ALAB.P A Labs Capital II Corporation

A-Labs Capital II Inc. (TSX-V: ALAB.P) (the “Company”) is pleased to announce that it has entered into a letter of intent dated October 16, 2019 with S.R.P. Plus Holdings Ltd. (“VLife”), an Israeli private corporation.  Pursuant to the letter of intent, the Company and VLife have agreed to a proposed acquisition (the “Transaction”) by the Company of 100% of the outstanding securities of VLife in exchange for common shares of the Company (“Company Shares”).  The Transaction is intended to constitute the Company’s Qualifying Transaction under the policies of the TSX Venture Exchange (the “Exchange”).  

About VLife

VLife is a private company incorporated under the laws of Israel. Its primary business line is as a healthcare-focused commercial real estate and specialty medical services provider under the global brand of VLife Center. The commercial real estate segment of VLife’s business model is focused on managing premium lifestyle medical centers that can be rented out to medical professionals. In addition, VLIFE operates its own proprietary pain-management and aesthetics clinics within each of the VLife Centers.  VLIFE currently manages four medical centers in Israel aiming to provide industry leading standard of care and is in the process of opening an additional two centers in in Israel.

Transaction Terms

Pursuant to the letter of intent, the parties will negotiate a definitive agreement providing for the definitive terms of the Transaction.  Other than certain provisions, including confidentiality and standstill provisions, the letter of intent is non-binding and is subject to the entering into of the definitive agreement.

Pursuant to the letter of intent, the parties intend to complete a business combination – the structure of which will be determined after receiving tax, legal and other advice – whereby the Company will acquire all of the issued and outstanding shares of VLife from the VLife shareholders in exchange for the issuance of Company Shares to VLife shareholders based upon an entity value for VLife of US$30,000,000 and an entity value for the Company of US$1,000,000, before taking into account the Financing (as defined below).  Accordingly, if the Transaction is completed, and assuming the completion of the maximum offering under the Financing at the previously mentioned entity value of VLife, it is expected that the current shareholders of the Company will hold approximately 2.4% of the issued and outstanding Company Shares, the shareholders of VLife will hold approximately 73.2% of the issued and outstanding Company Shares, and the investors under the Financing will hold approximately 24.4% of the issued and outstanding Company Shares, all on a non-diluted basis.

On closing of the Transaction, the business of the Company will be the global business of VLife, and, therefore, the Company is expected to operate in the Technology or Diversified Industries sectors as defined by the TSXV.

Financing

In connection with the Transaction, the Company or VLife is proposing to conduct a brokered private placement for gross proceeds of a minimum of US$8,000,000 and a maximum of US$10,000,000 (the “Financing”).   Further terms of the Financing will be announced in a subsequent news release.

VLife will pay broker, finder and/or advisory fees in conjunction with the Transaction and Financing, the details of which will be disclosed in a subsequent press release and/or the Filing Statement.

Name Change

On closing of the Transaction, the Company is proposing to change its name to "VLife (Canada) Ltd." or such other name as VLife may determine.

Directors and Officers

The following are brief biographies of certain proposed directors and officers of the Company at Closing. Information regarding additional directors and officers will be provided at a later date.

Mr. Shlomo Baranovski, Co-Founder and President

Mr. Baranovski is the Co-Founder of VLife and has served as President of VLife since its incorporation in 2014. Together with his co-founders, he has developed a Proof-of-Concept (POC) method of building a business unit, optimizing its financial performance and then replicating it via a scale-up model. For the past 30 years, Mr. Baranovski has built several businesses based on the scale-up method, including SB Capital, a real estate business in North-America built from a POC to hundreds of millions of dollars value with hundreds of SFR’s, commercial centres, multi family and constructions with replicated scale-up of over 2,500 SFR units in over 40 locations, and has also built Beyond Clinics, a leading aesthetics chain of clinics in Israel, by implementing the same POC method, scaling the business from a single clinic into a nation-wide recognised multi-clinic business.

