ViveRE Communities Inc. provides update on pending acquisitions and closes $1.325 million financing

Halifax, Nova Scotia – April 17, 2020 – ViveRE Communities Inc. (TSXV:VCOM) (“ViveRE” or the “Company”) provides the following corporate update. 

ViveRE recognizes the significant impact COVID-19 is having on our residents, business partners and communities. The business impact on our operations has been minimal. As at April 1, 2020, our portfolio of 243 units had less than 1% vacancy. None of our residents requested deferral of their April rent and all rents were collected in full. This reflects the demographic and quality of our resident base. Our priority in this time continues to be operating in a manner that promotes the safety and health of our residents, staff, business partners and communities.

Acquisition of 75 Emma Street, Oshawa and Private Placement

As press released on January 8, 2020, ViveRE entered into a Share Purchase Agreement to acquire all the shares of Emma and Albert Development Inc. (“Emma”), whose sole asset is the real property located at 75 Emma Street, Oshawa, Ontario (the “Emma St. Property” or the “Emma Acquisition”). The Emma St. Property is a newly built multi-unit residential property totaling 20 units of which 19 are three-bedroom units and 1 is a two-bedroom unit. Upon closing this acquisition ViveRE will have 263 units under ownership and another 223 units under agreement.

ViveRE will acquire Emma for a purchase price of $7,300,000, subject to adjustments at closing. The amended terms whereby ViveRE will satisfy the purchase price as follows; (i) a collateral mortgage in the amount of $4,780,750;  (ii) the issuance to the vendors of 2,083,333 common shares of ViveRE at a deemed price of $0.24 per common share representing consideration of $500,000; (iii) the vendors providing an unsecured vendor take back loan in the amount of $500,000 repayable in 24 months and bearing interest at 7% per annum, convertible at the option of the vendors into 1,851,851 common shares of ViveRE at a deemed price of $0.27 per common share for 24 months from the closing date; (iv) the issuance to the vendors of 2,000,000 warrants to acquire common shares of ViveRE at an exercise price of $0.27 per common share for a term of 24 months from the closing date; (v) the assumption of an existing shareholder loan of approximately $900,000 and (vi) the balance of the purchase price payable in cash from the proceeds of a $1,325,000 non-brokered private placement financing (see below) and cash on hand. 

ViveRE has received an offer for mortgage financing in the amount of $4,780,750. The Emma Acquisition is expected to close on April 23, 2020 and is subject to TSX Venture Exchange (the “Exchange”) approval.

Effective April 16, 2020, ViveRE has completed its previously announced non-brokered private placement offering of Tier 1 and Tier 2 units. A total of 33 Tier 1 units were sold at a price of $25,000 per Tier 1 unit and 2 Tier 2 units at a price of $250,000 per Tier 2 unit for aggregate gross proceeds of $1,325,000. Each Tier 1 unit comprises 52,083 common shares of ViveRE and a $12,500 convertible debenture, bearing annual interest of 7% for a term of two years. The debenture is convertible into common shares of ViveRE at a price of $0.27 per share. Each Tier 2 unit comprises 520,833 common shares of ViveRE and a $125,000 convertible debenture, bearing annual interest of 7% for a term of two years. The debenture is convertible into common shares of ViveRE at a price of $0.27 per share. Each Tier 2 unit also includes 500,000 common share purchase warrants, exercisable at a price of $0.27 per share for a period of two years from the date of issuance. 

The securities issued pursuant to the offering and any common shares issuable thereunder are subject to a four-month hold period. Certain insiders of the Company subscribed for 7 Tier 1 units for an aggregate of $175,000 of the offering. The Company's material change report in relation to the insider participation in the offering will not have been filed at least 21 days before the closing of the offering, as the participation of insiders was not known at that time. The Company paid a cash commission of $21,000 which was equal to 7.0% of the gross proceeds raised through certain brokers.  

ATMJ Portfolio, Moncton

Further to the ViveRE press release dated February 18, 2020, the Company has entered into a definitive agreement to acquire a 100% interest in ten (10) multi-unit residential properties (the “Properties” or the “ATMJ 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”).

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; (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, having a 3-year term and an exercise price of $0.27 per common share; (v)  the placing of a collateral mortgage in the amount of $23,062,000; and (vi) the balance paid to ATMJ in cash. 

ViveRE has received an offer for mortgage financing in the amount of $23,062,000. The ATMJ Acquisition is expected to close in May 2020 and is subject to Exchange approval.  

ViveRE will undertake a non-brokered private placement financing of up to $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 Tier 2 Unit purchased will also include 500,000 common share purchase warrants, exercisable at a price of $0.27 per common share of ViveRE for a period of two years from issuance.  Tier 3 Units will also be offered in amounts of $500,000 per Unit. Each Tier 3 Unit is comprised of 2,083,333 common shares of ViveRE and 1,000,000 common share purchase warrants, exercisable at a price of $0.27 per common share of ViveRE for a period of two years from issuance. The proceeds from this offering will be used to fund the ATMJ Acquisition and for general working capital and is subject to Exchange approval.

Company 

ViveRE 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.  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. Following the closing of the currently pending acquisitions 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   

For further information contact:

Mike Anaka
Chief Executive Officer   
902-440-7579

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.

(Not for distribution to US wire services or for dissemination in the United States of America)