Newton Energy Corporation
TSX VENTURE : NTN

August 29, 2007 15:11 ET

Newton Energy Corporation Announces Completion of Reverse Take-Over, Financing Update and Second Quarter Results

CALGARY, ALBERTA--(Marketwire - Aug. 29, 2007) - Newton Energy Corporation (TSX VENTURE:NTN) (formerly NX Capital Corp.) (the "Company" or "NEC") is pleased to announce that it has completed its previously announced reverse take-over (the "Transaction") of Newton Energy Inc. ("Newton") whereby NEC has acquired all of the issued and outstanding shares of Newton and changed its business to an oil and gas exploration, development and production company. As part of the Transaction NEC has also consolidated all of its issued and outstanding shares on a twenty for one basis and changed its name to "Newton Energy Corporation".

As part of the Transaction, NEC also announces that its previously announced Private Placement has been amended and it is proceeding with a private placement of subscription receipts ("Subscription Receipts") of the Company. NEC has entered into an engagement agreement with Wolverton Securities Ltd. (the "Agent") in connection with a financing (the "Financing") to raise a minimum of $2,000,000 and up to a maximum of $5,000,000 through the issuance of a minimum of 4,000,000 Subscription Receipts and up to a maximum of 10,000,000 Subscription Receipts at a price of $0.50 per Subscription Receipt. Each Subscription Receipt will be deemed to be exchanged, without payment of any additional consideration, for one consolidated common share of the Company ("Common Share"), with 15% of each subscriber's Subscription Receipts issuable upon the first closing of the Financing and 85% issuable upon the Second Release Date (as defined herein) of the Financing.

An escrow agent will hold 85% of the net proceeds raised pursuant to the Financing in trust, with 15% of the proceeds, net of commissions and expenses, released to the Company on the first closing of the Financing with the remaining 85% of the Financing held in trust with the escrow agent, not to be released to the Company until the Company is awarded by the UK Department of Trade and Industry ("DTI") not less than 65,000 acres of exploration licenses in the 13th Round of Onshore Licensing within the United Kingdom (the "Licenses") (the "Second Release Date"). In the event that the Company is not awarded the Licenses within one year from the First Release Date, or upon receiving written instructions from the Agent and the Company, the escrow agent shall return 85% of the aggregate subscription price to the Agent without interest or deduction in exchange for the outstanding Subscription Receipts, with any interest earned to be paid to the Company.

The Agent will be paid a corporate finance fee of $12,500 (plus GST) and a cash commission of up to 7% of the gross proceeds of the Financing. In addition, the Agent will be granted an Agent's Option (the "Agent's Option") on the First Release Date to purchase that number of Common Shares equal to 10% of the number of Subscription Receipts subscribed for under the Financing issued under the same terms of the Financing. The Agent's Option will be exercisable for a period of two (2) years from the First Release Date. The Subscription Receipts will be subject to a four month hold period in the selling jurisdictions commencing on the closing date in accordance with applicable securities Laws. Closing of the Financing is subject to regulatory and stock exchange approval and is expected to occur on or about September 7, 2007.

Following the completion of the Transaction NEC has cash and no oil and gas assets, and will therefore not meet the minimum listing requirements of the TSX Venture Exchange (the "Exchange"). NEC must acquire oil and gas assets which meet the minimum listing requirements of the Exchange and complete the Financing before its common shares will be reinstated for trading. A further press release or filing statement will be issued when the Company acquires Licences that meet minimum listing requirements.

The Company is also pleased to announce its financial results for the six month period ended June 30, 2007. For complete disclosure of NEC's June 30, 2007 second quarter financial results and Management Discussion and Analysis, please go to www.SEDAR.com and view documents listed under Newton Energy Corporation.

ADVISORY:

Investors are cautioned that, except as disclosed in the management information circular dated May 2, 2007 prepared in connection with the Transaction and the Public Record, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of NEC should be considered highly speculative and exchange trading in the securities will remain halted until the Transaction has been completed and all approvals obtained.

Certain information regarding Newton Energy Corporation including managements assessment of future plans and operations, may constitute forward-looking statements under applicable securities laws and necessarily involve risks associated with production, marketing and transportation such as loss of market, volatility of prices, currency fluctuations, environment risks, competition from other producers and ability to assess sufficient capital from those anticipated in the forward-looking statements.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Newton Energy Corporation
    Michael Frey
    President and CEO
    (403) 514-9900
    or
    Newton Energy Corporation
    Suite 107, 6227 - 2nd Avenue S.E.
    Calgary, Alberta T2H 1J5
    Email: newtonenergy@shaw.ca