Grande West Transportation Group Inc.
TSX VENTURE : BUS

Grande West Transportation Group Inc.

July 16, 2014 09:30 ET

Grande West Announces Brokered Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwired - July 16, 2014) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES

Grande West Transportation Group Inc. (TSX VENTURE:BUS) ("Grande West" or the "Company") is pleased to announce it has entered into an engagement letter (the "Engagement Letter") with Wolverton Securities Ltd. and Euro Pacific Canada, Inc. (together, the "Agents"), as co-lead agents, to sell, on a "commercially reasonable efforts" private placement basis, up to 6,000,000 units (the "Units") at a price of $0.50 per Unit, for aggregate gross proceeds to Grande West of up to $3,000,000 (the "Private Placement"), or such greater amount of Units as the Company and the Agents may agree. In addition, the Company has granted the Agents an over-allotment option to solicit and accept subscriptions for additional Units, up to a maximum of 25% of the Units sold in the Private Placement.

Each Unit shall consist of one common share of the Company (a "Common Share") and a half of one non-transferable share purchase warrant (each whole warrant, a "Warrant"). Each Warrant shall then entitle the holder thereof to acquire one additional Common Share for a period of 24 months from the closing date of the Private Placement at an exercise price of $0.65. In the event that, on any 20 consecutive trading days occurring after the date that is four months and one day following the closing date of the Private Placement, the closing price of the Common Shares on the TSX Venture Exchange (the "TSX.V") is greater than $0.95, the expiry date of the Warrants may be accelerated, at the sole discretion of the Company, to the 30th day after the date on which the Company gives notice to the Warrant holders of such acceleration.

Completion of the Private Placement is subject to a number of conditions, including the completion of due diligence by the Agents, the negotiation and execution of definitive documentation and receipt of the approval of the TSX .V to list the Common Shares underlying the Units and the Warrants on the TSX.V. All securities issued pursuant to the Private Placement will be subject to a four month and one day hold period in accordance with applicable securities laws.

Pursuant to the Engagement Letter, the Agents shall be entitled to receive compensation in the following form: (a) a 7% cash commission on the gross proceeds of the Private Placement; and (b) options (the "Agents' Options") to purchase up to 7% of the number of Units subscribed for under the Private Placement. Each Agents' Option will be exercisable for a period of 24 months from the closing date of the Private Placement at an exercise price of $0.50 per Unit. In addition, the Agents shall be entitled to receive a corporate finance fee and compensation for reasonable expenses of or incidental to, the issuance of Units under the Private Placement which are incurred by the Agents including the legal fees of Agents' counsel, disbursements and other expenses.

The net proceeds from the Private Placement will be used to fund the advance purchase of up to 15 Vicinity buses, both 27.5 and 30 foot models, to be held as inventory available for sale. Extensive market analysis conducted by the Company has demonstrated that there is customer demand for Vicinity buses that are available for quicker delivery rather than having to place a specific order in a production run.

The Private Placement will be exempt from prospectus and registration requirements of applicable securities laws. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and accordingly, may not be offered or sold within the United States or to "U.S. Persons", as such term is defined in Regulation S promulgated under the U.S Securities Act ("U.S. Persons"), except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom. This news release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States.

About Grande West Transportation Group

Grande West was formed in 2008 to design and develop a 27.5 foot bus, known as the "Vicinity." With little competition in the "mid-size" bus range, Grande West has set itself apart from others with the Vicinity bus - a heavy duty mid-size, true, community transit bus.

The Vicinity is designed with affordability, accessibility and global responsibility in mind. It costs materially less than a 40 foot transit bus, burns less fuel, emits less harmful emissions, has lower maintenance costs and achieves a life span twice as long as the cut-away buses which are based on a truck chassis which are currently used by many transit operators.

In a large and unsaturated market segment, Grande West is poised to capture sales growth from both the replacement of cut-away buses and the right sizing of larger buses for better utilization of transit fleets across Canada and the United States.

Initial deliveries of 15 Vicinity buses occurred in August 2013 to BC Transit. Grande West also recently recognized the sale of their demonstration bus. Currently, the Company has 18 new Vicinity buses in production mostly for delivery to Québec and Nova Scotia customers. The potential sales funnel is constantly growing, as the Vicinity is introduced to transit agencies across Canada.

For marketing and customer testing, 3 Vicinity demonstration buses are included in the current production run inclusive of our new 30 foot model with 2 doors for the Ontario market and airport shuttle bus applications.

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

Cautionary Note Regarding Forward-Looking Statements

This press release includes certain "forward-looking information" and "forward-looking statements" (collectively "forward-looking statements") within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding the completion of the Private Placement and the use of proceeds from the Private Placement, are forward-looking statements. Forward-looking statements are frequently, but not always, identified by words such as "expects", "anticipates", "believes", "intends", "estimates", "potential", "possible", and similar expressions, or statements that events, conditions, or results "will", "may", "could", or "should" occur or be achieved. Forward-looking statements involve various 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 Grande West's expectations include uncertainties relating to the ability to negotiate the Private Placement on acceptable terms; timing of closing; the ability to satisfy conditions of the Private Placement; receipt of approval from the TSXV; completion of the Private Placement; and other risk and uncertainties disclosed in Grande West's reports and documents filed with applicable securities regulatory authorities from time to time. Grande West's forward-looking statements reflect the beliefs, opinions and projections on the date the statements are made. Grande West assumes no obligation to update the forward-looking statements or beliefs, opinions, projections, or other factors, should they change, except as required by law.

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