HHT Investments Inc.
TSX VENTURE : HHT

February 10, 2014 18:24 ET

HHT Investments Inc. Mails Information Circular Regarding REIT Conversion

TORONTO, ONTARIO--(Marketwired - Feb. 10, 2014) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

HHT Investments Inc. (TSX VENTURE:HHT) (the "Corporation"), a capital pool company (as defined in Policy 2.4 (the "CPC Policy") of the TSX Venture Exchange (the "TSXV") Corporate Finance Manual), announced today that on February 6, 2014 it filed a management information circular (the "Information Circular") and notice of special meeting in respect of its previously announced reorganization under a plan of arrangement under the Business Corporations Act (Ontario) (the "Arrangement"), whereby it intends to convert into a real estate investment trust named "Boulevard Industrial Real Estate Investment Trust" (the "REIT"), subject to receipt of all necessary approvals, including the final approval of the TSXV and the shareholders of the Corporation (the "Shareholders"). The Information Circular is available for review under the Corporation's profile at www.sedar.com.

Arrangement

Pursuant to the Arrangement, among other things: (i) the issued and outstanding common shares ("Shares") of the Corporation will be exchanged for units ("Units") of the REIT on an one (1) for one (1) basis (the "Exchange Ratio"); and (ii) the issued and outstanding options and warrants to purchase Shares of the Corporation will be exchanged for options and warrants of the REIT to purchase Units, based upon the Exchange Ratio, on terms and conditions identical to the terms and conditions of the original options and warrants.

Acquisition

The Information Circular also describes the previously announced acquisition pursuant to which the REIT will acquire from an arm's length vendor (the "Vendor") the lands and buildings located at 1070 St. George Blvd., 1180 St. George Blvd. and 205 Commerce Street in Moncton, New Brunswick (collectively, the "Properties"), as more fully described in the Information Circular. The acquisition of the Properties and the Arrangement are proposed to constitute the Corporation's Qualifying Transaction as defined in the CPC Policy (collectively, the "Proposed Transaction").

The REIT will indirectly through a wholly-owned limited partnership, purchase the Properties from the Vendor for a purchase price of $15,000,000 (the "Purchase Price"), subject to customary adjustments. The Purchase Price will be satisfied by way of new and assumed mortgage financing, cash on hand and the proceeds of a prospectus offering by the REIT in all provinces of Canada, other than Quebec (the "Prospectus Offering"), to be completed in connection with the Proposed Transaction.

The Purchase Price equates to a value of approximately $63.40 per square foot. Net operating income for the first year is expected to be approximately $1.36 million, resulting in a capitalization rate of approximately 9.06%. The Properties, which are well located with prominent locations in established business parks, are comprised of over 236,000 square feet of gross leaseable area in modern and well maintained facilities that have excellent shipping and ceiling heights. In addition, the Properties located at 1070 St. George Blvd. and 1180 St. George Blvd. permit future expansion by up to 115,000 square feet. The Vendor has agreed to provide a rental guarantee in respect of one lease and to lease back approximately 13,000 square feet of space at market rates for up to three years. Including the head lease, the Properties are 97% leased.

Prospectus Offering

The REIT has filed a preliminary prospectus with the securities commissions in each of the Provinces of Canada, other than Quebec in respect of the Prospectus Offering. The Prospectus Offering will be for a total of 8,823,530 Units at an offering price of $0.17 per Unit for gross proceeds of $1,500,000 and 3,500 convertible debentures (the "Convertible Debentures") at $1,000 principal amount per Convertible Debenture for gross proceeds of $3,500,000, for total gross proceeds of $5,000,000 in the aggregate.

Each Convertible Debenture in the principal amount of $1,000 is an unsecured subordinated debenture of the REIT, bearing interest at 7% per annum, payable semi-annually in arrears, maturing on January 31, 2019, convertible by the holder thereof into 4,000 Units, representing a conversion price of $0.25 per Unit, pursuant to a trust indenture to be entered into between the REIT and Equity Financial Trust Company and more particularly described in the prospectus filed in connection with the Prospectus Offering.

Laurentian Bank Securities Inc. (the "Agent") has agreed to act as agent for the proposed Prospectus Offering pursuant to the terms and conditions of an engagement agreement (the "Engagement Agreement") between the Corporation and the Agent. The Engagement Agreement will be replaced by an agency agreement concurrently with the filing of the final prospectus for the Prospectus Offering.

In connection with the Prospectus Offering, the REIT shall grant to the Agent non-transferable warrants (the "Compensation Warrants") to purchase up to an aggregate of 500,000 Units at a price of $0.17 per Unit, exercisable for a period of two (2) years from the date of issuance. In addition, the REIT has agreed to pay the Agent a cash commission equal to 7.0% of the gross proceeds from the sale of the Units and Convertible Debentures under the Prospectus Offering. Also, the Corporation has previously paid to the Agent a structuring fee in the amount of $10,000 at the time of execution of the Engagement Agreement.

