Rare Earth Industries Ltd.
TSX VENTURE : RND

Rare Earth Industries Ltd.

August 07, 2012 20:57 ET

Rare Earth Announces Closing of Ackroo Offering

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 7, 2012) - Rare Earth Industries Ltd. (the "Company" or "RND") (TSX VENTURE:RND) announced today that in connection with the Company's previously announced proposed acquisition (the "Acquisition") of MoneyBar Rewards Inc., operating as Ackroo ("Ackroo"), Ackroo completed a private placement, co-led by Paradigm Capital and M Partners (the "Agents"), for aggregate proceeds of $3.5 Million (the "Offering"). The private placement combined with the Company's funds will provide Ackroo $6.1 Million in working capital that it will use to accelerate its growth and market share in North America.

The Offering involved the sale by Ackroo of 7,841,467 subscription receipts at $0.45 per subscription receipt. Immediately prior to the closing of the proposed Acquisition, subject to the satisfaction of certain conditions, each subscription receipt will be automatically converted, without further payment, into two common shares of Ackroo and two common share purchase warrants of Ackroo. On closing of the Acquisition, such shares and warrants will be exchanged into 7,841,467 common shares and an equal number of warrants of the Company on the basis of one Company share for each two Ackroo shares and one Company warrant for each two Ackroo warrants. As a result, each subscription receipt will ultimately entitle the holder thereof to receive one common share of the Company and one warrant of the Company. Each Company warrant issued will entitle the holder to acquire one common share of the Company at an exercise price of $0.70 per share, until the date that is thirty six months following listing of the Company's shares on the TSX Venture Exchange ("TSXV") following closing of the Acquisition (the "Listing"), subject to adjustment in certain events.

The proceeds from the Offering less the expenses of agents incurred in connection with the Offering are being held in escrow, pending satisfaction of certain release conditions, including closing of the Acquisition. The escrowed proceeds are required to be returned to subscribers if the release conditions are not satisfied by 5:00 p.m. (Eastern) on September 28, 2012.

Upon release from escrow, the proceeds raised through the Offering will be used to satisfy the Company's financial obligations and for general working capital purposes on a post-Acquisition basis.

In connection with the Offering, the Agents and other finders are entitled to receive cash commissions in the amount of $275,052 and have been issued an aggregate of 611,228 agent's options by Ackroo that, assuming completion of the Acquisition, will be exchanged for an aggregate of 611,228 Company agent options. Each such Company agent option shall entitle the holder to acquire one Company common share and one Company warrant at a price of $0.45 until the date that is two years following the date of Listing. Each such Company warrant will be exercisable to purchase one Company common share at a price of $0.70 per share until the date that is thirty six months from the date of Listing, subject to adjustment in certain events. The agents' commission has been deposited in escrow on closing of the Offering and will be released to the agents upon closing of the Acquisition.

The closing of the Offering was one of the material pre-conditions for the Company and Ackroo to move forward with the Acquisition. The Transaction remains subject to regulatory approval, including the approval of the TSXV and other closing conditions.

Trading in the common shares of the Company is halted at present. It is unlikely that trading will resume until the Acquisition is completed and approved by the TSXV. Further details about the proposed Acquisition and the combined entity will be provided in the filing statement to be prepared and filed by the Company in accordance with the policies of the TSXV.

The Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release.

ABOUT RARE EARTH INDUSTRIES LTD.:

Rare Earth Industries Ltd. is a mineral exploration company focused on rare earth elements and rare metals. Following completion of its 2011 exploration program, the Company made a decision to curtail exploration activities in order to preserve cash and position the Company to assess other strategic opportunities both within and outside of the rare‐earths sector. The Company has a strong balance sheet and continues to investigate market opportunities that will allow it to further enhance shareholder value.

ABOUT ACKROO:

Ackroo enables small to medium sized businesses, independent merchants and business networks to increase profitability and build long-term customer relationships through customized loyalty and rewards programs. Their web-based solutions provide the power of a massively scalable software platform in a lightweight online tool that works with existing point-of-sale equipment, making it easy and affordable for businesses of any size to design and launch their own five-star loyalty program. Ackroo's online and in-store loyalty program options provide a blend of stored value capabilities and diverse loyalty incentives, arming businesses with their own 'private currency' and the flexibility to create customized loyalty programs that resonate with their customers. Ackroo is headquartered in Ottawa, Canada. For more information, visit: www.ackroo.com.

This news release may include forwardlooking statements that are subject to risks and uncertainties. All statements within, other than statements of historical fact, are to be considered forward looking. Although the Company believes the expectations expressed in such forwardlooking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forwardlooking statements. Factors that could cause actual results to differ materially from those in forwardlooking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. There can be no assurances that such statements will prove accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties. We do not assume any obligation to update any forwardlooking statements except as required under the applicable laws.

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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