AXEA Capital Corp.
TSX VENTURE : XEA.H

AXEA Capital Corp.

April 12, 2011 14:30 ET

AXEA Capital Corp.: Update on Proposed Qualifying Transaction with Two-West Wind and Solar Inc.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 12, 2011) - AXEA Capital Corp. (TSX VENTURE:XEA.H) ("AXEA") is pleased to provide this Press Release to its shareholders and members of the public to update shareholders and others with respect to its proposed "qualifying transaction" with Two-West Wind and Solar Inc. ("Two-West") previously announced on February 14, 2011.

About Two-West Wind and Solar

Two-West is a private vertical-axis wind turbine ("VAWT") and solar company with its head office located in Toronto, Ontario. Two-West sells 4kw VAWTs to municipalities, schools, sports facilities and golf courses and other commercial venues. In addition to selling turbines, Two-West also sells sponsorship banners on the VAWTs, creating a high-impact visual statement for sponsors and site owners alike.

There are currently 34 shareholders of Two-West. Ubequity Capital Partners Inc. ("Ubequity") directly and indirectly owns or controls 19.50% of the outstanding shares of Two-West, Chris White (the CEO of Two-West) owns 17.41% and Ron Stewart (VP of Sales of Two-West) owns 12.47% of the outstanding shares of Two-West. No other person owns or controls, directly or indirectly, more than 10% of the outstanding shares of Two-West.

Ubequity is controlled by Martin J. Doane (50%), a director of Two-West, and Bill G. Calsbeck (42%), a director of AXEA.

Financial Information

On the basis of the unaudited financial statements for the year ended December 31, 2010, Two-West had total assets of $104,000, liabilities of $1,520,000, a shareholders' equity of ($1,416,000), and a working capital deficiency of $279,476.

About the Proposed Transaction

AXEA and Two-West have agreed to combine their businesses by means of a triangular amalgamation (the "Amalgamation"). The Amalgamation is expected to constitute the "qualifying transaction" of AXEA as defined by the policies of the TSX Venture Exchange (the "Exchange").

The Amalgamation will effectively provide for the acquisition of all of the outstanding equity interests of Two-West by AXEA, indirectly through a wholly-owned Ontario incorporated subsidiary of AXEA (the "Amalgamation Entity") in a transaction in which the shareholders of Two-West will receive shares of AXEA (the "AXEA Shares") and, if applicable, convertible securities of AXEA. As a result of the Amalgamation of Amalgamation Entity and Two-West (the "Amalgamated Corporation"), AXEA will become the sole beneficial owner of all of the outstanding shares of Amalgamated Corporation. The exchange ratio for the exchange of shares of Two-West ("Two-West Shares") and convertible securities of Two-West for AXEA Shares and convertible securities, as the case may be, will be approximately 1:6.

The Amalgamation will result in AXEA issuing an aggregate of 12,000,000 AXEA Shares to the shareholders of Two-West (the "Consideration Shares") and an aggregate of up to 8,000,000 AXEA Shares to purchasers in connection with the proposed Offering (as such term is defined below).

The Amalgamation is an arm's length transaction and therefore is not a related party transaction. As a result, no meeting of AXEA shareholders is required as a condition to completion of the Amalgamation.

In conjunction with and concurrent with the Amalgamation, Two-West expects to complete a brokered private placement (the "Offering") through Union Securities Ltd. ("Union") to raise gross proceeds of a minimum of $1,500,000 (the "Minimum Offering") and a maximum of $2,000,000 (the "Maximum Offering") through the issuance of units (a "Unit") at $1.41 per Unit. Each Unit consisting of one Two-West Share and one-half of one warrant (a "Warrant"), with each whole Warrant entitling the holder thereof to acquire one Two-West Share at a price of $1.98 for a period of 24 months from the closing of the Offering, subject to acceleration. Union will be entitled to a commission of 8% of the aggregate gross proceeds raised as well as agent's options (the "Agent's Options") equal to 8% of the aggregate number of Units purchased. Each Agent's Option will entitle the holder thereof to purchase one Unit at an exercise price of $1.41 per Two-West Share for a period of 24 months from the closing of the Offering.

The parties anticipate issuing up to 200,000 Units as part of an initial closing (the "Initial Closing") prior to the closing of the Amalgamation. A second closing (the "Subsequent Closing") will occur concurrently with and is conditional upon the closing of the Amalgamation and minimum gross proceeds of $1,500,000.

As a part of the Amalgamation, the Two-West Shares and Warrants issued in the Offering will be exchanged for securities of AXEA in accordance with the provisions of the transaction agreement governing the terms of the Amalgamation. In the event the Maximum Offering is completed 1,416,591 Two-West Shares will be exchanged for 8,000,000 AXEA Shares and 708,296 Warrants will be exchanged for 4,000,000 warrants of AXEA with an amended exercise price of $0.35 per share. In the event the Minimum Offering is completed 1,062,443 Two-West Shares will be exchanged for 6,000,000 AXEA Shares and 531,222 Warrants will be exchanged for 3,000,000 warrants of AXEA with an amended exercise price of $0.35 per share. All numbers are approximate based on the exchange ratio.

The net proceeds of the Offering will be used for inventory and work-in-progress, finalizing the controller design, finalizing the extrusion equipment for the production units and for general working capital purposes.

