Lime Hill Capital Corporation

TSX VENTURE : LHL.P


May 16, 2011 16:48 ET

Lime Hill Capital Corporation and Liquid Nutrition Group Inc. Complete Amalgamation to Form Liquid Nutrition Group Inc. and Concurrent Unit Financing

CALGARY, ALBERTA--(Marketwire - May 16, 2011) -

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

Liquid Nutrition Group Inc. ("Liquid Nutrition") today announced the completion of the amalgamation of Liquid Nutrition Group Inc. ("PrivateCo") and Lime Hill Capital Corporation ("Lime Hill") (TSX VENTURE:LHL.P), a capital pool company, to form the amalgamated company named Liquid Nutrition Group Inc. (the "Amalgamation"). The Amalgamation constitutes the Qualifying Transaction of Lime Hill pursuant to Policy 2.4 of the TSX Venture Exchange Inc. ("TSX Venture").

At the annual and special meeting of the shareholders of Lime Hill held on May 12, 2011, the shareholders of Lime Hill approved the terms of the Amalgamation and related transactions. PrivateCo has received approval for the Amalgamation from its shareholders.

"We are pleased to conclude the amalgamation with Lime Hill," said Glenn Young, President, Liquid Nutrition Group Inc. "The response to our offering was very positive - we surpassed our objective of raising $5 million in financing. This reception further strengthens our resolve to expand Liquid Nutrition across North America, as there is a hearty appetite for healthy living, functional beverages and supplements."

As a result of this amalgamation, Liquid Nutrition will continue its expansion plans across Canada and the United States with the first phase of its franchised stores expected to open in Toronto and Los Angeles.

The Amalgamation became effective on May 13, 2011, the date the Certificate of Amalgamation was issued in respect of the Amalgamation under the Canada Business Corporations Act. In connection with the Amalgamation, the issued and outstanding convertible debentures of PrivateCo (the "Debentures"), as more particularly described in the press release of the Lime Hill dated February 18, 2011, were automatically converted into units of PrivateCo (the "Units") immediate prior to the Amalgamation on the basis of one Unit for each $0.90 of outstanding principal amount of Debentures and accrued interest thereon. Each Unit is comprised of one common share of PrivateCo ("PrivateCo Share") and one-half of one common share purchase warrant of PrivateCo (each whole warrant, a "PrivateCo Warrant"). An aggregate of 2,936,428 PrivateCo Shares and 1,468,214 PrivateCo Warrants were issued to the holders of the Debentures.

Pursuant to the Amalgamation: (i) each common share of Lime Hill outstanding immediately prior to the Amalgamation was exchanged for one-eighth (1/8) of one fully-paid and non-assessable common share of Liquid Nutrition ("Liquid Nutrition Share") and one sixteenth (1/16) of one common share purchase warrant of Liquid Nutrition ("Liquid Nutrition Warrant") upon receipt of the required documentation from each shareholder; (ii) each PrivateCo Share, including the PrivateCo Shares comprising the Units sold under the Unit Financing described below, was exchanged for one (1) Liquid Nutrition Share; and (iii) each PrivateCo Warrant, including the PrivateCo Warrants comprising the Units sold under the Unit Financing described below, was exchanged for one (1) Liquid Nutrition Warrant. Each of the outstanding stock options and agent's option of PrivateCo and Lime Hill were replaced/continued into replacement securities of Liquid Nutrition with identical terms.

Unit Financing

In connection with the completion of the Amalgamation, PrivateCo completed a private placement (the "Unit Financing") of 2,687,500 Units for total aggregate gross proceeds of $2,687,500.

Avenue Capital Markets CPVC Inc. (the "Agent") acted as agent of the Corporation in connection with the Unit Financing. The Agent and certain other arm's length parties were paid a cash commission equal to 10% of the gross proceeds and were granted agent's options to purchase 268,750 Units at a price of $1.00 per Unit for a period of 36 months from the closing date. The PrivateCo Shares, PrivateCo Warrants and agent's options issued in connection with the Unit Financing were exchanged for securities of Liquid Nutrition as described above.

Other

Liquid Nutrition's Board of Directors is comprised of Greg Chamandy, Glenn Young, Dana Ades-Landy, Arlene Dickinson, Brandon Kou and Darren Stark.

Concurrent with the completion of the Amalgamation, stock options to purchase an aggregate of 2,273,500 Liquid Nutrition Shares with an exercise price of $1.00 per share were granted to the directors, officers and employees of Liquid Nutrition.

The completion of the Amalgamation has received conditional approval of TSX Venture and is subject to its final approval, which Liquid Nutrition expects to receive after completion of the required filings.

Trading in the common shares of Lime Hill was halted at the request of Lime Hill and will remain halted until the Liquid Nutrition Shares are listed. The Liquid Nutrition Shares are expected to commence trading under the symbol "LQD" after TSX Venture issues its final bulletin.

After giving effect to the Amalgamation and the Unit Financing, there are 16,418,053 Liquid Nutrition Shares issued and outstanding (calculated on a non-diluted basis).

About Liquid Nutrition

Liquid Nutrition is an international functional beverage, food, vitamin and supplement store franchisor. Headquartered in Montreal, Quebec, Liquid Nutrition is committed to bringing healthy and delicious eating to communities around the world. Through its wholly-owned subsidiary, Liquid Nutrition Franchising Corporation, Liquid Nutrition is currently the franchisor of seven stores located in Montreal, with franchise expansion opportunities throughout Canada and the United States, as well as international licenses. For store locations or more information visit www.liquidnutrition.ca.

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

Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Except as required pursuant to applicable securities legislation, Liquid Nutrition will not update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by Liquid Nutrition.

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

Neither the TSX Venture nor its Regulation Service 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