AMENDMENT No. 1 to OFFERING MEMORANDUM

Transcription

1 AMENDMENT No. 1 to OFFERING MEMORANDUM Date: June 15, 2016 The Issuer Name: Head office: Address: Suite 111, th Avenue, Langley, British Columbia Phone: (Toll Free: ) info@vwrcapital.com Fax: (Toll Free: ) Website: Amendments to Our Memorandum Our Memorandum dated January 15, 2016 is hereby amended to increase the size of the offering from $25,000,000 (25,000,000 Shares) to $60,000,000 (60,000,000 Shares). The amendments to, and updated sections of, our Memorandum are set out below and on the pages following. Securities offered: Price per security: offering: offering: The Class A Preferred Non-voting (redeemable) Shares (New investors without any shares must also purchase one Common Share for $1.00) $1.00 per Share There is no minimum. You may be the only purchaser. Funds available under the offering may not be sufficient to accomplish our proposed objectives. $60,000,000 (60,000,000 Shares) plus proceeds from sale of any Common Shares. subscription amount: $100 Payment terms: The subscription price for Shares being purchased is payable in full by the closing of the offering. See Item 5.2 Subscription Procedure. Proposed closing date(s): September 1, 2016 Income tax consequences: There are important tax consequences to these securities. See Item 6 Income Tax Consequences and Registered Plan Eligibility. Selling agent?... No Resale restrictions You will be restricted from selling your securities for an indefinite period. See Item 10 Resale Restrictions of the Memorandum. Purchaser s rights You have two business days to cancel your agreement to purchase these securities. If there is a misrepresentation in this Amendment or the Memorandum, you have the right to sue either for damages or to cancel the agreement. See Item 11 Purchasers Rights. No securities regulatory authority or regulator has assessed the merits of these securities or reviewed the Memorandum, as amended hereby. Any representation to the contrary is an offence. This is a risky investment. See Item 8 Risk Factors of the Memorandum.

2 Item 1 USE OF AVAILABLE FUNDS The disclosure under this Item of our Memorandum is amended by replacing Section 1.1 and Section 1.2 with the following: 1.1 Funds The funds that will be available to us from this offering, together with the estimated funds that will be available from other sources, are set out in the following table. Description Assuming A Amount to be raised by this offering (1) $ 100 $ 60,000,000 B Selling commissions and fees 0 0 C Estimated offering costs (legal, accounting, audit, etc.) 10,000 15,000 D Available funds: D = A - (B+C) ($ 9,900) $ 59,985,000 E Additional sources of funding required (available) Cash on hand (2) Credit facility (3) 0 8,552, ,552,993 F Working capital deficiency (4) 0 0 G Total: G = (D+E) - F $ 8,543,093 $ 68,537,993 (1) Excluding proceeds from the sale of Common Shares. (2) Cash on hand as at the date of this First Amendment to our Memorandum. (3) Balance available under our credit facility as at the date of this First Amendment to our Memorandum. The balance available depends on the amount of qualifying mortgage loans we have made, therefore, the full amount under our credit facility may not be available. Furthermore, it is unlikely we will borrow the full amount available under the credit facility. See Item 2.2 Description of our Business Credit Facility. (4) We do not have and do not expect to have a working capital deficiency. 1.2 Use of Available Funds We intend to use the funds available to us from this offering and from other sources, as estimated in Item 1.1 Funds, as set out in the following table. Description of Intended Use of Available Funds (1) (Listed in order of priority) Assuming Investment in residential, commercial, development $ 8,543,093 $ 68,537,993 and bare land mortgages (2) TOTALS $ 8,543,093 $ 68,537,993 (1) Our revenue from operations has been, and we expect it to continue to be, sufficient to cover our operating costs. 1

3 (2) Partial repayment of our credit facility from the net proceeds of this offering will allow us to borrow an equal or possibly larger (due to our ability to leverage funds borrowed) amount from the facility and invest it in mortgages. See Items 2.2 Description of our Business Credit Facility and 4.2 Share Capital Long Term Debt. 2.2 Description of Our Business The disclosure under this Item of our Memorandum is amended by replacing the paragraph entitled Taxation of MICs with the following: Taxation of MICs Under the Income Tax Act (Canada), a MIC is not taxed on its annual net income and capital gains if such income and one-half of such capital gains are distributed to the MIC s shareholders within 90 days of the MIC s financial year. Therefore, to qualify as a MIC and receive this favourable tax treatment, we annually distribute all of our net income and one-half of our capital gains to our Preferred Shareholders. The annual distribution is paid, at the election of each Preferred Shareholder, in cash or in further Preferred Shares within 90 days of our financial year end. These distributions are subject to tax as described in Item 6 Income Tax Consequences and Registered Plan Eligibility. 2.3 Development of Our Business The disclosure under this Item of our Memorandum is amended by replacing the paragraph and table respecting the 910 mortgages held as security for loans totalling over $187,000,000 with the following: As at the date of this First Amendment to our Memorandum, we held 1,019 mortgages as security for loans totalling over $222,000,000 as follows: First Mortgages Second Mortgages Third Mortgages Province No. Principal No. Principal No. Principal British Columbia 233 $ 85,461, $ 16,516, $ 1,966,492 Alberta 146 $ 42,799, $ 5,101,893 4 $ 358,581 Saskatchewan 31 $ 4,744, $ 1,119,017 0 $ 0 Manitoba 71 $ 11,387, $ 875,413 0 $ 0 Ontario 153 $ 41,798, $ 9,663,662 4 $ 368,659 Totals 634 $ 186,192, $ 33,276, $2,693, Short Term Objectives and How We Intend to Achieve Them The last column of the table under this Item of our Memorandum is amended so that it reads as follows: What we must do and how we will do it Target completion date or, if not known, number of months to complete Our cost to complete Carry out the offering as described in the Memorandum. Next 12 months $ 10,000 $ 15,000 2

