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RYU Apparel Announces $12.5M Non-Brokered Private Placement

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Vancouver, British Columbia--(Newsfile Corp. - August 17, 2021) - RYU Apparel Inc. (TSXV: RYU) (OTCQB: RYPPF) (FSE: RYAA) ("RYU" or the "Company"), a creator of award-winning urban athletic apparel, is pleased to announce that it intends to complete a non-brokered private placement financing of up to 12,500 units (each, a "Unit") at a price of $1,000 per Unit for aggregate gross proceeds of up to $12,500,000 (the "Offering").

Each Unit will consist of: (i) a $1,000 principal amount three-year 12% debenture (each, a "Debenture"); and (ii) 8,333 transferrable common share purchase warrants (each, a "Warrant"). The Debentures will bear interest at 12% per annum (the "Interest"), from the date of issuance (the "Closing"), such Interest to be payable annually until the Maturity Date (as defined below). The Debentures will mature on the date that is 3 years from the date of Closing (the "Maturity Date"). The Debentures may be prepaid in whole or in part at any time, without penalty, on not less than five (5) business days' prior written notice by the Company to the holder.

Each Warrant will entitle the holder thereof to acquire one common share in the capital of the Company (each, a "Warrant Share") at a price of $0.12 per Warrant Share for a period of three years from the date of Closing. In the event that the Company's common shares trade at a volume weighted average price on the TSX Venture Exchange (the "TSXV") (or such other exchange on which the common shares may be traded at such time) of $0.25 or greater per common share for a period of five (5) consecutive trading days after four months and one day from the date of Closing, the Company may accelerate the expiry of the Warrants by giving notice to the holders thereof (by disseminating a news release advising of the acceleration of the expiry date of the Warrants) and, in such case, the Warrant will expire on the thirtieth (30th) day after the date of such notice.

If the aggregate gross proceeds of the Offering are equal to or less than $10,000,000, the Debentures will be issued on an unsecured basis. However, if the aggregate gross proceeds of the Offering are greater than $10,000,000, the Debentures will be issued on a secured basis. Repayment by the Company of amounts owing under the Debentures will be secured by a charge over all of the assets of the Company. All subscribers to the Offering would be required to enter into an agency and inter-lender agreement with the Company, pursuant to which the subscribers will appoint an agent (the "Agent") to act on their behalf as to certain matters relating to the Debentures, including with respect to enforcement of the security interest.

The proceeds of the Offering are expected to be used for inventory and general working capital.

Closing of the Offering remains subject to the acceptance of the TSXV. The Debentures and the Warrants will be subject to a statutory hold period expiring on the date that is four months and one day after Closing. The Offering will be conducted by the Company utilizing the "accredited investor" exemption of National Instrument 45-106 - Prospectus and Registration Exemptions and also other applicable exemptions available to the Company.

None of the securities issued in connection with the Offering will be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), and none of them may be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act. This news release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities in any state where such offer, solicitation, or sale would be unlawful.

Any participation by insiders in the Offering will be considered to be a "related party transaction" as defined in Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). This portion of the Offering however, is expected to be exempt from the valuation requirement of MI 61-101 by virtue of the exemption contained in section 5.5(b) as the Company's common shares are listed on the TSXV and from the minority shareholder approval requirements of MI 61-101 by virtue of the exemption contained in section 5.7(a) of MI 61-101 in that the fair market value of the consideration of the Units distributed to insiders will not exceed 25% of the Company's market capitalization. No new insiders are anticipated to be created, nor will there be any change of control as a result of the Offering.

The convertible debenture financing previously announced in RYU's news releases dated March 23, 2021 and May 11, 2021, has been terminated.

For regular updates on RYU Apparel visit: http://ryu.com

On Behalf of the Board

"Cesare Fazari" Cesare Fazari, CEO
Tel: 1-844-535-2880

Corporate Communications
Anna Brazier +1
(844) 535-2880

U.S. Investor Relations
RedChip Companies Inc.
Dave Gentry (407) 491-4498

About RYU

RYU Apparel (TSXV: RYU) (OTCQB: RYPPF), or Respect Your Universe, is an award winning urban athletic apparel and accessories brand engineered for active lifestyles. Designed without compromise for fit, comfort, and durability, RYU exists to facilitate optimal human performance. For more information, please visit the RYU website at: http://ryu.com

This news release contains forward-looking information that involves various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance of RYU, such as statements: (i) that RYU intends to undertake and close the Offering; and (ii) the use of proceeds thereof. There are numerous risks and uncertainties that could cause actual results and RYU's plans and objectives to differ materially from those expressed in the forward-looking information, including: (i) adverse market conditions; (ii) risks inherent in the apparel industry in general; (iii) the inability of RYU to complete the Offering; or (iv) the TSXV not approving the Offering. Actual results and future events could differ materially from those anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, RYU does not intend to update these forward-looking statements.

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.


To view the source version of this press release, please visit https://www.newsfilecorp.com/release/93540