Parkit Enterprise Announces Proposed $36.25MM Industrial Real Estate Acquisition and $10MM Private Placement

TORONTO, ON, NOVEMBER 24, 2020 – PARKIT ENTERPRISE INC. (TSXV: PKT; OTC: PKTEF)

Toronto, Ontario--(Newsfile Corp. - November 24, 2020) - PARKIT ENTERPRISE INC. (TSXV: PKT) (OTC Pink: PKTEF) ("Parkit") has entered into an asset purchase agreement dated November 24, 2020 (the "Purchase Agreement"), with two private companies (collectively, referred to as the "Vendors"), pursuant to which Parkit has agreed to purchase two properties, located at 5600 Finch Ave East, Toronto, Ontario and 4390 Paletta Court, Burlington, Ontario (the "Properties"), for an aggregate purchase price of $36,250,000, subject to customary adjustments (the "Proposed Acquisition"). The Vendors are not related parties to Parkit and the Proposed Acquisition constitutes an Arm's Length Transaction for the purposes of the ‎TSX Venture Exchange ("TSXV") policies. Concurrent with the closing of the Proposed Acquisition, Parkit also intends to complete a $10,000,000 private placement of Common Shares as more fully described below.

Focus on Industrial Properties

Beginning with the purchase of the Properties, Parkit will focus on the acquisition of high-quality industrial properties in the Greater Toronto Area and surrounding regions. Management believes that the industrial real estate market in Canada benefits from secular tailwinds, including but not limited to the proliferation of ecommerce, significant population growth, and the resilience of the asset class. The additions to our board adds the depth of experience needed to capitalize on this opportunity. Management believes that a publicly traded industrial real estate vehicle will provide investors with compelling exposure to an increasingly important part of the real estate market.

David Delaney, Parkit's Chairman, noted, "This proposed transaction signals an important milestone for Parkit. We will be acquiring two fantastic properties, but more importantly, we will be building a team of highly experienced professionals that are capable of rapidly growing Parkit to the benefit of all shareholders." 

Avi Geller, Parkit's Interim CEO, said, "We are excited with the proposed transaction and the prospect of welcoming Steven Scott and his team to Parkit. We have been following Steven's successes from afar and we are very pleased to be working together on this transaction. Industrial real estate has been the top performing real estate asset over the past 5 years and has clearly shown its resilience through the pandemic."

Steven Scott, the proposed incoming Chair of Parkit, states, "The last 5 years have shown tremendous demand for warehouse, logistics and ecommerce solutions. With historically low cost of debt and continued population growth, the proposed transaction positions Parkit to capitalize on these trends."

Purchase Price and Payment 

The purchase price for the Proposed Acquisition is $36,250,000, subject to adjustments. The Purchase price will be satisfied as follows: (i) the sum of $10,000,000 by the issuance of 40,000,000 common shares of Parkit ("Common Shares") at a deemed price of $0.25 per Common Share, with 20,000,000 of such Common Shares being issued to each of the Vendors; (ii) the assumption of mortgages on the Properties totaling approximately $17,800,000 ("Mortgage Assumptions"); and (iii) Vendor take-back loans in the aggregate amount of approximately $8,450,000 ("Vendor Take-Back Loans"). Depending on the satisfaction of certain conditions, Closing is expected to occur on or before December 31, 2020 ("Closing Date"). 

Properties

Upon the closing of the Proposed Acquisition, Parkit will own two Class A industrial properties totaling 230,000 square feet of rentable industrial space in the Greater Toronto Area. The Properties are fully leased with the leases having an average term remaining of 4.8 years. The Finch Avenue East Property has been owned by the Vendors since 1987, and the Paletta Court Property has been owned by the Vendors since 1995. The Properties have an appraised value of $36,425,000 from an arm's length third party.

The Finch Avenue East Property is owned by NAWOC Holdings Limited, a private Ontario company which is controlled by Access Self Storage Inc., and the Paletta Court Property is owned by SRS Realty Group Inc., a private Ontario company controlled by Steven Scott.