4 What we must do and how we will do it Target completion date or, if not known, number of months to complete Our cost to complete Use the offering proceeds to provide mortgage loans with a reasonable and manageable level of risk in accordance with our existing lending practices. Next 12 months 0 $ 59,985,000 Item 4 CAPITAL STRUCTURE The disclosure under this Item of our Memorandum is amended by replacing Sections 4.1 through Section 4.4 with the following: 4.1 Share Capital Our share capital is set out in the following table. Number outstanding Description of Security (1) Number Authorized to be Issued Price per Security as at the date of this First Amendment to our Memorandum after the after the (2) Common Shares unlimited $ Class A Preferred Non-voting Shares unlimited $ ,980, ,980, ,008,644 (1) There are not any options, warrants or other securities convertible into Common Shares or Preferred Shares. (2) Assuming no Common Shares are sold. The final amount of, and allocation between, Common Shares and Preferred Shares issued will depend on the number of new and existing investors and amount of subscriptions received. There are only 36,028,449 Preferred Shares left to be sold as 23,971,551 Preferred Shares of the maximum possible 60,000,000 Preferred Shares have been sold as at date of this First Amendment to our Memorandum. 4.2 Current and Long Term Debt Securities Our current and long term indebtedness is set out in the following table. Description of Debt & Whether Secured (1) Interest Rate (annual) Repayment Terms Amount as at the Date of this Memorandum Current Demand Loan TD Bank Prime % Interest payable monthly & Principal repayable on demand $ 4,947,007 Banker s Acceptances 3.15% Repayable in 30 days $ 30,500,000 3

5 Description of Debt & Whether Secured (1) Interest Rate (annual) Repayment Terms Amount as at the Date of this Memorandum Term Loans 2.91% Repayable September 4, 2016 $ 6,000,000 Long Term Term Loans $ 0 (1) All loans are secured as described in Item 2.2 Description of our Business Credit Facility. 4.3 Prior Sales Within the past 12 months, we have issued Common Shares and Preferred Shares (and no securities convertible or exchangeable into Common Shares or Preferred Shares) as set out in the following table. Date of Issuance Type of Security Issued Number of Securities Issued Price per Security Total Funds Received September 1, 2015 (1) Preferred 10,222,010 $1.00 $ 10,222,010 February 29, 2016 June 1, 2016 Common 11 $ Preferred 8,067,753 $1.00 8,067,753 Common 62 $ Preferred 15,903,725 $ ,903,725 Totals Common 73 $1.00 Preferred 34,193,488 $1.00 $ 34,193,561 (1) Issued in lieu of payment of the annual cash distribution of our net profits for the preceding financial year. The balance of the annual distribution was paid in cash. 4.4 Redemption History During our last two financial years and subsequent period to the date of this Memorandum, we have redeemed the following Common Shares and Preferred Shares: Redemption Financial Year Opening Received during Paid Out during Ending # Amount # Amount # Amount # Amount Common Shares $ 0 17 $ $ 17 0 $ $ 0 28 $ $ 28 0 $ (1) 0 $ 0 8 $ 8 8 $ 8 0 $ 0 4

6 Redemption Financial Year Opening Received during Paid Out during Ending # Amount # Amount # Amount # Amount Preferred Shares $ 0 64 $ 7,514, $ 7,514,896 0 $ $ $ 6,886, $ 6,886,545 0 $ (1) 0 $ 0 98 $ 3,763, $ 3,763,058 0 $ 0 (1) Financial period from September 1, 2015 to the date of this First Amendment to our Memorandum. We paid all redemption requests in full using our cash on hand and, if necessary, funds available from our credit facility. We expect redemptions to continue approximately as they have for the last two financial periods and do not expect that such redemptions will cause any adverse effect on our operations or payment of income distributions. 5

7 Item 13 DATE AND CERTIFICATE Dated: June 15, 2016 The Memorandum, as amended by this Amendment, does not contain a misrepresentation. The Issuer (signed) D. (DOUGAL) B. SHEWAN President (chief executive officer) (signed) MARNI L. STUEHMER Controller (chief financial officer) On Behalf of the Directors (signed) EVAN A. BRETT Director (signed) GORDON J. ZACHER Director