Toro Beverages Inc enters into a Letter Of Intent with a Capital Pool Company for a proposed Qualifying Transaction

Not for distribution to United States newswire services or for dissemination in the United States

 

News Release - Montreal, Quebec – December 23, 2021: Toro Beverages Inc. (“Toro”) is pleased to announce that it has entered into a letter of intent dated December 10, 2021 (the “LOI”) with First Tidal Acquisition Corp. (TSX-V: AAA.P) (“First Tidal” or the “Company”) regarding a proposed transaction to acquire all of the issued and outstanding securities of Toro (the “Transaction”). Upon completion of the Transaction, the combined entity (the “Resulting Issuer”) will continue the business of Toro. The Transaction is intended to constitute the “Qualifying Transaction” of First Tidal, as such a term is defined in Policy 2.4 – “Capital Pool Companies” of the TSX Venture Exchange (the “Exchange”). 

The proposed Transaction is an Arm’s Length Qualifying Transaction pursuant to the policies of the Exchange and, as such, the Company is not required to obtain shareholder approval for the proposed Transaction.

About Toro Beverages Inc.

Toro is a bold, fast-growing beverage company founded in 2017, when it revolutionized the energy drink industry by introducing Canada's first matcha-powered energy drink. The Company now markets natural energy drinks under the brand ToroMatcha, as well as innovative Hard Matcha Seltzers under the brand Matcha Colada. Toro products are carried across Canada and the United Arab Emirates through a distribution network of nearly 800 points of sale including select Loblaws, Whole Foods, Sobeys, IGA, Metro and Zoom stores. Toro plans to expand into the United States and other global markets upon completion of this Transaction. The company has built powerful brands that resonate with the increasing demand for better-for-you products. Toro is committed to becoming a global leader in matcha-based beverages across both non-alcoholic and alcoholic categories. For more information about Toro, visit www.torobeverages.com

Proposed Management of the Resulting Issuer

Subject to Exchange approval, on completion of the Transaction, it is currently anticipated that the board of directors of the Resulting Issuer will consist of five (5) directors. Information with respect to the proposed directors and officers of the Resulting Issuer will be included in a subsequent press release. The Qualifying Transaction.

Terms of the Transaction

Subject to the execution of a definitive agreement (“Definitive Agreement”), First Tidal proposes to acquire all of the issued and outstanding securities of Toro from Toro’s securityholders. Each holder of Class A shares in the capital of Toro (the “Toro Shares”) will receive one common share in the capital of the Resulting Issuer (the “Resulting Issuer Shares”). All outstanding convertible securities of Toro will be exchanged or replaced with convertible securities of the Resulting Issuer on a one-to-one basis and on the economic terms and conditions substantially similar to the previously issued securities.

The closing will be conditional upon Toro completing a private placement  financing of subscription receipts (the “Subscription Receipts”) at a price of $0.50 per Subscription Receipt, each of which will, prior to the effective time of the Transaction, automatically convert into one Toro Share and one-half of one Toro Share purchase warrant (each whole warrant,  a “Financing Warrant”), with each Financing Warrant exercisable into one additional Toro Share at an exercise price of $0.75 (provided that if the closing price of the Resulting Issuer Shares on any stock exchange on which they are then listed is equal to or greater than $1.00 for a period of ten (10) consecutive trading days at any time prior to the expiry date of the Financing Warrants, the Resulting Issuer will have the right to accelerate the expiry time of the Financing Warrants by giving notice to the holders that the Financing Warrants will expire on a date that is not less than ten (10) days from the date notice is given), for no additional consideration upon the satisfaction of certain escrow release conditions, including the conditional approval of the Exchange for the Transaction and satisfaction or waiver of all of the conditions precedent to the Transaction as set out in the Definitive Agreement (the “Concurrent Financing”), to raise a minimum of gross proceeds of $3,500,000 and a maximum gross proceeds of $5,000,000,  to be completed within thirty days of receiving conditional approval of the Transaction by the Exchange. First Tidal intends to make an application for an exemption from the Exchange’s sponsorship requirements.

The Transaction is conditional upon, among other things:

  • the parties will have received all necessary regulatory and third-party consents, approvals and authorizations as may be required in respect of the Transaction, including, but without limitation, acceptance of the Exchange;
  • completion of due diligence to the satisfaction of the parties;
  • approval of the board of directors of each of First Tidal and Toro to final terms and conditions of the Transaction as set forth in the Definitive Agreement and all other necessary matters related thereto prior to the signing of the Definitive Agreement;
  • the signing of the Definitive Agreement;
  • completion of all matters, and the satisfaction of all conditions (unless waived in writing), under the Definitive Agreement required to be completed or satisfied on or before closing of the Transaction including but not limited to completion of the Concurrent Financing;
  • the shareholders of Toro will have approved the Transaction; and
  • completion by First Tidal of a consolidation of the First Tidal securities on a 3 for 1 basis, effective immediately prior to the closing of the Transaction (the “Consolidation”); and
  • completion by Toro of a split of the Toro securities on a 2 for 1 basis, effective prior to the closing of the Concurrent Financing and the Transaction (the “Split”).

