Kingsway Arms Retirement Residences Inc.
TSX VENTURE : KWA.P

July 31, 2008 19:21 ET

Kingsway Arms Retirement Residences Inc. Announces Completion of Qualifying Transaction

TORONTO, ONTARIO--(Marketwire - July 31, 2008) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Kingsway Arms Retirement Residences Inc. (TSX VENTURE:KWA.P) (the "Corporation" or "Kingsway"), a capital pool company listed on the TSX Venture Exchange (the "Exchange"), is pleased to announce today that it has completed its qualifying transaction (the "Qualifying Transaction") pursuant to policies of the TSX Venture Exchange (the "Exchange"). The Qualifying Transaction was previously described in the May 1, 2008 and July 8, 2008 press releases of the Corporation and in the filing statement of the Corporation dated June 30, 2008 (the "Filing Statement"), which was filed on SEDAR under the Corporation's profile.

Pursuant to the Qualifying Transaction, Kingsway (i) acquired a seniors housing facility located at 145 Murray Drive, in Aurora, Ontario from Alert Care 87-2 Limited Partnership, an Ontario limited partnership, pursuant to the terms of an amended and restated agreement of purchase and sale dated as of April 25, 2008, as amended by amending agreement made as of May 29, 2008; and (ii) completed a private placement of 4,000,000 common shares of the Corporation at a price of $0.25 per common share for aggregate gross proceeds of $1,000,000, pursuant to which National Bank Financial Inc. ("NBF") acted as sole agent, on a best-efforts basis, on behalf of the Corporation (the "Private Placement"). As previously disclosed, in connection with the Private Placement, NBF was paid a commission equal to 6% of gross proceeds raised directly by NBF.

The Corporation now has 16,500,000 common shares outstanding. In addition, following the Qualifying Transaction, 560,000 options to purchase common shares of the Corporation were granted to officers, directors and consultants of the Corporation.

The insiders of the Corporation remain Messrs. Patrick Byrne, Graham Parker, Robert Kanee, John Mackinnon, Dino Chiesa, Peter Williams, Richard Dubrovsky and Dan Kowalchuk, each a director and/or officer of the corporation, as applicable. The directors and officers, as a group, participated in the Private Placement, directly and indirectly, for an aggregate of 736,000 common shares of the Corporation, representing 18.4% of the shares issued pursuant to the Private Placement.

The Exchange has confirmed that it will be issuing a bulletin advising that the Corporation has met the requirements to be listed on the Exchange as a Tier 2 company and that trading in the common shares of the Corporation will commence at the opening of trading on August 5, 2008 under the trading symbol "KWA".

Pursuant to the terms of an escrow agreement dated July 13, 2007 among Kingsway, Computershare Investor Services Inc. and certain escrow securityholders, an aggregate of 5,381,500 common shares of the Corporation have been placed in escrow, whereby 10% of such shares will be released immediately, following issuance of the Exchange bulletin evidencing final acceptance of the Qualifying Transaction and the balance of such shares will be released in tranches in accordance with the escrow agreement over the 36 months hereafter.

Kingsway Arms Retirement Residences Inc.

With the completion of the acquisition, Kingsway is the owner of a seniors housing facility located in Aurora, Ontario. The Corporation will actively pursue the acquisition or development of additional senior housing facilities in order to grow the Corporation's portfolio of properties.

This press release is not an offer of securities for sale in the United States. The securities of the Corporation referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended. Securities of the Corporation may not be offered or sold in the United States absent registration or an exemption from registration.

This Press Release contains forward-looking statements. These statements generally can be identified by use of forward looking word such as "may", "expects", "anticipates", "intends", "believe" or "could" or the negative thereof or similar variations. The completion of the Qualifying Transaction and the future business, operations and performance of the target property could differ materially from those expressed or implied by such statements. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including that the Qualifying Transaction is completed. Forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to: the ability of the Corporation to satisfy the requirements of the Exchange with respect to the Qualifying Transaction. Additional, important factors that could cause actual results to differ material from expectations include, among other things, general economic and market factors, local real estate conditions, including the development of properties in close proximity to the target property, competition, changes in government regulation, dependence on tenants' financial conditions, interest rates, the availability of equity and debt financing, environmental and tax related matters, and reliance on key personnel. There can be no assurances that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The cautionary statements qualify all forward-looking statements attributable to the Corporation and persons acting on its behalf. Unless otherwise stated, all forward looking statements speak only as of the date of this Press Release and the Corporation has no obligation to update such statements except as required by law.

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. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this press release.

Contact Information

  • Kingsway Arms Retirement Residences Inc.
    Mr. Patrick Byrne
    Chief Executive Officer
    (647) 288-2942 ext. 102
    or
    Kingsway Arms Retirement Residences Inc.
    Mr. Graham Parker
    Chief Operating Officer
    (647) 288-2942 ext. 101