(NOT FOR DISTRIBUTION TO THE UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES)
Thoroughbred Capital Inc. ("Thoroughbred" or the "Corporation") (TSX
VENTURE:TBC.P), a Capital Pool Company ("CPC"), is pleased to provide further
particulars regarding its previously announced proposed qualifying transaction
with Sunora Foods Ltd. ("Sunora"), a private company based in Calgary, Alberta
(the "Proposed Transaction"). Sunora carries on the business of trading high
quality retail, food service and bulk food oils.
The parties intend to change the Corporation's name to Sunora Foods Inc. and
file articles of continuance under the Business Corporations Act (Alberta)
following completion of the Proposed Transaction.
The stock symbol "SNF" has been reserved with the TSX Venture Exchange (the
"Exchange") for Thoroughbred as it will exist upon completion of the Proposed
Transaction (the "Resulting Issuer").
Details of the Proposed Qualifying Transaction
On April 9, 2013, Thoroughbred entered into an arm's length Agreement in
Principle with Sunora pursuant to which Thoroughbred intends to acquire all of
the issued and outstanding shares of Sunora (the "Sunora Shares"). Pursuant to
the Proposed Transaction, Thoroughbred intends to (i) acquire all of the issued
and outstanding Sunora Shares by way of a securities exchange of 30,000,000
common shares of Thoroughbred (the "Thoroughbred Shares") at a deemed price of
$0.167 per share or $5,010,000 in the aggregate and (ii) complete a financing by
way of a brokered private placement (the "Brokered Private Placement") and a
non-brokered private placement (the "Non-Brokered Private Placement") for total
aggregate proceeds of not less than $600,000 and not more than $1,100,000 (the
"Financing"). The Proposed Transaction is expected to constitute Thoroughbred's
Qualifying Transaction as defined in Policy 2.4 of the Exchange Corporate
Finance Manual (the "CPC Policy") and is subject to compliance with all
necessary regulatory approvals and certain other terms and conditions.
Pursuant to a securities exchange agreement currently under negotiation,
Thoroughbred will purchase all of the issued and outstanding Sunora Shares held
by the sole shareholder of Sunora (the "Sunora Shareholder") all on the exchange
basis described above. Based on the 10,000 Sunora Shares currently issued and
outstanding, the Sunora Shareholder will receive 3,000 Thoroughbred Shares for
each 1 Sunora Share. Steve Bank, the President and sole director of Sunora,
residing in Calgary, Alberta, holds 100% of the issued and outstanding Sunora
Shares.
The parties intend that the offer and sale of Thoroughbred Shares in the
Proposed Transaction shall be made in reliance on an exemption from the
registration and prospectus requirements pursuant to section 2.12 of National
Instrument 45-106 Prospectus and Registration Exemptions.
After completion of the Proposed Transaction and prior to the closing of the
Financing, there will be 36,000,000 Thoroughbred Shares issued and outstanding,
of which current shareholders of Thoroughbred will own 6,000,000 Thoroughbred
Shares (16.67%) and the former Sunora shareholder will own 30,000,000
Thoroughbred Shares (83.33%). Accordingly, the Proposed Transaction will
constitute a reverse asset acquisition of Thoroughbred for accounting purposes.
Together with the expected closing of the minimum Financing concurrently with
the Proposed Transaction, the outstanding share capital of Thoroughbred is
expected to consist of an aggregate of 40,000,000 Thoroughbred Shares issued and
outstanding, of which current shareholders of Thoroughbred will own 6,000,000
(15%), the former Sunora shareholder will own 30,000,000 (75%) and shareholders
pursuant to the minimum Financing will hold 4,000,000 Thoroughbred Shares (10%)
and 4,000,000 Warrants (as defined below).
Together with the expected closing of the maximum Financing concurrently with
the Proposed Transaction, the outstanding share capital of Thoroughbred is
expected to consist of an aggregate of 43,333,333 Thoroughbred Shares issued and
outstanding, of which current shareholders of Thoroughbred will own 6,000,000
(13.9%), the former Sunora shareholder will own 30,000,000 (69.2%) and
shareholders pursuant to the maximum Financing will hold 7,333,333 Thoroughbred
Shares (16.9%) and 7,333,333 Warrants (as defined below).
Following the Proposed Transaction, the Resulting Issuer will become a Tier 2
Issuer within the Industrial Industry Segment pursuant to Policy 2.1 Initial
Listing Requirements of the Manual.
About Sunora (www.sunora.com)
Sunora Foods Ltd., a private company with its head office at 4616 Valiant Dr.
NW, Suite 205, Calgary, Alberta, was incorporated under the laws of the Province
of Alberta on June 25, 1990.
