Crowsnest Acquisition Corp.
TSX VENTURE : CAW.P

March 13, 2014 15:59 ET

Crowsnest Acquisition Corp. Announces Engagement Letter With Global Securities Corporation

CALGARY, ALBERTA--(Marketwired - March 13, 2014) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.

Crowsnest Acquisition Corp. (TSX VENTURE:CAW.P) (the "Corporation" or "Crowsnest"), a "capital pool company", as such term is defined in the policies of the TSX Venture Exchange ("Exchange"), is pleased to announce that it has entered into an engagement letter (the "Engagement Letter") with Global Securities Corporation ("Global") dated March 6, 2014, with respect to the financing to be completed in connection with the Corporation's "Qualifying Transaction" (as such term is defined in the policies of the Exchange) involving QE2 Acquisition Corp. ("QE2"), all as previously disclosed in the news release of Crowsnest dated February 28, 2014 and available under the Corporation's SEDAR profile at www.sedar.com.

Under the terms of the Engagement Letter, Global has been appointed to act as Crowsnest's agent to raise, on a "commercially reasonable efforts" basis, gross proceeds of a minimum of $500,000 and a maximum of $1,000,000 (the "Private Placement") to be completed in conjunction with, or prior to the closing of the Qualifying Transaction. Subject to the policies of the Exchange, the Private Placement will consist of an offering of 12% interest bearing subordinate note debentures ("Debentures") with interest payable semi-annually in arrears. The Debentures will have a two-year maturity period, and will be convertible into common shares of the Resulting Issuer ("Common Shares") at a conversion price of the greater of $0.50 per Common Share or the "Market Price" (as such term is defined under the policies Exchange) per Common Share, with a forced conversion when the simple average closing price of the Common Shares on Exchange exceeds $0.65 for a minimum of 20 consecutive trading days (whether or not trading of Common Shares occurs on such days, provided that the Common Shares trade on at least 5 of such trading days). The Debentures will be subject to a four month hold period in accordance with applicable securities law.

Global will receive a commission of 8% of the aggregate gross proceeds placed under the Private Placement payable in cash. Global will also be granted 160,000 non-transferrable broker warrants ("Broker Warrants") based on completion of the maximum amount of $1,000,000 under the Private Placement, and prorated accordingly if the Private Placement is completed for less than the maximum amount of $1,000,000. Each Broker Warrant will entitle Global to purchase Common Shares at an exercise price of $0.50 per Common Share and will be valid for a period of 24 months from the date of issuance. The Broker Warrants will be subject to a four month hold period in accordance with applicable securities law. Global will also be reimbursed for its reasonable legal and out-of-pocket expenses and will also receive a corporate finance fee.

The proceeds of the Private Placement will be used for general working capital and the Resulting Issuer's future growth plans.

Sponsorship of Qualifying Transaction

Sponsorship of the Qualifying Transaction is required by the Exchange unless an exemption from this requirement can be obtained in accordance with the policies of the Exchange. The Corporation has applied to the Exchange for an exemption to the sponsorship requirement. There is no assurance that an exemption from this requirement will be obtained.

Trading Halt

The Common Shares are currently halted from trading, and the trading of the shares is expected to remain halted pending completion of the Qualifying Transaction.

Additional Information

Completion of the Qualifying Transaction and the Private Placement is subject to a number of conditions, including but not limited to, Exchange acceptance, and if applicable pursuant to the requirements of the Exchange, majority of the minority approval. 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 Qualifying Transaction, any information released or received with respect to the Qualifying 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.

Cautionary Statements

This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the proposal to complete the Qualifying Transaction and associated transactions, including statements regarding the terms and conditions of the Qualifying Transaction, the Private Placement, and the use of proceeds of the Private Placement. Although the Corporation believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Corporation can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. The terms and conditions of the Qualifying Transaction and the Private Placement may change based on the Corporation's due diligence (which is going to be limited as the Corporation intends largely to rely on the due diligence of other parties of the Qualifying Transaction to contain its costs, among other things) and the receipt of tax, corporate and securities law advice for both Crowsnest and QE2. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Qualifying Transaction, the Private Placement and associated transactions, that the ultimate terms of the Qualifying Transaction, the Private Placement, and associated transactions will differ from those that currently are contemplated, and that the Qualifying Transaction, the Private Placement, and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The statements in this press release are made as of the date of this release. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Corporation, QE2, Global, their securities, or their respective financial or operating results (as applicable).

Neither the TSX Venture Exchange, Inc. nor its Regulation Services Provider (as that term is defined in the polices of the TSX Venture Exchange) has in any way passed upon the merits of the Qualifying Transaction and associated transactions and neither of the foregoing entities has in any way approved or disapproved of the contents of this press release.

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.

The Common Shares have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. 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 the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

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