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Subversive Real Estate Extends Redemption Deadline

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Subversive Real Estate Acquisition REIT LP (the "REIT LP") (NEO: SVX.U, SVX.RT.U, OTCQX: SBVRF) announced that it has changed the deadline for redemption of its restricted voting units (the "Restricted Voting Units") from November 2, 2020 to November 9, 2020, as further described below.

On October 7, 2020, the REIT LP announced that it had entered into definitive agreements (the "Definitive Agreements") of approximately US$183 million in real estate acquisitions and first lien mortgage originations (collectively, the "Initial Portfolio"). The acquisition of the Initial Portfolio will be the REIT LP’s qualifying transaction (the "Qualifying Transaction").

"We are extremely excited about this opportunity to create the second publicly-traded REIT focused on the U.S. cannabis industry, but the first to concentrate on both adult use and medicinal cannabis real estate," stated Michael Auerbach, Founder of Subversive Capital and Executive Chairman at the REIT LP. "The portfolio we have assembled provides an initial cash flow that supports a very attractive dividend yield, and our pipeline offers a potential path to growth in cash flows and value over time for shareholders. The decision to amend the deadline was made to extend the opportunity to participate in the potential upside that this combination offers and take advantage of the additional grant of contingent rights for investors."

On October 19, 2020, the REIT announced that it has agreed to grant an aggregate of up to 24,116,750 million contingent rights (the "Contingent Rights") to holders of Restricted Voting Units that are not redeemed in connection with the Qualifying Transaction and to holders of Restricted Voting Units that are issued in connection therewith, which Contingent Rights will be issued to holders of record on the day following the closing of the Qualifying Transaction (the "Closing").

The Contingent Rights will be distributed to holders of Restricted Voting Units pro rata based on the number of Restricted Voting Units held by such holder. Accordingly, if there are no redemptions of Restricted Voting Units, each holder of record will receive one Contingent Right per Restricted Voting Unit held. To the extent there are redemptions of Restricted Voting Units, each Non-Redeeming Holder will receive more than one Contingent Right per Restricted Voting Unit held, depending upon the quantum of redemptions.

On the automatic exercise of the Contingent Rights, holders will be entitled to receive, for no additional consideration, one limited partnership unit ("Limited Partnership Units") for every five Contingent Rights held, which may be subject to adjustment. The Contingent Rights will automatically be exercised by the holders thereof upon the earlier of (a) the listing of the REIT LP units on a recognized major U.S. exchange, and (b) cannabis production and sale becoming federally legal in the United States.

In support of the transaction, and in connection with the issuance of the Contingent Rights, the REIT LP’s founders agreed to (a) forfeit the equivalent of approximately four million Limited Partnerships Units in the form of proportionate voting units with a notional equity value of approximately US$40 million, and (b) defer distributions on the equivalent of an approximately four million additional Limited Partnerships Units in the form of proportionate voting units with a notional equity value of approximately US$10 million until the exercise of the Contingent Rights and to forfeit such securities if the Contingent Rights expire prior to their exercise.

The REIT LP has applied to list the Contingent Rights on the Neo Exchange Inc. under the symbol SVX.RT.C. The listing of the Contingent Rights is subject to the REIT LP fulfilling all of the requirements of the exchange.

The Contingent Rights will not possess any redemption or distribution rights. The Contingent Rights will expire and be worthless if they do not convert upon their terms prior to the 10th anniversary of the Closing.

No fractional Contingent Rights will be issued. If a holder would be entitled to receive a fractional interest in a Contingent Rights, we will round down to the nearest whole number of Contingent Rights to be issued to such holder. The Contingent Rights will not be distributed if the REIT LP’s qualifying transaction does not close. In connection with the distribution of the Contingent Rights, the REIT LP’s currently issued and outstanding rights will be adjusted in accordance with their terms, details of which adjustment will be provided once determined.

The REIT LP’s final prospectus, which contains details of the Qualifying Transaction, is available on SEDAR at www.sedar.com and at www.subversivecapital.com/reit.

To redeem their Restricted Voting Units in connection with the Qualifying Transaction, holders must deposit their Restricted Voting Units for redemption prior to 5:00 p.m. (Toronto time) on November 9, 2020, in accordance with the instructions contained in the notice of redemption (the "Notice of Redemption"). The Notice of Redemption was mailed to all holders of Restricted Voting Units on October 8, 2020, and is available on SEDAR at www.sedar.com. Other than the deadline for redemption, the information set out in the Notice of Redemption is unchanged.

The Qualifying Transaction is expected to close on or around November 13, 2020.

About Subversive Real Estate Acquisition REIT LP

Subversive Real Estate Acquisition REIT LP is a limited partnership established under the Limited Partnerships Act (Ontario) formed for the purpose of effecting, directly or indirectly, an acquisition of one or more businesses or assets, by way of a merger, amalgamation, arrangement, equity exchange, asset acquisition, equity purchase, reorganization, or any other similar business combination involving the REIT LP that will qualify as its qualifying transaction for the purposes of the rules of the Exchange. The REIT LP is a special purpose acquisition corporation for the purposes of the rules of the Neo Exchange Inc. (the "Exchange"). The REIT LP’s restricted voting units and rights are listed on the Exchange under the symbols "SVX.U" and "SVX.RT.U", respectively.

Additional information is located at www.subversivecapital.com/reit.

Forward-Looking Statements

Certain statements contained in this news release constitute "forward-looking information" for the purpose of applicable Canadian securities legislation ("forward-looking statements"). These statements reflect the General Partner’s management’s expectations with respect to future events. Forward-looking statements include, but are not limited to, statements concerning the REIT LP’s ability to complete the Qualifying Transaction. All statements other than statements of historical fact are forward-looking statements. The use of the words "anticipate", "believe", "continue", "could", "estimate", "expect", "intends", "may", "might", "plan", "possible", "potential", "predict", "project", "should", "would", and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not a forward-looking statement. These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or events to differ materially from those anticipated or implied in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. Unless otherwise indicated, these statements speak only as of the date of this prospectus.

Such forward-looking statements are qualified in their entirety by the inherent risks, uncertainties and changes in circumstances surrounding future expectations which are difficult to predict and many of which are beyond the control of the REIT LP, including with respect to the REIT LP’s ability to effect the Qualifying Transaction.

Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management of the REIT LP as of the date of this news release, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The REIT LP’s estimates, beliefs and assumptions, which may prove to be incorrect, include various assumptions, including, but not limited to, the anticipated receipt of any required regulatory approvals and consents to close the Qualifying Transaction (including the final approval of the Exchange); the expectation that each counterparty will comply with the terms and conditions of the applicable Definitive Agreement; and the expectation that no event, change or other circumstance will occur that could give rise to the termination of one or more of the Definitive Agreements.

When relying on forward-looking statements to make decisions, the REIT LP cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. Forward-looking statements should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ, possibly materially, from the results discussed in the forward-looking statements, including, but not limited to the factors discussed under "Risk Factors" in the final prospectus.

Although management has attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known that management believes are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information.

All forward‐looking statements included in and incorporated into this news release are qualified by these cautionary statements. Unless otherwise indicated, the forward‐looking statements contained herein are made as of the date of this news release, and except as required by applicable law, the REIT LP nor its sponsors do not undertake any obligation to publicly update or revise any forward‐looking statement, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201102005454/en/

Contacts

INVESTORS:
Subversive Real Estate Acquisition REIT LP
REITinfo@subversivecapital.com

MEDIA:

Conscious Communications Collective
Leland Radovanovic
leland@consciouscoms.com
845-200-5249