Indiva Announces Closing of Private Placement of Units

Announces Prairie Merchant Participates in Offering and Becomes Insider; Provides Early Warning Report

— Indiva Limited (the “Company” or “Indiva”) (TSXV:NDVA) (OTCQX:NDVAF), a leading Canadian producer of cannabis edibles and other cannabis products, is pleased to announce that further to its news releases dated June 26, 2020 and July 9, 2020, it has closed the second and final tranche of its private placement of Units (the “Units”) in the aggregate principal amount of $4,167,198.80, being 13,890,663 Units (the “Final Tranche”). This brings the total funds raised for this private placement to $5,179,498.80 and the total number of Units issued to 17,264,996 (the “Offering”).  The Company expects that the proceeds of the Offering will be used for equipment purchases, working capital and general corporate purposes, including the national launch of Wana™ Sour Gummies.  Indiva has received more than $1.1 million of initial purchase orders to date for Wana gummies from provincial wholesalers, and aims to build on its leading market share nationally in chocolate with national distribution of award-winning Wana™ Sour Gummies.  Proceeds will also be used to expand Indiva’s flower and pre-roll offering to additional provinces, allowing the Company to participate in the largest market segments nationally.

STRATEGIC INVESTORS:

In connection with the Final Tranche, the Company issued 3,333,333 Units to Prairie Merchant Corporation, a company controlled by W. Brett Wilson, for total consideration of $1,000,000. The Company also issued 3,333,333 Units to Allan Markin, for total additional consideration of $1,000,000.

Immediately following the closing of the Final Tranche, W. Brett Wilson and his affiliates, including Prairie Merchant Corporation (collectively, “Wilson”), have control of 13.4% of the issued and outstanding Common Shares on a partially-diluted basis, assuming the exercise of all of Wilson’s convertible securities of the Company.

ATB Capital Markets Inc. also participated in this Offering.  Insiders also participated in the Offering in the total amount of $360,000 or 1,200,000 Units.

FINANCING:

As previously announced in the Company’s June 26, 2020 news release, each Unit is comprised of one common share in the capital of the Company (each a “Common Share”) and one common share purchase warrant (each a “Warrant”). Each Warrant will entitle the holder to acquire one common share in the capital of the Company at an exercise price of $0.40 any time up to 36 months following the Closing Date of the Offering, subject to adjustments in certain customary events.

The Offering is subject to final approval from the TSX Venture Exchange.

In connection with the Final Tranche, the Company paid broker fees in cash totalling $168,700, representing 3.3% of the proceeds raised from Units placed by the brokers and issued to the brokers a total of 562,333 non-transferable broker warrants (“Broker Warrants“), representing 3.3% of the Units placed by such brokers. Each Broker Warrant entitles the holder to acquire one Common Share at an exercise price of $0.30 for a period of 36 months.

The Offering was conducted by the Company utilizing the “accredited investor” exemption of National Instrument 45-106 – Prospectus and Registration Exemptions, and also other applicable exemptions available to the Company.

All securities issued in connection with the Offering will be subject to a statutory hold period of four months and one day from the applicable closing date.

None of the securities have been or will be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities, in any jurisdiction in which such offer, solicitation or sale would require registration or otherwise be unlawful.

MI 61-101 Disclosure & Early Warning

An affiliate of John Marotta, a director of the Company, being Marotta Investments Limited, participated in the Final Tranche (in addition to the 836,000 Units subscribed for in the first tranche of the Offering) and, as such, the issuance of the Units to such insider is a “related-party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). However, the issuance is exempt from: (i) the valuation requirement of MI 61-101 by virtue of the exemption contained in Section 5.5(b), as the shares into which the Units are convertible are not listed on a market specified in MI 61-101, and (ii) from the minority shareholder approval requirement of MI 61-101 by virtue of the exemption contained in Section 5.7(1)(a) of MI 61- 101, as the fair market value of the Units does not exceed 25% of the Company’s market capitalization. A material change report was not filed by the Company 21 days before the closing of the Final Tranche as the level of insider participation was not known at that time and the Company moved to close the Final Tranche immediately upon satisfaction of all applicable closing conditions. In the view of the Company, this was reasonable in the circumstances because the Company wished to complete the Final Tranche as soon as possible.

