Gulfstream Acquisition 1 Corp.
TSX VENTURE : GFL.P

February 23, 2016 18:16 ET

Gulfstream Acquisition 1 Corp. Announces Proposed Qualifying Transaction With Blue Goose Capital Corp.

TORONTO, ONTARIO--(Marketwired - Feb. 23, 2016) -

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Gulfstream Acquisition 1 Corp. (TSX VENTURE:GFL.P) ("Gulfstream" or the "Company"), a capital pool company, is pleased to announce that it has entered into a non-binding letter of intent (the "LOI") with Blue Goose Capital Corp. ("Blue Goose") which outlines the general terms and conditions of a proposed transaction (the "Proposed Transaction") that will result in Gulfstream acquiring all of the issued and outstanding shares of Blue Goose (the "Blue Goose Shares").

The Proposed Transaction is currently expected to be completed by way of a three cornered amalgamation, or an acquisition of the Blue Goose Shares, merger, amalgamation, plan of arrangement, reorganization, business combination, sale of all or substantially all of the assets, or exchange of assets or securities in a similar transaction between Gulfstream and Blue Goose or other similar transaction which will result in Blue Goose becoming a wholly-owned subsidiary of Gulfstream.

Overview of Blue Goose

Blue Goose is a privately-held Canadian-based, organic and natural food company, specializing in healthy, humanely raised beef, chicken and fish products. Blue Goose is a vertically integrated company focused on the production, distribution and sale of organic and natural beef, chicken and fish. Organic protein is produced by raising livestock in a purely organic environment, with feed from organically grown crops and no substrates or animal by-products in the feed, and by employing the highest standards of animal husbandry and welfare, with no use of artificial growth hormones or antibiotics. Blue Goose owns over 45,000 acres of farm land in British Columbia, and a recognized consumer brand with beef, chicken, and fish products distributed to over 640 retail locations across Canada, making Blue Goose well-positioned to capitalize on the high-growth organic food market.

The Proposed Transaction

It is anticipated that the LOI is to be superseded by a definitive agreement (the "Definitive Agreement") between Gulfstream and Blue Goose with such agreement to include representations, warranties, conditions and covenants typical for a transaction of this nature. The Proposed Transaction is subject to, among other things, receipt of the requisite shareholder approval of Blue Goose, final approval of the TSX Venture Exchange (the "Exchange") and the satisfaction of customary closing conditions, including the conditions described below.

The Proposed Transaction is expected to constitute the Company's qualifying transaction (the "Qualifying Transaction") pursuant to Policy 2.4 - Capital Pool Companies (the "Policy") of the Exchange.

The Proposed Transaction is not a Non Arm's Length Qualifying Transaction pursuant to Section 2.1 of the Policy and, as such, the Company is not required to obtain shareholder approval for the Proposed Transaction. However, the Company intends to hold its annual general and special meeting of shareholders to approve, in addition to ordinary annual general meeting business, certain matters ancillary to the Proposed Transaction, including a name change, a change in the board of directors of the Company and a consolidation of the common shares of Gulfstream (the "Gulfstream Shares") of which the ratio is expected to be determined at a later date (the "Consolidation Ratio"), all to be effective upon closing ("Closing") of the Proposed Transaction. The Company currently intends to call the annual general and special meeting as soon as practicable.

Upon completion of the Proposed Transaction, Gulfstream will continue on with the business of Blue Goose with Blue Goose as its wholly-owned, operating subsidiary and change its name to "Blue Goose Capital" or such other name as may be acceptable to Blue Goose and the Exchange (the Company after the Proposed Transaction being referred to herein as the "Resulting Issuer").

It is currently anticipated that under the Proposed Transaction, each shareholder of Blue Goose (including those receiving Blue Goose Shares as a result of the Blue Goose Financing, as defined below, and each, a "Blue Goose Shareholder") will receive Gulfstream Shares in exchange for the Blue Goose Shares held by such holder.

Certain of the Gulfstream Shares to be issued to the Blue Goose Shareholders pursuant to the Proposed Transaction, including up to 100% of the securities to be issued to "Principals" (as defined under applicable laws), may also be subject to escrow provisions imposed pursuant to the policies of the Exchange.

None of the securities to be issued pursuant to the Proposed Transaction have been or will be registered under the U.S. Securities Act, or any state securities laws, and any securities issued pursuant to the Proposed Transaction are anticipated to be issued in reliance upon available exemptions from such registration requirements and applicable exemptions under state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.

