The Real Good Food Company Announces Definitive Debt Refinancing Agreement to Enhance Liquidity

Debt Refinancing to Enhance Liquidity Position by $15 Million & Significantly Reduce Cash Debt Service

CHERRY HILL, N.J., Nov. 21, 2023 (GLOBE NEWSWIRE) -- The Real Good Food Company, Inc. (NASDAQ: RGF) (“Real Good Foods” or the “Company”), a leading health and wellness frozen and refrigerated foods company, today announced the signing of a definitive debt refinancing agreement with PMC Financial Services Group, LLC (“PMC”), which is expected to enhance the Company’s liquidity position by up to $15 million.

Per the terms of the agreement, the Company entered into a new $45.0 million second lien loan agreement with PMC (“mezzanine debt”). This new loan will pay down $20 million of existing term loans and a portion of the Company’s existing revolving credit facility. After closing, capacity under the revolving credit facility will be $70 million, giving the Company access to an incremental $15 million in liquidity.

This new second lien loan will mature December 31, 2025 (concurrent with the rest of the credit facility), carrying a 9% payment-in-kind (“PIK”) interest and 9% cash interest. PMC will be issued penny warrants for a 5% equity interest in the Company, which are exercisable between December 31, 2025 and November 20, 2033.

In addition, terms for the Company’s equipment loan were amended to be interest only until May 31, 2024.

Bryan Freeman, Executive Chairman, said: “We are pleased to announce this strategic debt refinancing with PMC Financial Services who has been our lender since 2016. This debt refinancing, combined with $15.4 million in net proceeds from our recent equity offering, significantly strengthens our balance sheet and reduces our cash debt service by approximately $6.0 million annually, providing the Company with the liquidity needed to execute upon our plan.

“As we rapidly expand the business in the fourth quarter and beyond, our margin improvements, increased liquidity, and lower cash debt service costs will play a key role in enabling us to achieve sustainable, profitable growth,” concluded Freeman.

About Real Good Food Company

Real Good Foods (NASDAQ: RGF) is a leading health and wellness frozen and refrigerated foods company, providing a better way to enjoy your favorite foods. The Company’s mission is to provide “Real Food You Feel Good About Eating”, making delicious, nutritious foods that are low in sugar, low in carbohydrates and high in protein. The Real Good Foods family of products includes breakfast, lunch, dinner, and snacks – available in over 16,000 stores nationwide with additional direct-to-consumer options.