/NOT FOR DISTRIBUTION TO US WIRE SERVICES
OR FOR DISSEMINATION IN THE UNITED STATES
OF AMERICA/
HALIFAX, Feb. 10, 2020 /CNW/ - ViveRE Communities Inc.
(TSXV: VCOM) ("ViveRE" or the "Company") announces that it has
entered into a definitive agreement 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").
Upon closing the acquisition of the Properties, as well as 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 263.
Transaction
As previously announced 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 6,481,481common 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
In accordance with the terms of ViveRE's outstanding Convertible
Debentures issued in 2018, the Company intends to settle
$19,660.24 of interest payable for
the three month period ending January 31,
2020, with the issuance of 94,515 common shares at a deemed
price per share of $0.208. The
issuance of the common shares is subject to receipt of TSX Venture
Exchange (the "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.