ToughBuilt Industries, Inc. Announces $5 Million Registration

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LAKE FOREST, Calif., Feb. 15 12, 2022 (GLOBE NEWSWIRE) — ToughBuilt Industries, Inc. (“ToughBuilt” or the “Company”) (NASDAQ: TBLT; TBLTW), announced today that it has entered into a securities purchase agreement with certain institutional investors to the issue and sale of 2,500 Series F Convertible Preferred Shares (the “Preferred Series F”) and 2,500 Series G Convertible Preferred Shares (the “Preferred Series G”) pursuant to a registered direct offering. ToughBuilt has also agreed to issue investors non-registered warrants to purchase up to an aggregate of 18,750,000 common shares in a concurrent private placement. Each Series F Preferred Share and Series G Preferred Share will have a stated value of $1,000 per share and will be convertible after the Closing Date into common shares at a conversion price of $0.20 per share. The warrants have an exercise price of $0.251 per share, will be exercisable on the later of (i) the date of shareholder approval to increase the number of authorized common shares or to to effect a reverse stock split of the common shares and (ii) six months from the date of issue and will expire five years from the date of initial exercise. The offering is expected to close on or about February 16, 2022, subject to the satisfaction of customary closing conditions.

HC Wainwright & Co. is acting as the exclusive placement agent for the offering.

Gross proceeds to the Company are expected to be approximately $5 million before placement agent fees and other offering costs. The Company currently intends to use the net proceeds of the offering for working capital purposes.

The Company plans to call a special meeting of shareholders to approve a proposal to effect a consolidation of common shares and a proposal to increase the number of common shares authorized (the “Proposals”). Preferred Series F has voting rights, with the common shares as a single class, equal to the number of common shares underlying the Preferred Series F on the proposals. Preferred Series G has voting rights, together with the common stock as a single class, equal to 500,000 votes per Preferred Series G share on the proposals, provided that, in accordance with Nasdaq listing rules, any votes cast by preferred Series G with respect to the Proposals shall be counted by the Company in the same proportion as the total number of common shares voted on the Proposals.

Today, the Company also announced that the Company’s Board of Directors (the “Board”) has resolved to cancel the special meeting of shareholders scheduled to be held at 1:00 p.m. (Pacific Time) on February 15, 2022. The Company will announce when a new record date has been established by the Board by filing a proxy statement with the Securities and Exchange Commission (the “SEC”).

The Preferred Series F and Preferred Series G and the common shares underlying the Preferred Series F and Preferred Series G described above (but not the Warrants or the common shares underlying the Warrants) are offered and sold by the Company in a registered direct offering pursuant to a “shelf” registration statement on Form S-3 (File No. 333-252630), including a base prospectus previously filed with the SEC on February 2, 2021 and effective February 8, 2021. The offering of these securities is only made by way of a prospectus supplement which forms part of the registration statement. A final prospectus supplement and accompanying base prospectus relating to the registered direct offering will be filed with the SEC and will be available on the SEC’s website at http://www.sec.gov. Electronic copies of the Prospectus Supplement and the accompanying Base Prospectus may also be obtained by contacting HC Wainwright & Co., LLC at 430 Park Avenue, 3rd Floor, New York, NY 10022, by telephone at (212) 856 -5711 or by email. mail to [email protected].

The warrants issued pursuant to the concurrent private placement and the common shares underlying the warrants are being offered pursuant to a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Act”), and Regulation D promulgated thereunder and have not been registered under the Act or applicable state securities laws. Accordingly, the warrants and the underlying common stock may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of statute. and applicable state securities laws.

This press release does not constitute an offer to sell or the solicitation of an offer to buy, and there will be no sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

ABOUT TOUGHBUILT INDUSTRIES, INC.

ToughBuilt is an advanced product designer, manufacturer and marketer with a focus on innovative products. Currently we focus on tools and other accessories for the professional construction and DIY industries. We market and distribute various lines of home improvement and construction products for the DIY and professional markets under the TOUGHBUILT brand, within the global multi-billion dollar-a-year tool market industry. All of our products are designed by our in-house design team. Since launching product sales in 2013, we have experienced significant annual sales growth. Our current product range comprises three main categories, with several additional categories in various stages of development, consisting of Soft Goods & Kneepads and Sawhorses & Work Products. Our mission is to provide the building and home improvement communities with innovative, superior products resulting in part from informed creativity for our end users while enhancing performance, enhancing well-being and by strengthening brand loyalty. Additional information about the Company is available at: https://www.toughbuilt.com/.

FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements”. Such statements include, but are not limited to, statements regarding the intended use of proceeds of the offering and statements regarding the expected closing and closing date of the offering and may be prefaced with the words “at the intend to”, “may”, “will”, “plan”, “expect”, “anticipate”, “project”, “predict”, “estimate”, “aim”, “believe”, “hope” , “potential” or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the control of the Company and cannot be predicted or quantified and, therefore, the actual results may differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties associated with (i) the impact of the global COVID-19 pandemic and government actions on our business, (ii) supply chain disruptions. supply, (iii) market acceptance of our new products, (iv) delays in product introduction in key markets, (v) inability to obtain regulatory approvals for the ability to sell our products in certain markets, (vi) intense industry competition from much larger multinational corporations, (v) product liability claims, (vii) product malfunctions, (viii) our manufacturing capabilities limitations and our reliance on subcontractors for assistance, (ix) our efforts to successfully obtain and maintain intellectual property protection covering our products, which may not be successful, (x) our dependence on sole-sourcing certain product components, (xi) the fact that we will need to raise additional capital to meet our business needs in the future and that such capital raising can be costly, dilutive or difficult to obtain (xii) the fact that we operate in multiple foreign jurisdictions, which exposes us to exchange rate fluctuations, logistical and communication challenges, burdens and costs of compliance with foreign laws and policies and economic instability in each jurisdiction; and (xiii) market and other conditions. More detailed information about the Company and the risk factors that could affect the making of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s annual report on Form 10-K and its quarterly reports. on Form 10-Q. Investors and security holders are urged to read these materials free of charge on the SEC’s website at http://www.sec.gov. The Company undertakes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise, except as required by law.

Contact with Investor Relations:

KCSA Strategic Communications
David Hanover
[email protected]

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