Alpha Peak Leisure Inc.
TSX VENTURE : AAP

Alpha Peak Leisure Inc.

June 26, 2015 19:22 ET

Alpha Peak Announces Completion of Qualifying Transaction

RICHMOND, BRITISH COLUMBIA--(Marketwired - June 26, 2015) - Alpha Peak Leisure Inc. (TSX VENTURE:AAP) ("Alpha Peak" or the "Company") is pleased to announce that it has completed its Qualifying Transaction (as defined in Policy 2.4 - Capital Pool Companies of the Corporate Finance Manual (the "Manual") of the TSX Venture Exchange (the "Exchange")), as previously described in its press releases dated July 30, 2014, December 3, 2014, May 15, 2015 and June 22, 2015, and more particularly set out in its most recent information circular dated May 15, 2015 (the "Information Circular"), which is available under the profile of the Company at www.sedar.com. As a result of the completion of the Qualifying Transaction, the Company expects to resume trading as a Tier 1 Industrial Issuer at the opening of the market on or about July 2, 2015. The common shares will trade under the symbol "AAP".

Bob Hot-Hoi Chong, now Chairman of the Company, stated, "Today is a tremendous milestone for Total Wonder Enterprises and Alpha Peak. After more than 9 years of dedication and investment, we are finally ready to unveil our asset, the Swallows' Gully national scenic spot, within the public capital markets. I believe that Swallows' Gully, with its unique natural and cultural endowment, will grow into one of China's high growth and sought after nature destinations, and we have the right management team in place to fully capitalize on the asset's potential. I would like to thank all our partners in this venture, including the local Ganzi government, for sharing our vision, and providing unwavering support to elevate Alpha Peak and Swallows' Gully into the next growth phase. We believe the monopolistic nature of our operating and development right will continue to position Swallows' Gully as a direct beneficiary of China's massive tourism market, burgeoning middle class spending, and highly favorable national and regional policy on infrastructure and tourism, over the longer term."

The Company completed the Qualifying Transaction through the amalgamation (the "Amalgamation") and related transactions of the pre-amalgamated Company and 1016772 B.C. Ltd. (the "Target"), a private company incorporated under the laws of British Columbia and indirect holding company of Gonga Terraferma Limited, a company incorporated under the laws of the People's Republic of China and owner of Swallows' Gully (as described below).

Capitalization

As a result of completion of the Qualifying Transaction:

  • existing shareholders of the pre-amalgamated Company continue to hold 10,600,000 common shares, representing approximately 16.47% of the Company;
  • existing shareholders of the Target hold 45,356,146 common shares, representing approximately 70.49% of the Company;
  • subscribers to the Financing (defined below) hold 8,355,334 common shares, representing approximately 12.98% of the Company; and
  • the Sponsor (defined below) holds 35,000 common shares, representing approximately 0.05% of the Company.

Financing

As previously announced on June 22, 2015, in connection with the Qualifying Transaction, the pre-amalgamated Company closed a brokered private placement (the "Financing") consisting of the issuance of 8,355,334 subscription receipts (each, a "Subscription Receipt") at a price of $1.80 per Subscription Receipt for gross proceeds of $15,039,601.20. Immediately prior to the Amalgamation, each Subscription Receipt was converted without additional consideration into a pre-amalgamated Company common share. Upon completion of the Amalgamation, each such pre-amalgamated Company common share was cancelled and reissued as a Company common share on a one-to-one basis.

Directors and Officers

In connection with the Qualifying Transaction, certain directors and officers of the Company resigned and were appointed, such that the directors and officers of the Company are now as follows:

Bob Hot-Hoi Chong Director and Chairman
Dennis Chi-Wai Tam Director and Vice Chairman
Charles Hok-Hei Chong Director
Peter Kai-Sing So Director
Kenneth Poon Director and Chief Executive Officer
Anthony Kan-Hee Tyen Director
Teresa Lin Director
Neil Labatte Director
Paul Zhang Chief Financial Officer
Kelvin Ngai Chief Operating Officer

For further biographical information about the foregoing persons, see the Information Circular.

