Ceres Capital Corp.
TSX VENTURE : SRS.P

December 24, 2008 07:00 ET

Ceres Capital Corp. Announces Completion of Acquisition of Reliable Energy Ltd., Brokered Private Placement, Change to Management and Stock Option Grant

CALGARY, ALBERTA--(Marketwire - Dec. 24, 2008) - Ceres Capital Corp. (the "Corporation" or "Ceres") (TSX VENTURE:SRS.P), a capital pool company, is pleased to announce that it has completed the acquisition of all of the issued and outstanding securities of Reliable Energy Ltd. ("Reliable") as the Corporation's qualifying transaction pursuant to the policies of the Exchange (the "Qualifying Transaction"), as described in the Corporation's press releases dated September 29, 2008 and December 2, 2008. Final approval of the Exchange is subject to the Corporation fulfilling all of the requirements of the Exchange.

The Qualifying Transaction was effected in accordance with the terms of a three-cornered amalgamation agreement (the "Amalgamation Agreement") among Ceres, Ceres Acquisition Corporation ("Subco") and Reliable, pursuant to which Reliable amalgamated with Subco to form Amalco and the Reliable Shareholders received six (6) Ceres Shares for each Reliable Share held (the "Exchange Ratio"). Pursuant to the Amalgamation Agreement, Ceres issued 116,594,622 Ceres Shares at a deemed price of $0.18 per Ceres Share based on an aggregate of 19,432,437 issued and outstanding Reliable Shares, which includes the 12,353,274 Reliable Shares issued pursuant to the private placement of common shares and flow-through shares completed by Reliable on December 11 and 23, 2008, for gross proceeds of $9,739,761. Canaccord Capital Corporation acted as agent under the private placement. Reliable issued options entitling the holders thereof to purchase an aggregate of 953,704 Reliable Shares at a price of $0.70 per share to Canaccord and others in the selling group under the private placement. In addition, Canaccord received 225,000 Reliable Shares, at a deemed price of $0.70 per share, for acting as exclusive financial advisor, and representatives of Griffiths Energy and Resources Inc. received an aggregate of 500,000 Reliable Shares, at a deemed price of $0.70 per share, by way of an advisory fee under the private placement.

Pursuant to the Amalgamation Agreement, Ceres acquired all of the issued and outstanding options, warrants and other convertible securities of Reliable in exchange for similar convertible securities of Ceres based on the Exchange Ratio. More specifically, Ceres acquired the remaining outstanding convertible Reliable securities as follows:

(a) Ceres issued an aggregate of 2,940,000 stock options to purchase an aggregate of 2,940,000 Ceres Shares, at an exercise price of $0.17 per share, in exchange for the 490,000 Reliable stock options (the "Reliable Options");

(b) Ceres issued an aggregate of 135,450 broker's warrants, each warrant entitling the holder to acquire one Ceres Share, at an exercise price of $0.17 per share, in exchange for the 22,575 Reliable Series A Broker's Warrants;

(c) Ceres issued 5,722,224 broker's warrants, each warrant entitling the holder to acquire one Ceres Share, at an exercise price of $0.12 per share, in exchange for 953,704 Reliable Series B Broker's Warrants which were issued to Canaccord and the selling group in connection with the Reliable Private Placement;

(d) Ceres issued an aggregate of 505,716 common share purchase warrants in exchange for the 84,286 Reliable bonus plan warrants;

(e) Ceres issued an aggregate of 857,142 common share purchase warrants, each warrant entitling the holder to acquire one Ceres Share, at an exercise price of $0.47 per share, in exchange for the 142,857 Reliable series A common share purchase warrants; and

(f) Ceres also assumed the obligations of Reliable under unsecured convertible debentures in the principal amount of $1,260,000, which now entitle the holder thereof to convert the principal amount of the debenture into Ceres common shares at a conversion price equal to $1.40 per share.

In addition to the Ceres options issued in exchange for the Reliable Options set out in (a) above, Ceres also granted stock options exercisable to acquire an aggregate of 870,000 Ceres Shares at a price of $0.18 per share to certain directors and officers of the Resulting Issuer, being Paul Moller (130,000), John Newman (130,000), Murray Swanson (130,000), Dennis Nerland (240,000) and Allan Laird (240,000).

After giving effect to the Qualifying Transaction, the Board of Directors of Ceres consists of Paul Moller, Murray Swanson, Terry Lyons, Mike Seth, Brian Hurl, Dennis Nerland and Allan Laird. Mr. Moller is President and Chief Executive Officer; Mr. Newman is Chief Financial Officer; and Mr. Swanson is Vice-President, Operations.

Trading in the common shares of the Corporation will remain halted until certain required documents have been provided to the TSXV.

This new release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

Neither 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 release.

Contact Information

  • Ceres Capital Corp.
    Paul Moller
    President, Chief Executive Officer and Director
    (403) 266-2640