NXA Inc.
TSX VENTURE : NXI

December 20, 2012 16:01 ET

NXA Inc. Enters Into Letter of Intent

TORONTO, ONTARIO--(Marketwire - Dec. 20, 2012) - NXA INC. ("NXA" or the "Company") (TSX VENTURE:NXI) is pleased to announce that it has entered into a non-binding letter of intent (the "LOI"), dated December 20, 2012, with Delavaco Real Estate Opportunities Corp. ("Delavaco"), pursuant to which the Company has agreed to acquire all of the issued and outstanding common shares in the capital of Delavaco (the "Proposed Transaction") from the shareholders of Delavaco in exchange for the issuance by the Company to the shareholders of Delavaco of an aggregate of approximately 663,680,040 common shares in the capital of the Company ("Common Shares") on a pro rata basis, subject to the satisfaction or waiver of certain conditions set out in the LOI. Upon completion of the Proposed Transaction, the former shareholders of Delavaco will hold approximately 97.5% of the issued and outstanding Common Shares of the Company.

Delavaco is a private real estate investment firm incorporated under the laws of the Province of Ontario and focuses on maintaining a portfolio of U.S. based multi-family residential real estate units in Florida and Texas. Delavaco was founded and is currently managed by Mr. Andrew DeFrancesco, the principal of Delavaco Capital, a private equity firm headquartered in Fort Lauderdale, Florida with offices in Toronto, Canada and Bogota, Colombia, which holds a portfolio of interests in natural resources, retail, and real estate investments.

Approval of the LOI and the terms of the Proposed Transaction has been received from the board of directors of the Company. If the Proposed Transaction is completed and the required shareholder, regulatory and TSX Venture Exchange (the "Exchange") approvals are obtained, the Corporation will become an investment issuer listed under Tier 2 of the Exchange, and will be engaged in the real estate investment business of Delavaco (the "Resulting Issuer").

Mr. DeFrancesco, a director of the Company, is also the co-founder, Chairman, Chief Executive Officer and principal shareholder of Delavaco, and as a result, is considered to be a "related party" of the Company under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Share Purchases ("MI 61-101"). The Proposed Transaction will therefore constitute a "related party transaction" under MI 61-101 and accordingly, the Company will seek disinterested shareholder approval at a special meeting of the shareholders of the Company to be set at a later date.

The Company previously engaged in the mineral exploration business in British Columbia, Canada; it completed the process of transferring all of its mining claims to the original claimholders of the mineral properties on July 20, 2010.

Completion of the Proposed Transaction is subject to certain conditions, including receipt of necessary Exchange and regulatory approvals, disinterested approval of the shareholders of the Company and Delavaco, completion of satisfactory due diligence by the Company and Delavaco, completion of definitive legal documentation and completion by Delavaco of a private placement (the "Private Placement") of securities of Delavaco. The Private Placement will involve an offering of subscription receipts of Delavaco, which subscription receipts are intended to be automatically exercisable for units of Delavaco (the "Delavaco Units") upon satisfactory completion or waiver of all conditions precedent to the Proposed Transaction. It is intended that each Delavaco Unit shall be ultimately comprised of a secured convertible debenture convertible into Delavaco shares and common share purchase warrants, each entitling the holder thereof to purchase one (1) Delavaco Share. Each Delavaco Unit is intended to be exchanged for equivalent securities of NXA pursuant to, and upon completion of, the Proposed Transaction. It is contemplated that the closing of the Private Placement will occur no later than March 29, 2013. Subject to the satisfaction of such conditions, the Proposed Transaction is expected to close on or about April 30, 2013. However, there can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Trading of the Common Shares has been halted by the Exchange and the Common Shares will remain halted in accordance with Exchange policies until all required documentation with respect to the Proposed Transaction has been received and the Exchange is otherwise satisfied that the halt should be lifted.

A press release with further particulars relating to the Proposed Transaction will follow in accordance with the policies of the Exchange.

Completion of the Proposed Transaction is subject to a number of conditions, including Exchange acceptance and disinterested shareholder approval. The Proposed 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 to be prepared in connection with the Proposed Transaction, 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 NXA Inc. should be considered highly speculative.

The statements used in this press release may contain forward-looking statements, and are based on the opinions and estimates of management, or on opinions and estimates provided to, and accepted by, management. These opinions and estimates are used by management, and speak only as of the date of this press release. Forward-looking statements in this press release include, but are not limited to, the closing of the Proposed Transaction and the anticipated benefits from the Proposed Transaction. Forward-looking statements involve significant known and unknown risks, uncertainties and assumptions, including with respect to the closing of the Proposed Transaction, the timing and receipt of all applicable regulatory approvals and third party consents, the anticipated benefits from the Proposed Transaction and the satisfaction of other conditions to the completion of the Proposed Transaction. Forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ, possibly significantly. Although the Company believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual events or results will be consistent with these forward-looking statements. Except as required by applicable law, the Company does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking information, whether as a result of new information, future developments or otherwise. Readers are therefore cautioned not to place undue reliance on any forward-looking statements.

The Exchange 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 Exchange nor its Regulation Services Provider (as that term is defined in policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • NXA Inc.
    Paul Van Damme
    Chief Financial Officer
    (416) 847-6905