Sponsorship

In connection with the Qualifying Transaction, the Company, the Target and Canaccord Genuity Corp. (the "Sponsor") entered into a sponsorship agreement dated effective June 19, 2015. The Company paid a total of $175,000 (plus applicable taxes) and issued to the Sponsor 35,000 common shares of the Company. The Company has also paid the Sponsor $75,000 for expenses of the Sponsor.

Escrow Shares

As disclosed in the Information Circular, the 45,356,146 common shares of the Company issued to existing shareholders of the Target have been deposited into escrow.

Hold Periods

The 35,000 common shares issued to the Sponsor are subject to a four month and one day hold period under applicable Canadian securities laws and 41,407,769 of the 45,356,146 escrowed shares issued to directors and officers of the Company are subject to a four month and one day Exchange hold period. The remainder of the shares issued upon completion of the Amalgamation are not subject to a hold period.

About the Company

The Company, via its wholly-owned subsidiary Total Wonder Enterprise, has a 40-year operating and development right with the Hailuo Valley Scenic Area Administration for Swallows' Gully, a national scenic spot in China encompassing an area of approximately 593km2. Located in Ganzi Tibetan Autonomous Prefecture in Sichuan and within a cluster of highly frequented tourist landmarks(1), Swallows' Gully is recognized as one of the most pristine and beautiful scenic sights in China.

We commenced commercial operations in 2013, and have demonstrated meaningful year-on-year visitation growth. Year to date, we have received more than 12,000 visitors, representing 58% year-to-year growth. Swallows' Gully has been steadily gaining popularity since its opening. This is witnessed by our marketing partnerships with Tong Cheng International Travel Agency Co. Ltd., which is a subsidiary of Tong Cheng Network Technology Shareholding Co. Ltd, one of the largest online travel reservation platforms in China and Chengdu Tai Feng International Travel Agency Co. Ltd., which has more than 100 professional agents and covers more than 80% of the market share of the tours to Ganzi Autonomous Region. These collaborations are expected to further drive not only direct visitation but also Swallows' Gully awareness regionally and nationally.

In addition to marketing partnerships, we expect the local government's continued efforts to achieve 5A national tourism status for the local area to underpin the longer-term potential for Swallows' Gully.

(1) Includes Hailuogou Valley, Leshan Giant Buddha, Mount Emei and Daocheng Yading

This notice is not an offer of securities for sale in the United States. The securities of the companies referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws of the United States, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements under the Securities Act and applicable state securities laws of the United States.

ON BEHALF OF THE BOARD OF DIRECTORS OF ALPHA PEAK LEISURE INC.

Dennis Chi-Wai Tam, Vice Chairman and Director

Forward-Looking Statements:

Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on Alpha Peak's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, this release contains forward-looking information relating to the commencement of trading on the Exchange. Other forward looking statements in this press release includes: "I believe that Swallows' Gully, with its unique natural and cultural endowment, will grow into one of China's high growth and sought after nature destinations, and we have the right management team in place to fully capitalize on the asset's potential"; "We believe the monopolistic nature of our exclusive operating and development right will continue to position Swallows' Gully as a direct beneficiary of China's massive tourism market, burgeoning middle class spending, and highly favorable national and regional policy on infrastructure and tourism, over the longer term"; "These collaborations are expected to further drive not only direct visitation but also Swallows' Gully awareness regionally and nationally"; and "In addition to marketing partnerships, we expect the local government's continued efforts to achieve 5A national tourism status for the local area to underpin the longer-term potential for Swallows' Gully". Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to Alpha Peak.

The material factors and assumptions include the parties to the proposed Qualifying Transaction being able to obtain the necessary regulatory approvals. Risk factors that could cause actual results or outcomes to differ materially from the results expressed or implied by forward-looking information include, among other things: changes in tax laws and other laws and regulations in connection with operations of scenic tourism destinations in China, the Company's ability to obtain approvals and permits from applicable government agencies in China for projects that it wishes to carry out in Swallows' Gully, general reception of Swallows' Gully as a tourism destination by the targeted markets in China and elsewhere in the world, general economic and business conditions in China and elsewhere in the world; and changes in the regulatory regime. Alpha Peak cautions the reader that the above list of risk factors is not exhaustive. The forward-looking information contained in this release is made as of the date hereof and Alpha Peak is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein. This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States.

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 adequcy or accuracy of this release.

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