Private Placement

Concurrently with the closing of the Proposed Acquisition, Parkit intends to complete a non-brokered private placement offering of 40,000,000 Common Shares at a ‎price of $0.25 per Common Share, for gross proceeds of $10,000,000 (the "Private Placement"). The Private Placement is expected to close concurrently with the Proposed Acquisition on the Closing Date. The net proceeds of the Private Placement will be used for future acquisitions, expansions and general working capital. ‎

‎It is anticipated that certain current insiders and shareholders, and their affiliates, of Parkit (collectively "Parkit Investors") will purchase up to $2,500,000 of the Private Placement. Participation by Parkit Investors in the Private ‎‎Placement will be on the same terms as arm's length investors. There is no minimum aggregate ‎‎subscription amount for the Private Placement, but completion of the Private Placement is subject to ‎‎all regulatory approvals, including the TSXV acceptance. Depending on market conditions, ‎the ‎gross proceeds of the Private Placement could be increased or decreased. All securities issued in ‎connection with the Private Placement will be subject to a hold period of four months and one day ‎from the date of closing.‎

Material Conditions Precedent to the Proposed Acquisition 

The obligations of Parkit and the Vendors to complete the Proposed Acquisition are subject to the satisfaction of initial conditions including: (i) TSXV acceptance of the Proposed Acquisition and the Private Placement; (ii) shareholder approval; (iii) completion of due diligence in respect of the Properties (a condition solely for Parkit) and completion of due diligence of Parkit (a condition solely for the Vendors); and (iv) creditor consent in respect of the Mortgage Assumptions (collectively, the "Initial Conditions"). The closing of the Proposed Acquisition is also subject to the satisfaction of other customary closing conditions prior to the Closing Date, as set forth in the Purchase Agreement, including, but not limited to: the accuracy of representations and warranties in the Purchase Agreement; terms, covenants and conditions of the Purchase Agreement having been performed; and no material adverse change having occurred prior to the Closing Date.

Other Terms of the Purchase Agreement

Pursuant to the Purchase Agreement, Avi Geller will continue as CEO of Parkit and JoAnne Odette will continue as Chief Financial ‎Officer of Parkit.‎ In addition, the Vendors and Parkit have agreed that, in conjunction with the closing of the Proposed Acquisition, the Board of Directors of Parkit will be reconstituted and shall be composed of Avi Geller, Brad Dunkley, David Delaney, Julie Neault, Iqbal Khan, Blair Tamblyn, and Steven Scott as Chair of Parkit. 

Set forth below are brief biographies of each of the proposed new directors as well as those directors that will remain:

New Directors

Steven Scott, Toronto, Ontario, Steven is the Chair and Chief Executive Officer of StorageVault Canada Inc., a self storage company listed on the TSXV. Mr. Scott is also Chair and Chief Executive Officer of The Access Group of Companies focusing on the ownership, acquisition and development of storage, multi-residential and commercial real estate in Canada. Mr. Scott currently also serves as a director of Timbercreek Financial Corp. and Park Lawn Corporation. Mr. Scott is also a Director and Treasurer of the Canadian Self Storage Association.

Julie Neault, Toronto, Ontario, Julie is the Managing Director, Global Credit of Timbercreek Asset Management. Prior to joining Timbercreek, Ms. Neault was Vice President, Origination at Harbour Mortgage Corporation, and held various roles at MCAP and CIBC Mortgages Inc. Ms. Neault is a graduate of the University of Toronto.

Iqbal Khan, Toronto, Ontario, Iqbal is the Chief Financial Officer and a director of StorageVault, a self storage company listed on the TSXV. Mr. Khan is also a Principal and Chief Financial Officer of The Access Group of Companies focusing on the ownership, acquisition and development of storage, multi-residential and commercial real estate in Canada. Mr. Khan is also the Chair of the Canadian Self Storage Association Tax Committee.

