BROKERED PRIVATE PLACEMENT OFFERING OF
$11,000,000 AND $11,000,000 TERM LOAN FACILITY
CALGARY,
AB and LONDON, ON, Feb. 23,
2021 /PRNewswire/ - Sundial Growers Inc.
("Sundial") (NASDAQ: SNDL), a Canadian licensed
producer of recreational cannabis and Indiva Limited
("Indiva") (TSXV:NDVA) (OTCQX:NDVAF), a leading Canadian
producer of cannabis edibles, are pleased to announce the closing
of the previously announced $22,000,000 strategic investment (the
"Investment") into Indiva by Sundial.
The Investment was completed by way of a brokered private
placement (the "Placement") led by ATB Capital Markets Inc.
("ATB" or the "Agent") of 25,000,000 common
shares of Indiva (the "Common Shares") at a price of
$0.44 per Common Share, raising gross
proceeds of $11,000,000 (the "Equity
Investment"), and a secured non-revolving term loan facility to
Indiva in the principal amount of $11,000,000 (the "Term Loan"). Sundial was
the sole subscriber in the Placement and sole lender of the Term
Loan.
The Term Loan matures on February 23,
2024 (the "Maturity Date") and bears an interest rate
of 9% per annum. 50% of accrued interest is payable in cash on the
last day of each month and the remaining 50% of accrued interest is
payable, at the option of Indiva, (i) in cash on the last day of
each month, or (ii) payable in arrears on the Maturity Date. The
Term Loan was issued at an original issue discount of 4% and
provides that upon a change of control of Indiva, Sundial shall
have the option exercisable within 60 days to require Indiva to
prepay 104% of the outstanding principal amount of the Term Loan
and all accrued and unpaid interest.
Pursuant to the Investment, Sundial and Indiva entered into an
investor rights agreement (the "IRA") whereby Sundial was
granted the right to participate in future equity financings to
maintain its pro-rata ownership in Indiva and registration rights,
subject to customary limits and exceptions. In addition, the IRA
provides that in the event Indiva completes a further offering of
securities, which contain warrants, in the ninety (90) days
following the closing of the Investment (a "Further
Offering"), it shall issue to Sundial, for no additional
consideration, and on the terms of such warrants offered in the
Further Offering, such number of warrants equal to the number of
warrants Sundial would have received had the Equity Investment been
made in the Further Offering (the "Conditional Warrants").
Any issuance of Conditional Warrants is subject to the prior
approval of the TSX Venture Exchange (the "TSXV") and if
issued, will contain a provision preventing their exercise if,
following such exercise, Sundial or its affiliates would hold
greater than 19.9% of the issued and outstanding Common Shares and
have a maximum term of five (5) years.
Indiva intends to use the net proceeds of the Investment to
retire its outstanding debt in full, which includes its demand loan
and promissory note, as well as for working capital and other
general corporate purposes.
The Investment is subject to the final approval of the TSXV. The
Common Shares issued under the Placement will be subject to a
statutory hold period of four months and one day following the
closing of the Placement.
Pursuant to the Investment, Indiva paid to ATB: (a) a cash
commission equal to $330,000 being
3.0% of the aggregate gross proceeds from the Placement; and (b) a
financial advisory fee of $220,000,
being 2.0% of the principal amount of the Term Loan.
Early Warning
Immediately prior to the Placement, Sundial and its affiliates
held no Common Shares. Upon the closing of the Placement Sundial
and its affiliates exercise control and direction over 18.45% of
the issued and outstanding Common Shares. Sundial and its
affiliates do not currently own any convertible securities of
Indiva. The Common Shares are being acquired for investment
purposes and, as of the date of this news release, Sundial and its
affiliates have no current intention to acquire control or
direction over additional securities of Indiva above 19.9% of the
issued and outstanding Common Shares, either alone or together with
any joint actors.
The securities to be offered pursuant to the Placement have not
been, and will not be, registered under the U.S. Securities Act of
1933, as amended (the "U.S. Securities Act") or any U.S.
state securities laws, and may not be offered or sold in
the United States or to, or for
the account or benefit of, United
States persons absent registration or any applicable
exemption from the registration requirements of the U.S. Securities
Act and applicable U.S. state securities laws. This news release
shall not constitute an offer to sell or the solicitation of an
offer to buy securities in the United
States, nor shall there be any sale of these securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful.
ABOUT SUNDIAL GROWERS INC.
Sundial is a public company with common shares traded on Nasdaq
under the symbol "SNDL". Sundial is a licensed producer that crafts
cannabis using state-of-the-art indoor facilities. Our
'craft-at-scale modular growing approach, award-winning genetics
and experienced master growers set us apart. Our Canadian
operations cultivate small-batch cannabis using an individualized
"room" approach, with 448,000 square feet of total space.
Sundial's brand portfolio includes Top Leaf, Sundial Cannabis,
Palmetto and Grasslands. Our consumer-packaged goods
experience enables us to not just grow quality cannabis, but
also to create exceptional consumer and customer experiences. We
are proudly Albertan, headquartered in Calgary, AB, with operations in Olds, AB, and
Rocky View County, AB. For more information on Sundial, please go
to www.sndlgroup.com.
ABOUT INDIVA LIMITED
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, Artisan Batch, and
other Powered by INDIVA™ products through license agreements
and partnerships. Click here to connect with Indiva
on LinkedIn, Instagram, Twitter and Facebook, and here to find
more information on the Company and its products.
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) has in any way passed upon the merits of the
contents of this press release and neither of the foregoing
entities 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. Various assumptions or
factors are typically applied in drawing conclusions or making the
forecasts or projections set out in forward-looking information.
Those assumptions and factors are based on information currently
available to the parties. The material factors and assumptions
include the receipt of regulatory approval and third party
consents, the ability of Indiva to satisfy its existing debt
obligations with the proceeds of the Placement and Term Loan, use
of proceeds and other risks associated with regulated entities in
the cannabis industry.
The forward-looking information contained in this release is
made as of the date hereof and the parties are not obligated to
update or revise any forward-looking information, whether as a
result of new information, future events or otherwise, except as
required by applicable securities laws. Because of the risks,
uncertainties and assumptions contained herein, investors should
not place undue reliance on forward looking information. The
foregoing statements expressly qualify any forward-looking
information contained herein.
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SOURCE Sundial Growers Inc.