Yonge Street Capital Corp.

December 18, 2006 17:23 ET

Yonge Street Capital Corp. Corporate Update

TORONTO, ONTARIO--(CCNMatthews - Dec. 18, 2006) - Yonge Street Capital Corp. ("Yonge Street") (TSX VENTURE:YSC.P), a capital pool company, announces an update on its negotiations to enter into an agreement (the "Agreement") to complete an arm's length qualifying transaction (the "Qualifying Transaction") with Hempline Inc. (operating as "Stemergy"), in accordance with the policies of the TSX Venture Exchange (the "Exchange").

As disclosed in its March 27, 2006 prospectus, Yonge Street identified Stemergy as a potential Qualifying Transaction. Since completing its initial public offering on August 18, 2006, Yonge Street has had extensive negotiations with Stemergy on the possible terms of a Qualifying Transaction. Stemergy has advised Yonge Street that Stemergy's attentions are now being devoted solely to internal matters to Stemergy, and until it has satisfactorily addressed those matters Stemergy is not in a position to plan or make commitments into the future. As a result, merger talks between Yonge Street and Stemergy have been suspended. If Stemergy's internal matters are successfully concluded within a reasonable time, Yonge Street is prepared to resume merger discussions with Stemergy.

Yonge Street is a corporation existing under the provisions of the Canada Business Corporations Act and is a reporting issuer in the provinces of Ontario, Manitoba, Alberta and British Columbia. Yonge Street currently has 3,028,750 issued common shares. In addition, there are outstanding 302,875 stock options exercisable at $0.20 per share that have been granted to Yonge Street's directors and officers, and an agent's option to purchase 102,875 common shares at an exercise price of $0.20 per share granted to the agents on Yonge Street's initial public offering.

Investors are cautioned that trading in the securities of a capital pool company should be considered highly speculative.

Further information concerning Yonge Street can be found in the prospectus of Yonge Street dated March 27, 2006 and at www.sedar.com.

The TSX Venture Exchange has not approved or disapproved the contents of this news release.

Contact Information

  • Yonge Street Capital Corp.
    Gerald Ruth
    President, CEO and Director
    (416) 899-3304