Chrome Capital Inc.
TSX VENTURE : KRM.P

December 18, 2008 16:22 ET

Chrome Capital Announces Proposed Qualifying Transaction With Trilennium Solitions Inc.

CALGARY, ALBERTA--(Marketwire - Dec. 18, 2008) -

NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA

Chrome Capital Inc. ("Chrome" or the "Corporation") (TSX VENTURE:KRM.P) is pleased to announce that it has entered into an arm's length letter of intent dated December 18, 2008 (the "Letter of Intent") with Trilennium Solutions Inc. ("Trilennium"), and its shareholders pursuant to which Trilennium and Chrome have agreed to merge their companies in a reverse take over of Chrome by way of a business combination, which may include an amalgamation (the "Combination"). The Combination is expected to constitute the Qualifying Transaction of the Corporation as defined in the policies of the TSX Venture Exchange Inc. ("TSX Venture").

About Chrome

Chrome, a capital pool company ("CPC") as defined in Policy 2.4 (the "CPC Policy") of the TSX Venture, was incorporated under the provisions of the Business Corporations Act (Alberta) on October 4, 2006 and completed its initial public offering in March of 2007. Chrome currently has 2,068,000 common shares (the "Chrome Shares") issued and outstanding, of which 1,050,000 Chrome Shares are subject to a 3 year escrow agreement with releases of 10% on closing of the Qualifying Transaction and 15% every six months thereafter. Chrome has granted stock options to its directors and officers to purchase 205,000 Chrome Shares (the "Existing Chrome Options") at a price of $0.20 per share until May 7, 2010 and an agent's option to Blackmont Capital Inc., the agent on Chrome's initial public offering, to purchase 82,000 Chrome Shares at a price $0.20 per share until March 15, 2009 (the "Agent's Option") The current directors of Chrome are Gregory R. Harris (President, CEO and CFO), Bernie Kraft, Richard Boxer and Tonya Pizzey.

About Trilennium

Trilennium is a private company incorporated on March 3, 2008 under the provisions of the Business Corporations Act (BC). Trilennium's head office is located in Vancouver, B.C. It was established for the purpose of acquiring and consolidating companies which provide a comprehensive suite of Web-based services exclusively for the non-profit and philanthropy sector. Its merger and acquisition strategy is intended to integrate a number of isolated business processes that will reduce non-profits' operating costs and increase their access to funding. Trilennium intends to also provide industry solutions, tools, training and community based support, operating space and related services by Trilennium Centres™; revenue streams may include: subscriptions, advertising, sponsorships, training, licensing, consulting and management/service contracts.

Trilennium has identified several possible acquisitions, with a proposed first acquisition (the "First Acquisition") of a company (the "Target Company"), which is expected to be acquired by Trilennium for approximately $10 million, payable as to $5 million by 4 million Trilennium Shares at a value of $1.25 each and cash of $5 million; the cash portion is being lent to Trilennium by a Canadian financial institution. Prior to the closing of the First Acquisition, Trilennium will close a $1 million private placement of 800,000 Trilennium Shares at $1.25 each (the "Private Placement"). It is a term of the First Acquisition that the shareholders of the Target Company will receive shares of a publicly traded company and consequently Trilennium, through its investment banker, James Edward Capital Corporation of Ottawa, approached the principals of Chrome to be that publicly traded company.

The closing of the First Acquisition and the Private Placement are conditions precedent to the closing of the Combination.

Trilennium currently has 2,334,750 common shares (the "Trilennium Shares") issued and outstanding, and no stock options, warrants, anti dilution or other rights to purchase Trilennium Shares, other than stock options to directors, officers, employees and consultants of Trilennium to purchase up to 750,000 Trilennium Shares at a price of $1.25 each until March 6, 2012 (the "Trilennium Options"). The directors and officers and other insiders of Trilennium, as a group, own 2,334,750 Trilennium Shares (100%) and 750,000 Trilennium Options (100%); all Chrome Shares and options issued on closing to Trilennium's or the resultant issuer's insiders will be subject to such escrow restrictions as the TSX Venture may impose.

