Rainy Hollow Ventures Inc. Enters into Letter of Intent for Qualifying Transaction with Sustainable Produce Urban Delivery Inc.

Vancouver, British Columbia--(Newsfile Corp. - October 1, 2020) - Rainy Hollow Ventures Inc. (TSXV: RHV.P) ("Rainy Hollow") and Sustainable Produce Urban Delivery Inc. ("SPUD") are pleased to announce that they have entered into a letter of intent (the "LOI") dated September 30, 2020 (the "Effective Date"), 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"). Rainy Hollow, a Capital Pool Company, intends that the Transaction will constitute an arm's length Qualifying Transaction (as such terms are defined in Policy 2.4 - Capital Pool Companies of the Corporate Finance Manual of the TSX Venture Exchange (the "TSXV")).

Trading in the common shares of Rainy Hollow is currently halted and will remain halted until completion of the Transaction. Rainy Hollow does not intend to apply to the TSXV for reinstatement of trading.

Terms of the Transaction

Pursuant to the terms and conditions of the LOI, Rainy Hollow and SPUD will negotiate and enter into a definitive agreement (the "Definitive Agreement") incorporating the principal terms of the Transaction as described in this press release. There is no assurance that a Definitive Agreement will be successfully negotiated or entered into.

Subject to the terms of the Definitive Agreement, Rainy Hollow and SPUD intend to complete the Transaction by way of amalgamation, arrangement, or other similar transaction, whereby Rainy Hollow will acquire all of the issued and outstanding securities of SPUD, to form the resulting issuer (the "Resulting Issuer"). The business combination will result in a reverse take-over of Rainy Hollow by SPUD. Prior to the closing of the Transaction, Rainy Hollow will complete a share consolidation on the basis of one (1) new Rainy Hollow common share for seven (7) old Rainy Hollow common shares outstanding (the "Consolidation").

In connection with the Transaction, if necessary, SPUD will convene a meeting of its shareholders for the purposes of approving the Transaction.

SPUD intends to complete a brokered financing of unsecured convertible debentures (the "Convertible Financing") on or about October 10, 2020 to raise a minimum of $5,000,000 and a maximum of $10,000,000 principal amount, which unsecured convertible debentures will automatically be converted, immediately prior to closing of the Transaction, into SPUD shares at a price per share equal to an amount representing a 15% discount to the listing price of the Resulting Issuer shares on the TSXV or the Toronto Stock Exchange (the "TSX"), as the case may be.

Concurrent Financing

In connection with the Transaction, SPUD also intends to complete a brokered financing for aggregate gross proceeds of at least $25,000,000 consisting of SPUD shares or subscription receipts (the "Concurrent Financing"), at a price to be determined in the context of the market, prior to closing of the Transaction.

About SPUD

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.

SPUD is headquartered in Vancouver, British Columbia. For more information, please visit http://spud.ca.

Management of the Resulting Issuer

As a result of the Transaction, the Resulting Issuer will indirectly carry on the business of SPUD and will change its name to "Sustainable Produce Urban Delivery Inc." or such other name as agreed to by the parties and as may be accepted by the TSXV or the TSX and any other relevant regulatory authorities (the "Name Change"). In addition to the Name Change, Rainy Hollow will also seek the requisite corporate approvals to complete the Consolidation, to set the number of directors (all SPUD nominees), and to elect the same.

If the Transaction is completed, it is expected that the board of directors of the Resulting Issuer will be comprised of suitable nominees, each of whom will be appointed by SPUD. Further, the officers of the Resulting Issuer will be determined by SPUD prior to completion of the Transaction.

Conditions Precedent

The LOI contemplates that the following condition precedents be met prior to the closing of the Transaction: (i) the entering into and execution of the Definitive Agreement; (ii) receipt of all required regulatory approvals with respect to the Transaction and listing of the Resulting Issuer shares on the TSXV or the TSX; (iii) all third party consents and corporate approvals necessary to complete the Transaction are obtained, including approval of the Name Change and the Consolidation, as applicable; (iv) no adverse material change in the business, affairs, financial condition, or operations of SPUD or Rainy Hollow has occurred between the Effective Date and the closing date; and (v) the Concurrent Financing shall have been completed.

About Rainy Hollow

Rainy Hollow is a CPC governed by the policies of the TSXV. Rainy Hollow's principal business is the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction. Investors are cautioned that trading in the securities of a CPC should be considered highly speculative.

Further Information

Rainy Hollow will provide further details in respect of the Transaction in due course by way of press release. However, Rainy Hollow will make available to the TSXV or the TSX, all information including financial information as required by the TSXV or the TSX and will provide, in a press release to be disseminated at a later date, required disclosure.

All information contained in this press release with respect to Rainy Hollow and SPUD was supplied by the parties respectively, for inclusion herein, without independent review by the other party, and each party and its directors and officers have relied on the other party for any information concerning the other party.

Investors are cautioned that, except as disclosed in the filing statement or disclosure documentation to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a "capital pool company" should be considered highly speculative.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV or TSX acceptance and if applicable pursuant to TSXV or TSX requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

The TSXV has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

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.

For further information:

Rainy Hollow Ventures Inc.
Michael Atkinson - Chief Executive Officer, Chief Financial Officer, Corporate Secretary, and
Director
Phone: (604) 689-1428

Sustainable Produce Urban Delivery Inc.
Peter van Stolk - Chief Executive Officer
Phone: (604) 215-7783

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

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 Transaction. Rainy Hollow 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 Rainy Hollow and SPUD. Such factors include, among other things: the receipt of all regulatory approvals with respect to the Transaction and listing of the Resulting Issuer Shares on the TSXV or the TSX; obtaining all third party consents and corporate approvals necessary to complete the Transaction, including approval of the Name Change and the Consolidation, as applicable; that no adverse material change in the business, affairs, financial condition or operations of SPUD or Rainy Hollow have occurred between the Effective Date and the closing date; that the Convertible Financing and the Concurrent Financing are completed; as well as other risks and uncertainties, including those described in Rainy Hollow's final prospectus dated April 30, 2018 filed with the British Columbia Securities Commission, the Alberta Securities Commission, and the Ontario Securities Commission and available on www.sedar.com.

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, Rainy Hollow and SPUD each undertake no obligation to publicly update or revise forward-looking information.

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

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/65052

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