Loyalist Group Limited
TSX VENTURE : LOY.H

December 31, 2010 09:00 ET

Loyalist Group Limited Announces Receipt of TSX Venture Final Approval for Its Private Placement and Acquisition of McKinsey International College the Language School Inc.

TORONTO, ONTARIO--(Marketwire - Dec. 31, 2010) - Loyalist Group Limited (TSX VENTURE:LOY.H) ("Loyalist" or the "Corporation") is pleased to announce that it has received final TSX Venture approval and therefore has completed its acquisition of 96% of the issued and outstanding shares in the capital of McKinsey International College The Language School Inc. ("McKinsey") originally announced by press releases dated October 27, November 2 and December 1, 2010 (the "Acquisition"). As such, McKinsey is now a subsidiary of the Corporation. The common shares of the Corporation will commence trading through the facilities of the TSX Venture Exchange on January 4, 2011 under the symbol "LOY".

In connection with the Acquisition, the Corporation completed a private placement financing (the "Financing") raising aggregate gross proceeds of $323,687. The details of the Financing are more fully described below.

Upon completion of the Financing and the Acquisition, the Corporation now has the following securities issued and outstanding, as more fully detailed below:

Shares issued and outstanding: 42,035,210
Warrants issued and outstanding: 2,157,917
Fully Diluted: 44,193,127

For full disclosure regarding the Acquisition and the businesses of McKinsey, please refer to the Corporation's filing statement (the "Filing Statement") dated November 29, 2010, a copy of which can be accessed through the Corporation's profile on SEDAR (www.sedar.com).

The Acquisition

Pursuant to the terms of a share exchange agreement dated October 25, 2010 (the "Share Exchange Agreement"), the Corporation agreed to acquire up to all of the issued and outstanding securities in the capital of McKinsey in exchange for common shares in the capital of the Corporation. An aggregate of 21,797,102 common shares in the capital of the Corporation were issued to the McKinsey shareholders in exchange for 15,040,000 common shares in the capital of McKinsey.

The Corporation obtained shareholder approval for the acquisition of McKinsey from shareholders holding in aggregate 12,393,163 common shares, or approximately 68.54% of the issued and outstanding common shares of the Corporation, by way of written consent.

In accordance with the policies of the TSX Venture Exchange, a total of 19,473,768 common shares are subject to Tier 2 surplus escrow agreement, 9,115,441 common shares are subject to Tier 1 value escrow agreement and 2,333,333 common shares are subject to Tier 2 value escrow agreement (collectively, the "Escrow Agreements"). The Escrow Agreements provide for staged releases over a period of three (3) years.

As further disclosed in the Filing Statement, in conjunction with the closing of the Acquisition, the following individuals have been appointed as the directors and officers of Corporation:

Name Position(s)
Andrew Ryu Chief Executive Officer and Director
Kenneth MacQueen President
Nancy Lee Chief Financial Officer
Michael Newman Director
James Coons Director
Raizul Huda Director

The Financing

Concurrently with the closing of the Acquisition, Corporation completed the Financing raising aggregate gross proceeds of $323,687 at a price of $0.15 per unit (the "Unit"). An aggregate of 2,157,917 Units were issued pursuant to the Financing. Each Unit is comprised of one common share and one common share purchase warrant (the "Warrant"). Each Warrant, which expires on December 20, 2012, entitles the holder thereof to acquire one common share at a price of $0.225 per common share. The common shares and Warrants are subject to a statutory four (4) month hold period expiring April 21, 2011.

In connection with the financing, the Corporation paid an arm's length party a finders fee of $800 and issued 5,333 warrants ("Finder Warrants"). Each Finder Warrant entitles the holder thereof to acquire one Unit at an exercise price of $0.15 for a period of two years from date of issuance.

About McKinsey

McKinsey is a private company that was incorporated on February 22, 2002 pursuant to the Business Corporations Act (Ontario). McKinsey is in the business of private education and provides educational services with an emphasis on teaching: (i) English as a second language; and (ii) professional development courses. McKinsey is run by experienced professionals in the private and public education field and is significantly involved in the recruitment and education of foreign students in Toronto. 

About Loyalist

Loyalist was incorporated pursuant to the Business Corporations Act (Alberta) on September 20, 1996. Loyalist completed its initial public offering by way of prospectus in April 1997 and commenced trading on the TSX-V in June 1997. Loyalist's common shares currently trade on the TSXV-NEX, with the trading symbol LOY.H.

Loyalist acquired an insurance brokerage and a provincially licensed property and casualty insurer in November 1997. Loyalist subsequently completed various acquisitions of insurance brokerages. In the first quarter of 2008 Loyalist sold its insurance operations; thereafter, Loyalist's principal business became identification, evaluation and the acquisition of an interest in assets or businesses.

This press release contains forward-looking statements based on assumptions, uncertainties and management's best estimates of future events. Actual results may differ materially from those currently anticipated. Investors are cautioned that such forward-looking statements involve risks and uncertainties. Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements are detailed from time to time in Loyalist Group Limited's periodic reports filed with the Ontario Securities Commission and other regulatory authorities. Loyalist Group Limited has no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 

Neither 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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