TORONTO, April 5, 2012 /CNW/ - TriNorth Capital Inc. ("Trinorth" or the "Company") (TSXV: TRT) is pleased to announce that on April 5, 2012, it entered
into a binding letter of intent (the "LOI") with Difference Capital Inc. ("Difference") relating to a proposed investment by Difference in the Company that
will entitle Difference to a 49.9% stake in the Company (the "Difference Transaction") for approximately $4.52 million.
Subject to applicable shareholder and regulatory approval, the Company
intends to consolidate its outstanding shares on the basis of 10 (old)
for 1 (new) shares, or such other ratio as may be determined by the
board of directors of the Company (the "Consolidation"). The Difference Transaction will be completed concurrent with, or
immediately following, the Consolidation becoming effective, and the
price per share will be $0.30 per share, excluding the Feronia shares
assuming the proposed Consolidation is done on a 10 (old) for 1 (new)
share basis.
Wes Hall, TriNorth's chairman, said: "We're delighted with this
transaction. Our board has examined various proposals, and we believe
that Difference has offered a solution that provides the greatest
future potential for our shareholders."
Pursuant to the LOI, the parties have agreed that Difference shall have
the right to designate two members to the board of directors of the
Company following completion of, or concurrent with, the closing of the
Difference Transaction. In addition, following completion of the
Difference Transaction, Difference has committed to assist the Company
to raise at least an additional $20 million in a follow on financing,
of which it will commit to purchase 49.9%, and will assist the Company,
on a best efforts basis, to raise $100 million in total. The specific
terms of this follow on financing will be determined and announced at a
later date. Existing shareholders will have the opportunity to
participate.
In addition, the parties have agreed that, subject to shareholder and
regulatory approval, concurrent with the completion of the Difference
Transaction, the Company will change its name to "Difference Capital
Funding Inc." (the "Name Change"). Difference intends for the Company to become a premiere technology
merchant bank.
As stated in its press release dated February 28, 2012, subject to
obtaining shareholder approval and regulatory approval, the Company
also intends to deliver the shares of Feronia Inc. ("Feronia") (TSXV: FRN) owned by the Company to the shareholders of the Company
as a payment on the reduction of the stated capital of Trinorth common
shares (the "Distribution"). The Company currently owns approximately 16 million Feronia shares.
The record date for the Feronia distribution is May 11, 2012.
The Company will seek shareholder approval of the Difference
Transaction, the Consolidation, the Name Change and the Distribution at
the annual and special meeting of shareholders to be held on May 14,
2012, or at a date to be determined by the board of directors, or any
adjournment thereof. An information circular providing further details
of the matters referred to herein will be mailed to shareholders of the
Company prior to the meeting in accordance with applicable securities
laws.
As a result of this transaction, TriNorth's previously announced
transaction with Mr. Roger Dent has been terminated by mutual and
amicable agreement.
About Difference Capital Inc.
Difference is a Toronto-based financial services firm founded by Michael
Wekerle, Paul Sparkes and Henry Kneis and specializing in alternative
investments. Difference's interests include hedge funds, private
equity and U.S. real estate.
Cautionary Notes
This press release contains forward-looking statements regarding future
growth, results of operations, performance, business prospects and
opportunities involving the Company. Words such as "expects",
"anticipates", "intends", "plans", "believes", "estimates", or similar
expressions, are forward-looking statements within the meaning of
securities laws. Forward-looking statements include, without
limitation, the information concerning possible or assumed future
results of operations of the Company. These statements are not
historical facts but instead represent only management's and the
board's expectations, estimates and projections regarding future
events. These statements are not guarantees of future performance and
involve known and unknown risks, assumptions, uncertainties, and other
factors that may cause actual results or events to differ materially
from what is expressed, implied or forecasted in such forward-looking
statements. In addition to the factors the Company currently believes
to be material such as, but not limited to, successful completion of
the Difference Transaction and the ability of the Company to achieve
the objectives contemplated thereby, its dependence on the efforts of
management, risks associated with fluctuations in net asset value and
valuation of the Company's portfolio, its ability to operate on a
profitable basis, changes in interest rates, evaluation of its
provision for income and related taxes, and other factors, such as
general, economic and business conditions and opportunities available
to or pursued by the Company, not currently viewed as material could
cause actual results to differ materially from those described in the
forward-looking statements. Although the Company has attempted to
identify important risks and factors that could cause actual actions,
events or results to differ materially from those described in
forward-looking statements, there may be other factors and risks that
cause actions, events or results not to be anticipated, estimated or
intended. Accordingly, shareholders should not place any undue reliance
on forward-looking statements as such information may not be
appropriate for other purposes. The Company does not undertake any
obligation to update or release any revisions to these forward-looking
statements to reflect events or circumstances after the date of this
press release except as required by applicable law.
Acceptance and completion of the Difference Transaction is subject to
the satisfaction of a number of conditions, including but not limited
to, TSX Venture Exchange acceptance and approval by shareholders.
Acceptance and implementation of the Consolidation, the Name Change and
the Distribution are also subject to the satisfaction of a number of
conditions, including but not limited to, approval by shareholders.
There can be no assurance that the Financing or any of the other
related transactions described herein will be completed as proposed or
at all.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
has in any way passed upon the merits of the proposed transactions and
neither of the foregoing entities has approved or disapproved of the
contents of this press release.