Sunora is a Calgary-based trader and supplier of canola, soybean, olive and
other food oils. Currently, Sunora is a relatively small player participating in
an international business populated by some of the largest companies in the
world. It successfully occupies a niche position in the industry that has been
achieved by building strong relationships with its suppliers and customers
through a history of reliable and responsive service. While Sunora regularly
cooperates with many of these companies, it also occasionally competes with
companies that have far greater resources. Sunora has operated with a measure of
success for over twenty years and has weathered both economic upturns and
downturns by remaining true to its commitment to its industry, its customers and
long-term business vision. Sunora operates by receiving orders from its
customers in the food oil processing, retail and food services markets. Sunora
contracts with seed crushers where food oil seeds are crushed to produce food
oils including canola, soybean and corn oils. Sunora's sales operations are
conducted through its experienced sales agents located across North America,
South America, Africa, Asia, the Middle East, Eastern Russia, Australia and New
Zealand. Sunora prides itself on its quality food oil products and intends to
continue its global expansion as well as its position as a supplier of food oil
to the health food industry.
Sunora prides itself on its quality branded and private label products. It
intends to continue its global expansion and leverage its position as a
significant North American supplier to the health food trade. Management expects
that sales will increase from $15 million to approximately $19.5 million by
2015. Management believes this is achievable through continued expansion of
Sunora's packaged and bulk exports overseas, by growing bulk oil trading
generally and by extending its value chain by exploring strategic packaging,
crushing and refining opportunities.
Financial Information on Sunora
The following figures are based on audited annual financial statements as at
August 31, 2012, 2011 and 2010 and unaudited interim financial statements as at
May 31, 2013:
Sales, gross margin and EBITDA (Earnings Before Interest, Taxes, Depreciation
and Amortization) for the 12 months ended August 31, 2012 were $16,784,515,
$671,646 and $271,079 respectively and for the nine months ended May 31, 2013
were $11,714,902, $551,722, and $232,454 respectively.
At May 31, 2013, Sunora had total assets of $3,126,594, total current
liabilities of $1,020,037, and a shareholders' equity of $2,106,557.
The pro forma consolidated balance sheet of Sunora and Thoroughbred, reflecting
the acquisition as if it occurred at May 31, 2013 and assuming the Units
allotted pursuant to the minimum Financing are fully subscribed, would result in
cash on hand of approximately $1,927,739, current liabilities of no more than
$1,052,596, and shareholders' equity of approximately $2,768,970.
Auditor's Qualification - Financial Statements of Sunora
The auditors of Sunora, Deloitte LLP, were appointed during the 2013 year to
audit the financial statements of Sunora for the years ended August 31, 2012,
2011 and 2010. There were no qualifying statements made by the auditors in
respect of the financial statements of Sunora.
Board of Directors and Management Team of the Resulting Issuer
It is contemplated that after the closing of the Qualifying Transaction the
directors of the Resulting Issuer will consist of Steve Bank (Chairman of the
Board), Eric Dahlberg, Ronnie Rash, James Lawson, Daniel Hilton and Michael
Inskip. Senior management will consist of Steve Bank (Chief Executive Officer),
Catherine Mark (Toews) (Chief Financial Officer) and Lorraine Mastersmith
(Corporate Secretary). All of the directors and members of the senior management
will be Insiders of the Resulting Issuer as defined in CPC Policy 1.1.
Steve Bank - Proposed Chairman of the Board and proposed Chief Executive Officer
Calgary, Alberta
Steve Bank is currently the President and sole director of Sunora and will be
the Chief Executive Officer and Chairman of the Board of the Resulting Issuer.
Sunora was founded by Mr. Bank in 1990. Mr. Bank has held a variety of senior
positions in the food industry commencing in 1968 as Executive Vice President
responsible for marketing in catalogue operations and finance followed by four
years as Vice President of Marketing at a subsidiary of the Quaker Oats
Corporation. Mr. Bank was also a partner in Britl Bread Bakeries and Director of
U.S. Marketing for Vivant Beverage Company.
Catherine Mark (Toews) - Proposed Chief Financial Officer
Calgary, Alberta
Catherine Mark has over twenty years of experience in the financial services
industry. Ms. Mark is a Certified General Accountant and is currently the
President of Valiant Financial Services Inc. Ms. Mark was previously Vice
President of Finance for Bronco Drilling Services Ltd. and an investment manager
with Alberta Futurevest Corporation.
