FIRST TRANCHE OF EQUITY PRIVATE PLACEMENT Mr. Doug Ridley reports
AVIDUS COMPLETES ACQUISITION OF TRUESTAR HEALTH INC. AND FIRST TRANCHE OF EQUITY PRIVATE PLACEMENT
Further to its news release of July 16, 2014, Avidus Management Group Inc. has completed the acquisition of substantially all of the assets of Truestar Health Inc., a network-marketing company based in Toronto.
Under the terms of the asset purchase agreement, Avidus completed the acquisition for an aggregate purchase price (not including value of inventory) of $6-million. Of the purchase price, $500,000 was paid upon closing of the acquisition, and the remaining $5.5-million will be paid based upon a 5-per-cent royalty override on Truestar's revenue. Avidus will pay for existing Truestar inventory as products are sold. The 5-per-cent royalty override does not begin until after current Truestar inventory is sold.
As part of the acquisition, Avidus is acquiring Truestar's proprietary software system that allows distributors and customers to create customized nutritional, diet and exercise plans around Truestar's 30-plus products. In addition, Avidus has completed the first tranche of its previously announced non-brokered private placement of units of the company at a subscription price of 10 cents per unit. A total of 7,091,700 units was issued under the first tranche closing for gross proceeds of $709,170. Each unit consists of one common share and one common share purchase warrant; each warrant entitles the holder thereof to purchase an additional common share of the company at an exercise price of 20 cents per common share for a period of three years from the date of issue.
All securities issued under the private placement are subject to a four-month hold period expiring Nov. 26, 2014, during which time the securities may not be traded. The proceeds of the private placement have been used to finance the acquisition and for general working capital.
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