Pre-Closing Capitalization of Toro

As of the date hereof, 8,438,824 Toro Shares, 3,000,000 Class Seed Preferred shares, 3,000,000 performance warrants to purchase Class A shares, and 82,680 finder warrants to purchase Class A shares are issued and outstanding. In addition, and subject to Exchange approval, there will be 3,000,000 performance warrants issued to Mr. Sam Saoudi to purchase Toro Shares subject to certain milestone requirements. Prior to the completion of the Concurrent Financing and the Transaction, Toro will complete the Split and immediately thereafter the Class Seed Preferred shares issued and outstanding will be converted or exchanged for Toro Shares.

Pre-Closing Capitalization of First Tidal 

As of the date hereof, First Tidal’s authorized share capital consists of an unlimited number of common shares and an unlimited number of preferred shares in the capital of First Tidal, issuable in series, of which 8,000,000 common shares and no preferred shares are issued and outstanding. In addition, First Tidal has 200,000 stock options and 320,000 broker warrants issued and outstanding. Prior to the closing of the Transaction, First Tidal will complete the Consolidation. 

Post-Closing Capitalization of the Resulting Issuer

Upon completion of the Transaction and assuming the completion of the minimum Concurrent Financing, it is anticipated that there will be approximately 32,544,314 Resulting Issuer Shares issued and outstanding, 66,666 stock options, 3,772,026 share purchase warrants, and 3,000,000 performance warrants. Upon completion of the Transaction and assuming the completion of the maximum Concurrent Financing, it is anticipated that there will be approximately 35,544,314 Resulting Issuer Shares issued and outstanding, 66,666 stock options, 5,272,026 share purchase warrants, and 3,000,000 performance warrants, as detailed in the following table:  

Description of Security

Number of Securities Assuming Minimum Concurrent Financing

Number of Securities Assuming Maximum Concurrent Financing

Toro Shares (post-Split)

22,877,648(2)(3)

22,877,648(2)(3)

Toro Finder Warrants (post-Split)

165,360

165,360

Toro Performance Warrants

3,000,000

3,000,000

First Tidal Shares (post-Consolidation)

2,666,666(1)

2,666,666(1)

First Tidal Stock Options (post-Consolidation)

66,666

66,666

First Tidal Broker Warrants (post-Consolidation)

106,666

106,666

Concurrent Financing Shares

7,000,000

10,000,000

Concurrent Financing Warrants(4)

3,500,000

5,000,000

    (1) 1,333,333 of these shares will be subject to an 18-month escrow release schedule imposed by the Exchange.
    (2) 20,014,244 of these shares will be subject to a three-year escrow release schedule imposed by the Exchange.
    (3) 2,863,404 of these shares will be subject to a one-year voluntary release schedule.
    (4) It is anticipated that broker fees consisting of cash and broker warrants will be payable on some of the Concurrent Financing.

    Toro will issue additional news releases related to the final legal structure and terms of the Transaction, financing details, financial information, the names and background of insiders of the Resulting Issuer and other material information as it becomes available. 

    Trading in the shares of First Tidal is presently halted. The shares of First Tidal will remain halted until the Transaction is completed and approved by the Exchange.

    Contact Information

    Oussama Saoudi (Sam)
    Chief Executive Officer, Toro Beverages Inc
    Tel: 514-452-5053
    Email: oussama@toromatcha.com 

    This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein in the United States. The securities described herein have not been registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities law and may not be offered or sold in the “United States”, as such term is defined in Regulation S promulgated under the U.S. Securities Act, unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration requirements is available.

    Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and, if applicable, pursuant to the requirements of the Exchange, shareholder approval. There can be no assurance that the Transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative. The Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this news release.

    Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

    Forward-Looking Statements

    Certain statements in this release contain forward-looking statements or information, which include completion of the proposed Transaction and related Concurrent Financing, future plans, regulatory approvals and other matters. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such information can generally be identified by the use of forwarding-looking wording such as “may”, “expect”, “estimate”, “anticipate”, “intend”, “believe” and “continue” or the negative thereof or similar variations. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, including but not limited to, business, economic and capital market conditions, the ability to manage operating expenses, security threats, and dependence on key personnel. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which the Resulting Issuer will operate in the future, including the demand for its products, anticipated costs, and the ability to achieve goals. Factors that could cause the actual results to differ materially from those in forward-looking statements include, failure to obtain regulatory approval, the continued availability of capital and financing, equipment failures, litigation, increase in operating costs, the impact of Covid-19 or other viruses and diseases on the ability to operate, failure of counterparties to perform their contractual obligations, government regulations, loss of key employees and consultants, and general economic, market or business conditions. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The reader is cautioned not to place undue reliance on any forward-looking information.

    There can be no assurance that the proposed Transaction or Concurrent Financing will be completed or, if completed, will be successful. The forward-looking statements contained in this news release are made as of the date of this news release.  Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  Additionally, the Company undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above.

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