(TheNewswire)
Edmonton, Alberta - TheNewswire - December 19, 2023 - Yorkton Equity Group Inc. (TSXV:YEG) (“ Yorkton ” or the “ Company ”) is pleased to announce that due tostrong investor demand, it has upsized and closed the final tranche ofits non-brokered private placement, as previously announced on October12 th , 2023, October 18 th , 2023 and November 27 th , 2023 (the"Private Placement") of unsecured convertible debentures ofthe Company (the “Convertible Debentures”).
The Private Placement was increased to raise aggregategross proceeds of up to $2,736,000 through the sale of 2,736Convertible Debentures. Upon closing of the Private Placement, Yorktonissued an aggregate of 2,736 Convertible Debentures, at an issue priceof $1,000 per Convertible Debenture, for gross proceeds of$2,736,000.
Details of this PrivatePlacement:
Each Convertible Debenture has an issue price of $1,000with an interest rate of eight percent (8%) per annum, payableannually to the Convertible Debenture holders only in cash no laterthan thirty (30) days from the anniversary date of the closing date ofthe Private Placement to the maturity date.
Each Convertible Debenture will mature on the date thatis five (5) years from the date of issuance of the ConvertibleDebenture (the “Term”). The principal amount of each ConvertibleDebenture may, at the option of the Convertible Debenture holder, beconvertible, in whole or in part during the Term, into common sharesof the Company (“Common Shares”) at a conversion price of $0.20per Common Share (the “Conversion”), after which such principalamount of the Convertible Debenture will be extinguished.
The Company, after a period of thirty-six (36) monthsfollowing the date of closing, will have the right, but not theobligation, to redeem the principal amount and any unpaid interest ofthe Convertible Debenture, in cash, without penalty, at any time priorto the date of maturity by providing a thirty (30) calendar day noticeperiod (the “Redemption Notice”) to the Convertible Debentureholder by way of a written notice or a press release dulydisseminated. Within ten (10) business days after receipt of theRedemption Notice, the Convertible Debenture holder, at its solediscretion, may request for a Conversion (of the principal amount onlyexclusive of any interest component which is payable in cash only)from the Company by the issuance of Common Shares. All rights toConversion lapses ten (10) business days after receipt of theRedemption Notice.
The Convertible Debentures and any Common Sharesissuable upon conversion are subject to a statutory hold periodlasting four months and one day following the closing date.
The Company has used the proceeds from the initialtranche closing of the Private Placement for the closing of theacquisition of “The Fuse”, a 125-unit condominium grademulti-family residential complex that was constructed in 2015 and iscomprised of two buildings situated on approximately 2.67 acres ofland located in the Summerside neighborhood with the municipaladdresses of 2105 and 2109 68 Street SW, Edmonton, Alberta (previouslyannounced on October 18 th , 2023) and the Company intends to use theadditional proceeds from the Private Placement for unallocated andgeneral working capital.
In connection with the closing of the PrivatePlacement, the Company paid fees of $12,800 to Sentinel FinancialManagement Corp.
Pursuant to the Private Placement, Mr. Ben Lui acquired2,000 Convertible Debentures in the initial tranche closing (aspreviously announced on October 18 th , 2023) and 33Convertible Debentures in the final tranche closing of the PrivatePlacement, for an aggregate of 2,033 Convertible Debentures in theprincipal amount of $2,033,000. The transactions are each consideredto be a “related party transaction” pursuant to the policies ofthe TSX Venture Exchange and Multilateral Instrument 61-101,Protection of Minority Security Holders in Special Transactions (“MI61-101”) as Mr. Ben Lui is the CEO, director and majorityshareholder of Yorkton. These transactions were exempt from theformal valuation and minority shareholder approval requirements of MI61-101. In particular, the Company has determined that the exemptionset out in paragraph (b) in section 5.5 of MI 61-101 is applicablesince the Company is not listed on the Toronto Stock Exchange, butonly on the TSX Venture Exchange. In addition, regarding the minority shareholder approval exemption, theindependent directors have determined that the exemption set out inparagraphs (1)(b) in section 5.7 of MI 61-101 is applicable in thatthe distribution of the securities to Mr. Ben Lui has a fair marketvalue of not more than $2,500,000 and the Company is not listed on theToronto Stock Exchange, but only on the TSX Venture Exchange.
The Company did not file a material change report inrespect of these transactions 21 days in advance of the closing of thePrivate Placement because insider participation had not beenconfirmed. The shorter period was necessary in order to permit theCompany to close the Private Placement in a timeframe consistent withusual market practice for transactions of this nature.
