Kadestone Enters into Definitive Agreement to Acquire BC-Based Real Estate Development Company

Executive Summary

• Kadestone Capital Corp. has entered into a purchase agreement to acquire a subsidiary of Attollo Management Inc., a private real estate development firm led by David Negrin, to gain rights and interests in select real estate development projects.
• The total consideration for the acquisition is C$12 million, to be satisfied entirely by the issuance of 12,000,000 common shares of Kadestone at a price of C$1.00 per share.
• The transaction is classified as a "related party" transaction under Multilateral Instrument 61-101 because David Negrin is a current director of Kadestone and will become a Control Person post-closing, requiring written consent from disinterested shareholders holding more than 50% of the outstanding shares.

Key Details

• Transaction Structure: Kadestone will acquire a subsidiary of Attollo Management Inc. that owns rights and interests in select real estate development projects.
• Consideration: C$12 million total, satisfied by issuing 12,000,000 common shares ("Consideration Shares") at C$1.00 per share.
• Closing Timeline: Expected by December 31, 2025, and no later than June 30, 2026, subject to customary conditions.
• Conditions Precedent:
  • Receipt of regulatory, TSX Venture Exchange (TSX-V), and shareholder approvals.
  • Entry into a binding definitive agreement for one or two residential/mixed-use real estate development projects in the Greater Vancouver area currently being negotiated by Attollo.
• Shareholder Consent Requirements:
  • David Negrin is a current director and will become a Control Person (owning >20% of shares) post-closing.
  • Kadestone intends to rely on exemptions from formal valuation and minority shareholder approval under MI 61-101.
  • Written consent is required from disinterested shareholders holding >50% of current issued and outstanding Common Shares (excluding Negrin and affiliates).
• Post-Closing Ownership:
  • Pre-closing: Negrin beneficially owns ~1.70% (non-diluted) / 2.34% (partially diluted).
  • Post-closing: Negrin expected to beneficially own ~21.72% (non-diluted) / 22.23% (partially diluted) of Common Shares.
• Escrow and Hold Period:
  • Consideration Shares are subject to an escrow agreement and a time-based release schedule.
  • All Consideration Shares are subject to a statutory hold period expiring four months and one day following issuance.
• Key Personnel:
  • David Negrin (Attollo) will ensure transfer of assets/projects.
  • Kevin Hoffman (Kadestone's Chief Development Officer) will lead project execution.
  • Negrin brings over 30 years of experience, including leadership at Aquilini Development and Concord Pacific Group.

Notable Quotes

• "We are honored to work alongside David through the Acquisition. David's unparalleled experience and legacy in shaping Western Canada's urban landscape are invaluable. The Acquisition not only adds strategic development opportunities to our platform but also strengthens our position as a developer of community-focused, impactful projects." — Brent Billey, CEO