Real Good Food gets $45 million mezzanine debt via PMC Financial

By Marisa Wong

Los Angeles, Nov. 21 – Real Good Food Co., Inc. entered into a new $45 million second-lien loan agreement with PMC Financial Services Group, LLC, according to a press release.

Real Good Food said it signed the definitive debt refinancing agreement to enhance its liquidity position by up to $15 million.

This new mezzanine debt 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 revolver will be $70 million, giving the company access to an incremental $15 million of liquidity.

This new second-lien loan will mature Dec. 31, 2025, concurrent with the rest of the credit facility, carrying a 9% payment-in-kind interest and 9% cash interest.

PMC will be issued penny warrants for a 5% equity interest in Real Good Food, which are exercisable between Dec. 31, 2025 and Nov. 20, 2033.

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

Executive chairman Bryan Freeman said in the release, “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 million annually, providing the company with the liquidity needed to execute upon our plan.”

The health and wellness frozen and refrigerated foods company is based in Cherry Hill, N.J.

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