Eric C. Dahlberg - Proposed Director
Calgary, Alberta
Eric Dahlberg has over forty years experience in the petroleum industry as a
geologist and teacher. Mr. Dahlberg is currently a Geologist and President of
Saskatchewan Oil Ventures Ltd. and Consulting Geologist and President of ECD
Geological Specialists, positions that he has held since 1977 and 1979
respectively. Mr. Dahlberg holds a Ph.D. from Penn State University in Geology,
Geochemistry and Statistics in addition to a Masters of Science and a Bachelor
of Arts. Mr. Dahlberg is also the author of numerous articles, five manuals, two
books and over two dozen reports on various subjects related to the petroleum
industry. He has developed and taught over four hundred short courses and
presented to an excess of six thousand students. Of particular interest is Mr.
Dahlberg's knowledge and networks gained during his teaching career of such
diverse countries as China, Australia, Great Britain, Israel, Indonesia,
Malaysia, Norway and Thailand to name a few.
Ronnie Rash - Proposed Director
Henderson, Nevada
Mr. Rush has been involved in the food service industry for over 42 years. In
March 2008 Mr. Rush became an owner and full equity partner of Organic Foods
International LLC where he continues to provide consulting services to Branded
companies and secures new business for many vendors. He began his career in 1971
with the Maxwell House Division of General Foods operating in sales management
and marketing services. Mr. Rush's ascendancy in the industry is highlighted by
progressively senior positions including Vice President of Sales & Marketing,
Chief Operating Officer and President of various companies. At each stage of his
career, Ron increased the sales and market position of the companies he worked
for. Ron Rush holds a Bachelor of Science degree and continues his education in
areas of negotiation, plant management, consumer promotions, finance &
accounting.
James E. Lawson - Proposed Director
Calgary, Alberta
Over his business and professional career of 42 years, James Lawson served as a
chief financial officer or a director of a number of public and private
companies. His areas of focus have included corporate finance, business advice
in accounting, taxation and reporting issues. In the mid 1990s he was a founder
and the first CFO of WestJet Airlines Ltd. listed on the TSX in 1999. He has
served as a Chief Financial Officer and Director of Jubliee Resources Inc. and
Canscot Resources Ltd., both companies listed on the Exchange until sold in
2003. In addition, he was a director of Tusk Energy Inc. until it became a trust
in November 2004. He was a director of TUSK Energy Corporation serving as the
Audit Committee Chairman on the TSX until sold in 2009. Several years ago he was
the CEO and CFO of Canoel International Energy Ltd. until it completed its
"Qualifying Transaction." He is a shareholder, director and CFO of Essentialtalk
Network Incorporated and Ice Health Systems Inc. both private technology
development companies specializing in software for the medical and dental
fields.
Michael Inskip - Proposed Director
Ottawa, Ontario
Michael Inskip is currently a director and the President and CEO of
Thoroughbred. He has served on the board of directors of LeoNovus Inc. since
2008. He has experience in leading global sales, all aspects of marketing,
business development and business operations for both public and early stage
private companies. For the period May, 2005 to May, 2008. Mr. Inskip was
Director Sales, Marketing and Business Operations for Enablence Technologies
Inc. a publicly traded entity on the Exchange. Between 2001 and 2005, Mr. Inskip
held senior sales and marketing positions with privately held start-up
technology companies. Mr. Inskip was also responsible for marketing for Iridian
Spectral Technologies, which was later acquired by JDS Uniphase, during the
period December 1998 to June 2001. Mr. Inskip has a Bachelor of Arts (Law) from
Carleton University, an International Business Diploma from Algonquin College
and an International Trade Diploma from the Forum for International Trade
Training Program (FITT). Mr. Inskip has an Executive Certificate in Management
and Leadership from the MIT Sloan School of Management, and he has completed the
Executive Program in Venture Capital at UC Berkeley. Mr. Inskip has lived and
worked in Beijing, China and Silicon Valley, USA and is currently an advisor to
early stage companies.
Daniel Hilton - Proposed Director
Ottawa, Ontario
Daniel Hilton is currently a director and the CFO of Thoroughbred. He is a
Chartered Accountant with a broad range of experience in strategic planning and
leadership of finance and operations. He has served on the board of directors of
LeoNovus Inc. since 2008. Hilton is currently Executive Director of the
Conservative Party of Canada. He was previously the Director of Finance and
Administration, Research and Development for World Heart Corporation and a
co-founder and CFO of Kids Futures Ltd., a national loyalty program which in
December of 2005 became a publicly traded entity on the Exchange. Mr. Hilton was
formerly the Vice-President Finance and Technology and Senior Vice-President,
Corporate Development & Administration of Enablence Technologies Inc., a
publicly traded entity on the Exchange. Mr. Hilton earned his B.COMM from the
University of Ottawa, and earned his professional designation with the firm
Deloitte & Touche LLP. Mr. Hilton holds graduate business degrees with both
Queen's University and Cornell University.
