HALIFAX, Feb. 18, 2020 /CNW Telbec/ – 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 ten (10) multi-unit residential properties (the “Properties” or the “Acquisition”) comprising 223 units located in Moncton, New Brunswick. The Properties are located at 145-155 McLaughlin Road, 27 Edmond Street, 50 Maplewood Drive and 2380 Mountain Road, and are owned by ATMJ Properties Inc. (“ATMJ”).
Upon closing the ATMJ Acquisition, as well as, the acquisition of the Denaco properties in Moncton (refer to ViveRE news release dated February 10, 2020) and 75 Emma St. in Oshawa (refer to ViveRE news release dated January 8, 2020), the total number of units owned by ViveRE will increase from 119 to 486.
Transaction
ViveRE will acquire the Properties for a purchase price of $30 million, subject to customary adjustments at closing. ViveRE will satisfy the purchase price as follows: (i) the payment to ATMJ of deposits totalling $50,000 of which $40,000 is a refundable deposit; (ii) the issuance to ATMJ of 4,166,667 common shares of ViveRE at a price of $0.24 per share representing consideration of $1,000,000; (iii) the issuance to ATMJ of an unsecured convertible debenture in the amount of $1,000,000 with a two year term having an interest rate of 7% per annum and convertible into common shares of ViveRE at a price of $0.27 per share; (iv) the issuance to ATMJ of 4,000,000 common share purchase warrants (“Warrants”), having a 3-year term and an exercise price of $0.27 per common share; (v) at the option of ViveRE, the assumption by ViveRE of existing mortgage debt encumbering the Properties; (vi) the placing of a collateral mortgage in the maximum amount of $22,500,000; and (vii) the balance paid to ATMJ in cash. For the most recent fiscal year the total revenue of the Properties was $2,612,335 (unaudited) and total operating expenses were $915,557 (unaudited). No finders fee will be paid on the Acquisition.
The Acquisition is subject to TSX Venture Exchange (the “Exchange”) approval.
Financing
ViveRE will undertake a non-brokered private placement financing in the maximum amount of $7,500,000 in the form of Units. Tier 1 and Tier 2 units are 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 and convertible to common shares of ViveRE at a price of $0.27 per common share. Tier 1 Units will be offered in amounts of $25,000 per Unit. Tier 2 Units 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. Tier 3 Units will be offered in amounts of $500,000 per Unit. Each $500,000 Tier 3 Unit is comprised of 2,083,333 common shares of ViveRE and 1,000,000 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 Acquisition and for general working capital. The price reservation for this proposed $7,500,000 Private Placement will only apply to proceeds used to fund the acquisition of the Properties.
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. 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 a further 500 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.
