VANCOUVER, British Columbia--(BUSINESS WIRE)--Sustainable Produce Urban Delivery Inc. ("SPUD" or “the Company”), today provided an update on its proposed transaction with Rainy Hollow Ventures Inc. (“Rainy Hollow”) (TSXV: RHV.P), a Capital Pool Company listed on the TSX Venture Exchange. As previously-announced by Rainy Hollow, the Company and Rainy Hollow entered into a letter of intent (the “LOI”) dated September 30, 2020 which outlines the terms and conditions pursuant to which Rainy Hollow and SPUD will complete a transaction that will result in a reverse take-over of Rainy Hollow by SPUD (the “Transaction”). In accordance with the terms and conditions of the LOI, Rainy Hollow and SPUD are currently negotiating and will enter into a definitive agreement (the “Definitive Agreement”) incorporating the principal terms of the Transaction described in Rainy Hollow’s press release dated October 1, 2020 (please refer to such press release for additional details on the LOI and proposed Transaction).
In connection with the Transaction, SPUD intends to complete a brokered private placement financing (the “Offering”) of subscription receipts (the “Subscription Receipts”) of SPUD for gross proceeds of at least C$25,000,000 and up to C$30,000,000. Each Subscription Receipt shall entitle the holder thereof to receive, upon the satisfaction or waiver (to the extent such waiver is permitted) of certain escrow release conditions prior to the escrow release deadline, including all conditions precedent to the Transaction being satisfied, and without payment of additional consideration therefor, one common share of SPUD (a “SPUD Share”). The Company expects the Offering to close on or about December 9, 2020.
Canaccord Genuity Corp. and Desjardins Securities Inc., are acting as co-lead agents in connection with the Offering (the “Co-Lead Agents”) on behalf of a syndicate of agents, including Cormark Securities Inc. and PI Financial Corp. The Co-Lead Agents have also been granted an option (the “Over-Allotment Option”), exercisable in whole or in part at any time up to 48 hours before the Closing Date of the Offering, to increase the size of the Offering by up to 15%.
Upon completion of the Transaction, the proceeds of the Offering are anticipated to be used principally for expansion of its operations, working capital and general corporate purposes.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
SPUD provides an online grocery shopping platform focused on organic and natural foods through SPUD.ca. SPUD.ca offers an online platform through which consumers can order and schedule home delivery of groceries and other essentials.
FoodX Technologies is the software behind SPUD.ca's integrated food business eco-system that includes online retail, community retail locations, food preparation services, wholesale and last mile distribution. FoodX Technologies is the only scalable end-to-end eGrocery management Solution (eGMS) designed to meet the needs of large and small grocery retailers while providing profitable unit economics. FoodX's award winning eGrocery platform is the culmination of 20 years of experience in online grocery and has a proven track record of delivering efficiency, sustainability and profitability. FoodX utilizes Microsoft as its technology partner and has partnered with Canada's Digital Technology Super Cluster in the advancement of its innovation pipeline. For more information, please visit https://www.foodxtech.com/
SPUD is headquartered in Vancouver, British Columbia. For more information, please visit http://spud.ca.
Notice on Forward Looking Information
Information set forth in this news release contains forward-looking statements. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates, and projections as at the date of this press release. Any statements that involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events, or performance are not statements of historical fact and may be forward-looking statements. These statements reflect management’s current estimates, beliefs, intentions, and expectations; they are not guarantees of future performance, the entering into of the Definitive Agreement, or the closing of the Offering or the Transaction. SPUD cautions that all forward-looking statements are inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond the control of SPUD and Rainy Hollow. Such factors include, among other things: the receipt of all regulatory approvals with respect to the Offering, the Transaction and listing of the shares of the resulting issuer following the completion of the Transaction on the Toronto Stock Exchange or the TSX Venture Exchange; obtaining all third party consents and corporate approvals necessary to complete the Transaction; that no adverse material change in the business, affairs, financial condition or operations of SPUD or Rainy Hollow have occurred between the signature date of the LOI and the closing date of the Transaction; that the Offering is completed. Accordingly, actual and future events, conditions and results may differ materially from the estimates, beliefs, intentions, and expectations expressed or implied in the forward-looking information. Except as required under applicable securities legislation, SPUD and Rainy Hollow each undertake no obligation to publicly update or revise forward-looking information.