Blair Tamblyn, Toronto, Ontario: Blair is the Chief Executive Officer and Co-Founder of Timbercreek Asset Management. Mr. Tamblyn is also Chair and CEO of Timbercreek Financial Corp. Mr. Tamblyn has served on numerous public boards. Prior to founding Timbercreek in 1999, Mr. Tamblyn worked with Connor, Clark & Company where he was licensed as a securities trader. Mr. Tamblyn is a graduate of the University of Western Ontario and completed the small/medium sized Enterprise Board Effectiveness Program offered by Rotman, together with the Institute of Corporate Directors. 

Incumbent Directors and Officers

Avi Geller, Spring Valley, New York: Avi Geller has been a director of Parkit since May 2018 and the Interim CEO since October 2018. Avi has extensive experience in the small and microcap markets and has worked on a variety of debt, equity and hybrid deals across multiple industries. Since 2017 Avi has been the Chief Investment Officer of Leonite Capital LLC, a diversified family office investment vehicle with extensive holdings in real estate, venture capital, private equity, public equities (with a focus on small-cap and micro-cap public companies), alternative lending, and hedge funds. Mr. Geller is also a Non-Executive Director of Nova Minerals Ltd., a mining company based in Australia focused on gold exploration, a member of the board of directors of Australis Capital Inc., a company operating in the U.S. cannabis industry and a member of the board of directors of DealFlow Financial Products Inc., an information services provider to investment banks, investment funds and financial services companies.

David Delaney, Toronto, Ontario: David Delaney has been a director of Parkit since May 2018. He has served as Chair since August 2018, and served as Executive Chairman from August 2018-November 2019. Mr. Delaney is the President of Concord Investment Partners, an investment company focused on listed equities and midmarket private companies. Prior thereto, Delaney spent five years working for a Toronto based real estate developer and a Toronto based lender. From 2007 to 2011, he trained and practiced as an architect at the University of Toronto and Diamond and Schmitt Architects, respectively. Delaney has been a CFA Charterholder since 2016. He has a Master of Architecture degree from the University of Toronto and a Bachelor of Arts degree from Acadia University. Delaney is a director of Canada's National Ballet School. 

Brad Dunkley, Toronto, Ontario: Brad Dunkley has been a director of Parkit since May 2017. Brad is a Co-Founder, Co-CEO and Portfolio Manager at Waratah Capital Advisors Ltd., a Toronto-based alternative asset manager. Prior to co-founding Waratah in 2010, Mr. Dunkley spent 12 years at Gluskin Sheff + Associates. Mr. Dunkley holds a Bachelor's degree in business administration from Wilfrid Laurier University and is a CFA charterholder. He is a member of the Board of Directors of Beautiful World Canada and a trustee of the Dunkley Charitable Foundation.

JoAnne Odette, Vancouver, British Columbia: JoAnne Odette, has been the CFO of Parkit since August 2017. Ms. Odette has held a number of senior financial roles both in Canada and internationally, including the CFO in Canadian publicly traded issuers Levon Resources Ltd. (August 2017 to August 2019) and Butte Energy Inc. (January 2018 to October 2020). Ms. Odette is a CPA and a graduate of the University of Alberta with a Bachelor of Commerce degree..

Concurrent with the completion of Proposed Acquisition, it is anticipated that Access Results Management Services Inc. (the "Manager"), an affiliate of one of the Vendors, will be retained to manage the Properties. The management agreement among the Manager and Parkit will, subject to certain conditions, have a term of 5 years and result in industry standard (non-material) compensation payable to the Manager. 

Trading Halt 

Trading in Parkit's Common Shares on the TSXV is halted and will remain halted until documentation required by the TSXV in relation to the Proposed Acquisition has been reviewed and accepted by the TSXV.

Other Information 

Completion of the Proposed Acquisition is subject to a number of conditions as disclosed above and as set forth in the Purchase Agreement, including, but not limited to, TSXV acceptance, shareholder approval, completion of due diligence, and creditor consent. Where applicable, the transaction cannot close until the required shareholder approval is obtained.‎ ‎There can be no assurance that the Proposed Acquisition or the Private Placement will be completed as proposed or at all. The TSXV has in no way passed upon the merits of the Proposed Acquisition and has neither approved nor disapproved the contents of this press release. Parkit will be making an application for an exemption from the TSXV sponsorship requirements based on the significant public company experience of the incoming board members. The Proposed Acquisition is subject to the sponsorship requirements of the TSXV, unless an exemption from the sponsorship requirement is available or a waiver is granted. Parkit intends to apply for an exemption to the sponsorship requirement. There is no assurance that an exemption from this requirement will be obtained.

