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2016

Pinetree Capital Announces Amendment To Its Rights Offering & Special Meeting Update

Not For Distribution To United States Newswire Services Or For Dissemination In The United States

TORONTO, Ontario (March 21, 2016) – Pinetree Capital Ltd. (TSX: “PNP”) announces an amendment to its  rights offering that was previously announced on March 9, 2016 to extend the expiry of the offering from April 22, 2016 to April 26, 2016.  Additionally, the shareholder approval to be sought at Pinetree’s upcoming special meeting for a waiver of its shareholder rights plan will now only be in respect of a waiver of the application of the plan to 2507492 Ontario Ltd. (“TolnaiCo”), a purchaser under the offering.

Under the rights offering, Pinetree is offering rights to holders of its common shares at the close of business on the record date of March 23, 2016, on the basis of one right for each common share held. Each right entitles the holder to subscribe for one common share of Pinetree upon payment of the subscription price of $0.025 per common share.  The rights offering is being conducted in Canada only.

The rights will trade on the Toronto Stock Exchange under the symbol PNP.RT commencing on March 21, 2016 and until noon on April 26, 2016 and the rights will expire at 4:00 p.m. (Toronto time) on April 26, 2016 (the “Expiry Time”), after which time unexercised rights will be void and of no value.  Shareholders who fully exercise their rights will be entitled to subscribe for additional common shares, if available as a result of unexercised rights prior to the Expiry Time, provided that the shareholder rights plan will be triggered if, as a result of the exercise of rights, any shareholder holds 20% or more of the outstanding common shares, which may result in significant dilution for such shareholders and have a material adverse effect on the value of Pinetree’s common shares.

Details of the rights offering are set out in the amended and restated rights offering notice dated March 21, 2016, and the amended and restated rights offering circular dated March 21, 2016, which are available under Pinetree’s profile at www.sedar.com.  The amended and restated rights offering notice dated March 21, 2016, and accompanying rights certificate will also be mailed to each eligible shareholder of Pinetree as at the record date. Registered shareholders who wish to exercise their rights must forward the completed rights certificate, together with the applicable funds, to the rights agent, Equity Trust Financial Company, on or before the Expiry Time.  Shareholders who own their common shares through an intermediary, such as a bank, trust company, securities dealer or broker, will receive materials and instructions from their intermediary.

There are currently 226,130,510 common shares of Pinetree outstanding.  If all of the rights issued under the rights offering are validly exercised (or if the Tolnai Purchase described below is fulfilled), the offering will raise gross proceeds of approximately $5.65 million, the net proceeds of which will be allocated to the payment of the outstanding principal amount and accrued interest on Pinetree’s convertible debentures at maturity on May 31, 2016.

Tolnai Purchase

In connection with the rights offering, Pinetree has entered into an agreement (the “Tolnai Purchase Agreement”) with TolnaiCo, a private company controlled by Peter Tolnai, pursuant to which TolnaiCo has agreed to purchase (the “Tolnai Purchase”) all of the common shares that are not otherwise purchased by holders of the rights under the rights offering, subject to a minimum of 135,678,306 common shares (60% of the common shares issuable under the rights offering) and a maximum of 225,678,249 common shares (99.8% of the common shares issuable under the rights offering).  Accordingly, if more than 40% of the rights are validly exercised under the rights offering, TolnaiCo will not be obligated to subscribe for any common shares pursuant to the Tolnai Purchase.  If the Tolnai Purchase is fulfilled, TolnaiCo will own between 30% and 49.9% of Pinetree’s outstanding common shares upon completion of the rights offering.

Completion of the Tolnai Purchase is subject to other conditions, in addition to the minimum and maximum number of common shares to be purchased, including:

  1. the appointment of Peter Tolnai as Pinetree’s Chief Executive Officer and as a director on closing;
  2. the resignations on closing of those existing directors of Pinetree, if any, requested by TolnaiCo;
  3. the submission of a 1-for-100 share consolidation to shareholders for approval at the Shareholder Meeting (described below); and
  4. the waiver of the application of Pinetree’s shareholder rights plan to the acquisition of common shares by TolnaiCo pursuant to the Tolnai Purchase, which will also be submitted for approval at the Shareholder Meeting described below.