Lorraine Mastersmith - Proposed Corporate Secretary
Ottawa, Ontario
Lorraine Mastersmith is a Partner in the Business Law Group at Perley-Robertson,
Hill & McDougall LLP. Her practice focuses on advising her clients with respect
to expanding into international markets, accessing public markets and financing
their ventures with banks, private lenders and all forms of equity investors.
Prior to joining Perley-Robertson, Hill & McDougall LLP, Ms. Mastersmith was
in-house general counsel to two significant multi-national Ottawa technology
companies. She has advised and supported senior executives and directors of
public and private companies on a wide range of legal matters in Canada and
abroad.
Sponsorship and Proposed Private Placement
Sponsorship of a qualifying transaction of a CPC is required by the Exchange
unless exempt in accordance with the Exchange's policies. Thoroughbred intends
to apply for exemption from Sponsorship pursuant to section 3.4 (a) (ii) of CPC
Policy 2.2 on the basis of the Brokered Private Placement of $600,000 in
connection with the Proposed Transaction. However, no assurance can be given
that Thoroughbred will obtain this exemption.
In conjunction with the Proposed Transaction, Thoroughbred intends to raise
capital through the Financing for aggregate total proceeds of a minimum of
$600,000 and a maximum of $1,100,000 by way of a Brokered Private Placement and
a Non-Brokered Private Placement.
The Brokered Private Placement shall consist of the issuance of 4,000,000 units
of Thoroughbred (the "Units") at a price of fifteen cents ($0.15) per Unit for
aggregate gross proceeds of $600,000. Each Unit is comprised of one (1)
Thoroughbred Share and one (1) warrant to purchase one (1) Thoroughbred Share
(the "Warrant"). Each Warrant will entitle the holder to purchase one (1)
Thoroughbred Share at a price of twenty-five cents ($0.25) per Thoroughbred
Share for a period of twenty-four (24) months from the closing date of the
Brokered Private Placement.
Thoroughbred has retained the services of Fin-XO Securities Inc. to act as the
agent to assist it to complete the Brokered Private Placement on a commercially
reasonable efforts basis (the "Agent"). The Agent will be paid a corporate
finance fee of $20,000 plus applicable taxes in addition to a cash commission of
seven and one half percent (7.5%) of gross proceeds of the Units sold by the
Agent pursuant to the Brokered Private Placement (the "Agent's Commission") and
will be granted an option to purchase Thoroughbred Shares in an amount equal to
seven and one half percent (7.5%) of the Units sold by the Agent pursuant to the
Brokered Private Placement (the "Agent's Option"). The Agent's Option will have
a term of twenty-four (24) months and will be exercisable at $0.15 per
Thoroughbred Share.
The Non-Brokered Private Placement shall consist of the issuance of a maximum of
3,333,333 Units of Thoroughbred at a price of fifteen cents ($0.15) per Unit for
aggregate gross proceeds of not more than $500,000. Each Unit is comprised of
one (1) Thoroughbred Share and one (1) Warrant. Each Warrant will entitle the
holder to purchase one (1) Thoroughbred Share at a price of twenty-five cents
($0.25) per Thoroughbred Share for a period of twenty-four (24) months from the
closing date of the Non-Brokered Private Placement.
Thoroughbred has retained the services of a finder (the "Finder") to facilitate
the Non-Brokered Private Placement to investors in the People's Republic of
China. The Finder will be granted an option to purchase Thoroughbred Shares in
an amount equal to seven and one half percent (7.5%) of the Units issued in the
Non-Brokered Private Placement to subscribers identified through the efforts of
the Finder (the "Finder's Option"). The Finder's Option will have a term of
twenty-four (24) months and will be exercisable at $0.15 per Thoroughbred Share.
No Agent's Commission, Agent's Option or Finder's Option will be payable by the
Resulting Issuer on subscriptions in the Financing introduced directly by the
officers and directors of Thoroughbred or Sunora.
Stock Options and other matters
The parties expect that no amendments will be made to Thoroughbred's existing
stock option plan and that no options under this plan are intended to be issued
as part of the Proposed Transaction.
The Proposed Transaction will constitute an arm's length Qualifying Transaction,
as no party to the transaction is a "Control Person" (as defined in CPC Policy
1.1) of both Thoroughbred and Sunora. There is no requirement to obtain
shareholder approval of the Qualifying Transaction from the shareholders of
Thoroughbred, and no "Majority of the Minority" requirements are triggered under
CPC Policy 5.9. A filing statement to be prepared and filed on SEDAR in
conjunction with the Proposed Transaction will contain full particulars of the
Proposed Transaction.
