Aumento Capital IV Corporation Announces Qualifying Transaction With VeroLube Inc.

TORONTO, ONTARIO--(Marketwired - April 15, 2014) -

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Aumento Capital IV Corporation ("Aumento" or the "Company") (TSX VENTURE:ACV.P), a capital pool company, is pleased to announce that it has entered into a binding letter agreement (the "Letter Agreement") dated April 11, 2014 with VeroLube Inc. ("VeroLube") pursuant to which Aumento will acquire all of the issued and outstanding shares of VeroLube Inc. ("VeroLube Shares") in exchange for shares of Aumento (each, an "Aumento Share") on a one-for-one basis. The transaction is expected to be completed by way of a plan of arrangement (the "Arrangement") under the provisions of the Canada Business Corporations Act (the "CBCA") or other similar transaction which will result in VeroLube becoming a wholly-owned subsidiary of Aumento (the "Proposed Transaction"). In addition, subject to the policies of the TSX Venture Exchange (the "Exchange"), all outstanding common share purchase warrants ("VeroLube Warrants") and compensation warrants ("VeroLube Compensation Warrants") of VeroLube that have not been duly exercised prior to the effective time of the Arrangement (the "Effective Time") will be converted or exchanged for warrants ("Aumento Warrants") or compensation warrants ("Aumento Compensation Warrants"), as the case may be, of Aumento that will entitle the holders to receive, upon exercise thereof, Aumento securities, rather than VeroLube securities, on substantially the same terms and conditions as were applicable to such VeroLube Warrants and VeroLube Compensation Warrants immediately before the Effective Time.

Pursuant to a Stock Purchase Agreement dated March 10, 2014, as amended (the "SPA"), between Nuverra Environmental Solutions, Inc. ("Nuverra") (NYSE:NES), an environmental solutions provider incorporated under the laws of Delaware, and VeroLube USA, Inc. ("VeroLube USA"), a wholly-owned subsidiary of VeroLube incorporated under the laws of Texas, VeroLube USA has agreed to acquire from Nuverra all of the issued and outstanding shares of Thermo Fluids Inc. ("TFI"), a wholly-owned subsidiary of Nuverra incorporated under the laws of Delaware, for consideration consisting of US$165 million in cash and US$10 million in common shares of VeroLube, subject to the terms and conditions contained in the SPA. VeroLube's acquisition of TFI should be completed concurrent with, or immediately prior to, the closing of the Proposed Transaction.

The Letter Agreement is to be superseded by a definitive agreement (the "Definitive Agreement") between Aumento and VeroLube (such agreement to include representations, warranties, conditions and covenants typical for a transaction of this nature) to be signed on or about April 16, 2014 (or such other date as may be mutually agreed in writing between Aumento and VeroLube). The Proposed Transaction is subject to, among other things, receipt of the requisite shareholder approval, final approval of the Supreme Court of British Columbia and the Exchange and standard closing conditions, including the approval of the directors of each of Aumento and VeroLube of the Definitive Agreement, as well as the conditions described below.

The Proposed Transaction will constitute the Company's qualifying transaction (the "Qualifying Transaction") pursuant to Policy 2.4 - Capital Pool Companies of the Exchange (the "Policy").

The Proposed Transaction is not a Non Arm's Length Qualifying Transaction pursuant to Section 2.1 of the Policy and, as such, the Company is not required to obtain shareholder approval for the Proposed Transaction. However, the Company intends to hold a special meeting of shareholders to approve certain matters ancillary to the Proposed Transaction, including a name change and change in the board of directors, effective upon closing of the Proposed Transaction ("Closing"). The Company intends to call the special meeting as soon as practicable and to be held on or about May 28, 2014.

Upon completion of the Proposed Transaction, Aumento will continue on with the business of VeroLube (which will include the business of TFI), with VeroLube as its wholly‐owned, operating subsidiary.

Contemporaneous with completion of the Qualifying Transaction, the Company will seek to list on the Toronto Stock Exchange (the "TSX").

