole discretion on the Issuer.

The Issuer will at the same time as the issue of each Tranche issue to the Investor such number of Warrants as have an aggregate exercise price equal to 50% of 115% of the Subscription Price for such Tranche.

Main Characteristics of the Warrants attached to the Convertible Bonds

For each tranche of Convertible Bonds drawn by the Company, the Investor shall receive Warrants entitling the Investor to purchase a number of shares in the Company equivalent to fifty percent (50%) of the value of the tranche, adjusted for the exercise premium, during a period of Five (5) years. The warrants will be stripped from the convertible Bonds upon issuance of each tranche.

“Warrant pricing conditions” the Exercise Price of the Warrants to be issued at each Tranche issuance shall be equal to one hundred and fifteen percent (115%) of the VWAP of the 15 trading days immediately preceding the date of the request to issue such Tranche, except for the first Tranche for which the exercise price shall be defined as equal to one hundred and fifteen percent (115%) of the lowest both:

  1. the VWAP of the 15 trading days immediately preceding the signing of the Agreement.
  2. the VWAP of the 15 trading days immediately preceding the request to issue the first Tranche.

The Warrants may not be assigned or transferred without the prior consent of the Issuer, except to or for the benefit of Affiliates of the Investor.

The Warrants will not be admitted to trading on any financial market.

The Investor shall transfer to the Company and free of payment, seventy five percent (75%) of all Warrants received pursuant to this Agreement, which in turn shall distribute them to key members of the management team in accordance with certain pre-determined performance objectives.

In all cases, the exercise price of the warrants divided by the Exercise Ratio may not be less than the par value of the Company's shares.

In the event that the exercise price of the Warrants theoretically applicable on the date of exercise of the Warrants is lower than the nominal value of the Company's shares, the  holder will pay an exercise price for the Warrants equal to the nominal value of the Company's shares and will receive a number of shares equal to the applicable Exercise Ratio, it being specified that he will at the same time receive a contractual indemnity in cash of an amount equal to the number of Warrants exercised multiplied by the difference between (i) the nominal value of the Company's shares and (ii) the theoretical exercise price of the Warrants.

Modification of rights

If, at any time or from time to time there shall be any modification of the rights of conversion, exchange or subscription attaching to any such securities (other than in accordance with the terms (including terms as to adjustment) applicable to such securities upon issue) or to the rights, options, warrants or other rights to subscribe or purchase as are mentioned in the agreement so that following such modification the consideration per Share receivable has been reduced and is less than the Current Market Price per Share on the date of the first public announcement of the proposals for such modification, the Warrant Exercise Price shall be adjusted by multiplying the Warrant Exercise Price in force immediately prior to such modification by the following fraction: A+B/A+C

where:

“A”  equals the number of Shares in issue immediately before such modification (but where the relevant securities carry rights of conversion into or rights of exchange or subscription for Shares which have been issued by the Issuer for the purposes of or in connection with such issue, less the number of such Shares so issued);

“B”  equals the number of Shares which the aggregate consideration (if any) receivable for the Shares to be issued or otherwise made available upon conversion or exchange or upon exercise of the right of subscription attached to the securities so modified would purchase at such Current Market Price per Share; and

“C”  equals the maximum number of Shares which may be issued or otherwise made available upon conversion or exchange of such securities or upon the exercise of such rights of subscription attached thereto at the modified conversion, exchange or subscription price or rate but giving credit in such manner as an Independent Advisor shall, acting as an expert, consider appropriate for any previous adjustment in accordance with the Agreement

provided that if at the time of such modification (the “Specified Date”) such number of Shares is to be determined by reference to the application of a formula or other variable feature or the occurrence of any event at some subsequent time (which may be when such securities are converted or exchanged or rights of subscription or otherwise are exercised or at such other time as may be provided) then for the purposes of the Agreement shall be determined by the application of such formula or variable feature or as if the relevant event occurs or had occurred as at the Specified Date and as if such conversion, exchange, subscription or purchase had taken place on the Specified Date.

Such adjustment shall become effective on the date of modification of the rights of conversion, exchange or subscription attaching to such securities. In the event the after the issue of a Warrant the Issuer issues any share at a price (“the Issue Price”) which is below the Exercise Price for that Warrant then the Exercise Price for that Warrant will be reduced to the Issue Price. In the event that after the Issuer grants any rights, options, warrants or other rights to subscribe for or purchase any Shares at a price (“the Subscription Price”) which is below the Exercise Price for the Warrant then the Exercise Price for that Warrant will be reduced to the Subscription Price.

The new shares issued upon conversion of the CB or upon exercise of the Warrants will be admitted to trading on Euronext Growth subject to approval by Euronext. The new shares will rank pari passu in all aspects.

The Company will maintain on its website a table of monitoring of Convertible Bonds and Warrants and the number of shares outstanding.

Theoretical impact of the Convertible Bonds and Warrants issue

For information purposes only, the impact of the shareholding of a shareholder that currently holds 1% of the Company’s share capital at €0.10 per share, subject to the Issuer subscribing to €3,000,000 in Tranches would be as follows:

  Shareholder's interest (in percentage)
Undiluted basis Diluted basis (*)
   
Before issue of new shares resulting from the conversion of all the Investment Agreement and the exercise of all the warrants 1% 1%
After issuance of 300,000,000 new shares resulting from the conversion of the CBs alone (**) 0.18% 0.18%
After issue of 150,000,000 new shares resulting from the exercise of the Warrants alone (**) 0.31% 0.31%
After the issue of 450,000,000 new shares resulting from the conversion of the CCs and the exercise of the warrants (*)   0.13% 0.13%

 (*) after exercise of all existing dilutive instruments
(**) Based on a conversion and exercise price of €0.01 per share. This dilution is without prejudice to the final number of shares to be issued and their issue price, which will be determined on the basis of the market price.

References :

  1. The following main conditions must be met for a Tranche to be drawn:
    1. the Company complies with its obligations under the Investment Agreement;
    2. no material adverse changes have occurred;
    3. the Company has not entered into any commitments permitting a change of control;
    4. no event of default is in progress;
    5. the commitment period has not expired;
  2. The events of default include in particular the delisting of the Company shares and certain cases of change of control of the Company.

This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and or otherwise that involve risks, uncertainties and assumptions that could cause Rapid Nutrition PLCs actual results and experience to differ materially from anticipated results and expectations expressed in these forward-looking statements. Rapid Nutrition PLC has in some cases identified forward-looking statements by using words such as "anticipates," "believes," "hopes," "estimates," "looks," "expects," "plans," "intends," "goal," "potential," "may," "suggest," and similar expressions. Rapid Nutrition PLC undertakes no obligation to release publicly the results of any revisions to any such forward-looking statements that may be made to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events, except as required by applicable law or regulation.

This media information does not constitute an offer to sell, or a solicitation of an offer to buy, any securities. This information does not constitute an offering prospectus within the meaning within the meaning of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 of June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71 or a listing prospectus within the meaning of the listing rules of the Euronext Exchange or OTC Markets. The media release is in accordance with International Reporting Standard: Rule 12g3-2(b) under the Securities Exchange Act ('Rule 12g3-2(b)') permits non-U.S. companies with securities listed primarily on a Qualified Foreign Exchange to make publicly available to U.S investors in English the same information that is made publicly available in their home countries as an alternative to SEC reporting Exchange Act Rule 12g3-2(b).

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