The portion of the purchase price to be paid in cash will be funded through the Company's current working capital and the proceeds of the brokered private placement described below.The Company's obligation to complete the purchase of the Property is subject to the Company receiving Exchange Approval of the Acquisition. About the Property The Property is a newly renovated former commercial building consisting of six storeys. The building currently consists of retail commercial space on the first floor and basement levels and five storeys of apartment units above the commercial space. The civic address of the Property is 100 Princess Street, Winnipeg, Manitoba. The commercial floor space is presently 100% occupied and the residential units are 60% rented by unit count. Once the residential units are completely leased it is anticipated that the aggregate monthly rent from the retail commercial space and the residential units will be well in excess of $120,000 per month. The Vendor The Vendor is a limited partnership, the general partner of which is Taurean Latitude I GP Inc., an Alberta company controlled by Ashish Garg. The Vendor owns 100% of the Property. Private Placement The Company has appointed MGI Securities Inc. (" MGI") as its exclusive agent for a brokered private placement using the "Accredited Investor" and "Offering Memorandum" prospectus exemptions, where applicable in the following proposed jurisdictions: British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia and Newfoundland and such other jurisdictions as the Company and MGI may agree, on the terms set out below (the " Financing"). The terms of the Financing are as follows:
- A minimum of 20,000,000 and a maximum of 45,000,000 subscription receipts (the " Subscription Receipts") at a price of $0.20 per Subscription Receipt, where each Subscription Receipt will be automatically exchanged for one (1) unit (each a "Unit") in the capital of the Company upon completion of the Qualifying Transaction (the "Closing"), which will be evidenced by the publication of the Exchange Bulletin.
- Each Unit to be comprised of one common share of the Company (a " Unit Share") and one common share purchase warrant (each such whole warrant, a " Warrant").
- Each Warrant will entitle its holder to purchase one common share of the Company at an exercise price of $0.30 for a period of 36 months from the date of Closing.
- The Warrants will be subject to an accelerated expiry date if the Company's common shares trade at $0.40 or higher for a period of 20 consecutive trading days after the date that is 12 months after the date of Closing (the " Acceleration Right").
- The Company will pay MGI a cash commission of up to 8% of the aggregate proceeds raised under the Financing and issue MGI compensation options (the " Agent's Compensation Options") to purchase that number of units (the " Agent's Units") as is equal to up to 8% of the aggregate number of Units issued pursuant to the Financing, each Agent's Compensation Option being exercisable at an exercise price of $0.20 per Agent's Unit for a period of 36 months from date of Closing. Each Agent's Unit will be comprised of one common share of the Company and one common share purchase warrant of the Company (an " Agent's Warrant"), where each Agent's Warrant is exercisable into one common share of the Company at an exercise price of $0.30 for a period of 36 months from the date of Closing.
- The proceeds of the sale of the Subscription Receipts will be held in escrow (the " Escrowed Proceeds") pending publication of the Exchange Bulletin. Upon publication of the Exchange Bulletin, the Escrowed Proceeds will be released to the Company. Upon receipt of the Escrowed Proceeds, the Subscription Receipts will be automatically exchanged into the underlying Unit Shares and Warrants. Proceeds of the Financing will be used to fund the Acquisition, cover the costs of the Financing and for general working capital purposes.