Rainmaker Resources Ltd.
TSX VENTURE : RIR

Rainmaker Resources Ltd.

November 30, 2017 19:57 ET

INDIVA Corporation and Rainmaker Resources Ltd. Announce Filing Statement In Respect of Reverse Takeover Acquisition

LONDON, ONTARIO and VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 30, 2017) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

INDIVA Corporation ("INDIVA" or the "Company") and Rainmaker Resources Ltd. ("Rainmaker") (TSX VENTURE:RIR) are pleased to announce that a Filing Statement dated as of November 29, 2017 has been filed in connection with Rainmaker's acquisition (the "Transaction") of 100% of the issued and outstanding shares of INDIVA, whose wholly owned subsidiary is a Licensed Producer of medical cannabis pursuant to Canada's Access to Cannabis for Medical Purposes Regulations. The Transaction constitutes a Reverse Takeover and Change of Business within the meaning of TSX Venture Exchange ("TSXV") Policy 5.2.

Subject to the satisfaction of all conditions precedent to the completion of the Transaction, including the receipt of all necessary TSXV and regulatory approvals, the closing of the Transaction is expected to be completed December 8, 2017, and a further press release will be issued following closing.

In connection with the closing of the Transaction, the net proceeds of the subscription receipt ("Subscription Receipt") financing of Rainmaker previously announced by way of press releases dated June 1, 2017 and August 28, 2017 (the "Offering") are expected to be released to the Company from escrow. Immediately prior to the closing of the Transaction, the Company expects to complete a consolidation (the "Consolidation") on the basis of 10.878 pre-Consolidation common shares to one (1) post-Consolidation common share, and change its name from "Rainmaker Resources Ltd." to "INDIVA Ltd.", subject to applicable regulatory approvals.

Reference should be made to the comprehensive press release of Rainmaker and INDIVA dated June 1, 2017 for further details regarding the Transaction.

Closing of Second and Third Tranches of Offering

Rainmaker and INDIVA are also pleased to announce that closing of the second tranche of the Offering (the "Second Tranche"). Rainmaker and INDIVA expect to complete a third tranche of the Offering in early December, 2017.

Pursuant to the Second Tranche, Rainmaker issued 2,774,527 Subscription Receipts at a price of $0.75 per Subscription Receipt for aggregate gross proceeds of $2,080,895.25. Each Subscription Receipt will convert into one common share (each, a "Resulting Issuer Share") in the capital of the issuer resulting from the amalgamation of INDIVA and Rainmaker, such amalgamation to follow the consolidation of Rainmaker's outstanding common shares on a 10.878:1 basis, and one-half of one common share purchase warrant. Each whole warrant ("Warrant") will entitle the holder to purchase a Resulting Issuer Share at $0.90 for a period of two years from the date of the completion of the Transaction.

The Second Tranche is in addition to the 7,674,609 Subscription Receipts issued by Rainmaker on August 28, 2017, at a price of $0.75 per Subscription Receipt for aggregate gross proceeds of $5,755,956.75 (the "First Tranche"). Together, an aggregate of 10,449,136 Subscription Receipts have been issued for aggregate gross proceeds of $7,836,852.00 under the First and Second Tranches of the Offering. The aggregate gross proceeds of the First and Second Tranches of the Offering have been placed in escrow, and will be released upon completion of the Transaction.

Reference should be made to the press release of INDIVA and Rainmaker dated August 28, 2017 for a description of the escrow arrangement under which the aggregate gross proceeds of the Offering are held.

Sunel Securities Inc. ("Sunel") is entitled to a cash commission of $23,579.64 and 23,580 broker warrants ("Broker Warrants") in respect of Tranche 2 of the Offering. Each Broker Warrant entitles Sunel to acquire, at an exercise price of $0.75 per Equity Broker Warrant, one Resulting Issuer Share for a period of 24 months following closing of the Transaction.

Convertible Debenture Financing

The Second Tranche of the Offering was completed concurrently with the offering (the "Convertible Debenture Financing") of 10% senior convertible debentures ("Convertible Debentures") of INDIVA at a price of Cdn. $1,000 per Convertible Debenture for aggregate gross proceeds of $7,500,000 (the "Debenture Proceeds").

"We are very pleased to have exceeded our goal of raising $15,000,000 with these two concurrent financings and to now be in a position to move forward with the expansion of our London facility to 40,000 square feet. I would like to thank our team at INDIVA and our partners for their hard work to get this financing completed," commented Niel Marotta, Chief Executive Officer of INDIVA.

The gross proceeds of the Convertible Debenture Financing will be held in escrow pending the completion of the Transaction (the "Escrow Release Date").