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 Parkit should be considered highly speculative. 

About PARKIT 

Parkit Enterprise Inc. is engaged in the acquisition, optimization and asset management of income producing parking facilities and industrial real estate across the United States and Canada. Parkit's Common Shares are listed on TSX-V (Symbol: PKT) and on the OTC (Symbol: PKTEF).

For more information please contact:

Investor Relations
Email: ir@parkitenterprise.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. 

Forward-Looking Information: This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein is forward-looking information. Generally, forward-looking information may be identified by the use of forward-looking terminology such as "plans", " expects" or "does not expect", "proposed", "is expected", "budgets", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. In particular, this press release contains forward-looking information in relation to: the completion of the Proposed Acquisition and the Private Placement and the terms thereof; the Closing Date for the Proposed Acquisition and the Private Placement; Parkit's new focus on industrial real estate; the composition of the purchase price for the Proposed Acquisition and the availability; ‎the size of the Private Placement, the participation of Parkit Investors in the Private Placement and the use of proceeds of the Private Placement, including potential future acquisitions and expansions; the description of the Properties; the continuance of the current management upon completion of the Proposed Acquisition and the appointment of new directors in connection with the Proposed Acquisition; the execution of the management agreement among Parkit and the Manager; and the Proposed Acquisition and the Private Placement resulting in the creation of new insiders and not resulting in a change of control or reverse takeover of Parkit‎. This forward-looking information reflects Parkit's current beliefs and is based on information currently available to Parkit and on assumptions Parkit believes are reasonable. These assumptions include, but are not limited to: the completion of satisfactory due diligence by all parties in relation to the Proposed Acquisition; the satisfactory fulfilment of all terms and conditions contained in the Purchase Agreement; the receipt of all required approvals for the Proposed Acquisition and the Private placement including regulatory, TSXV, third party, creditor and, if applicable, shareholder approvals; the issuance of Parkit common shares as part of the purchase price for the Proposed Acquisition; market acceptance of the Proposed Acquisition and the Private Placement; acceptable financing to complete the Proposed Acquisition, including Mortgage Assumptions and Vendor Take-Back Loans; and Parkit's continued response and ability to navigate the COVID-19 pandemic being ‎consistent with, ‎or better than, its ability and response to date‎‎. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Parkit to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: general business, economic, competitive, political and social uncertainties; general capital market conditions and market prices for securities; delay or failure to receive shareholder, board, third party or regulatory approvals; the actual results of Parkit's future operations; competition; changes in legislation, including environmental legislation, affecting Parkit; the timing and availability of external financing on acceptable terms; conclusions of economic evaluations; lack of qualified, skilled labour or loss of key individuals; risks related to the COVID-19 pandemic including various recommendations, orders and measures of ‎governmental authorities to try to limit the pandemic, including travel restrictions, border closures, non-‎essential business closures, service disruptions, quarantines, self-isolations, shelters-in-place and social ‎distancing, disruptions to markets, economic activity, financing, supply chains and sales channels, and a ‎deterioration of general economic conditions including a possible national or global recession; and the impact ‎that the COVID-19 pandemic may have on Parkit which may include: decreased demand for the services that Parkit offers; and a deterioration of ‎financial markets that could limit Parkit's ability to obtain external financing‎. A description of additional risk factors that may cause actual results to differ materially from forward-looking information can be found in Parkit's disclosure documents on the SEDAR website at www.sedar.com. Although Parkit has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking information contained in this press release is expressly qualified by this cautionary statement. The forward-looking information contained in this press release represents the expectations of Parkit as of the date of this press release and, accordingly, are subject to change after such date. However, Parkit expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.

NAVIGATION