Summary of the Proposed Qualifying Transaction

It is proposed that Chrome and Trilennium will complete the Combination pursuant to an amalgamation or otherwise as counsel to both parties may determine on the basis of an agreed value of $1.25 per Trilennium Share and an agreed value of $0.188 per Chrome Share such that Chrome will issue approximately 6.6489361 (the "Exchange Ratio") Chrome Units (where a Chrome Unit comprises one Chrome Share plus a quarter of one stock purchase warrant (a "Chrome Warrant") where one whole Chrome Warrant entitles the holder to purchase one Chrome Share at $0.30 for a period of 24 months from the date of issue) for each of the 7,134,750 Trilennium Shares then outstanding (which includes the Trilennium Shares issued pursuant to the Private Placement and the Target Company). The Trilennium Options will likewise be exchanged for stock options of Chrome, as applicable, adjusted on the basis of the Exchange Ratio with vesting provisions and expiry dates of such convertible securities remaining identical to the terms granted by Trilennium. Trilennium has also agreed to pay a finder's fee to James Edward Capital Corporation calculated as to 5% of the vend-in value of Trilennium to Chrome, that being $445,922 and has agreed that its fee will be paid as to $100,000 in cash plus 1,840,010 Chrome Shares; such shares will have the same escrow provisions as are to be applied to the directors, officers and other insiders of Trilennium.

On closing of the Qualifying Transaction, Chrome will issue to Trilennium's shareholders approximately (subject to rounding) 49,278,507 Chrome Shares at a deemed price of $0.188 per share, Chrome Warrants to purchase up to 11,859,624 Chrome Shares at a price of $0.30 per share and stock options to purchase up to 4,986,702 Chrome Shares at a price of $0.30 per share. Upon completion of the Qualifying Transaction, it is expected that the Trilennium shareholders, as a group, will own approximately 96% of the issued and outstanding Chrome Shares (prior to the exercise of the above noted Chrome Warrants and the Existing Chrome Options and Agent's Options to purchase in total 287,000 Chrome Shares, all of which could total 17,133,326 Chrome Shares and the receipt of up to $4,552,787. On full dilution Chrome will have 68,479,834 Chrome Share and will have received $13,868,505 in deemed value and cash. There is no guarantee that the warrants or options will be exercised in part or in whole.

Chrome will have a shareholders meeting to approve a name change and other matters in relation to the Combination, as required by corporate law but, pursuant to the CPC Policy, no vote on the Qualifying Transaction is required. No date as yet has been set for such meeting.

Proposed Directors and Officers

Upon completion of the proposed Qualifying Transaction, it is expected that the board of directors of Chrome will be comprised of Robert W. Harrison, Alan E. Heather, Christopher Holt and Bernie Harrison, all of Vancouver, BC. It is also expected that Mr. Heather will become President and Chief Executive Officer and that Mr. Holt will become the Vice-President of the resultant issuer. The backgrounds of these individuals are as follows.

R. W. (Bob) Harrison (65) is the Chairman of Trilennium and is responsible for the global merger and acquisition strategy and acquisition financing. Mr. Harrison is an experienced corporate leader with more than thirty years in senior level administration and management. He has also acted as an expert consultant to both industry and governments. He has worked world-wide on strategic and financial planning for companies in the transport, hospitality, manufacturing, technology, agriculture, natural resources, environmental, educational and telecommunications sectors. Mr. Harrison received a Bachelor of Commerce (Economics), cum laude honours in 1963 from the Universite de Montreal (Loyola College) and a Diploma in Accountancy, McGill University. He has served his community as the President, Board of Trade of Montreal and Vice-President and Board Member of the National United Way.

Alan E. Heather (57) is the President and CEO of Trilennium. He is responsible for providing strategic direction for Trilennium and its subsidiaries and has been an innovator, developing the vision and framework for Trilennium. Mr. Heather was the President and CEO of Soar International, a leading international company leveraging the economic benefits of hosting sports events from 1993-2001. Soar International developed a proprietary software system for hosting major sports events. He was also involved in a management capacity in Canadian Olympic swimming, oversaw the aquatic facility development strategy ($140MM+) in British Columbia, and the development of Canada's event hosting strategy for Tourism Canada. Mr. Heather has worked extensively with event hosts across North America, Europe, and Asia, advising them on their hosting opportunities and potential.

Mr. Heather has extensive experience in working with non-profit organizations at all levels of experience and interests, has been a board member, executive staff, and supplier to the non-profit industry for over 35 years and is an award winning leader in Association Management. He has served as a founding member of the Canadian Sport Tourism Alliance, and as a Director on the National Association of Sport Commissions (US). Mr. Heather received his Bachelor of Physical Education from the University of Alberta (1973), and studied a year of Graduate Studies, University of Alberta, in Sport Psychology.

Christopher Holt (44) is the Executive Vice President of Trilennium and is responsible for overall product design and development. Mr. Holt has achieved extensive experience in the educational, non-profit and technology sectors, supporting government and community social services and developing innovative solutions. He has developed long-standing and respected relationships with a wide variety of executives and board members of non-profit organizations throughout BC.

Mr. Holt has designed and managed social service programs in the employment, mental health, personal motivation, street-level entrepreneurship assistance, housing and shelter areas. He also co-founded Logic Lynx Technologies Inc. which supplied best-in-class case management and public health technology solutions to government and non-profit organizations. This led a team of business analysts and programmers to develop Sector Lynx, a revolutionary case management system for government human and health services. The result was the first fully configurable Case Management Application Service Provider (ASP) service for community-based human service providers.

