/NOT FOR DISTRIBUTION TO US WIRE SERVICES OR
FOR DISSEMINATION IN THE UNITED STATES OF
AMERICA/
HALIFAX, Jan. 30, 2020 /CNW/ - ViveRE Communities
Inc. (TSXV: VCOM) ("ViveRE" or the "Company") announces that it
has entered into an exclusive letter of intent to acquire a 100%
interest in three multi-unit residential properties (the
"Properties" or the "Acquisition") located in Moncton, New Brunswick. The Properties are
located at 150 Lewisville Road (55 units), 154 Lewisville Road (34
units) and 39 Pleasant Street (35 units), and are owned by Denaco
Group Ltd. ("Denaco").
Transaction
ViveRE will acquire the Properties for a purchase price of
$13.5 million, subject to customary
adjustments at closing. ViveRE will satisfy the purchase price as
follows: (i) the payment to Denaco of a refundable deposit of
$50,000; (ii) the issuance to Denaco
of 2,083,333 common shares of ViveRE at a price of $0.24 per share representing consideration of
$500,000; (iii) at the option of
ViveRE, the assumption by ViveRE of any existing mortgage debt
encumbering the Properties; and (iv) the balance paid to Denaco in
cash and the placing of a collateral mortgage in the maximum amount
of $9.75 million. For the
period ended August 31, 2019 the
annual total revenue of the Properties was $1,366,000 (unaudited) and total operating
expenses were $608,000 (unaudited).
No finders fee will be paid on the Acquisition.
Concurrent with the Acquisition, Denis
Arsenault, the owner of Denaco, or an entity controlled by
Denis Arsenault ("Arsenault"), will
subscribe for; (i) 7,291,667 common shares of ViveRE, such shares
to be issued at $0.24 per share for
aggregate gross proceeds of $1,750,000; (ii) an unsecured convertible
debenture ("Debenture") in the principal amount of $1,750,000; and (iii) 7,000,000 common share
purchase warrants ("Warrants"), having a 3-year term and an
exercise price of $0.27 per common
share. The Debenture will have a 2-year term, bear interest at the
rate 7% per annum, to be paid annually, and will be convertible
into 6,481,481 common shares of ViveRE at a price of $0.27 per common share, assuming full conversion.
This subscription is expected to close at least three business days
in advance of the closing of the Acquisition.
Upon completion of the Acquisition and subscription, both of
which are subject to Exchange acceptance, Arsenault, directly or
indirectly, would own a total of 9,375,000 common shares of ViveRE
representing 14.1% ownership of the issued number of shares
assuming the maximum subscription and the conversion of the 2018
convertible debentures (see below). On a fully diluted basis post
Acquisition and presuming Arsenault converted the Debenture into
6,481,481 common shares of the Issuer and also exercised his
Warrants for 7,000,000 common shares of the Issuer, then Arsenault
would own 22,856,481 common shares of the Issuer representing 28.6%
ownership of all of the issued and outstanding shares of the
Issuer. As a condition of the conversion feature of the
Debenture and the exercise of the Warrants, and as required by the
policies of the Exchange, management will seek disinterested
shareholder approval in respect of providing approval for Arsenault
to exercise his conversion rights under the Debenture and his
exercise rights under the Warrants, and thereby becoming a control
person of the Company as defined under applicable law and the
policies of the Exchange.
The Acquisition and concurrent subscription are subject to TSX
Venture Exchange (the "Exchange") approval.
2018 Convertible Debentures
As previously announced on August 22,
2018, the Company completed the private placement of Series
A and Series B convertible debentures (the "2018 Debentures") for
aggregate gross proceeds of $1,300,000. The 2018 Debentures mature on
August 22, 2020 and bear an interest
rate of 12%, payable half in shares and half in cash. The 2018
Debentures are convertible into units of the Company at a price of
$0.15 per unit, such units consisting
of one common share in the capital of the Company (the "Common
Shares") and one Common Share purchase warrant ("Warrant"), each
such Warrant entitling the holder to acquire one Common Share for a
period of 24 months from the date of issuance of the Warrant at a
price of $0.175 per Common Share.
Concurrent with the completion of the Acquisition and related
subscription disclosed above, the holders of the 2018 Debentures
have agreed to convert the outstanding principal of $1,300,000 into 8,666,666 units, each unit to
consist of one common share and 0.75 warrant, each full warrant
entitling the holder to acquire one common share at a price of
$0.175 per common share for a period
of two years following issuance of the warrants, such conversion
terms being the terms of the conversion set out in the applicable
debenture excepting the number of warrants are reduced by 25%.