About Thoroughbred
Thoroughbred was incorporated under the Business Corporations Act (Ontario) on
March 8, 2011 and its fiscal year end is December 31. Thoroughbred is classified
as a CPC as defined in CPC Policy 2.4 and as such Thoroughbred has not commenced
commercial operations and has no assets other than cash with which to identify
and evaluate businesses or assets with a view to completing a Qualifying
Transaction. As a result, Thoroughbred's current business is to identify and
evaluate businesses and assets with a view to completing a Qualifying
Transaction.
The common shares of Thoroughbred have traded on the Exchange (under the symbol
"TBC.P") since September 1, 2011. Trading in the common shares of Thoroughbred
was halted at the Corporation's request on December 30, 2011 pending the
announcement of a proposed qualifying transaction with Innovative Labs LLC. On
July 30, 2012 the Corporation announced that the parties had mutually agreed to
terminate the letter of intent which was signed on December 30, 2011 and their
respective obligations thereunder. Trading in the shares resumed at the
Corporation's request on August 1, 2012. Trading in the shares was halted at the
Corporation's request on April 10, 2013 pending the announcement of the Proposed
Transaction.
In accordance with the CPC Policy, Thoroughbred was required to complete a
Qualifying Transaction prior to September 3, 2013. On September 3, 2013
Thoroughbred received a notice from the Exchange confirming that its shares were
suspended from trading and it is required to either complete a Qualifying
Transaction or transfer its listing to the NEX board of the Exchange prior to
December 3, 2013 to avoid the delisting of its shares from the Exchange. The
Exchange has granted an extension until December 6, 2013 for Thoroughbred to
hold a shareholders' meeting seeking the necessary approvals to transfer to the
NEX. The shareholders' meeting is expected to be held on December 6, 2013.
Should Thoroughbred fail to either complete the Proposed Transaction or
satisfactorily hold its shareholders' meeting on December 6, 2013 and file all
of the documentation required to transfer to the NEX by no later than December
10, 2013, the Exchange may proceed to delist the securities of Thoroughbred
without further notice.
Further information about Thoroughbred can be found its prospectus dated June
28, 2011 and other filings of the Corporation with the Canadian securities
regulators, which filings are available at www.sedar.com.
Completion of the Proposed Transaction is subject to a number of conditions,
including but not limited to, completion of satisfactory due diligence,
completion of the Financing, execution of a definitive agreement, receipt of all
applicable consents to and approvals of the Proposed Transaction including
approval of the Exchange, and if applicable pursuant to Exchange Requirements,
majority of the minority shareholder approval. The Proposed Transaction cannot
close until the required approvals and exemptions are obtained. Where
applicable, the Proposed Transaction cannot close until the required shareholder
approval is obtained. There can be no assurance that the Proposed Transaction
will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information
circular or filing statement of Thoroughbred to be prepared in connection with
the Proposed Transaction, any information released or received with respect to
the transaction may not be accurate or complete and should not be relied upon.
Trading in securities of a capital pool company should be considered highly
speculative.
The Exchange has in no way passed upon the merits of the Proposed Transaction
and has neither approved nor disapproved the contents of this press release.
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 press release.
Certain information in this press release may contain forward-looking
statements. This information is based on current expectations that are subject
to significant risks and uncertainties that are difficult to predict. Actual
results might differ materially from results suggested in any forward-looking
statements. These and all subsequent written and oral statements containing
forward-looking information are based on the estimates and opinions of
management on the dates they are made and expressly qualified in their entirety
by this notice.
The Corporation assumes no obligation to update the forward-looking statements,
or to update the reasons why actual results could differ from those reflected in
the forward looking-statements unless and until required by securities laws
applicable to the Corporation. Readers are cautioned not to place undue reliance
on any statements of forward-looking information that speak only as of the date
of this release. Additional information identifying risks and uncertainties is
contained in the Corporation's filings with the Canadian securities regulators,
which filings are available at www.sedar.com.
This is not an offer for sale, or solicitation of an offer to buy, in the United
States or to any U.S. Person (as defined in Regulation S under the U.S.
Securities Act of 1933, as amended) of any equity shares or any other securities
of the Corporation or Sunora.
FOR FURTHER INFORMATION PLEASE CONTACT:
Thoroughbred Capital Inc.
Michael Inskip
Chief Executive Officer
(613) 797-2842
(613) 238-8775 (FAX)
Michael.Inskip@thoroughbredcapital.ca
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