The net proceeds from the Prospectus Offering will be used by the REIT to acquire the Properties and for general trust purposes.

Neither the Units nor the Convertible Debentures offered have been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of Units or Convertible Debentures in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Information Circular Disclosure Changes

For purposes of providing clarification with respect to certain disclosure in the Information Circular, the rules of the TSXV require that the two resolutions approving the Unit Option Plan and Long Term Incentive Plan, respectively, each receives the affirmative vote of a majority of the votes cast at the Meeting excluding votes attaching to Shares beneficially owned by (i) Insiders to whom Unit Options may be granted under the Unit Option Plan and Insiders to whom Restricted Units and Deferred Units may be granted under the Long Term Incentive Plan, respectively and (ii) associates of the Persons referred to in (i).

For purposes of complying with the TSXV requirements referred to above, the Corporation has been informed that the Insiders, and the associates of the Insiders, of the Corporation beneficially own or have control or direction over 5,605,000 Shares representing approximately 18.68% of the outstanding Shares. Accordingly, votes attached to the Shares held by Insiders and their associates representing an aggregate of 5,605,000 Shares or 18.68% of the outstanding Shares will be excluded from determining whether or not the foregoing resolutions have been approved by Shareholders of the Corporation. This represents an increase of 700,000 Shares (or 2.33%) from the figures originally disclosed in the Information Circular describing the approval requirements of Unit Option Plan and Long Term Incentive Plan.

Information about the Meeting

The special meeting (the "Meeting") of the Shareholders will be held at 9:00 a.m. (Toronto time) on March 7, 2014, at the offices of the Corporation's solicitors, WeirFoulds LLP, at Suite 4100, 66 Wellington Street West, Toronto, Ontario, M5K 1B7. Each person who is a holder of record of Shares at the close of business on February 5, 2014, is entitled to receive notice of, and to attend and vote at, the Meeting, and any adjournment or postponement thereof. The Corporation has received a confirmation of mailing from the Corporation's transfer agent.

Boulevard Capital Corporation ("Boulevard Capital"), a corporation owned and controlled by Scott Hayes, Mark Hogan and Heidi Tibben, will be the asset manager of the REIT pursuant to an asset management agreement to be entered into between the REIT and Boulevard Capital on the effective date of the Arrangement. As Scott Hayes, Mark Hogan and Heidi Tibben are directors and officers of the Corporation and currently own an aggregate of approximately 16.02% interest in the Corporation, and are the sole directors, officers and shareholders of Boulevard Capital, certain aspects of the Arrangement will constitute "related party transactions" under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions and therefore must be approved by the affirmative vote of a majority of minority shareholders of the Corporation.

Investors are cautioned that, except as disclosed in the Information Circular, any information released or received with respect to the Arrangement may not be accurate or complete and should not be relied upon.

Registered Shareholders unable to attend the Meeting in person are requested to read the Information Circular and the form of proxy which accompanies the notice of meeting and to complete, sign, date and deliver the form of proxy, together with the power of attorney or other authority, if any, under which it was signed (or a notarially certified copy thereof) to Equity Financial Trust Company at 200 University Avenue, Toronto, Ontario, M5H 4H1, Attention: Proxy Department, no later than 5:00 p.m. (Toronto time) on the last business day immediately preceding the date of the Meeting or any adjournment or postponement thereof. Late proxies may be accepted or rejected by the Chairman of the Meeting in his discretion, and the Chairman is under no obligation to accept or reject any particular late proxy.

Registered Shareholders have the right to dissent with respect to the Arrangement and be paid the fair value of their Shares in accordance with the provisions of section 185 of the Business Corporations Act (Ontario) and an interim order of the Ontario Superior Court of Justice with respect to the Arrangement dated February 3, 2014, if the Arrangement becomes effective. This right to dissent is described in the Information Circular. Failure to strictly comply with the dissent procedures set out in the Information Circular may result in the loss or unavailability of any right of dissent.

Sponsorship of a Qualifying Transaction is required by the TSXV unless exempt in accordance with TSXV policies. The Corporation intends to apply for an exemption from the sponsorship requirements pursuant to the policies of the TSXV, however, there is no assurance that the Corporation will ultimately obtain this exemption. Upon completion of the Proposed Transaction, the REIT is expected to meet all of the minimum listing requirements for a Tier 2 Real Estate Issuer.

HHT Investments Inc.

The principal business of the Corporation is the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction. The Corporation has not commenced commercial operations and has no assets other than cash.

This press release contains forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Examples of such statements include the intention to complete the Proposed Transaction and the intention to reorganize the Corporation into a real estate investment trust. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect the Corporation.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the Information Circular, any information released or received with respect to the Proposed 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 TSXV has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

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