Triumph Ventures II Corporation Announces Letter of Intent with Claxton Real Estate Company Ltd.

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR RELEASE PUBLICATION, DISTRIBUTION OR DISSEMINATION DIRECTLY, OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES./

TORONTO, Nov. 27, 2013 /CNW/ - Triumph Ventures II Corporation (TSXV: TVT.P) ("Triumph" or the "Company") is pleased to announce that it has entered into a letter of intent (the "LOI") dated November 20, 2013 with Claxton Real Estate Company Ltd. ("Claxton"), a corporation existing under the laws of Ontario, which outlines the general terms and conditions pursuant to which Triumph and Claxton intend to complete a transaction that will result in Triumph acquiring all of the issued and outstanding securities of Claxton. The transaction will constitute Triumph's qualifying transaction (the "Qualifying Transaction") under the policies of the TSX Venture Exchange (the "Exchange"). Following completion of the Qualifying Transaction, it is anticipated that the resulting issuer (the "Resulting Issuer") will be a Tier I company.

Terms of Acquisition

Under the terms of the LOI, Triumph will acquire all of the issued and outstanding securities of Claxton (including the Private Placement Shares, as hereinafter defined) in exchange for cash consideration and/or equity in Claxton, as further described below (the "Transaction"). It is currently anticipated that the Transaction will consist of a business combination effected through a share exchange, merger, amalgamation, arrangement or other similar form of transaction which would result in Claxton, or such other entity that may be created for completing the Transaction, amalgamating with or becoming a wholly-owned subsidiary of Triumph. The final structure of the Transaction is subject to receipt of definitive tax, corporate and securities law advice satisfactory to both Triumph and Claxton and their respective direct and indirect shareholders. The Transaction will be memorialized in a definitive agreement incorporating the terms of the LOI and other such terms negotiated between the parties (the "Definitive Agreement").

Pursuant to the terms of the LOI, completion of the Qualifying Transaction will be subject to a number of conditions, including receipt of gross proceeds of not less than $3,000,000 pursuant to the QT Financing (as defined and described below); the absence of material adverse changes in the business, affairs or operations of either party; the receipt of all required shareholder, regulatory and third party approvals, including conditional approval by the Exchange of the Transaction; completion of all due diligence reviews; execution of an asset management agreement between Claxton and Claxton Capital Management Inc.; and the availability of $100,000 of net free cash available for use by the Resulting Issuer.

The proposed Qualifying Transaction is not a "Non-Arm's Length Qualifying Transaction" within the meaning of Policy 2.4 of the Exchange and, as such, shareholder approval is not required, unless otherwise required by the Exchange.

Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange, unless exempt in accordance with Exchange policies. Triumph intends to apply for an exemption from sponsorship requirements, however, there is no assurance that Triumph will obtain this exemption. In the event that sponsorship is required, it is intended that PSSI (as defined below) will be retained for this purpose.

A filing statement in respect of the proposed Qualifying Transaction will be prepared and filed in accordance with Policy 2.4 of the Exchange on SEDAR at www.sedar.com no less than seven business days prior to the closing of the proposed Qualifying Transaction. A press release will be issued once the filing statement has been filed, as required pursuant to Exchange policies or any other material changes occur.

Capitalization

There are currently 2,953,126 common shares of Triumph ("Triumph Shares") issued and outstanding. There are 278,271 options issued and outstanding as incentive options that entitle the holders thereof to acquire an aggregate of 278,271 Triumph Shares at a price of $0.20 per Triumph Share. There are 175,313 warrants issued and outstanding that entitle the holders thereof to acquire an aggregate of 175,313 Triumph Shares at a price of $0.20 per share.

There are currently 17,470,360 Claxton shares ("Claxton Shares") issued and outstanding and 6,666,667 Class A preferred shares issued and outstanding. There are 3,000,000 options issued and outstanding as incentive options that entitle the holders thereof to acquire an aggregate of 3,000,000 Claxton Shares at a price of $0.20 per Claxton Share. The share capital of the Resulting Issuer will depend on the form of the Transaction and will be set out in the Definitive Agreement.

QT Financing

It is a condition of the LOI that prior to or concurrent with the completion of the Qualifying Transaction, Claxton shall complete a brokered private placement (the "QT Financing"), for minimum proceeds of $3,000,000 and maximum proceeds of $5,000,000 through the sale of Claxton Shares (the "Private Placement Shares") on a commercially reasonable best efforts basis. Claxton will use the proceeds of the QT Financing for further acquisitions and general working capital purposes.

Portfolio Strategies Securities Inc. ("PSSI") has been appointed lead agent of Claxton. PSSI and Claxton intend to enter into an engagement letter in this connection in short order. It is intended that PSSI shall receive aggregate cash fees equal to 9% of the gross proceeds raised pursuant to the QT Financing and, conditional upon the completion of the Qualifying Transaction, warrants equal to 6% of the number of the Private Placement Shares sold under the QT Financing (the "Broker Warrants"). Each Broker Warrant shall be exercisable into one Claxton Share at $0.20 per Claxton Share for a period of 24 months from the earlier of the completion of the Qualifying Transaction and the date that the Claxton Shares become listed and posted for trading. PSSI will be permitted to conduct a full due diligence investigation of Claxton before the closing of the QT Financing.

Claxton

Claxton was formed under the laws of the Province of Ontario on April 29, 2013 for the purposes of acquiring income producing properties in the United States in the industrial, office and retail asset classes. The major shareholders that control Claxton are Sean Cleary who resides in Oakville, Ontario; Gravitas Financial Inc., a company formed under the laws of the Province of Ontario with offices in Toronto, Ontario; and 2380663 Ontario Inc., as company formed under the laws of the Province of Ontario and controlled by David Hopkinson, who resides in Oakville, Ontario.

