ViveRE Communities Inc. Announces Closing of Denaco Acquisition and Conversion of Convertible Debentures
/NOT FOR DISTRIBUTION TO US WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/
HALIFAX, March 16, 2020 /CNW/ - ViveRE Communities Inc. (TSXV: VCOM) ("ViveRE" or the "Company" or the "Issuer") announces that, further to its press releases dated January 30 and February 10, 2020, it has completed the acquisition from Denaco Group Ltd. ("Denaco") of a 100% interest in three multi-unit residential properties (the "Properties" or the "Acquisition") comprising 124 units 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).
Acquisition
ViveRE acquired the Properties for a purchase price of $13.5 million, subject to customary adjustments at closing. ViveRE satisfied the purchase price with 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), with the balance being paid in cash.
In connection with the Acquisition, and as previously announced, Denis Arsenault ("Arsenault"), the owner of Denaco subscribed for: (i) 7,291,667 common shares of ViveRE at a price of $0.24 per common 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 "Subscription"). The Debenture has a 2-year term, bears interest at the rate 7% per annum to be paid annually, and is convertible into 6,481,481common shares of ViveRE at a price of $0.27 per common share, assuming full conversion.
ViveRE has placed a collateral mortgage on the Properties in the amount of $10.125 million having a fixed annual rate of interest of 2.05% and a 25-year amortization period.
Upon completion of the Subscription and Acquisition, Arsenault, directly or indirectly, owns a total of 9,375,000 common shares of the Issuer representing 13.92% ownership of the issued number of shares. 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 ViveRE, then Arsenault would own 22,856,481 common shares of the Issuer representing 28.29% 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 TSX Venture Exchange (the "Exchange"), management has obtained disinterested shareholder approval from a majority of shareholders 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.
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 common shares and half in cash. Concurrent with the completion of the Subscription, the holders of the 2018 Debentures have converted the outstanding principal of $1,300,000 into 8,666,662 units, each unit consists of one common share and 0.75 warrant, with 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 from the date of issuance of the warrants.
In accordance with the terms of the 2018 Debentures, the Company intends to settle $9,402.72 of interest payable for the period February 1 to March 16, 2020, with the issuance of 37,159 common shares at a deemed price per share of $0.253. The issuance of the common shares is subject to receipt of 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 an additional 500+ units in the next 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.
Mike Anaka, Chief Executive Officer, 902-440-7579
Share this article