As noted above, immediately following the closing of the Final Tranche, W. Brett Wilson and his affiliates, including Prairie Merchant Corporation (collectively, “Wilson”), have control of 13.4% of the issued and outstanding Common Shares on a partially-diluted basis.

Wilson acquired the Units for investment purposes. Wilson may acquire or dispose of additional securities of the Company in the future through the market, privately, or otherwise, as circumstances or market conditions warrant. Any transaction that Wilson may pursue may be made at any time and from time to time without prior notice and will depend on a variety of factors, including, without limitation, the price and availability of the Company’s securities, subsequent developments affecting the Company, its business and prospects, other investment and business opportunities available to the Company, general industry and economic conditions, the securities markets in general, tax considerations and other factors deemed relevant by Wilson.

Immediately following the closing of the Final Tranche, the holdings of John A. Marotta and his affiliates, including Marotta Investments Ltd. (“Marotta“) decreased to less than 10% of the issued and outstanding Common Shares on a partially-diluted basis.

Further details regarding Wilson’s and Marotta’s subscriptions and holdings will be set forth in early warning reports to be filed with the applicable securities commissions using the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) and will be available for viewing on the Company’s profile at www.sedar.com.

Shares for Debt Transaction

The Company is pleased to announce that further to its press release dated July 9, 2020, the TSXV has approved and the Company has settled and extinguished $115,458.33 of the Company’s outstanding debt through the issuance of 461,832 Common Shares at a deemed price of $0.25 per Common Share (the “Debt Settlement”).

An aggregate of 46,811 Shares were issued to certain directors and officers of the Company (the “Related Parties”). The Shares in the Debt Settlement are subject to a four month plus one day hold period from the date of issuance.

The shares for debt transaction involving the Related Parties constitutes a “related party transaction” under MI 61-101. However, the issuance is exempt from: (i) the valuation requirement of MI 61-101 by virtue of the exemption contained in Section 5.5(b), as the Common Shares are not listed on a market specified in MI 61-101, and (ii) from the minority shareholder approval requirement of MI 61-101 by virtue of the exemption contained in Section 5.7(1)(a) of MI 61-101, as the fair market value of the Common Shares does not exceed 25% of the Company’s market capitalization. The participation by the Related Parties in the shares for debt transactions has been approved by directors of the Company who are independent in connection with such transaction.

ABOUT INDIVA

Indiva sets the standard for quality and innovation in cannabis. As a Canadian licensed producer, Indiva creates premium pre-rolls, flower, capsules, and edible products and provides production and manufacturing services to peer entities. In Canada, Indiva produces and distributes the award-winning Bhang® Chocolate, Wana™ Sour Gummies, Ruby® Cannabis Sugar, Sapphire™ Cannabis Salt and other Powered by INDIVA™ products through license agreements, partnerships and joint ventures. Click here to connect with Indiva on LinkedInInstagramTwitter and Facebook, and here to find more information on the Company and its products.

CONTACTS
Niel Marotta, CEO
Phone: 613-883-8541
Email:  niel@indiva.com

Steve Low, Investor Relations
Phone: 647-620-5101
Email: stevelow@indiva.com

DISCLAIMER AND READER ADVISORY

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

Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words “could”, “intend”, “expect”, “believe”, “will”, “projected”, “estimated” and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the parties’ current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. All such statements involve substantial known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to vary from those expressed or implied by such forward-looking statements. Forward-looking statements reflect current expectations regarding future events and operating performance and speak only as of the date of this news release. Forward-looking statements involve significant risks and uncertainties, pertaining to, among other things, COVID-19 and its impact on both the Company’s business and operations and those of its customers, cash available to fund operations, availability of capital, revenue fluctuations they should not be read as guarantees of future performance or results, and they will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties and other risks detailed from time-to-time in the Company’s ongoing filings with the securities regulatory authorities, which filings can be found at http://www.sedar.com. These forward-looking statements are made as of the date of this news release and the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, unless required by applicable securities laws.

SOURCE GLOBENEWSWIRE

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