Edmonton, AB - TheNewswire - April 20, 2023 - Yorkton Equity Group Inc. (“Yorkton” or the “Company”) (TSXV:YEG) announces the receipt of final Exchange acceptance for the closing of its private placement previously announced on February 10, 2023 (the “Private Placement”).  The Company will issue 250 unsecured convertible debentures of the Company (the “Convertible Debentures”) to the investors at an issue price of $1,000 per Convertible Debenture for aggregate gross proceeds of $250,000.  Mr. Ben Lui, an insider of the Company, participated in the Private Placement and acquired 55 unsecured convertible debentures for $55,000.

 

Details of this Private Placement:

 

Each Convertible Debenture will have an issue price of $1,000 with an interest rate of eight percent (8%) per annum, payable annually to the Convertible Debenture holders only in cash no later than thirty (30) days from the anniversary date of the closing date of the Private Placement to the maturity date.

 

Each Convertible Debenture will mature on the date that is five (5) years from the date of issuance of the Convertible Debenture (the “Term”). The principal amount of each Convertible Debenture may, at the option of the Convertible Debenture holder, be convertible, in whole or in part during the Term, into common shares of the Company (“Common Shares”) at a conversion price of $0.30 per Common Share (the “Conversion”), after which such principal amount of the Convertible Debenture will be extinguished.

 

The Convertible Debentures may be repurchased by the Company, in whole or in part, at the Convertible Debenture holder’s request, subject to the sole discretion of management of the Company, acting reasonably. For a period of thirty (30) calendar days following the third (3rd) and fourth (4th) anniversary after the closing date, the Convertible Debenture holder may request, but shall not be obligated to, (the “Repurchase Request”) the Company to repurchase the Convertible Debenture, in whole or in part, not previously converted or redeemed, such that the principal amount and any unpaid interest of the Convertible Debenture will be payable in cash by the Company on the date that is one hundred and eighty (180) calendar days after receipt of the Repurchase Request by the Company.

 

The Company, after a period of thirty-six (36) months following the date of closing, will also have the right, but not  the obligation, to redeem the principal amount and any unpaid interest of the Convertible Debenture in cash, without penalty, at any time prior to the date of maturity by providing a thirty (30) calendar day notice period (the “Redemption Notice”) to the Convertible Debenture holder by way of a written notice or a press release duly disseminated. Within ten (10) business days after receipt of the Redemption Notice, the Convertible Debenture holder, at its sole discretion, may request for a Conversion (of the principal amount only exclusive of any interest component which is payable in cash only) from the Company by the issuance of Common Shares.  All rights to Conversion lapses ten (10) business days after receipt of the Redemption Notice.

 

The Convertible Debentures and any Common Shares issuable upon conversion will be subject to a statutory hold period lasting four months and one day following the closing date.

 

The Company intends to use the proceeds from the Private Placement for the continued acquisition of multi-family rental properties in strategic markets consistent with its secure and aggressive growth business model, and general working capital.

 

Pursuant to the Private Placement, Mr. Ben Lui acquired 55 Convertible Debentures in the principal amount of $55,000.  This transaction is considered a “related party transaction” pursuant to the policies of the TSX Venture Exchange and Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions (“MI 61-101”) as Mr. Ben Lui is the CEO, director and majority shareholder of Yorkton.  This transaction will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101. In particular, the Company has determined that the exemption set out in paragraph (b) in section 5.5 of MI 61-101 is applicable since the Company is not listed on the Toronto Stock Exchange, but only on the TSX Venture Exchange.  In addition, regarding the minority shareholder approval exemption, the independent directors have determined that the exemption set out in paragraphs (1)(b) in section 5.7 of MI 61-101 is applicable in that the distribution of the securities to Mr. Ben Lui has a fair market value of not more than $2,500,000 and the Company is not listed on the Toronto Stock Exchange, but only on the TSX Venture Exchange.

 

Early Warning Report Requirements:

 

Mr. Ben Lui, who currently owns or controls (directly or indirectly) 82,511,845 (approximately 73.23%) of the issued and outstanding Common Shares on a non-diluted basis, acquired Convertible Debentures in the principal amount of $55,000 pursuant to the Private Placement, being approximately 22% of the Convertible Debentures issued in the Private Placement and approximately 2% of all currently issued and outstanding convertible debentures of the Company. The Convertible Debentures held by Mr. Ben Lui may be converted, at his option, into a maximum of 183,333 Common Shares at a conversion price of $0.30 per Common Share by delivering written notice to convert at any time prior to the close of business on the last business day immediately preceding the maturity date.

 

Prior to the Private Placement, Mr. Ben Lui (directly or indirectly) owned 82,511,845 Common Shares and 275,000 stock options of the Company.  If all of Mr. Ben Lui’s stock options were exercised, Mr. Ben Lui would have owned (directly or indirectly) approximately 73.29% of the then issued and outstanding Common Shares, on a partially diluted basis.

 

After the completion of the Private Placement, Mr. Ben Lui (directly or indirectly) owns 82,511,845 Common Shares, 275,000 stock options of the Company and 55 Convertible Debentures.  If all of Mr. Ben Lui’s stock options and Convertible Debentures were exercised, Mr. Ben Lui would own (directly or indirectly) approximately 73.34% of the issued and outstanding Common Shares, on a partially diluted basis.

 

The Convertible Debentures were acquired for investment purposes. Mr. Ben Lui has no current intention to enter into any of the transactions listed in item 5 of Form F1 of National Instrument 62-103 but in the future, he may discuss such transactions with management and/or the board of directors of the Company and he may further purchase, hold, convert, vote, trade, dispose or otherwise deal in the securities of the Company, in such manner as he deems advisable to benefit from changes in market prices of the Company’s securities, publicly disclosed changes in the operations of the Company, its business strategy or prospects or from a material transaction of the Company, and he will also consider the availability of funds, evaluation of alternative investments and other factors. An early warning report will be filed by Mr. Ben Lui in accordance with applicable securities laws and will be available under the Company’s SEDAR profile at www.sedar.com.

 

About Yorkton

 

Yorkton Equity Group Inc. is a growth-oriented real estate investment company committed to providing shareholders with growing assets through accretive acquisitions, organic growth, and the active management of multi-family rental properties with significant upside potential. Our current geographical focus is in markets in Alberta and British Columbia with diversified and growing economies, and strong population in-migration. Our business objectives are to achieve growing Net Operating Income (“NOI”) as well as Net Asset Value (“NAV”) in our multi-family rental property portfolio in strategic markets across Canada.

 

The management team at Yorkton Equity Group Inc. has well over 30 years of real estate experience in acquiring and managing rental assets.

 

Further information about Yorkton is available on the Company’s website at www.yorktonequitygroup.com and the SEDAR website at www.sedar.com.

 

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 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-looking information within the meaning of Canadian securities legislation concerning the business of Yorkton. Forward-looking information is based on certain key expectations and assumptions made by the management of Yorkton. Although Yorkton believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Yorkton can give no assurance that they will prove to be correct. Forward-looking statements contained in this press release are made as of the date of this press release. Yorkton disclaims any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

 

This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein in the United States. The securities described herein have not been and will not be registered under the United States Securities Act of 1933, as amended, or any applicable securities laws or any state of the United States and may not be offered or sold in the United States or to the account or benefit of a person in the United States absent an exemption from the registration requirement.