Lime Hill Capital Corporation

March 24, 2011 15:42 ET

Lime Hill Capital Corporation Announces Update of Qualifying Transaction With Liquid Nutrition Group Inc.

CALGARY, ALBERTA--(Marketwire - March 24, 2011) -


Lime Hill Capital Corporation ("Lime Hill" or the "Corporation") (TSX VENTURE:LHL.P) is pleased to provide an update to its qualifying transaction (the "Business Combination") with Liquid Nutrition Group Inc. ("LNGI") previously announced on January 12 and February 28, 2011, pursuant to which Lime Hill will amalgamate with LNGI under the Canada Business Corporations Act to form a new company. The Business Combination, when completed, will constitute the qualifying transaction of the Corporation pursuant to Policy 2.4 of the TSX Venture Exchange Inc. (the "TSX Venture") Corporate Finance Manual.

The Business Combination is subject to the approval of TSX Venture and all other necessary regulatory approvals. The completion of the Business Combination is also subject to additional conditions precedent, including shareholder approval of each of Lime Hill and LNGI.

Amendment to Equity Financing

Lime Hill and LNGI have agreed to amend the terms of the brokered private placement of units of LNGI (each a "LNGI Unit") to be completed immediately prior to the completion of the Business Combination (the "Private Placement"). Pursuant to the amended terms of the Private Placement, LNGI intends to issue a minimum of 500,000 and a maximum of 3,000,000 LNGI Units at a price of $1.00 per unit for gross proceeds of a minimum of $500,000 and a maximum of $3,000,000. Each LNGI Unit shall consist of one common share of LNGI and one-half of one common share purchase warrant of LNGI (each a "LNGI Warrant"). Each whole LNGI Warrant shall entitle the holder to purchase one common share of LNGI at a price of $1.50 per share for a period of five (5) years from the date of issuance.

LNGI has engaged Avenue Capital Markets CPVC Inc. to act as agent (the "Agent") on a "commercially reasonable efforts" basis for the Private Placement and in connection therewith intends to pay a cash commission of up to 10% of the gross proceeds of the Private Placement. The Agent will also be granted agent's options (the "Agent's Options") to purchase up to 10% of the number of LNGI Units sold under the Private Placement, with each Agent's Option entitling the holder to purchase one LNGI Unit at a price of $1.00 per unit for a period of 36 months from the closing of the Private Placement.

Selected Financial Information of LNGI

Based on the audited consolidated opening balance sheet of LNGI as at December 21, 2010, LNGI had intangible assets of a carrying amount of $27,540, liabilities of nil and shareholders' equity of $27,540.

The following is a schedule of pro forma consolidated revenues presenting the revenues that would have been earned by LNGI had the license between LNGI, as licensor, and Liquid Nutrition Inc. ("LNI"), as licensee, dated December 21, 2010, been in place for the periods presented. Royalties are calculated at 6% of revenues of LNI, sourcing and distribution revenues are calculated at 1.5% of product costs of LNI, and advertising revenues are calculated at 2% of revenues of LNI.

52 weeks ended September 28, 2008 ($
52 weeks ended September 27, 2009 ($
52 weekends ended September 26, 2010 ($
September 27, 2010 to December 31, 2010 ($
Royalties 101,854   118,531   107,066   16,851  
Sourcing and distribution revenues 25,464   29,633   26,766   4,213  
Advertising revenues 33,951   39,510   35,689   5,617  
Total: 161,269   187,674   169,521   26,861  

Key Business Partners

LNGI has entered into a promotion and endorsement agreement (the "Endorsement Agreement") with Steve Nash, a professional basketball player. Pursuant to the Endorsement Agreement, LNGI has been granted a license to use the full name, autograph and facsimile signature of Steve Nash, together with his image, likeness and endorsement, and any combination thereof as may be approved by him in advance, in connection with the promotion of the LNGI business.
LNGI is currently in discussions regarding endorsement opportunities with other professional athletes and certain experts in the nutrition industry.

Resumption of Trading

Trading of the common shares of Lime Hill is expected to resume on the TSX Venture on March 28, 2011.

As indicated above, completion of the Business Combination is subject to a number of conditions, including but not limited to, TSX Venture acceptance and shareholder approval. The Business Combination cannot close until the required shareholder approval is obtained. There can be no assurance that the Business Combination will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the information circular of LNGI to be prepared in connection with the Business Combination, any information released or received with respect to the Business Combination may not be accurate or complete and should not be relied upon. Trading in the securities of LNGI or Lime Hill should be considered highly speculative.

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

This press release contains forward-looking statements. More particularly, this press release contains statements concerning: the receipt of TSX Venture and shareholder approval of the Business Combination and the completion of the Business Combination. The forward-looking statements are based on certain key expectations and assumptions made by Lime Hill and LNGI including the timing of receipt of required shareholder and TSX Venture approvals and the satisfaction of other conditions to the completion of the Business Combination.

Although Lime Hill and LNGI believe that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because no assurance can be provided that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks that required shareholder and TSX Venture approvals are not obtained on terms satisfactory to the parties or at all, and risks that other conditions to the completion of the Business Combination are not satisfied on the timelines set forth in the Amalgamation Agreement or at all.

The forward-looking statements contained in this press release are made as of the date hereof and neither Lime Hill nor LNGI undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

This release does not constitute an offer for sale of securities in the United States.

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

Contact Information

  • Lime Hill Capital Corporation
    Michael Rousseau
    (403) 816-1947
    Glenn Young
    (416) 889-4920