The Convertible Debentures will mature on the date that is 24 months following the closing of the Transaction. The Convertible Debentures will bear interest at a rate of 10.0% per annum commencing on the Escrow Release Date and will be payable in cash semi-annually in arrears on June 30 and December 31 in each year. The first interest payment will be made on the earlier of December 31 or June 30 following the Escrow Release Date and will include interest payable from the Escrow Release Date. Interest will be computed on the basis of a 360-day year composed of twelve 30-day months.

Subject to the approval of the TSXV, the Convertible Debentures and any unpaid and accrued interest thereon will be convertible, at the option of the holder, into Resulting Issuer Shares at any time prior to the close of business on the last business day immediately preceding the date that is 24 months from the Escrow Release Date at a conversion price equal to $0.75 per Resulting Issuer Share (the "Conversion Price"), subject to adjustment in certain events.

The Resulting Issuer will be permitted to force conversion of the Convertible Debentures if the 10-Day Volume Weighted Average Price (the "VWAP") of the Resulting Issuer Shares is equal to or greater than $1.32 per Resulting Issuer Share, which is 175% of the Conversion Price, subject to a minimum volume for the VWAP calculation of 100,000 shares per day in each day over the averaging period.

INDIVA engaged PI Financial Corp. ("PI") as lead agent in connection with the Convertible Debenture Financing. Sunel acted as a selling group member on the Convertible Debenture Financing. In consideration of their services in connection with the Convertible Debenture Financing, PI and Sunel received aggregate cash commission of $525,000 and 700,000 Broker Warrants on the same terms as those issued under the Offering.

Update on Transaction

INDIVA and Rainmaker are pleased to announce that they have entered into a definitive agreement with respect to the Transaction (the "Acquisition Agreement"), pursuant to which Rainmaker will, subject to certain conditions, acquire 100% of the issued and outstanding securities of INDIVA.

Pursuant to TSXV Policy 5.2, shareholder approval is not required in connection with the Transaction, as INDIVA and Rainmaker are Arm's Length Parties, Rainmaker is without active operations following its recent divestment of mineral properties (as further described below), and the Resulting Issuer Shares will resume trading following the Transaction.

At its Annual and Special Meeting of Shareholder held November 22, 2017, Rainmaker received shareholder approval pursuant to TSXV Policy 5.3 for its divestment of its remaining mineral interest in certain mineral claims in the Dufferin Lake Property, located in the Athabasca basin in Saskatchewan (the "Disposition"). Pursuant to a purchase agreement dated September 8, 2017, among Rainmaker, Eagle Trail Properties Inc., and NexGen Energy Ltd. ("NexGen"), Rainmaker agreed to sell its remaining interest in Dufferin Lake to NexGen. In consideration of the Company's interest in the project, NexGen will issue 27,777 common shares in the capital of NexGen to Rainmaker.

The Disposition is a strategic decision by Rainmaker to cease its mining operations in order to shift its focus to the Transaction and carry on the medical cannabis business of INDIVA. The Disposition will facilitate the completion of the Transaction and support the Company's transition into the medical cannabis industry.

Rainmaker shareholders should refer to the management information circular of Rainmaker dated October 23, 2017 with respect to, among other things, the Disposition, which is available under Rainmaker's issuer profile on SEDAR at www.sedar.com.

ABOUT INDIVA:

INDIVA is a Canadian supplier of high quality, medical grade cannabis. INDIVA's strain selection, cultivation and client care processes combine the know-how and experience of an internationally recognized and award-winning grow-team with GMP-compliant quality assurance standard operating procedures.

INDIVA's wholly owned subsidiary is a Licensed Producer under Canada's Access to Cannabis for Medical Purposes Regulation ("ACMPR") with its first indoor cannabis production facility located in London, Ontario.

INDIVA aims to become a global marijuana brand recognized for high quality cannabis products and excellent client care. As marijuana laws liberalize in Canada, INDIVA will expand its product offering to include safe edibles and other client-friendly cannabis products. In addition, as marijuana laws liberalize internationally, INDIVA will use its Canadian operations as a platform to open new markets for its cannabis products. See www.INDIVA.ca for more information on INDIVA.

DISCLAIMER & 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 Transaction 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. In particular, this release contains forward-looking information relating to the intention of the parties to complete the Offering, Convertible Debenture Financing, and the Transaction. 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 parties being able to obtain the necessary corporate, regulatory and other third parties approvals; licensing and other risks associated with regulated ACMPR entities; and completion of satisfactory due diligence. 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.

This press 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. Not for distribution to U.S. Newswire Services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. Securities laws.

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