Lateral Capital Corp.
TSX VENTURE : LCP.P

October 25, 2012 14:23 ET

Lateral Capital Corp. Announces Closing of Previously Announced Private Placement

CALGARY, ALBERTA--(Marketwire - Oct. 25, 2012) -

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

Lateral Capital Corp. (the "Corporation") (TSX VENTURE:LCP.P) is pleased to announce that it has closed the first tranche of its previously announced brokered private placement offering (the "Private Placement") of 17,760,736 subscription receipts ("Subscription Receipts") at a price of $0.14 per Subscription Receipt for total gross proceeds of $2,486,503. The Private Placement was completed in connection with the Corporation's proposed asset acquisition from a private Alberta based company, whereby the Corporation has agreed to acquire certain oil production, oil and gas reserves, lands, leases and miscellaneous interests held by the private company in Southern Alberta (the "Proposed Acquisition") as described in the Corporation's press releases dated July 27, 2012, August 28, 2012 and October 18, 2012. The Proposed Acquisition will constitute the qualifying transaction (the "Qualifying Transaction") of the Corporation in accordance with Policy 2.4 of the TSX Venture Exchange (the "Exchange").

The Private Placement was co-led by Stonecap Securities Inc. and Wolverton Securities Ltd. (the "Co-Lead Agents"). Upon closing of the Qualifying Transaction, the Co-Lead Agents will be paid a cash commission of 10% of the gross proceeds of the Private Placement less any gross proceeds from subscribers identified by the Corporation on the president's list (the "President's List"), and broker warrants (the "Broker Warrants") equal to 10% of the number of Subscription Receipts issued pursuant to the Private Placement less that number of Subscription Receipts issued pursuant to those subscribers on the President's List. Upon closing of the Qualifying Transaction, the Co-Lead Agents will be paid a cash commission of 5% of the gross proceeds of the Private Placement from those subscribers identified by the Corporation on the President's List, and Broker Warrants equal to 5% of the number of Subscription Receipts issued to those subscribers identified by the Corporation on the President's List. A total of 1,541,180 Broker Warrants will be issued to the Co-Lead Agents upon closing of the Qualifying Transaction, which entitle the Co-Lead Agents to acquire common shares of the Corporation at a price of $0.14 per Broker Warrant for a period of 24 months after the date of the Proposed Acquisition.

The net proceeds of the Private Placement (the "Escrowed Proceeds") will be held in escrow. The Escrowed Proceeds (and accrued interest) will be released to the Corporation upon satisfaction of certain customary conditions. The Subscription Receipts will be issued under exemptions from the prospectus requirement and will be subject to a statutory hold period ending February 26, 2013.

The net proceeds of the Private Placement will be used to fund a 100 per cent working interest in 2,400 acres of oil and gas mineral rights in the Medicine Hat area of South East Alberta (the "Medicine Hat Assets") for a purchase price of $1,490,000 ($1,459,200 cash and $30,800 paid through issuance of 220,000 common shares), subject to customary post closing adjustments. Production from the Medicine Hat Assets is comprised of approximately 30 bbls/d of heavy, 20 degrees API oil from five Sunburst oil wells. Based on a review of available data on the Medicine Hat Assets, including logs from existing wells, the private company's management has identified five drilling locations on the lands being acquired as well as additional prospective zones in the Barrons, 2WS, and Medicine Hat formations.

About the Corporation

The Corporation is incorporated under the provisions of the Business Corporations Act (Alberta) and has a registered office in Calgary, Alberta. It is a "capital pool company" under the policies of Exchange. As such it intends for the Proposed Acquisition to constitute the "Qualifying Transaction" of the Corporation as such term is defined in the policies of the Exchange.

Cautionary Statements:

This news release contains "forward-looking statements" within the meaning of applicable securities laws relating to the proposal to complete the Proposed Acquisition and associated transactions, including statements regarding the terms and conditions of the Proposed Acquisition and associated transactions. Readers are cautioned not to place undue reliance on forward-looking statements. 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 Proposed Acquisition and associated transactions, that the ultimate terms of the Proposed Acquisition and associated transactions will differ from those that currently are contemplated, and that the Proposed Acquisition 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 news 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, the properties or their respective financial or operating results or (as applicable) their securities.

Neither the TSX Venture Exchange, Inc. nor its Regulation Service Provider (as that term is defined under the policies of the TSX Venture Exchange) has in any way passed upon the merits of the Proposed Acquisition and associated transactions and has neither approved nor disapproved of the contents of this press release.

Contact Information

  • Lateral Capital Corp.
    Ken Leigh
    President and Chief Executive Officer
    (604) 318-4106