The Proposed Transaction

The Proposed Transaction will be effected by way of the Arrangement whereby Aumento will acquire all of the issued and outstanding VeroLube Shares such that, in accordance with the Arrangement, each shareholder of VeroLube (including those becoming shareholders as a result of the VeroLube Financing, as defined below) ("VeroLube Shareholder") will receive one (1) Aumento Share for each one (1) VeroLube Share held by such holder. In addition, subject to the policies of the Exchange, all outstanding VeroLube Warrants and VeroLube Compensation Warrants that have not been duly exercised prior to the Effective Time will be converted or exchanged for Aumento Warrants or Aumento Compensation Warrants, as the case may be, that will entitle the holders to receive, upon exercise thereof, Aumento securities, rather than VeroLube securities, on substantially the same terms and conditions as were applicable to such VeroLube Warrants and VeroLube Compensation Warrants immediately before the Effective Time. It is expected that all options held by officers and directors of Aumento resigning at Closing will be cancelled.

All Aumento Shares issued pursuant to the Proposed Transaction, except those certain Aumento Shares issued to U.S. persons who are affiliates (as defined in Rule 144(a)(1) under the United States Securities Act of 1933, as amended (the "U.S. Securities Act")) of VeroLube at the time the Proposed Transaction is submitted for vote or consent by the shareholders of VeroLube, will be freely tradable under applicable securities legislation but may be subject to an Exchange imposed restriction on resale. Some of the Aumento Shares to be issued to the VeroLube Shareholders pursuant to the Proposed Transaction, including up to 100% of the securities to be issued to "Principals" (as defined under applicable laws), may also be subject to escrow provisions imposed pursuant to the policies of the Exchange.

The parties have agreed that during the period from signing the Letter Agreement through to execution of the Definitive Agreement, each of Aumento and VeroLube will continue their respective operations in the ordinary course and will not solicit or accept alternative offers (subject to fiduciary duties). Subject to satisfactory completion of due diligence, the parties expect to execute the Definitive Agreement on or about April 16, 2014 and have agreed to use their best efforts to complete the Proposed Transaction by June 10, 2014 or as soon as reasonably practicable thereafter.

None of the securities to be issued pursuant to the Arrangement have been or will be registered under the U.S. Securities Act, or any state securities laws, and any securities issued pursuant to the Arrangement are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities Act and applicable exemptions under state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.

Proposed Private Placement

VeroLube expects to complete a private placement (the "VeroLube Financing") in an amount at least sufficient to complete the acquisition of TFI pursuant to the SPA, the terms of which are to be determined in the context of the market. Canaccord Genuity Corp. has been retained to act as sole bookrunner and lead agent and will be paid customary compensation for such agency services. The net proceeds from the VeroLube Financing will be used to complete the acquisition of TFI pursuant to the SPA, to develop used oil re-refineries using VeroLube's ReGen™ technology and for general corporate purposes. Further details with respect to the VeroLube Financing, including the amount, will be provided by way of a subsequent news release prior to any resumption of trading.

The securities to be issued pursuant to the VeroLube Financing have not been and will not be registered under the U.S. Securities Act, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. Any public offering of securities of VeroLube to be made in the United States must be made by means of a prospectus containing detailed information about VeroLube and management, as well as financial statements.

The securities to be issued pursuant to the VeroLube Financing will be "restricted securities" as defined under Rule 144(a)(3) of the U.S. Securities Act and will contain the appropriate restrictive legends as required under the U.S. Securities Act and National Instrument 45-102.

Conditions to Proposed Transaction

Prior to completion of the Proposed Transaction (and as conditions of closing):

• Aumento shall, with appropriate shareholder approval, change its name to "VeroLube Inc." or such other name as may be acceptable to VeroLube and the Exchange and change its board of directors, effective upon Closing;
  
  
• VeroLube shall obtain shareholder approval of the Proposed Transaction;
  
  
• VeroLube shall obtain receipt of the interim order and the final order of the Supreme Court of British Columbia with respect to the Arrangement in form and substance satisfactory to each of Aumento and VeroLube;
  
  
• VeroLube shall complete the VeroLube Financing;
  
  
• VeroLube shall complete, through VeroLube USA, the acquisition of TFI pursuant to the SPA;
  
  
• Aumento shall have filed a filing statement in accordance with the rules of the Exchange (the "Filing Statement"), outlining the terms of the Proposed Transaction. VeroLube will provide assistance and details as to the business, assets, properties and operations of VeroLube and will be responsible for any and all audited financial statements related to its business and operations and those of TFI (and for preparing the pro forma financial statements, based in part on information provided by Aumento); and
  
  
• Aumento shall have obtained conditional approval from the Exchange for the Proposed Transaction as its Qualifying Transaction.
  
