TORONTO, April 5, 2012 /PRNewswire/ - 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.
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