Newtopia Announces Closing of Previously Announced $1.5 Million Non-Brokered Offering of Subordinated Non-Convertible Secured Debentures

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TORONTO, July 17, 2023 /CNW/ - Newtopia Inc. ("Newtopia" or the "Company") (TSXV: NEWU) (OTCQB: NEWUF), a tech-enabled whole health platform creating sustainable habits that prevent, slow, and reverse chronic disease, is pleased to announce that on July 14, 2023, it closed its previously announced non-brokered offering of subordinated and postponed 13% secured non-convertible debenture units (the "Units") for gross proceeds of CAD$1.5 million (the "Offering").

Each Unit is comprised of: (i) $10,000 principal amount of subordinated and postponed secured non-convertible debentures of the Company (the "Debentures"); and (ii) for no additional consideration, 30,769 common shares of the Company (each whole common share, a "Bonus Share", and collectively, the "Bonus Shares"). The Bonus Shares are calculated based on 20% of the principal amount of the Debentures purchased divided by $0.065, being the closing market price of the common shares of the Company on June 29, 2023, being the closing price on the trading day prior to the day on which the Offering was initially announced. The securities issued pursuant to the Offering are subject to a four month hold period that expires on November 15, 2023. An aggregate of 4,615,366 Bonus Shares were issued in connection with the closing of the Offering.

The Debentures will mature on July 14, 2025 (the "Maturity Date") and are secured by the assets of the Company and bear interest at a rate of 13.0% per annum payable quarterly in arrears in cash.

The Company will pay to the holders of the Debentures an annual work and credit maintenance fee of 2% of the principal amount in cash. The annual maintenance fee will be paid in advance for each year, with the first payment due and payable on October 14, 2023 and the final maintenance fee payment due and payable on July 14, 2024.

To demonstrate continued support of the Company's growth plans, Jeff Ruby, the Company's Chief Executive Officer, Chairperson and director, as well as Roger Poirier, a director, participated in the Offering in an aggregate amount of $187,600. Such participation is considered a related party transaction within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The related party transaction is exempt from minority approval, information circular, and formal valuation requirements pursuant to the exemptions contained in Sections 5.5(a) and 5.7(1)(a) of MI 61-101, as neither the fair market value of the gross securities issued nor the consideration paid exceeds 25% of the Company's market capitalization.

The Debentures cannot be redeemed for four months from closing of the Offering; however can thereafter be repaid in part or in full at any time subject to an early repayment fee equal to: (i) 6% of the principal amount of the Debentures if repayment occurs prior to the date that is six months following the closing date of the Offering (the "Closing Date"); (ii) 4% of such principal amount if repayment occurs following the date that is six months following the Closing Date but prior to the first anniversary of the Closing Date; (iii) 3% of such principal amount if repayment occurs following the first anniversary of the Closing Date but prior to the date that is six months following such first anniversary; or (iv) 2% of such principal amount if repayment occurs following the date is six months following the first anniversary of the Closing Date but prior to the Maturity Date.

The Debentures, the Bonus Shares and the Compensation Options (as defined below) issued pursuant to the Offering will be subject to a hold period of four months plus one day from the Closing Date, except as permitted by applicable securities legislation and the rules of the TSX Venture Exchange (the "Exchange"). The Offering is subject to final approval by the Exchange.

Certain finders acting in connection with the Offering received a finder's fee in the aggregate total amount of $58,200 and 872,307 non-transferable compensation options (the "Compensation Option"). The Compensation Options were calculated based on 7% of the principal amount of Debentures purchased by subscribers that were introduced to the Company by each such finder divided by $0.065, being the closing market price of the common shares of the Company on the Exchange on June 29, 2023. Each Compensation Option is exercisable into one common share of the Company at $0.065 per share, subject to adjustments in certain events, until July 14, 2025.

The Company will use the proceeds of the Offering for corporate and general working capital purposes. The completion of the Offering meets the Company's obligations to raise additional capital set out in a letter agreement with the Company's Schedule I bank lender to allow the Company to continue to access credit under its credit facility with the bank.

Newtopia is a personalized whole health platform helping people create positive lifelong habits that prevent, slow, or reverse chronic disease while reducing healthcare costs. The platform leverages genetic, social and behavioral insights to create individualized prevention programs with a focus on metabolic disease, diabetes, mental health challenges, hypertension, weight management and musculoskeletal disorders. With a person-centered approach that combines virtual care, digital tools, connected devices and actionable data science, Newtopia delivers sustainable clinical and financial outcomes. Newtopia serves some of the largest nationwide employers and health plans and is currently listed in Canada on the Toronto Stock Exchange (TSXV: NEWU) and is quoted in the US on the OTCQB^® Venture Market (OTCQB: NEWUF). To learn more, visit newtopia.com , LinkedIn or Twitter.

This news release contains forward-looking information and forward-looking statements, within the meaning of applicable Canadian securities legislation, and forward looking statements, within the meaning of applicable United States securities legislation (collectively, "forward-looking statements"), which reflects management's expectations regarding Newtopia's future growth, results from operations (including, without limitation, future production and capital expenditures), performance (both operational and financial) and business prospects and opportunities. Wherever possible, words such as "predicts", "projects", "targets", "plans", "expects", "does not expect", "budget", "scheduled", "estimates", "forecasts", "anticipate" or "does not anticipate", "believe", "intend" and similar expressions or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative or grammatical variation thereof or other variations thereof, or comparable terminology have been used to identify forward-looking statements. All statements other than statements of historical fact may be forward-looking ?information. Such statements reflect Newtopia's current views and intentions with respect to future ?events, based on information available to Newtopia, and are subject to certain risks, uncertainties, and ?assumptions. Material factors or assumptions were applied in providing forward-looking information. While forward-looking statements are based on data, assumptions and analyses that Newtopia believes are reasonable under the circumstances, whether actual results, performance or developments will meet Newtopia's expectations and predictions depends on a number of risks and uncertainties that could cause the actual results, performance and financial condition of Newtopia to differ materially from its expectations. These forward-looking statements include, among other things, the Exchange and senior secured lender approval of the Offering, the use of proceeds from the Offering, statements relating to Newtopia's business plans and outlook. Forward-looking statements are not a guarantee and are based on a number of estimates and assumptions management believes to be relevant and reasonable, whether actual results, performance or developments will meet Newtopia's expectations and predictions depends on a number of risks and uncertainties that could cause the actual results, performance and financial condition of Newtopia to differ materially from its expectations. Certain of the "risk factors" that could cause ?actual results to differ materially from Newtopia's forward-looking statements in this press release ?include, without limitation: the termination of contracts by clients, risks related to COVID-19 including various recommendations, orders and measures of ??governmental authorities to try to limit the pandemic, including travel restrictions, border closures, ??non-essential business closures, quarantines, self-isolations, shelters-in-place and social ?distancing, ?disruptions to markets, economic activity, financing, supply chains and sales channels, ?and a ?deterioration of general economic conditions including a possible national or global ?recession; and other general economic, market and business conditions and factors, including the risk factors discussed or referred to in Newtopia's disclosure documents, filed with the securities ?regulatory authorities in certain provinces of Canada and available at www.sedar.com including Newtopia's final long form prospectus dated March 30, 2020.

Should any factor affect Newtopia in an unexpected manner, or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, Newtopia does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this press release is made as of the date of this press release, and Newtopia undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law.

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.

SOURCE Newtopia Inc.