Pursuant to the 2018 Debentures, 91,955 shares of the
Corporation were granted to 2018 Debenture holders at a price of
$0.165 per share for the period
ending November 1, 2018 to pay
interest owed on the 2018 Debentures. The debt settlement for
interest due on the 2018 Convertible Debentures for the periods
ending on April 30, 2019,
July 31, 2019 and October 31, 2019 were previously disclosed by the
Corporation in press releases dated May 1,
2019, August 1, 2019 and
December 3, 2019.
Concurrent Ongoing Private Placement
As previously announced, ViveRE Communities Inc. is undertaking
a non-brokered private placement financing in the form of Units,
comprised of 50% common shares at a price of $0.24 per common share and 50% convertible
debenture, bearing interest at 7%, maturing in 2 years, convertible
to common shares of ViveRE at a price of $0.27 per common share. The Corporation will
raise up to $1,000,000 of Tier 1
Units which will be offered in amounts of $25,000 per Unit. The Corporation will raise up
to $3,000,000 of Tier 2 Units which
will be offered in amounts of $250,000 per unit. Each $250,000 Tier 2 Unit purchased will also include
500,000 share purchase warrants, exercisable at a common share
price of $0.27 per common share of
ViveRE for a period of two years from issuance. The proceeds from
these Private Placements will be used to fund the previously
announced acquisition of 75 Emma Street, Oshawa, Ontario (the "Emma Street Property")
and for general working capital. The price reservation for this
proposed $4,000,000 Private Placement
will only apply to proceeds used to fund the acquisition of the
Emma Street Property. These Private Placements are subject to
Exchange approval.
Company
ViveRE Communities Inc. (TSX.V: VCOM) (the "Company")
continues to execute its plans to acquire recently built or
refurbished, highly leased multi-residential properties in bedroom
communities across Canada. The
Company aims to satisfy the needs of the newly emerging 55+
resident. The demographic that has changed the world is now
changing the way residential rental apartments cater to their
requirements. Their desire for community, along with service and
convenience amenities has led to the emergence of the Naturally
Occurring Retirement Community or "NORC". Apartments are the next
"home", after years of owning they look forward to the carefree
lifestyle provided through renting in a community of their peers.
ViveRE Communities Inc. intends to consolidate this emerging market
niche. After the acquisitions of 41 and 50 Noel Avenue,
Saint John, NB, and 542 and 550
Ryan Street, Moncton NB, the
Company has developed a robust pipeline of qualified properties for
potential acquisition. Screening properties identified to match the
criteria set out in the Company business plan (proximity to
healthcare, amenities, services and shopping), management has
identified a number of attractive targets for consideration by the
Board. The Company intends to acquire in excess of 400 units in the
coming twelve months.
On behalf of the Board of Directors of ViveRE Communities
Inc.
"Mike Anaka"
Chief Executive Officer
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.
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 press release.
Forward-Looking Statements
This news release contains forward-looking statements
relating to the future operations of ViveRE and other statements
that are not historical facts. Forward-looking statements are often
identified by terms such as "will", "may", "should", "anticipate",
"expects" and similar expressions. All statements other than
statements of historical fact, included in this release, including,
without limitation, statements regarding the future plans and
objectives of ViveRE Communities Inc, are forward-looking
statements that involve risks and uncertainties. There
can be no assurance that such statements will prove to
be accurate and actual results and future events could differ
materially from those anticipated in such statements. Important
factors that could cause actual results to differ materially from
ViveRE Communities Inc.'s expectations include other risks detailed
from time to time in the filings made by ViveRE Communities Inc.
with securities regulators.
The reader is cautioned that assumptions used in the
preparation of any forward-looking information may prove to be
incorrect. Events or circumstances may cause actual results to
differ materially from those predicted, as a result of numerous
known and unknown risks, uncertainties, and other factors, many of
which are beyond the control of ViveRE Communities Inc. The reader
is cautioned not to place undue reliance on any forward-looking
information. Such information, although considered reasonable by
management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those anticipated.
Forward-looking statements contained in this news release are
expressly qualified by this cautionary statement. The
forward-looking statements contained in this news release are made
as of the date of this news release and ViveRE Communities Inc.
will only update or revise publicly the included forward-looking
statements as expressly required by Canadian securities
law.
SOURCE ViveRE Communities Inc.