  

Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless exempt in accordance with Exchange policies. The parties will be seeking a waiver of any requirement for a Sponsor, but in the event a waiver is not available, will seek a sponsorship relationship for this transaction with a TSX and TSXV member firm, and will update the markets accordingly.

It is currently anticipated that the Insiders of the Resulting Issuer will include each of Terrence A. Lyons, Gregory M. Clarkes, Leslie Wulf, Ken Cherry and Bruce Hall, who are expected to become directors and/or senior officers of the Resulting Issuer. Additional Insiders of the Resulting Issuer will include directors of subsidiaries of VeroLube (including directors of TFI as a wholly-owned subsidiary of VeroLube USA following completing of the SPA), who will become directors of subsidiaries of the Resulting Issuer and are currently Messrs. Lyons, Wulf and Clarkes.

On Closing, all directors and officers of Aumento will resign and nominees of VeroLube will be appointed.

As a result of the Arrangement, VeroLube will become a wholly-owned subsidiary of Aumento and Aumento will continue on with the business of VeroLube, which will include the business of TFI (the Company after the Proposed Transaction being referred to herein as the "Resulting Issuer"). The Resulting Issuer is expected to be the largest producer of commercial fuel oil from recovered used motor oil ("UMO") in the Western United States, using VeroLube's patented and certified ReGen™ re-refining process to produce high yields of quality reprocessed fuel oil ("RFO").

Upon closing of the Proposed Transaction, the name of the Resulting Issuer will be changed to "VeroLube Inc." or such other name as may be acceptable to VeroLube and the Exchange.

About VeroLube

VeroLube, a private company incorporated under the CBCA, is a provider of used oil re-refining services using its own patented and certified ReGen™ re-refining process producing high yields of quality hydrocarbon products from UMO. The VeroLube structure has VeroLube, the parent company, holding the ReGen™ technology, with the expectation of developing an operation of used oil re-refining plants globally, developing re-refineries with joint venture partners and licensing technology to third parties. Upon closing of the SPA, VeroLube will achieve vertical integration by operating TFI's route-based UMO collection network.

VeroLube is considered a development stage company and has had no revenues from operations to date. VeroLube had net losses for the years ended December 31, 2013 and 2012 of $1,929,137 and $720,075, respectively. As of December 31, 2013, VeroLube had total assets of $6,557,591 and total liabilities of $1,990,570 (all figures are unaudited).

About TFI

TFI, which currently comprises Nuverra's Industrial Solutions segment, is the largest producer of commercial fuel oil from recovered UMO in the Western United States and the third-largest collector of UMO in the United States. Headquartered in Scottsdale, Arizona, TFI provides route-based environmental services and waste recycling solutions, offering customers a reliable, high-quality and environmentally responsible solution through its "one-stop shop" of collection and recycling services for waste products including UMO, oily water, spent antifreeze, used oil filters and parts washers. TFI collects approximately 50 million gallons of UMO annually from a diverse base of more than 20,000 locations and reprocesses it to be sold in the form of RFO to (i) refiners as a critical feedstock for the production of base lubricants and (ii) industrial customers as a lower cost, higher "BTU" alternative to diesel fuel. TFI's assets focused on servicing industrial end-markets include 31 processing facilities serving Western United States, tanker trucks, vacuum trucks and trailers, and railcars. UMO volume is sourced from participants within the automotive service industry (e.g. quick lube shops, auto dealerships, retail automotive service providers, etc.) and a diverse array of commercial and industrial operations across the trucking, railroad, manufacturing and mining industries. TFI has established relationships with RFO customers located throughout the United States, typically consisting of re-refiners and energy-intensive industries that require the use of a boiler or furnace, such as the asphalt, pulp, paper and bunker fuel markets.