The deemed transaction price for the Amalgamation is $0.25 per AXEA Share. The Consideration Shares (12,000,000) will be issued to the shareholders of Two-West representing a deemed purchase price of $3,000,000, up to $5,000,000 including the 8,000,000 AXEA Shares which may be issued to the purchasers under the Offering.

Immediately prior to the completion of the Amalgamation, there will be 7,496,667 AXEA Shares outstanding. Following completion of the Amalgamation the former shareholders of Two-West will own approximately 44% of the AXEA Shares, current shareholders of AXEA will hold approximately 27% of the AXEA Shares and purchasers under the Offering will hold approximately 29% of the AXEA Shares (assuming the Offering is fully subscribed). Accordingly, the Amalgamation will constitute a reverse take-over of AXEA.

Following completion of the Amalgamation, the Amalgamated Corporation will be a wholly-owned subsidiary of AXEA.

Completion of the Amalgamation is conditional upon all necessary regulatory approvals, including the approval of the Exchange, and other conditions which are typical for a business combination transaction of this type.

The proposed management of AXEA following the completion of the Amalgamation is as follows:

Martin J. Doane – Director (Chairman)

Mr. Doane is currently the Chairman of the Board of Directors at Two-West. He is a founding partner and the CEO of Ubequity and he has over 18 years' experience as a lawyer and two decades of activity in the corporate finance, M&A, financial services and venture capital fields. He has served on a variety of boards of both public and private companies. He has also served as the CEO of technology and digital media companies, including most recently, Silverback Media PLC (now Adenyo), which he grew in less than 3 years from an idea to a multi-national mobile solutions group, with a revenue base of $25 million and 100+ employees. Mr. Doane is a graduate of the University of Western Ontario and Osgoode Hall Law School. In 2002, he was awarded the Golden Jubilee Medal for his public service to Canada.

Chris White – Chief Executive Officer and Director

Mr. White is currently the CEO and a Director at Two-West. He has spent over 25 years as a successful entrepreneur in the industrial crane business with expertise in electro-mechanical design, manufacturing and aftermarket support throughout Canada and the U.S. Most recently, Mr. White was involved with building the largest LEED manufacturing plant in North America.

Bill G. Calsbeck – Director

Mr. Calsbeck is currently a Director at AXEA. He brings over 25 years of capital market and micro-cap experience to AXEA. He began his career in Banking and Trust Services and after several years moved into the Human Resources field, providing consulting services to clients such as the Vancouver Stock Exchange, Expo 86, MDA, and several major institutions. His duties extended from executive recruiting and board member selection to financial planning, mergers and acquisitions, IPOs and raising capital. Mr. Calsbeck has participated in hundreds of millions of dollars of equity and debt financings for clients. Mr. Calsbeck also serves on the Board of Directors for Deloro Resources Ltd., an emerging junior oil company with projects in Southwestern Saskatchewan.

Richard Meloff – Director

Mr. Meloff is currently a member of the Board of Directors of Two-West. He is also a Managing Director at Ubequity, a boutique merchant bank. He holds a BA (Honours) from McGill University and a JD and MBA from the University of Toronto Faculty of Law and Rotman School of Management. Mr. Meloff has worked closely with management of Two-West since its inception and was instrumental in raising its seed capital. Before joining Ubequity, he served in various corporate development capacities at two large, publicly-traded companies. Prior to this, Mr. Meloff practiced corporate law in New York City, focusing on public M&A and complex strategic sourcing transactions.

John Craig – Chief Financial Officer

Mr. Craig is currently the CFO at Two-West. He is a Chartered Accountant and has 35 years of progressive financial experience in rapid growth environments. His experience includes senior financial management roles in the telecom, travel and construction industries and a partnership with a venture capital firm.

Ron Stewart – Vice-President, Sales

Mr. Stewart is currently the Vice-President of Sales at Two-West. He has over 30 years of high level sales and marketing experience in the outdoor advertising and visual communications sector. Mr. Stewart has cultivated long standing and valuable relationships with Fortune 500 companies across North America and has sold hundreds of millions of dollars worth of outdoor advertising across North America.

Jack VanderDeen – Vice-President, Operations & Engineering

Mr. VanderDeen is currently the Vice-President of Operations and Engineering at Two-West. He has over 23 years of manufacturing and automation experience in the aerospace and automotive sectors, holding senior executive positions in that time. He has managed multi-million dollar projects and achieved year-over-year growth rates in excess of 100%.

Union, subject to completion of satisfactory due diligence and certain other conditions, has agreed to act as sponsor in connection with the Amalgamation. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.

All parties shall use their good faith efforts to complete and be in a position to execute a definitive agreement relating to the Amalgamation on or before April 30, 2011 (or such other date as may be mutually agreed to by AXEA and Two-West).

The information in this press release related to Two-West, its business and its directors and management was provided to AXEA by Two-West.

Completion of the 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 transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the 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 TSX Venture Exchange Inc. 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 information in this news release includes certain information and statements about management's view of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward looking statements. Although AXEA believes that the expectations reflected in forward looking statements are reasonable, it can give no assurances that the expectations of any forward looking statements will prove to be correct. Except as required by law, AXEA disclaims any intention and assumes no obligation to update or revise any forward looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward looking statements or otherwise.

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

Contact Information