The securities which may be offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to U.S. persons without registration or applicable
Tel :604-617-6794
Fax:604-568-9844
Email:[email protected]
Toronto: TSX-V: MHI
Frankfurt: N8Z1/WKN: AODLHP
OTC Market (US): MHIFF
NEWS RELEASE
The securities which may be offered have not been, nor will be, registered under the United States Securities Act of 1933,
as amended, and may not be offered or sold in the United States or to U.S. persons without registration or applicable
exemption from the registration requirement of such Act. This release does not constitute an offer for sale of such
securities in the United States of America.
Vancouver, BC, Canada – October 9, 2019
MINERAL HILL ANNOUNCES THE EXECUTION OF A BINDING LOI
FOR THE ACQUISITION OF A “REIT” COMPANY
Mineral Hill Industries Ltd. (“MHI” or “Company”), trading on the TSX Venture Exchange (“TSXV”) under
the trading Symbol “MHI”, on the Deutsche Boerse, Frankfurt under the trading Symbol “N8Z1 wishes to
announce that in reference to its News Release dated September 5, 2019, it has executed a binding Letter of
Intent (“LOI”) on September 30, 2019 with a privately held “REIT” company (“Target-REIT”) incorporated
under the laws of the state of Florida, USA. As previously announced, Target-REIT leases its real estate tracts
and properties which it assembled over the past five years and leased to RV-parks, agriculture cultivation
centers and Cannabis dispensaries in Florida and Colorado.
After recent management meetings in Florida, the parties confirmed the terms of the previously non-binding
LOI and manifested the basic terms for a Definitive Acquisition Agreement (“DA-Agr”) with this binding
LOI. The parties have scheduled its next meetings in Colorado during the first half of October in order to
continue its due diligence on Target-REIT’s real estate tracts and properties which are to be included in MHI’s
proposed acquisition in preparation for the DA-Agr. The total value of Target-REIT’s assets (“Assets- REIT”)
being subject to the acquisition is deemed to be CAD$ 24,467,766 (“Deemed-Value”) derived from the
projected average value of the Assets-REIT for the next three years of operation, minus the presently
outstanding debt and/or mortgages against the Assets-REIT. The deemed values are conditional upon the
confirmation by an independent valuation and/or Target-REIT’s audited financial statements and, if necessary,
will be adjusted in the DA-Agr.
All shareholders, direct and/or indirect beneficiaries of Target-REIT including its directors and officers are
Arm’s Lengths to the Company as defined under the TSXV Policy 1.1. Under the terms of the binding LOI,
the parties agree that subsequent to the confirmation of the Deemed-Value and the approval of the transaction
by the TSXV, the Company will issue 48,934,766 common shares at a deemed value of CAD$ 0.50 per share
(the “Consideration-Shares”) to Target-REIT’s shareholders as consideration for the acquisition and that prior
to the issuance of the Consideration-Shares, Target-REIT will have arranged an initial Private Placement
funding (“PP1”) for up to CAD$1.5 million whereby PP1 will consist securities units (“PP1-Units) with one
common share and one full share purchase warrant at CAD$0.20 per PP1-Unit and its proceeds will be
dedicated as general working capital, reflected in the to be completed consolidated pro-forma financial
statements, being part of the approval submission to the TSXV. There will be no finder’s fees in respect to
the transaction and the proposed PP1 funding.
#170- 422 Richards Street,
Vancouver, BC, Canada, V6B 2Z4
www.MineralHill.com
Tel :604-617-6794
Fax:604-568-9844
Email:[email protected]
2
The LOI provides that MHI will issue Series “2” and Series”3” of its Class ”A” convertible preference shares
(“Pref-A2 Shares and “Pref-A3 Shares”) whereby:
(a) the Pref-A2 Shares will be issued at a deemed value of CAD$1.25 to present mortgage holders and
lenders in order to minimize the risk for present and future investors and to satisfy and eliminate certain
debt and mortgages or part thereof in the amount of up to CAD$ 1.5 million, which are presently
outstanding against some of Target-REIT’s assets. The Pref-A2 Shares will be issued at a deemed value of
CAD$1.25 per share, are convertible into common shares of MHI as Resulting Issuer at a ratio of 1:1 (one
Pref-A2 Share for one common share of the Resulting Issuer) at any time at the option of the Pref-A2
Shares holder, will be non-voting, but will be interest bearing at an annual rate of 8%. As of date of this
News Release, there are no agreements with the present mortgage holders or lenders regarding the
settlement of debt; and
(b) the Pref-A3 Shares will be issued at a deemed value of CAD$1.50 to the present shareholders of Target-
REIT in order to recognize the projected higher value in the amount of CAD$ 6,246,988 of Target-REIT’s
assets after the third year of operations compared to the deemed value used for the issuance of the
Consideration-Shares. Under the terms of the LOI and the above assumptions, the number of Pref-A3
Shares to be issued will be 4,164,659 non-voting and non-interest bearing Pref-A3 Shares which can only
be convertible into common shares of the Resulting Issuer at a conversion ratio of 1:1 (one Pref-A3 Share
for one common share of the Resulting Issuer), when the projected three-year value of CAN$ 30,549,533.00
for the acquired assets has been achieved on the third anniversary of the in the LOI defined effective date
of the transaction and confirmed by the audited financial statements of the Resulting Issuer.
Under the terms of the binding LOI, Target-REIT also agreed to obtain commitments for an additional “PP2”
funding of up to CAD$ 6.0 Million to be earmarked towards further acquisitions. At this point, it is assumed
that PP2 will be an equity issue with a share or unit price to be determined by the prevailing share price of the
Company’s common shares quoted on the TSXV subsequent to the approval of the proposed transaction.
The proposed transaction will be considered a Reversed Takeover (“RTO”) and a change of the Company’s
business direction with the future controlling shareholders of the Resulting Issuer being citizens of the USA.
In addition, the Company will apply to be listed as a "Real Estate" or "Investment" issuer and intends to make
an application for a waiver from sponsorship requirements.
Subsequent to the execution of the DA-Agr and after a comprehensive news release and satisfactory Filing
Statement has been filed, the Company plans to obtain the approval for the transaction from shareholders
holding more than 51% of its outstanding shares for the submission to the TSXV of the transaction approval.
The names and backgrounds of all Persons who will constitute Principals or Insiders of the Resulting Issuer
and, if any of such Persons is a Company, the full name and jurisdiction of incorporation, who directly or
indirectly beneficially holds a controlling interest in or who otherwise controls or directs that Company will
be addressed in the announcement following the execution of the Definitive Acquisition Agreement.
“Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange
acceptance and if applicable, disinterested shareholder approval. Where applicable, the transaction cannot close
until the required shareholder approval is obtained. There can be no assurance that the 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 transaction, any information released or received with respect to the
transaction may not be accurate or complete and should not be relied upon. Trading in the securities of [insert
name of Issuer] should be considered highly speculative.
#170- 422 Richards Street,
Vancouver, BC, Canada, V6B 2Z4
www.MineralHill.com
Tel :604-617-6794
Fax:604-568-9844
Email:[email protected]
3
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has
neither approved nor disapproved the contents of this news release.”
“Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."
The Company seeks Safe Harbor
For further information contact the Company or:
Dieter Peter, President & CEO; Phone: (604) 617-6794