TFI had revenue for the years ended December 31, 2013 and 2012 of US$116,263,411 and US$125,256,393, respectively, and net loss of US$98,251,662 and net income of US$10,451,591, respectively. As of December 31, 2013, TFI had total assets of US$188,750,422 and total liabilities of US$41,690,408 (all figures are unaudited and presented under U.S. GAAP).

Proposed Management of the Resulting Issuer

Subject to Exchange approval, on completion of the Proposed Transaction, it is currently anticipated that the board of directors of the Resulting Issuer will consist of up to eight directors. It is expected that the management team and the board of directors of the Resulting Issuer will include the persons identified below:

Terrence A. Lyons - Chairman & Director

Mr. Lyons currently serves as the Lead Independent Director and Chairman of the Audit Committee of Canaccord Genuity Group Inc. ("Canaccord") as well as a Director of Canaccord's subsidiaries in the UK, US, Canada, Australia and Asia. He is also a Director of several public and private corporations including Sprott Resource Corp. (Chairman), Martinrea International Inc. and Polaris Minerals Corporation (Chairman). Mr. Lyons is past Chairman of Northgate Minerals Corporation, which was acquired by Aurico Gold creating a new mid-cap gold company with a value of over $2.5 billion; and Eacom Timber Corporation, which was recently sold to a private equity firm for $300 million.

Mr. Lyons is a Civil Engineer (UBC) with an MBA from the University of Western Ontario. He sits on the Advisory Board of the Richard Ivey School of Business and is active in sports and charitable activities, is a past Governor of the Olympic Foundation of Canada, past Chairman of the Mining Association of B.C., past Governor and member of the Executive Committee of the B.C. Business Council and in 2007 was awarded the INCO Medal by the Canadian Institute of Mining and Metallurgy for distinguished service to the mining industry.

Gregory M. Clarkes - Director

Mr. Clarkes is the current Chairman of PNG Gold Corp. and has been its Chief Executive Officer since September 11, 2012. He is a financier with over 25 years of experience in raising capital for public companies in the resource and industrial sectors. He has been a major shareholder, as well as an officer and director, of many junior venture companies, and has been instrumental in helping them formulate business plans and strategies resulting in successful utilization of their financial resources. He was the founder, director, and significant shareholder of Skye Resources Inc., which was sold to HudBay Minerals Inc. in 2008 for $460 million. He is a Director of Mena Hydrocarbons, formerly Skana Capital. Mr. Clarkes is also a Director of the privately held resource company, Rossland Resources Inc.

Leslie Wulf - Director

Mr. Wulf has been the founder of several successful companies over his career spanning both private and public companies in both the USA and Canada, serving as CEO and Director. In each of these companies Mr. Wulf raised large sums of both public, private and bank financing. These companies span several different industries; Edleun (Education Learning Universe) the largest profit early learning and care provider (child care) in Canada; Adroit Investments M&A management company; Children's Choice Learning Centers Inc., a national non-traditional child care company in the USA; Real Time Management Solutions LLC, a web based real time child care management software company. Mr. Wulf was also one of the founders as well as President of Dirt Motorsport (now named World Racing Group) that consolidated the dirt track racing sanctioning bodies across USA and held more than 800 national and local races annually. Before entering into these various industries, Mr. Wulf was President and Chief Executive Officer of a US based operator of family entertainment, educational and fitness centers in eleven countries.

Ken Cherry - President, Chief Executive Officer and Director

Mr. Cherry has a broad depth of managerial experience, having held commercial and operational assignments across various industries. He has been involved in numerous acquisitions and divestitures and in development of new joint venture start-up related companies, serving in various board-related capacities. Mr. Cherry currently serves as the Chief Executive Officer of VeroLube since March 2014. He was formerly the Executive Vice-President and General Manager of FCC Environmental, the second-largest collector of used motor oil in the U.S., from December 2005 to March 2014. In that role, Mr. Cherry led the U.S. environmental operations of FCC Environmental, comprising of 38 locations serving 22 states, with approximately 600 employees. Prior to FCC Environmental, Mr. Cherry served as the Vice-President and General Manager of Siemens Hydrocarbon Services, a division of Siemens Corp, from 2005 to 2008. He was instrumental in leading the divesture sell process of the company in what later became FCC Environmental.

