CST: 27/07/2016 08:32:33   

FCF Capital Announces Plans to Appoint Stephen Reid as CEO, Pursue New Investment Opportunities and Increase Its Investment Capital

174 Days ago

TORONTO, ONTARIO--(Marketwired - Feb 3, 2016) - FCF Capital Inc. (TSX VENTURE:FCF) (the "Company" or "FCF") is pleased to announce that it has entered into a letter agreement (the "Agreement") with Stephen Reid and a corporation that is wholly-owned by Mr. Reid, that the Company believes will be critical to enhancing shareholder value. The key terms of the Agreement provide for (i) the appointment of Stephen Reid to the board of directors of FCF, and as the President and Chief Executive Officer of FCF, and (ii) the acquisition of certain related proprietary investment opportunities, in consideration for $2 million of common shares of FCF (which shares are to be held in escrow subject to the satisfaction of certain conditions described below) and the assumption of up to $350,000 of debt (collectively, the "Transaction"). The Transaction is expected to close on or about February 11, 2016 (the "Closing Date"). The Company will also pursue a private placement financing, on a "best efforts basis", of up to $25 million (the "Financing") following the closing of the Transaction. The Transaction and the Financing are subject to TSX Venture Exchange (the "Exchange") approval and conditional on the execution of various definitive agreements. As a condition to the approval of the Transaction by the Exchange, the Company is seeking the written consent to the Transaction from persons holding a majority of its common shares. The Transaction is an arm's length transaction.

Appointment of Stephen Reid

On the closing of the Transaction, Mr. Reid would be appointed to the board of FCF, and would be retained as the President and Chief Executive Officer. Mr. Bezanson would resign as Interim CEO and would be appointed Executive Vice-President, Capital Markets. Ms. Wolfe would step down as Executive Chair of the board, but would remain as a director of the Company.

Mr. Reid is currently the President and Chief Executive Officer of Group West Corporation, a company founded by Mr. Reid. Mr. Reid served as Senior Vice President of Business Development of Alaris Royalty Corp from July 2008 until March 2015. His role with Alaris was to create and build relationships with all sources of investment leads. In 2004, Mr. Reid co-founded Alaris IGF Corp., the general partner of Alaris Income Growth Fund L.P., which invested in a diversified portfolio of private businesses in exchange for royalties or distributions from the portfolio companies, with the principal objective of generating stable and predictable cash flows for dividend payments to its securityholders. From 2004 to 2008, Mr. Reid oversaw Alaris IGF Corp.'s business development efforts in terms of increasing the company's presence among the advisory referral networks across North America. In July 2008, Alaris Royalty Corp. acquired 100% of the issued and outstanding units of Alaris Income Growth Fund L.P. and all of the outstanding shares of Alaris IGF Corp.

On the closing of the Transaction, the board will also appoint Mr. James Bell as an independent director of the Company. Mr. Bell is a corporate and securities lawyer with over 15 years of experience. Mr. Bell has served as General Counsel for Olympia Financial Group Inc. (listed on the TSX) for the last 6 years and was a partner of an international law firm prior thereto. In addition, Mr. Bell serves as a director of Paramount Resources Ltd., a company listed on the TSX.

Mr. John Williamson has agreed to step down from the board on the closing of the Transaction. We wish to thank Mr. Williamson for his service to the Company for over 12 years and for assisting in establishing a strong platform at FCF.

Purchase of Investments Opportunities

On the closing of the Transaction, the Company would acquire all the shares of a company owned by Mr. Reid and the right to pursue the company's current and future investment opportunities, in consideration for $2,000,000, which consideration would be paid by the issuance of 14,285,714 common shares of FCF (the "ReidFCF Shares"). The issue price per share is equal to the net asset value of FCF per share, or $0.14 per share. FCF would also assume up to $350,000 of debt incurred by Mr. Reid's company. On the closing of the Transaction, the Reid FCF Shares would represent approximately 8.62% of the issued and outstanding common shares of FCF. The Reid FCF Shares would be held in escrow and released if and when the company's investment opportunities and any other investments made by FCF following the Closing Date deliver cumulative EBITDA of not less than $15 million following the Closing Date.

Issuance of Options

Pursuant to the Agreement and subject to the rules of the Exchange and the terms of the Company's stock option and deferred share unit plans, the Company has agreed to grant, on the Closing Date, 6,675,282 options to Stephen Reid, 3,000,000 options to Allan Bezanson, 2,000,000 options to Courtenay Wolfe, 1,483,396 options and deferred share units having a value of $100,000 to James Bell. Subject to the rules of the Exchange, all options granted will have an exercise price of $0.20 per share and vest as to one-third of the grant amount on each of the first, second and third anniversaries of the date the Reid FCF Shares are released from escrow.

Financing

In order to pursue the acquired investment opportunities and pursue its business plan, the Company has agreed to pursue the Financing on a "best efforts" private placement basis. The Financing is expected to raise up to $25 million at $0.14 per share, which would result in the issuance of up to 178,571,428 FCF common shares. It is expected that the Financing would close in March or April. The Financing is expected to be completed on an arm's length basis, except that Mr. Reid has indicated that he currently intends to participate in the Financing for up to $2 million.

Following completion of the Financing, the maximum number of shares issued pursuant to the Financing would represent approximately 52.19% of the issued and outstanding common shares of FCF.

Sale of PIF Shares

The Company also announced today that it has sold its investment in Polaris Infrastructure Inc. for total proceeds of approximately $9.59 million.

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

For further information about FCF or this news release, please visit our website at www.fcfcapital.ca.

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.

Caution concerning forward-looking information

This press release contains "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws, including statements regarding the closing of the Transaction and the Financing, the possible future returns from the acquired investment opportunities and other matters subject to the completion of the transactions set out in the Agreement. These information and statements address future activities, events, plans, developments and projections. All statements, other than statements of historical fact, constitute forward-looking statements or forward-looking information. Such forward-looking information and statements are frequently identified by words such as "may", "will", "should", "anticipate", "plan", "expect", "believe", "estimate", "intend" and similar terminology, and reflect assumptions, estimates, opinions and analysis made by management in light of its experience, current conditions, expectations of future developments and other factors which it believes to be reasonable and relevant. Forward-looking information and statements involve known and unknown risks and uncertainties that may cause actual results, performance and achievements to differ materially from those expressed or implied by the forward-looking information and statements and, accordingly, undue reliance should not be placed thereon. Risks and uncertainties that may cause actual results to vary include, but are not limited to: failure to complete the transactions set out in the Agreement; failure of the Company to raise additional funds by way of debt or equity financings as required to meet its investment objectives; failure to obtain regulatory or shareholder approval of the Transaction or the Financing, as the case may be; failure of the Company to achieve its business plan; as well as other risks and uncertainties which are more fully described in our annual and quarterly Management's Discussion and Analysis and in other filings made by us with Canadian securities regulatory authorities and available at www.sedar.com. FCF disclaims any obligation to update or revise any forward-looking information or statements except as may be required by applicable law.

Allan Bezanson
416-728-6278
info@fcfcapital.ca
Courtenay Wolfe
416-505-8555
info@fcfcapital.ca