Asset sale will improve balance sheet, reduce go forward investment and allow for financially viable refocus

Toronto, Ontario--(Newsfile Corp. - April 14, 2023) - General Assembly Holdings Limited (TSXV: GA) ("General Assembly" or the "Company") today announced that it has completed the sale of substantially all of its assets related to its production, sale and distribution of frozen pizza (the "Frozen Pizza Business"). The Company completed the sale of its Frozen Pizza Assets to Piano Piano Inc. ("Piano Piano"), a private Italian food restaurant and frozen pizza brand based in Toronto, pursuant to a definitive transaction agreement (the "Agreement") entered into on the date hereof between GA CPG Limited, a wholly owned subsidiary of the Company (the "Vendor"), and Pizapie Inc., a wholly owned subsidiary of Piano Piano (the "Purchaser"). The Purchaser and Piano Piano are each arm's length to the Company.

Details of the Transaction

The assets forming part of the sale include substantially all of the equipment, contracts, inventory and intangible property solely related to the Frozen Pizza Business (the "Frozen Pizza Assets"). The Frozen Pizza Assets excludes certain assets including, but not limited to, accounts receivable accrued prior to the closing of the sale in respect of the Frozen Pizza Business (the "Closing") and assets used in connection with the Company's operation of its restaurant business (the "Restaurant Business").

As consideration for the acquisition of the Frozen Pizza Assets, the Purchaser has assumed senior indebtedness in the aggregate amount of $1.76 Million owing to certain arm's length creditors of the Company (the "Assumed Debt") and other liabilities of the Company in respect of its manufacturing facility lease, equipment financing commitments and certain other accounts payable, totaling, together with the Assumed Debt, approximately $2.98 Million. The Assumed Debt forms part of the $3,000,000 debt financing completed and announced by the Company in the fourth quarter of 2021.

Certain employees of the Frozen Pizza Business have been offered new employment with Piano Piano and, effective as of the Closing, have ceased employment with the Company.

2499754 Ontario Limited ("249"), another wholly-owned subsidiary of the Company, retains ownership of its registered and unregistered trademarks, including "General Assembly", "General Assembly Pizza" and all branding, logos and designs in relation thereto (collectively, the "GA Trademarks"). The Vendor and 249 have granted the Purchaser and its affiliates the right to use the GA Trademarks royalty-free exclusively in connection with its operation of the Frozen Pizza Business and the sale of such other consumer packaged goods as the Purchaser may determine from time to time. The Vendor and 249 have agreed, and have agreed to cause the Company and GA Subscriptions Limited, another wholly-owned subsidiary of the Company (collectively, the Company, the Vendor, 249 and GA Subscriptions Limited are referred to as the "Vendor Group"), to limit their use of the GA Trademarks to the production, sale or distribution of fresh (not frozen) pizza, including the operation of the Company's existing pizza restaurant located in Toronto, and such other pizza restaurants as the Company may establish from time to time.

The Vendor has further agreed, on its own behalf and on behalf of each other member of the Vendor Group, not to compete with the Frozen Pizza Business for a period of 5 years following the Closing.

The foregoing description of the terms of the Agreement is of a summary nature. Reference should be made to the Agreement, which is available under the Company's profile on SEDAR at sedar.com.

Management Commentary

The Company performed a strategic review of its operations - both frozen and fresh - and concluded the sale of the Frozen Pizza Assets was the best option to allow the Company to refocus on its roots as a fast casual premium restaurant, and move forward with a financially viable business model. This review was based on available financing avenues for the Company given the increasingly challenging funding environment for micro-cap public companies in investment mode and the strategic alternatives that were available to maximize shareholder value.

The sale of the Frozen Pizza Business removes substantial indebtedness and financial obligations from the Company, as well as alleviating the ongoing requirement to fund the growth of the Frozen Pizza Business, which was operating in a significant cash burn position and, as a standalone operation, would continue to be in an unsustainable investment mode for the duration of 2023.

The transaction allows the Company to retain and invest in its cash flow positive Restaurant Business, that has now fully returned to pre-pandemic performance. Over the coming months, the Company expects to evaluate opportunities to expand its restaurant footprint while continuing to be prudent and realistic as it relates to its investment decisions, given prevailing market conditions and the current rebuilding of the Company's financial profile.

"Despite improving the financial performance of our frozen pizza operations over the last year, the team concluded the financial burden and timeline to achieve profitable scale were far too great to continue to operate the business model as a standalone competitor. This transaction provides meaningful relief to our balance sheet at a time where financial stability is a critical requirement for companies of our scale in the public markets. The remaining restaurant business is strong and growing," said Eric Balshin, interim CEO of the Company.

About General Assembly Holdings Limited

General Assembly opened in 2017 on a mission to bring better pizza to the people. What's better anyways? For starters, our pies are all made from 100% naturally leavened dough and are topped with thoughtfully sourced premium all-natural ingredients. Our menu is described in two words. Tradition reinvented. We don't always play it safe, but it's safe to say that we have a pie for every taste.

About Piano Piano | The Restaurant

Piano Piano is the Italian restaurant you always wished was just around the corner.

Sophisticated and fun, Piano Piano serves deeply satisfying food that comes in just the right size. The menu features traditional Italian fare that's been elevated to its most delicious self. If there's a common thread that runs through Piano Piano, it's a deep-seated soulfulness and sensuality that's at once warm, welcoming and just plain fun.

ON BEHALF OF THE BOARD OF DIRECTORS
Ted Hastings
Director

Forward-Looking Information

Certain information in this news release constitutes forward-looking statements and forward-looking information under applicable Canadian securities legislation (collectively, "forward-looking information"). Forward-looking information includes, but is not limited to, statements with respect to the business, financial performance and operations of the Company, on a consolidated basis. Forward-looking information in this news release includes, without limitation, the anticipated benefits of the transaction, the anticipated effect of the transaction on the Company's strategy, operations and financial performance, and the Company's ability to grow and expand the Restaurant Business.

Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events. Forward-looking information is necessarily based on a number of opinions, assumptions and estimates. The Company has made certain material assumptions, including but not limited to: prevailing market conditions; general business, economic, competitive, political and social uncertainties; and the ability of the Company to execute and achieve its business objectives. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

While considered reasonable by the Company as of the date of this news release, such opinions and assumptions are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements and future events to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail in the public documents of the Company available at . Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. Investors are cautioned that undue reliance should not be placed on any such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company. The Company does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.

Contacts

Eric Balshin, Chief Executive Officer, 647-892-8784, eric.balshin@gapizza.com

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

To view the source version of this press release, please visit