Loyalist Group Limited
TSX VENTURE : LOY

Loyalist Group Limited

June 29, 2015 06:00 ET

Loyalist Announces Execution of Forbearance Agreement with Senior Lender and Non-Brokered Private Placement Update

TORONTO, ONTARIO--(Marketwired - June 29, 2015) - Loyalist Group Limited ("Loyalist" or the "Company") (TSX VENTURE:LOY) announces that the Company has executed a forbearance agreement with an effective date of June 26, 2015 with Bank of Montreal (the "Senior Lender"). The forbearance agreement provides for a repayment date of September 30, 2015 provided that certain conditions and milestones are met, including the Company raising a minimum of $2.8 million of cash from existing or new investors by no later than July 10, 2015. The forbearance agreement will be available on SEDAR at www.sedar.com.

"Execution of the forbearance agreement is an important milestone which enables us to move forward with our financing initiatives. We appreciate Bank of Montreal's collaborative effort with our new management team to put Loyalist back on sound footing and rebuild confidence with all parties," said Shawn Klerer, Chief Executive Officer.

As noted in the press release dated June 22, 2015, the Company is presently undertaking a proposed non-brokered financing to raise gross proceeds of a minimum of $2.5 million and a maximum of $8.0 million (the "Offering") to be completed in two stages. Under the proposed terms of the Offering, the Corporation will issue up to 800,000 units (the "Units") at a price of C$10.00 per Unit for gross proceeds of C$8,000,000. Terms of the Offering are more fully described in the June 22, 2015 press release.

The net proceeds of the Offering will be used solely to fund the Company's working capital requirements during the period of forbearance under the Company's agreement with the Senior Lender. No portion of the net proceeds of the Offering will be used to repay any outstanding indebtedness (consisting of loans, credit facilities and debentures) of the Company, including amounts owing to the Senior Lender.

To date, the Company has obtained firm orders for the Offering totaling $2.8 million, of which $2.0 million is slated to close in the first stage, which is now expected to occur, on or about June 30, 2015. The remaining $0.8 million of firm orders will close in the second stage, which is now expected to occur on or about July 6, 2015. The Company will continue to work to obtain additional firm orders for the second closing. Insiders, including directors, officers, management and employees, together with family and friends have already committed $1.6 million to the Offering.

This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any of the securities in the United States. 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 may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

About Loyalist

Loyalist owns and operates private English as a Second Language (ESL) Schools, Career Colleges and Community Colleges in Toronto, Vancouver, Victoria and Halifax.

Forward-Looking Information and Statements

This news release includes certain forward-looking information and statements within the meaning of Canadian securities laws. Such forward-looking information and statements are not representative of historical facts or information or current condition, but instead represent only the Company's beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company's control. Generally, such forward-looking information or statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken, "will continue", "will occur" or "will be achieved". The forward-looking information contained herein includes information concerning the Offering and the proposed completion thereof and the entering into by the Company of the forbearance agreement with the Senior Lender. By identifying such information and statements in this manner, the Company is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such information and statements.

Any number of important factors could cause actual results to differ materially from these forward-looking statements as well as future results including, but not limited to, risks relating to: the Company's ability to service its outstanding indebtedness and the impact of that indebtedness on the Company's ability to raise additional capital, fund and maintain operations or meet business objectives; the Company's ability to comply with the terms of the forbearance agreement with the Senior Lender and the consequences of any breach or default thereunder; the ability of the Company to complete the Offering on terms acceptable to the Company or at all; the fact that new management of the Company, including the recently appointed Chief Executive Officer and Chief Financial Officer, have had limited experience with the Company and its operations and have not had sufficient time to fully analyze all facets of the Company's business; the impact of negative or unfavourable rumours in the marketplace on the Company's brands and student enrollment; any of the Company's announced or proposed acquisitions failing to close or becoming delayed before closing; carrying on business and activities in international jurisdiction where Canadian laws do not apply; any loss of certain key personnel; levels of student enrolment; delays in rolling out online education programs; delays to the completion of any planned initiatives or the inability to complete those initiatives; competition in the educational services market; and currency fluctuations. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information and statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. Accordingly, readers should not place undue reliance on any forward-looking information or statements contained in this press release.

The forward-looking information contained in this press release is made as of the date hereof, and the Company does not undertake to update any forward-looking information that is contained or referenced herein, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws. All subsequent written and oral forward looking information and statements attributable to the Company or persons acting on its behalf is expressly qualified in its entirety by this notice.

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

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