Zoolander Corporation

December 20, 2007 18:05 ET

Zoolander Corporation Update on Proposed Qualifying Transaction

TORONTO, ONTARIO--(Marketwire - Dec. 20, 2007) -


Zoolander Corporation ("Zoolander") (TSX VENTURE:ZOO.P), a capital pool company, is pleased to announce three further developments in connection with its proposed qualifying transaction pursuant to the policies of the TSX Venture Exchange (the "Exchange") announced August 15, 2007.

Private Placement of Subscription Receipts

Zoolander has engaged Blackmont Capital Inc. ("Blackmont") as agent in connection with a best efforts private placement of up to $15 million of subscription receipts. Concurrently with and in addition to the brokered private placement, Zoolander will issue and sell an aggregate of up to $10 million of subscription receipts on a non-brokered private placement basis. The issue price of the subscription receipts will be determined in the context of the market and all of the subscription receipts, whether issued pursuant to the brokered private placement or the concurrent offering, shall be created with the same terms and conditions. No commissions or finder's fees shall be paid by Zoolander in respect of the non-brokered private placement.

Each subscription receipt will be exercisable, for no additional consideration, to acquire one common share of Zoolander upon completion of the proposed qualifying transaction. At closing, the gross proceeds of the offering less Blackmont's costs and expenses in respect of the brokered private placement are to be deposited in escrow pending completion of the qualifying transaction. In the event the qualifying transaction is not completed on or before March 31, 2008, the escrowed proceeds are to be used to redeem the subscription receipts at a redemption price equal to the issue price thereof.

The offering is subject to regulatory approvals including the approval of the Exchange. All securities issued pursuant to the offering will be subject to applicable statutory, exchange and regulatory hold periods. The offering is expected to close on or before January 31, 2008.

Proposed Acquisition of 6785905 Canada Inc.

In addition to the transaction announced August 15, 2007, Zoolander has entered into a non-binding letter of intent dated as of December 14, 2007 to acquire of all of the issued and outstanding shares of 6785905 Canada Inc. ("6785905"), a corporation governed by the laws of Canada, from Jonathan Carroll and Ali Khoja, each of whom is a resident of Ontario.

6785905, created to be a hotel management company, is in the process of entering into contracts to manage boutique hotels in North America and is developing its own brand of boutique hotels under the J Hotels brand name. Mr. Carroll currently holds 55% of the issued and outstanding shares of 6785905. Mr. Khoja currently holds the remaining 45% of the issued and outstanding shares of 6785905.

Mr. Carroll is the co-founder of iTravel2000, one of Canada's largest online travel companies, and is a director of Travelzest plc, Mint Technology Corp. and OneXOne. Travelzest plc is an online travel group that is listed on AIM. Mint Technology Corp. is a TSX-V listed supplier of prepaid financial products and services and OneXOne is a non-profit foundation working to help preserve a quality of life for children locally and globally.

Mr. Khoja has over 18 years of managerial and leadership experience in the Canadian hotel industry, most recently serving as the General Manager of the SoHo Metropolitan Hotel in Toronto. Mr. Khoja taught at Algonquin College in the Hotel and Restaurant Management program for nine years and was the General Manager of Westmount Hospitality. Mr. Khoja has also managed the Holiday Inn Hotel and Suites in Markham, the ARC Hotel in Ottawa, the Radisson Ottawa and the Travelodge Ottawa.

Pursuant to the letter of intent, Zoolander will issue an aggregate of 8,000,000 common shares of Zoolander to the vendors (4,400,000 shares to Mr. Carroll and 3,600,000 shares to Mr. Khoja) in consideration for all of the issued and outstanding shares of 6785905. As a condition of closing, Mr. Carroll is to enter into a consulting agreement with Zoolander and is to become a member of Zoolander's board of directors. The consulting agreement is to have an initial term of three years and Mr. Carroll is to devote at least 50% of his time to Zoolander. Mr. Khoja is to be employed as the Chief Operating Officer of Zoolander on a full-time basis.

6785905 was incorporated on June 7, 2007 and has not produced any revenue to date. As at October 31, 2007, 6785905 has incurred expenses of approximately $68,000 relating primarily to management fees paid to Mr. Khoja to such date. While 6785905 has no operating history or significant book value, Zoolander believes that the operators are in-demand, experienced people who will play the key role in developing Zoolander.

The acquisition of 6785905 is to be conditional upon the completion of the private placement and the receipt of all necessary regulatory approvals. Following completion of the qualifying transaction, Zoolander is to be re-branded as the JHotel Group.

Share Transfers, Directors and Officers

Contemporaneously with and as a condition of the completion of the qualifying transaction, Caylee Financial Inc., Michael Cooper, Daniel Goodman and Mark Goodman have agreed to transfer an aggregate of 6,800,000 common shares of Zoolander to Dundee Realty Corporation ("Dundee Realty"), a private company existing under the laws of Ontario that is indirectly controlled by Dundee Corporation, a TSX-listed corporation.

Michael Cooper, the Chief Executive Officer, President and a director of Zoolander, indirectly holds a 23.2% voting interest in Dundee Realty. Michael Cooper will sell 2,000,000 common shares of the Corporation to Dundee Realty and will continue to serve as a director and officer of Zoolander following completion of the proposed share transfer and the qualifying transaction.

Daniel Goodman, a director of the Corporation, holds 500,000 common shares of Zoolander directly and is a 25% owner and a director of Caylee Financial Inc. which owns 4,000,000 common shares of the Corporation. In connection with the proposed share transfer, Daniel Goodman will cease to be a director or officer of Zoolander.

In addition to the appointment of Mr. Carroll to the board of directors, Zoolander is pleased to announce that Jason Lester has agreed to become a director and officer of Zoolander following completion of the qualifying transaction. Mr. Lester is the Chief Operating Officer of Dundee Realty. Mr. Lester formerly held the positions of Executive Vice-President, Asset Management and Vice-President, Acquisitions and Asset Management at Residential Equities REIT (which merged with Canadian Apartment Properties REIT on June 1, 2004).

The Qualifying Transaction

The completion of the qualifying transaction remains subject to the approval of the Exchange and all other necessary regulatory approvals. It is also subject to additional conditions precedent, including approvals required under applicable corporate or securities laws, satisfactory completion of due diligence reviews by the parties and certain other conditions customary for transactions of this nature.

Trading on the Zoolander Shares has been halted as required by Exchange policies.

As noted above, completion of the qualifying transaction is subject to a number of conditions, including, but not limited to, acceptance by the Exchange. The qualifying transaction cannot close until the required approvals have been obtained. There can be no assurance that the qualifying transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement or information circular of Zoolander to be prepared in connection with the proposed qualifying transaction, any information released or received with respect to the proposed qualifying transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Zoolander should be considered to be highly speculative.

This press release contains projections and forward-looking information that involve various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance of Zoolander. These risks and uncertainties could cause actual results and Zoolander's plans and objectives to differ materially from those expressed in the forward-looking information. Actual results and future events could differ materially from those anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. Zoolander assumes no obligation to update forward-looking information should circumstances or management's estimates or opinions change.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities of Zoolander in the United States. The 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 within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or unless an exemption from such registration is available.

The Exchange has in no way passed upon the merits of the proposed qualifying transaction and has neither approved nor disapproved the contents of this release.

Contact Information

  • Zoolander Corporation
    Orest Zajcew
    Chief Financial Officer and Secretary
    (416) 488-8825