Mr. Cherry received a Bachelor's of Business Administration (Finance) from Oklahoma University. Immediately after graduation, Mr. Cherry joined Conoco Oil Company on their Management Development Program. Upon completing Management Training, Mr. Cherry was promoted numerous times and served in various operational roles ranging from pipelines, refining as well as several commercial job related capacities from 1986 to 2000, including a two year assignment in E.I. Dupont's Petrochemicals Division. After a brief stint with Enron Corporation, Mr. Cherry resigned to accept a Regional Vice-President position with U.S. Filter's Hydrocarbon Recovery Services Group, which later became part of the Siemens Corp acquisition of U.S. Filter's water and environmental assets.

Bruce Hall - Chief Financial Officer

Mr. Hall, CPA serves as the Chief Financial Officer of VeroLube, Inc. He serves as a Senior Financial Executive with extensive experience serving as the Chief Financial Officer and in related financial management positions in the real estate development, energy, consulting and manufacturing industries. He has been the Chief Financial Officer of Nortia Capital Partners Inc. since January 18, 2006 and also serves as its Secretary and Treasurer. He has been a Consultant providing financial and management services for several public and private companies since May 2003. He served as the Chief Executive Officer and Chief Financial Officer of Santa Fe Petroleum Inc. (formerly, Baby All Corp.) from May 31, 2012 to November 28, 2012. He served as the Chief Financial Officer of Knight Energy Corp., since March 2006 and served as its Secretary and Treasurer. From January 2005 to March 2006, he served as Consultant, Interim Chief Executive Officer and Chief Financial Officer of Dent Zone International, Inc. He served as the Chief Financial Officer and Consultant of RG America Inc. (formerly known as Invvision Capital Inc.) from May 2004 to July 17, 2007 and served as its Secretary since May 2004. He also served in numerous financial and operating positions with companies in the hi-tech, manufacturing and real estate industries, including Chief Executive Officer of RG America Inc. from July 1, 2006 to July 17, 2007, Chief Financial Officer of Green Star Energies Inc. and Rock Ridge Resources, Inc. until August 2011. He served as a Principal of the Capital Funding and Consulting Group L.C. and a Senior Auditor with Arthur Young & Co, a predecessor of Ernst & Young LLP.

Mr. Hall began his career in public accounting with Arthur Young & Company, a predecessor of Ernst & Young LLP. He has been a Director of Baby All Corp. since May 31, 2012 and Nortia Capital Partners Inc., since January 2006. He served as a Director of Knight Energy Corp. since March 2006 and Santa Fe Petroleum, Inc. from May 10, 2012 to November 28, 2012. He served as an Executive Director of RG America Inc. from July 1, 2006 to July 17, 2007. He also served as a Director of MBI Financial Inc. (formerly, Local Telecom Systems Inc.) from November 15, 2005 to December 21, 2007. Mr. Hall holds both CPA (Certified Public Accountant) and CMA (Certified Management Accountant) designations. He graduated from the University of Texas at Austin with a B.S. in Accounting and a minor in Finance.

All information contained in this news release with respect to Aumento, VeroLube and TFI was supplied by the parties, respectively, for inclusion herein, and Aumento and its directors and officers have relied on VeroLube and TFI or any information concerning such party.

Completion of the Qualifying 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 Qualifying Transaction cannot close until the required shareholder approval is 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 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 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 press release.

This news release contains forward-looking statements relating to the timing and completion of the Proposed Transaction, the future operations of the Company and other statements that are not historical facts. Forward-looking statements are often identified by terms such as "will", "may", "should", "anticipate", "expects" and similar expressions. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding the Proposed Transaction and the future plans and objectives of the Company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations include the failure to satisfy the conditions to completion of the Proposed Transaction set forth above and other risks detailed from time to time in the filings made by the Company with securities regulations.

The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. As a result, the Company cannot guarantee that the Proposed Transaction will be completed on the terms and within the time disclosed herein or at all. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release and the Company will update or revise publicly any of the included forward-looking statements as expressly required by Canadian securities law.