Mr. Holt has been active on a variety of boards and commissions including: Advisor, Canadian Social Entrepreneurship Foundation; board member and non-profit sector representative for Rising Tide, a community development lending subsidiary of Pacific Coast Savings; Past Vice-Chair, Community Economic Development Corporation (CEDCO); Past Chairperson of BC College Information Officer Association, 2-year term. Mr. Holt is a graduate of the University of Victoria, Bachelor of Arts, 1986.

Bernie Harrison (67) is an independent Director of Trilennium and Chairman of the Audit Committee. Mr. Harrison holds a Bachelor of Commerce (1962) from Loyola College, Concordia University, and is a CGA. He has held numerous positions in management, auditing and accounting with Nortel, as well as acting as Controller, Operations Manager, VP Operations and CFO for a number of Canadian and US companies, including Continental Home Healthcare. Mr. Harrison also served as the Administrator for Bull, Housser, & Tupper, a large and prestigious Vancouver law firm. He is retired and has served as a Board member of the North Shore Winter Club, the CGA Association and his Credit Union.

Procedure for Closing

Prior to the completion of a "Qualifying Transaction", Chrome must submit for review to the Exchange a filing statement which must contain full, true and plain disclosure of all material facts relating to the Combination (the "Disclosure Documents"). Once approved, Chrome must file the Disclosure Documents on SEDAR. Chrome will be required to include in its Disclosure Document prospectus-level disclosure on Trilennium, including such audited and unaudited financial statements of Trilennium as may be required by the Exchange, as well as the Management Plan or if required, a valuation in respect of Trilennium and/or the Target Company prepared in accordance with the Exchange policies. Trilennium will make available to Chrome "prospectus level" disclosure with respect to Trilennium, including such financial statements and, will certify that the information in the Disclosure Document with respect to Trilennium and the Private Placement and Target Company to be full, true and plain disclosure.

Conditions to the Completion of the Qualifying Transaction

The obligations of the Chrome and Trilennium to consummate the Combination are shall be subject to, among other things: (i) the receipt of all necessary regulatory and TSX Venture approval, including, without limiting the generality of the foregoing, the approval of the Combination as a Qualifying Transaction in accordance with the CPC Policy; (ii) the First Acquisition and Private Placement being completed with the result that the Resulting Issuer (as defined in the policies of the TSX Venture) satisfies the minimum listing requirements of the TSX Venture for a Tier 2 Industrial Issuer; (iii) the receipt of all necessary shareholder and board of director approvals; and (iv) the review to the sole satisfaction of each of Chrome and Trilennium of the financial condition, business, properties, title, assets and affairs of the other party. The conditions listed above are for the benefit of, and maybe waived by, Chrome and Trilennium as it relates to the obligations of the other party to perform or obtain same.

There is no guarantee that the conditions precedent will be met or that the Qualifying Transaction will be completed on these terms or at all. Investors are cautioned that an investment in Chrome is with risk and should be considered speculative.

The completion of the Qualifying Transaction will not be subject to Chrome shareholder approval, which is in compliance with the CPC Policy for arm's length Qualifying Transactions. Chrome will have a shareholders meeting to approve a name change to reflect the Trilennium business post-closing and other matters but no vote will be held on the Qualifying Transaction. No date as yet has been set for such meeting.

Sponsorship

Chrome has requested that the TSX Venture waive the requirement for a Sponsorship Report in connection with the Qualifying Transaction. There are no guarantees that the TSX Venture will accept Chrome's request to waive the Sponsorship Report requirement, in which case Chrome will engage a Sponsor to prepare such a report.

Resumption of Trading and Further News

Trading of the Chrome Shares will not resume until the TSX Venture has accepted Chrome's request to waive the Sponsorship Report requirement or Chrome has engaged a Sponsor to prepare such a report. Chrome or until the Qualifying Transaction has closed; in any event Chrome will issue a further new release as soon as details are available regarding the resumption of trading.

As indicated above, completion of the transactions is subject to a number of conditions, including but not limited to, TSX Venture acceptance. There can be no assurance that the transactions will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Filing Statement of the Corporation to be prepared in connection with the transactions, any information released or received with respect to the transactions may not be accurate or complete and should not be relied upon. Trading in the securities of the Corporation should be considered highly speculative.

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. Chrome undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by Chrome.

The TSX Venture has in no way passed upon the merits of the proposed transactions and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Chrome Capital Inc.
    Gregory R. Harris
    President
    (403) 777-9222
    or
    Trilennium Solutions Inc.
    Alan E. Heather
    President
    (604) 739-0769