On October 2, 2013, Claxton (via its wholly-owned limited partnerships, Claxton Real Estate Limited Partnership and Claxton Real Estate (US) Limited Partnership 1), acquired a 100% fee interest in a portion of Palm Valley Pavilions East, a Target Anchored Shopping Center in Goodyear, Arizona. This acquisition constitutes Claxton's first acquisition of a business asset. It is Claxton's intention to continue to invest in other income producing properties, targeting external growth in markets that offer high quality commercial real estate at compelling relative valuations.

Management of Claxton believes that investment in a US commercial real estate platform that is diversified with respect to both geography and asset class has the potential to deliver attractive risk-adjusted returns, especially given the volatile global economy and prevailing low interest rate environment.

Claxton Financial Information (based on audited financial statements)

For the period from April 29, 2013 to August 31, 2013, Claxton had total assets of $249,492 and working capital of $26,699.

Proposed Management and Directors

Upon completion of the Qualifying Transaction, David Hopkinson, Sean Clearly, Stephen Gledhill, David Whalley, Eric Taferner, Steve Dulmage and Pierre Gagnon will assume management responsibility of the Resulting Issuer. David Hopkinson, Stephen Gledhill, Sean Clearly, David Whalley and Eric Taferner currently serve as directors and/or senior officers of Claxton and Claxton Capital Management Inc. Brief descriptions of these individuals are set out below. Steve Dulmage is currently a director of Triumph and Pierre Gagnon is currently a director and the Secretary and Chairman of Triumph; their respective biographies are available on SEDAR as part of the prospectus issued in relation to the initial public offering of Triumph.

David Hopkinson - President & Director: Mr. Hopkinson is the President of Claxton and President and Managing Partner of Claxton Capital Management Inc. Over the last 20 years, Mr. Hopkinson has worked in Canada and internationally as a senior investment specialist in international real estate with a focus on portfolio management and strategy and has directed over $800 million of international real estate assets and over $2.5 billion of Canadian real estate assets. He has extensive experience working within a number of investment environments including pension funds, real estate operating companies and fund managers for such organizations as OMERS, Oxford Properties, Bentall Kennedy and AEW Europe (Curzon Global Partners).

Sean Clearly - Chairman & Director: Mr. Cleary is the Chairman of the Board of Claxton and of Claxton Capital Management Inc. Over the last 25 years, Mr. Cleary has founded and scaled up companies across a number of industries in Canada and internationally with a specific focus on acquisitions, capital markets, solving problems for growth entities and the development of sustainable corporate strategy. To date, Mr. Cleary has helped to build many management teams and boards and has structured numerous financings, acquisitions and divestitures for growth companies in Canada and internationally.

Stephen Gledhill - Secretary & Director: Mr. Gledhill is the Chief Financial Officer of Claxton and Chief Financial Officer and Managing Partner of Claxton Capital Management Inc. Mr. Gledhill has over 25 years of financial-control experience, 8 years of which was with a large pension fund, and acts as CFO for multiple publically-traded companies. Since 2011, he has been the Managing Director of RG Management Services Inc., an accounting, administrative and corporate secretarial services company. In 1992, he formed Keshill Consulting Associates Inc., a boutique management consulting practice.

David Whalley - Director: Mr. Whalley is a Director and Partner of Claxton Capital Management Inc. Mr. Whalley has over 25 years of commercial real estate experience in landlord agency, design build, office tenant representation and investment sales experience as a senior vice president with Colliers International in Toronto. Mr. Whalley has successfully completed lease negotiations of several million square feet of office space in North America and internationally and has led greenfield and suburban office developments, core office tower investment and suburban office building acquisitions for end-users and investors in Canada and the United States.

Eric Taferner - Director: Mr. Taferner is Vice President of Claxon and a partner of Claxton Capital Management Inc. Mr. Taferner brings extensive operational experience rooted in 15 years of property management with a primary focus in the residential foreclosure market in southern Ontario and has directly managed a diverse portfolio of over $100 million in real property. Mr. Taferner has personally managed the acquisition and disposition of assets for Tier 1 and Tier 2 banks, lawyers' offices, sales agents and brokers, appraisers, collection departments and insurance companies as well as a number of third party contractors.

The Company has requested a halt in the trading of the Company's shares until the Qualifying Transaction is completed.

The Company will provide further details in respect of the Qualifying Transaction, in due course by way of press release.

Further Information

All information contained in this news release with respect to Triumph and Claxton was supplied by the parties respectively, for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party.

Completion of the Qualifying Transaction is subject to a number of conditions including, but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Qualifying Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Qualifying Transaction will be completed as proposed, or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) has in any way passed upon the merits of the proposed transaction and has neither approved nor disapproved of the contents of this release.

This press release does not constitute and the subject matter hereof is not, an offer for sale or a solicitation of an offer to buy, in the United States or to any "U.S Person" (as such term is defined in Regulation S under the U.S. Securities Act of 1933, as amended (the "1933 Act")) of any equity or other securities of the Company. The securities of the Resulting Issuer to be issued in connection with the QT Financing have not been registered under the 1933 Act and may not be offered or sold in the United States (or to a U.S. Person) absent registration under the 1933 Act or an applicable exemption from the registration requirements of the 1933 Act.

SOURCE Triumph Ventures II Corporation

Copyright 2013 Canada NewsWire