Grasslands Entertainment Inc.

Grasslands Entertainment Inc.

February 11, 2010 08:00 ET

Grasslands Entertainment Inc. Announces Amended Terms for Reverse Takeover and Change of Business

TORONTO, ONTARIO--(Marketwire - Feb. 11, 2010) - Grasslands Entertainment Inc. (TSX VENTURE:GEE) ("Grasslands" or the "Company") is pleased to announce that it has entered into an amended and restated letter of intent (the "Letter of Intent") dated February 4, 2010 with, among others, Grasslands Acquisitions Corp. (formerly, 2190879 Ontario Inc.) ("TargetCo"), a corporation indirectly owned or controlled by Foundation Financial Holdings Corp. ("FFHC"), pursuant to which the parties thereto have agreed to complete a share exchange between the Company and each of the holders of common shares of TargetCo, which will constitute a Reverse Takeover (the "RTO") of the Company as defined in the policies of the TSX Venture Exchange (the "TSX-V"). Following the RTO, TargetCo will be a wholly-owned subsidiary of the Company. The Letter of Intent amends and restates a previous letter of intent dated May 25, 2009 between the Company and FFHC.

In conjunction with the RTO, the Company will undergo a change in business to a merchant bank focused on the mineral, energy and alternative energy sectors. On or prior to the completion of the RTO, TargetCo will have investments in the following companies: Quia Resources Inc., a private company with gold exploration properties in Colombia; Caldera Geothermal Inc., a private company focused on geothermal exploration and development in the Western United States; Silver Shield Resources Corp. (TSX VENTURE:SSR), a TSX-V listed company focusing on advanced-stage silver properties in Northern Ontario and Mexico; Southern Oregon Gold Corp., a private company focused on gold exploration in south-western Oregon and acquiring gold exploration assets in South America through a transaction expected to be completed later this month; and Enerasia Renewable Corp., a private company focused on hydro and wind opportunities in the Philippines.

Summary of the Amended Terms of the Proposed Reverse Takeover

Under the terms of the Letter of Intent: (i) Grasslands shall consolidate (the "Share Consolidation") its Class A voting shares on a four (4) old shares ("Pre-Consolidated Shares") for one (1) new share basis (a "Consolidated Share"), such Share Consolidation to become effective prior to completion of the RTO; and (ii) the holders of the Consolidated Shares of the Company and each of the holders of common shares of TargetCo (the "TargetCo Common Shares") will engage in a share exchange (the "Share Exchange") of one (1) Consolidated Share for each TargetCo Common Share (the "Consideration Ratio").

The number of outstanding stock options, warrants, and broker options of Grasslands will be adjusted based on the same 4:1 ratio as the Pre-Consolidated Shares of Grasslands and, subject to the approval of the TSX-V, the exercise price of certain of those convertible securities will be amended to $0.14 per Consolidated Share on a post-Consolidation basis. The Consolidated Shares will be issued at an ascribed price of $0.14 per share. On completion of the RTO, TargetCo will be a wholly owned subsidiary of the Company. It is expected that, prior to the closing of the RTO, there will be 16,997,696 Pre-Consolidated Shares issued and outstanding and 7,857,143 TargetCo Common Shares issued and outstanding.

Under the terms of the Letter of Intent, TargetCo's audited financial statements will include net tangible assets ("NTA") equal to at least $900,000. If the NTA is less than $900,000, the Consideration Ratio will be adjusted so that the holders of TargetCo Common Shares will receive less than one (1) Consolidated Share for each TargetCo Common Share based upon a percentage equal to the amount by which the NTA is less than $900,000. For example, if the NTA is $800,000, the Consideration Ratio will be adjusted to 0.8888 Consolidated Share for each TargetCo Common Share.

Grasslands may also complete a financing of up to $5 million worth of Grasslands units (the "RTO Financing") in conjunction with the completion of the RTO. The units issued pursuant to the RTO Financing will have an issue price of $0.14 per unit on a post-Share Consolidation basis and be comprised of one Consolidated Share and one-half of one Consolidated Share purchase warrant with exercise terms of the warrant to be determined in the context of the market. The Company may permit certain subscribers to satisfy the purchase price for units subscribed for under the RTO Financing through payment of cash or exchange of securities that such subscribers hold in other private or public companies which are identified by Foundation as attractive additions to the asset mix of the Company.