Pinetree will pay a fee of $250,000 in cash to TolnaiCo on closing of the rights offering out of the proceeds of the rights offering, on the termination of the Tolnai Purchase by Pinetree if it accepts a “superior offer” or under other circumstances where TolnaiCo terminates the Tolnai Purchase, including if the minimum Tolnai Purchase is not met or the requisite shareholder consent is not received. 

Special Shareholders’ Meeting

At a special meeting of Pinetree’s shareholders (the “Shareholder Meeting”) to be held on April 22, 2016, in connection with the Tolnai Purchase, shareholders will be asked to approve a 1-for-100 share consolidation  and the waiver of the application of Pinetree’s shareholder rights plan to the Tolnai Purchase.   Shareholders will also be asked to confirm an amendment to the Corporation’s general by-law which reduces the quorum requirement for shareholder meetings to two shareholders holding at least 10% of the outstanding common shares entitled to vote at a meeting of shareholders (from 20%).  The board of directors has amended the by-law to provide for the change in quorum and the amendment is subject to confirmation by shareholders at the Shareholder Meeting.  Details of the special business will be contained in the management information circular to be prepared in respect of the Shareholder Meeting which will be available on Pinetree’s profile at www.sedar.com at a later date.

About Pinetree

Pinetree is a diversified investment and merchant banking firm focused on the small cap market, with early stage investments in resource, biotechnology and technology companies.  Pinetree’s shares are listed on the Toronto Stock Exchange under the symbol “PNP”.

This press release contains forward-looking information based on current expectations, including but not limited to our expectations in connection with the rights offering and Tolnai Purchase, including the use of proceeds and events which are proposed to occur on closing.  Forward-looking information is often, but not always, identified by the use of the words “contemplate”, “estimate”, “expect” and “anticipate” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur and any similar expressions or negative variations thereof.

In providing forward-looking information in this press release, we have made numerous assumptions regarding the rights offering and Tolnai Purchase, which we believe to be reasonable, including assumptions relating to: (i) the satisfaction or waiver of all conditions to the completion of the rights offering and Tolnai Purchase; (ii) the expected actions of third parties; and (iii) the outcome of the rights offering and related transactions, including the expected use of proceeds. Forward-looking information entails various risks and uncertainties however that could cause actual results to differ materially from those reflected in the forward-looking information. Specific risks that could cause actual results to differ materially from those anticipated or disclosed in this press release include, but are not limited to: (i) failure to satisfy the conditions to complete the rights offering and Tolnai Purchase, including failure to receive required approvals; (ii) the occurrence of any event, change or other circumstance that could give rise to the termination of the Tolnai Purchase Agreement; (iii) the delay of completion or failure to complete the rights offering or Tolnai Purchase for any other reason; (iv) the amount of costs, fees and other expenses incurred in connection with the rights offering and Tolnai Purchase and working capital requirements which can involve unknown or unexpected expenditures; (v) the anticipated timing of the shareholders’ meeting; (vi) the risk that the anticipated effects of the rights offering and Tolnai Purchase, if completed, may not result in the outcomes expected by us; and (vii) fluctuations in the fair value of investments due to thinly traded securities, issuer-specific events that effect a company’s market value or general market conditions. In addition, general risks relating to capital markets, economic conditions, regulatory changes, as well as the operations of our business may also cause actual results to differ materially from those anticipated or disclosed in this press release. Forward-looking information are not guarantees of future performance, and management’s assumptions upon which such forward-looking information are based may prove to be incorrect.

Accordingly, there can be no assurance that actual events or results will be consistent with the forward-looking information disclosed herein. In light of the significant uncertainties inherent in forward-looking information, any such forward-looking information should not be regarded as representations by us that our objectives or plans relating to the rights offering or Tolnai Purchase or otherwise will be achieved. Investors are cautioned not to place undue reliance on any forward-looking information contained herein and that such forward-looking information are provided solely for the purpose of providing information about our current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. In addition, forward-looking information relates to the date on which they are made.

We disclaim any intention or obligation to update or revise any forward-looking information contained in this press release, whether as a result of new information, future events or otherwise, except to the extent required by law.

Investor Relations:
Richard Patricio, LL.B.
Chief Executive Officer
Pinetree Capital Ltd.
211 Yonge Street, Suite 502
Toronto, Ontario, Canada, M5B 1M4
Phone: 416-941-9600
Email: ir@pinetreecapital.com
Website: www.pinetreecapital.com 

©Copyright 2012 Pinetree Capital Ltd.