Loyalist Group Limited

Loyalist Group Limited

July 10, 2015 06:00 ET

Loyalist Announces Second Stage Closing of Non-Brokered Private Placement

TORONTO, ONTARIO--(Marketwired - July 10, 2015) -


Loyalist Group Limited ("Loyalist" or the "Company") (TSX VENTURE:LOY) announces that the Company has completed the second stage closing of its non-brokered private placement (the "Offering") for approximately $1 million, bringing the total amount raised to date under the Offering to approximately $3.1 million. The company expects to complete one or more additional tranches of the Offering over the next several weeks for total proceeds of up to $8 million inclusive of proceeds raised to date.

Under the second tranche of the Offering, the Company issued 91,910 units, with each unit consisting of one first preferred share, Series A (each, a "Preferred Share") and 83.33 common share purchase warrants (each, a "Warrant"), for a total of 7,658,860 Warrants. Each whole Warrant will entitle the holder to acquire one common share of the Company at a price of $0.12 per share for a period of 24 months following the closing of this tranche of the Offering. If at any time following July 3, 2016 the closing price (or the average of the 'bid' and the 'ask', if not traded) of the common shares of the Company exceeds $0.25 per share for a period of 20 consecutive trading days, the Company may in its sole discretion elect to accelerate the expiry of the Warrants issued under this tranche of the Offering to the date that is 20 trading days after the date of issuance of a news release announcing the new expiry date.

Pursuant to applicable Canadian securities laws, the Preferred Shares and Warrants (and the common shares issuable upon exercise of the Warrants) will be subject to a hold period until November 10, 2015.

Certain directors, officers and insiders subscribed for an aggregate of 13,090 units under this tranche of the Offering. The participation of these parties in the Offering constitutes a "related party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") and the policies of the TSX Venture Exchange ("TSXV"). The Company is relying upon the exemptions from the formal valuation and minority shareholder approval requirements pursuant to sections 5.5(b) and 5.7(1)(a), respectively, of MI 61-101 on the basis that the Company is not listed on a specified stock exchange and, at the time the Offering was agreed to, neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction insofar as it involves interested parties (within the meaning of MI 61-101) in the Offering, exceeds 25% of the Company's market capitalization calculated in accordance with MI 61-101.

The Company was not in a position to file a material change report more than twenty one days in advance of the closing of this tranche of the Offering as the details of participation of the interested parties were not known at such time.

In connection with all tranches of the Offering completed to date, the Company paid certain arm's length finders an aggregate cash commission of approximately $72,000.

The Offering is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the final approval of the TSXV.

The Company also announces that it has entered into separate debt conversion agreements with a former independent director of the Company and the Company's corporate counsel to issue an aggregate of 6,589 units in settlement of approximately $65,895 in aggregate indebtedness owing by the Company to such parties. The settlement of the outstanding indebtedness is subject to all applicable regulatory approvals, including the approval of the TSXV.

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 information concerning changes to the management and board of the Company. 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 Bank of Montreal 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 to achieve the maximum gross proceeds sought under the Offering; the Company's ability to complete any proposed recapitalization or restructuring activities 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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