Concurrent with the closing of the RTO, Grasslands will enter into a Management Services Agreement with Foundation Opportunities Inc. ("FOI"), pursuant to which, FOI, among other things, will: (i) provide the services of at least three individuals to serve as directors, one of which shall also be President of the Company and another shall serve as Chief Executive Officer of the Company, and identify advisors with relevant experience in alternative energy, mining and oil & gas; (ii) administer the day-today business and affairs of Grasslands; (iii) provide due diligence and market research on potential investments; and (iv) source investment opportunities. As consideration for the services provided by FOI to Grasslands, FOI will receive a monthly service fee equal to the greater of $5,000 and an amount per month equal to 1/12th of 2% of the average monthly net asset value of the Company, and an incentive fee equal to (i) 10% of the increased net asset value of the Company over the previous year less a hurdle rate to be determined and (ii) 10% of realized after tax income.

No Non-Arm's Length Party (as that term is defined in the TSX-V Policies) of the Company has any direct or indirect beneficial interest in TargetCo or is an insider of TargetCo, and there is no relationship between any Non-Arm's Length Party of the Company and any Non-Arm's Length Party of TargetCo.

It is anticipated that on closing of the RTO, without including any securities to be issued pursuant to the RTO Financing and assuming there is no downward adjustment to the Consideration Ratio, the Company will have outstanding approximately 12,106,567 Consolidated Shares and approximately 18,750 options, 4,124,848 warrants and 87,700 broker options. Upon completion of the RTO, it is anticipated that Mendel Ekstein and Gerald Goldberg, currently directors of the Company, shall remain directors the Company. It is expected that upon completion of the RTO, the following persons will be appointed to positions as executive officers of the Company: Jeremy Goldman, Chief Executive Officer and Yannis Banks, President. Randy Koroll, the current Chief Financial Officer of Grasslands, is expected to continue to serve as Chief Financial Officer. It is anticipated that following completion of the RTO, FFHC, indirectly through its wholly-owned subsidiaries, shall be the only holder of more than 10% of the issued and outstanding Consolidated Shares (approximately 16%, assuming full subscription of the RTO Financing).

Completion of the RTO and related transactions is subject to the satisfactory completion of a number of conditions, including but not limited to, certain regulatory approvals, including TSXV acceptance, completion of satisfactory due diligence by both Grasslands and TargetCo, the negotiation of definitive agreements, and requisite shareholder approval.

Pursuant to the Letter of Intent, if certain conditions are not satisfied or waived by February 15, 2010, including but not limited to, the filing of a management information circular with the TSX-V and the completion of a pre-filing conference with the TSX-V, the Company may seek an alternative transaction. Upon notice of such alternative transaction, FFHC shall have ten business days to exercise a right of first refusal whereby, if exercised, FFHC shall pay a fee of $50,000 to the Company to secure a three month extension to the RTO contemplated by the Letter of Intent. If the RTO has not been completed by April 30, 2010, and the RTO is terminated, FFHC shall reimburse all of the costs of the Company incurred in connection with the RTO up to and including February 1, 2010.

The RTO and the related transactions cannot close until, among other things, the required shareholder and regulatory approvals are obtained. There can be no assurance that the RTO and the related transactions will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the RTO and the related transactions, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon.

Trading in the securities of Grasslands should be considered highly speculative.

About Foundation Financial Holdings Corp.

Foundation Financial Holdings Corp. is a Capital Markets Advisory firm committed to assisting small and medium-sized companies with rapid-growth potential. The group focuses on assisting pre-public stage clients in accelerating access to private capital and executing going-public transactions, as well as it works with public companies on financing, M&A transactions and strategic advisory services. Under the brand of Foundation Markets, it operates two wholly owned subsidiary brokerage companies, licensed respectively as an Exempt Market Dealer in Canada, and a Broker Dealer in the United States, and operates a Merchant Banking arm that in select cases will take equity interests in clients.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this release.

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