NOT FOR DISSEMINATION TO U.S. NEWSWIRE SERVICES
It is anticipated that the acquisition of the Brightstar Shares will be effected through the amalgamation of a wholly owned subsidiary ("SubCo") of the Corporation and Brightstar. The vendors of the Brightstar Shares are
Brightstar is a full service development company that will focus on developing independent seniors housing projects in the greater
Terms of Qualifying Transaction
Pursuant to the terms of the Letter of Intent, subject to completion of satisfactory due diligence, a definitive amalgamation agreement (the "Agreement") and receipt of applicable approvals, SubCo will amalgamate with Brightstar and the shareholders of Brightstar will receive post-consolidation shares (as described below) in the capital of the Corporation in exchange for their shares of the new amalgamated company.
The Qualifying Transaction is an arm's length transaction. No insiders of the Corporation own securities in Brightstar and no insiders of Brightstar own securities in the Corporation. It is intended that the Corporation will complete a 5(old shares) for 1 (new share) consolidation of its shares and a name change in connection with the Qualifying Transaction. The Corporation intends to call a meeting of its shareholders in the near future in order to approve the consolidation and name change.
Upon completion of the Qualifying Transaction, Brightstar will be a wholly owned subsidiary of the Corporation and the Corporation will be engaged in the business of Brightstar.
Brightstar was founded in
Brightstar has had discussions with many faith and not for profit groups that own valuable but underused real estate. Brightstar's appeal to these groups is that it provides them with a way to use their property without having to sell it while at the same time benefiting both the communities these groups serve as well as the organizations themselves. Although early discussions have taken place with these groups no joint venture agreements have yet been executed. Brightstar is however in the process of developing its first project in southern
Brightstar anticipates earning revenue from its projects in the following three ways (i) charging a development fee for the services associated with the development of each project (this fee will be a percentage of the total cost of each project); (ii) earning a percentage of the profits from the individual projects and (iii) earning profits on those projects which are developed for its own account without a joint venture partner.
Management and Board of Directors of the Resulting Issuer
Upon completion of the Qualifying Transaction, it is anticipated that the resulting issuer's Board of Directors will consist of
Sponsorship of Qualifying Transaction
Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless exempt in accordance with the Exchange policies. The Corporation is currently reviewing the requirements for sponsorship and may apply for exemption from sponsorship requirements pursuant to the policies of the Exchange, however there is no assurance that the Corporation will ultimately obtain this exemption.
Proforma Capital Structure
As a condition to the completion of the Qualifying Transaction, Brightstar will complete a private placement (the "Private Placement") for minimum gross proceeds of
The Corporation currently has 4,411,271 common shares issued and outstanding. The shares will be consolidated on the basis of 5 old shares for each 1 new share, resulting in 882,260 new shares prior to the amalgamation. Brightstar shareholders will be issued 18,000,000 post-consolidation shares. New investors will be issued 6,000,000 post-consolidation shares assuming the maximum Private Placement is achieved.
Following completion of the amalgamation, shareholders of the Corporation will hold equity interests equal to approximately 4% of the combined entity (assuming the maximum financing) with the remaining equity interests being held by shareholders of Brightstar and new investors participating in the Private Placement. The relative valuations of the Corporation and Brightstar will be adjusted to the extent that the pricing of the Private Placement is adjusted from that set forth in this press release.
In accordance with Exchange policy, the Corporation's shares are currently halted from trading and will remain so until the completion of the Qualifying Transaction.
The letter of intent will terminate (i) on the mutual consent of both the Corporation and Brightstar, (ii) if the Corporation is not satisfied with its due diligence review of Brightstar at
Description of Significant Conditions to Closing
Completion of the Qualifying Transaction is subject to a number of conditions including but not limited to, due diligence, Exchange acceptance and if required by Exchange policies and shareholder approval. Where applicable, the Qualifying Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The Corporation will make a subsequent news release with information on sponsorship and summary financial information in accordance with Exchange policy.
This news release contains "forward-looking statements" within the meaning of applicable securities laws relating to the proposal to complete the Qualifying Transaction and associated transactions, including statements regarding the terms and conditions of the Qualifying Transaction and associated transactions. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Qualifying Transaction and associated transactions, that the ultimate terms of the Qualifying Transaction and associated transactions will differ from those that currently are contemplated, and that the Qualifying Transaction and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The statements in this news release are made as of the date of this release. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Corporation, Brightstar, or their respective financial or operating results or (as applicable), their securities.