Mr. Ryan Selby reports

PODA COMPLETES MULTIPARTY SALE OF INTELLECTUAL PROPERTY ASSETS FOR US$100.5 MILLION

Further to its news release dated May 13, 2022, Poda Holdings Inc., together with Ryan Selby and Ryan Karkairan, has completed the sale of substantially all of the assets and properties used in the company's business to Altria Client Services LLC (ALCS), a subsidiary of Altria Group Inc., for a total purchase price of $100.5-million (U.S.), subject to certain adjustments and holdbacks, pursuant to a definitive agreement dated May 13, 2022.

Pursuant to the asset purchase agreement, Poda will change its name to Idle Lifestyle Inc. and its trading symbol to IDLE.X and expects to trade as an inactive issuer under the policies of the Canadian Securities Exchange.

Mr. Selby, Poda's chief executive officer, director and chairman of the company's board of directors, commented: "The completion of this sale represents the culmination of a tremendous amount of effort from the entire Poda team and I am extremely proud of what we have accomplished. I believe this transaction provides maximum value for the company and its shareholders and I know our innovative technology is now in good hands with Altria."

The transaction

Poda and the owners sold substantially all of the assets and properties used in the company's business of developing, manufacturing and marketing multisubstrate heated capsule technology, including, without limitation, the owners' patents related to such technology and the company's exclusive perpetual licence of certain of those patents pursuant to an amended and restated royalties agreement dated April 12, 2019.

Pursuant to the asset purchase agreement, as consideration for the purchased assets, ALCS paid the aggregate sum of $100.5-million (U.S.), as follows:

1. $55,275,000 (U.S.) to the company on closing of the transaction;
2. Up to $45,225,000 (U.S.) to the owners, $22,675,000 (U.S.) of which was paid to the owners on closing (with the remaining $22.55-million (U.S.) subject to escrows and holdbacks).

No portion of the purchase price paid to the company is subject to holdbacks or escrow.

As a result of the completion of the transaction, the company no longer has any material property or assets other than cash on hand plus the cash proceeds of the transaction, which are expected to amount to approximately $69.65-million after satisfying the company's obligations and liabilities. Poda anticipates it will make a cash distribution to holders of Poda's shares equal to approximately 40 cents per subordinate voting share and $400 per multiple voting share, representing a 167-per-cent premium to the closing share price of Poda as of May 12, 2022, the day prior to announcement of the transaction. Poda will provide further information in this regard, and the record date for the distribution, in a subsequent news release.

Poda expects to retain approximately $1-million in cash to explore new business opportunities for the economic benefit of its shareholders, subject to the terms of the asset purchase agreement.

It is anticipated that (i) Mr. Selby and Mr. Karkairan will resign from the board within 60 days of the closing; (ii) Aaron Bowden and Patrick Gray will remain on the board; (iii) Mr. Bowden and Mr. Gray will appoint a third member to the board to hold office until the next annual general meeting of shareholders; and (iv) Mr. Gray will serve as the chief executive officer of the company and will likely be the only employee of the company until a new chief executive officer is identified.

Advisers and counsel

Stifel Nicolaus Canada Inc. acted as financial adviser to Poda and DLA Piper (Canada) LLP and DLA Piper LLP acted as Poda's Canadian and United States legal counsel. Farris LLP acted as the owner's legal counsel. Blake, Cassels & Graydon LLP acted as legal counsel to the special committee. McGuireWoods LLP and Goodmans LLP acted as ALCS's United States and Canadian legal counsel.

Additional information

Further details regarding the transaction and the anticipated timing and amount of the distribution are set out in the asset purchase agreement and the management information circular sent to shareholders in connection with the special meeting held on June 22, 2022, which are available under Poda's profile on SEDAR.

We seek Safe Harbor.