Early Warning ReportRequirements:
Mr. Ben Lui, who currently owns or controls (directlyor indirectly) 82,511,845 (or 73.23%) of the issued and outstandingCommon Shares on a non-diluted basis, acquired 2,000 ConvertibleDebentures in the initial tranche closing (as previously announced onOctober 18 th , 2023) and 33 Convertible Debentures in the final trancheclosing, for an aggregate of 2,033 Convertible Debentures in theprincipal amount of $2,033,000 pursuant to the Private Placement,being 74.31% of the Convertible Debentures issued in the PrivatePlacement and 32.53% of all currently issued and outstandingconvertible debentures of the Company. The Convertible Debentures heldby Mr. Ben Lui may be converted, at his option, into a maximum of10,348,333 Common Shares at a conversion price of between $0.20 and$0.30 per Common Share by delivering written notice to convert at anytime prior to the close of business on the last business dayimmediately preceding the maturity date.
Prior to the final tranche closing of the PrivatePlacement, Mr. Ben Lui (directly or indirectly) owned 82,511,845Common Shares, 275,000 stock options, and 2,055 unsecured convertibledebentures (as previously announced on April 20 th , 2023 andOctober 18 th , 2023) of the Company. If all of Mr. Ben Lui’s stockoptions and unsecured convertible debentures were exercised, Mr. BenLui would have owned (directly or indirectly) 75.50% of the thenissued and outstanding Common Shares, on a partially dilutedbasis.
After the final tranche closing of the PrivatePlacement, Mr. Ben Lui (directly or indirectly) owns 82,511,845 CommonShares, 275,000 stock options of the Company and 2,088 unsecuredconvertible debentures. If all of Mr. Ben Lui’s stock options andunsecured convertible debentures were exercised, Mr. Ben Lui would own(directly or indirectly) 75.53% of the issued and outstanding CommonShares, on a partially diluted basis.
The Convertible Debentures were acquired for investmentpurposes. Mr. Ben Lui has no current intention to enter into any ofthe transactions listed in item 5 of Form F1 of National Instrument62-103 but in the future, he may discuss such transactions withmanagement and/or the board of directors of the Company and he mayfurther purchase, hold, convert, vote, trade, dispose or otherwisedeal in the securities of the Company, in such manner as he deemsadvisable to benefit from changes in market prices of the Company’ssecurities, publicly disclosed changes in the operations of theCompany, its business strategy or prospects or from a materialtransaction of the Company, and he will also consider the availabilityof funds, evaluation of alternative investments and other factors. Anearly warning report will be filed by Mr. Ben Lui in accordance withapplicable securities laws and will be available under the Company’sSEDAR+ profile at www.sedarplus.ca.
About Yorkton
Yorkton Equity Group Inc. is a growth-oriented real estate investmentcompany committed to providing shareholders with growing assetsthrough accretive acquisitions, organic growth, and the activemanagement of multi-family rental properties with significant upsidepotential. Our current geographical focus is in Alberta and BritishColumbia with diversified and growing economies, and strong populationin-migration. Our business objectives are to achieve growing NetOperating Income (“NOI”) as well as the asset values in ourmulti-family rental property portfolio in strategic markets acrossWestern Canada.
The management team at Yorkton Equity Group Inc. has well over 30years of prior real estate experience in acquiring and managing rentalassets.
Further information about Yorkton is available on the Company’swebsite at www.yorktonequitygroup.com and the SEDAR+ website at www.sedarplus.ca.
Neither the TSX Venture Exchange norits Regulation Services Provider (as that term is defined in thepolicies of the TSX Venture Exchange) accepts responsibility for theadequacy or accuracy of this release.
For further information on Yorkton,please contact:
Ben Lui, CEO - Corporate Office: (780) 409-8228
Yorkton Equity Group Inc. – Shareholder Communications: (780)907-5263
Email: investors@yorktonequitygroup.com
Forward-looking information
This press release may include forward-lookinginformation within the meaning of Canadian securities legislationconcerning the business of Yorkton. Forward-looking information isbased on certain key expectations and assumptions made by themanagement of Yorkton. Although Yorkton believes that the expectationsand assumptions on which such forward-looking information is based arereasonable, undue reliance should not be placed on the forward-lookinginformation because Yorkton can give no assurance that they will proveto be correct. Forward-looking statements contained in this pressrelease are made as of the date of this press release. Yorktondisclaims any intent or obligation to update publicly anyforward-looking information, whether as a result of new information,future events or results or otherwise, other than as required byapplicable securities laws.
This press release does not constitute an offer to sellor a solicitation of an offer to buy any of the securities describedherein in the United States. The securities described herein have notbeen and will not be registered under the United States Securities Actof 1933, as amended, or any applicable securities laws or any state ofthe United States and may not be offered or sold in the United Statesor to the account or benefit of a person in the United States absentan exemption from the registration requirement.
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