Mr. Golan Sapir, Co-Founder & CEO

Mr. Sapir is the Co-Founder of VLife and has served as Chief Executive Officer (CEO) of VLife since its incorporation in 2014.  Mr. Sapir is an accomplished executive director with over 20 years of experience in senior executive positions within the Israeli banking and capital markets prior to co-founding VLife, including CEO of Prisma Mutual Funds with over $8B under direct management; CMO of Ilanot Discount's Mutual Funds Management Co. Ltd.; Head of Marketing and member of the Board of Directors of Discount Mortgage Bank; and Vice President of Sigma Investment House, an Israeli boutique family office and investment firm.

Mr. Shmuel Ofnagel – Co-Founder & COO

Mr. Ofnagel is the Co-Founder of VLife and has served as the Chief Operating Officer (COO) of VLife for the past two years. Mr. Ofnagel is an experienced entrepreneur, with considerable expertise in the establishment and scale-up of real-estate businesses in Europe and Israel from incorporation to multi-million dollar value. In addition, Mr. Ofnagel is an experienced investor in the fields of real-estate, high-tech and medical assets.

Sponsorship

The Company will seek a waiver from the Exchange to the requirement to engage a sponsor in connection with the Transaction. If a sponsor is required, the Company will identify a sponsor and pay the sponsorship fee in cash or Company Shares or a combination of cash and Company Shares.  An agreement with a sponsor should not be construed as any assurance with respect to the merits of the Transaction or the likelihood of completion.

Trading Halt

In accordance with Exchange policies, the Company Shares are currently halted from trading and will remain so until certain documentation required by the Exchange for the Transaction can be provided to the Exchange. The Company Shares may resume trading following the Exchange's review of the required documentation or the Company Shares may remain halted until completion of the Transaction.

Conditions to Closing the Transaction

Closing of the Transaction is conditional upon, among other things, receipt of all required regulatory, corporate, and third party approvals, including Exchange approval, the negotiation and execution of the definitive agreement, satisfactory due diligence by both the Company and VLife, no material adverse change having occurred to the assets or share capital of either the Company or VLife, completion of the Financing, and, if required by the Exchange, filing of a sponsorship report with the Exchange. There can be no assurance that the Transaction will be completed on the terms proposed above or at all.

The Transaction is an Arm’s Length Qualifying Transaction, as defined in the policies of the Exchange, and is therefore not ordinarily subject to shareholder approval by the Company’s shareholders. However, as disclosed in the prospectus of the Company dated December 17, 2018, if a Target is considered to be a Portfolio Company of A-Labs Finance and Advisory Ltd., the Exchange has reserved the right to require Majority of the Minority Approval for such Qualifying Transaction (as such terms are defined in the prospectus of the Company dated December 17, 2018). The Exchange will make such determination regarding Majority of Minority Approval upon considering the facts once the Target is identified and transaction terms are identified to the Exchange.

For further information, please contact:

Doron Cohen, CEO and Director of the Company

Email: doron@alabs.co 

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the 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 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 a capital pool company should be considered highly speculative.

The TSX Venture 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 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.

Information concerning VLife, including the proposed directors and officers, has been provided to the Company by VLife for inclusion in this press release.

THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.

Caution Regarding Forward-Looking Information

The information in this news release includes certain information and statements about management’s view of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Forward looking statements in this news release include, but are not limited to, the closing of the Transaction and the anticipated benefits of the Transactions, including the proposed business of the Company after completion of the Transaction. Because of these risks and uncertainties and as a result of a variety of factors, including with respect to the closing of the Transaction and related matters, including the expected timing for execution of a definitive agreement, the expected capitalization of the Company after completion of the Transaction, the Financing and the proposed terms of the Financing, the change of the Company’s name, certain proposed directors and officers of the Company after completion of the Transaction, the timing and receipt of all applicable regulatory, corporate, shareholder and third party approvals, the anticipated benefits from the Transaction and the satisfaction of other conditions to Closing, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward looking statements. Although the Company believes that the expectations reflected in forward looking statements are reasonable, it can give no assurances that the expectations of any forward looking statement will prove to be correct. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward looking statements or otherwise.