Further details about the Proposed Transaction and the Resulting Issuer will be provided in a comprehensive press release when the parties enter into a Definitive Agreement and in the disclosure document to be prepared and filed in respect of the Proposed Transaction.

Proposed Blue Goose Financing

In connection with the Proposed Transaction, Blue Goose has entered into an agreement with Dundee Securities Ltd. and Canaccord Genuity Corp., as co-lead agents, to complete a best efforts brokered private placement (the "Blue Goose Financing") for gross aggregate proceeds of approximately $20 million, through the sale of subscription receipts (the "Blue Goose Subscription Receipts"). Each Blue Goose Subscription Receipt will be converted or deemed to be converted into one Blue Goose Share upon the satisfaction of certain escrow release conditions, among other things, without any further consideration from or any additional steps to be taken by the holder thereof, and subsequently, immediately prior to the Closing, into the equivalent value of shares of the Resulting Issuer. Blue Goose intends to use the net proceeds of the Blue Goose Financing for general working capital purposes and finance the equity portion of one or more acquisitions.

Conditions to Proposed Transaction

Completion of the Proposed Transaction is subject to certain conditions precedent including, among other things:

  • closing of the Blue Goose Financing;
  • completion of satisfactory due diligence investigations by each of Gulfstream and Blue Goose;
  • approval of the Proposed Transaction by the board of directors of each of Blue Goose and Gulfstream;
  • approval of the Proposed Transaction by Blue Goose shareholders; and,
  • receipt of any and all required consents, waivers and approvals from the Exchange, any securities regulatory authority and any other third party having jurisdiction, including approval from the Exchange for the Proposed Transaction as its Qualifying Transaction and the listing of the Resulting Issuer Shares on the Exchange.

Sponsorship of a Qualifying Transaction is required by the Exchange unless exempt in accordance with Exchange policies. Gulfstream is currently reviewing the requirements for sponsorship and may apply for an exemption from the sponsorship requirements pursuant to the policies of the TSXV; however, there is no assurance that Gulfstream will ultimately obtain this exemption. Gulfstream intends to include any additional information regarding sponsorship in a subsequent press release.

Proposed Management and Board of the Resulting Issuer

It is currently anticipated that all of the current officers and all but one of the current directors of Gulfstream will resign from their respective positions with Gulfstream. Subject to Exchange approval, on completion of the Proposed Transaction, it is currently anticipated that the board of directors of the Resulting Issuer will be nominated by Blue Goose. Ben Nikolaevsky will serve as President & CEO of the Resulting Issuer. Mr. Nikolaevsky is an experienced executive in the agriculture industry. Previously Mr. Nikolaevsky held the position of Market Vice President, CIBC focusing on agricultural lending and advisory, and Chief Credit Officer at IBM Canada.

Details with respect to the board of directors and the additional proposed directors, including the background of each such proposed director, will be announced in a subsequent disclosure.

Further Information

Further details about the Proposed Transaction and the resulting issuer will be provided in a comprehensive press release when the parties enter into a Definitive Agreement and in the disclosure document to be prepared and filed in respect of the Proposed Transaction.

Investors are cautioned that, except as disclosed in the disclosure document to be prepared in connection with the Proposed 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.

All information contained in this news release with respect to Gulfstream and Blue Goose was supplied by the parties, respectively, for inclusion herein, and Gulfstream and its directors and officers have relied on Blue Goose for any information concerning such party.

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. 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 Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

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

This news release contains forward-looking statements relating to the timing and completion of the Proposed Transaction, the future operations of the Company, Blue Goose, and the Resulting Issuer and other statements that are not historical facts. Forward-looking statements are often identified by terms such as "will", "may", "should", "anticipate", "expects" and similar expressions. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding the Proposed Transaction and the future plans and objectives of the Company, Blue Goose, and the Resulting Issuer are forward-looking statements that involve 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 the Company's, Blue Goose, and the Resulting Issuer expectations include the failure to satisfy the conditions to completion of the Proposed Transaction set forth above and other risks detailed from time to time in the filings made by the Company, Blue Goose, and the Resulting Issuer with securities regulations.

The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, Blue Goose, and the Resulting Issuer. As a result, the Company, Blue Goose, and the Resulting Issuer cannot guarantee that the Proposed Transaction will be completed on the terms and within the time disclosed herein or at all. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release and the Company, Blue Goose, and the Resulting Issuer will update or revise publicly any of the included forward-looking statements as expressly required by Canadian securities law.

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