Titanium Transportation Group and Northeastern Group announce Business Combination Transaction and Private Placement Financing

WOODBRIDGE, ON, Oct. 21, 2014 /CNW/ - Titanium Transportation Group Inc. ("Titanium") and Northeastern Group Inc. ("Northeastern" or the "Company"), a reporting issuer in Ontario, are pleased to announce that Titanium and the Company, together with 9050400 Canada Inc. ("9050400"), have entered into a letter of intent (the "LOI") that contemplates the acquisition of all of the issued and outstanding shares of Titanium and 9050400 by Northeastern (the "Proposed Transaction"). The Proposed Transaction is structured as a Reverse Takeover ("RTO") under the rules and policies of the TSX Venture Exchange, which will effectively result in the listing of Titanium on the TSX Venture Exchange.  The shareholders of Titanium and 9050400 will receive common shares of Northeastern (the "Northeastern Common Shares") in exchange for their common shares of Titanium and 9050400.  Prior to the Share Exchange, Northeastern will convert approximately $93,000 of shareholder debt and effect a consolidation of the Northeastern Common Shares, resulting in approximately 133,333 Northeastern Common Shares being issued and outstanding immediately prior to the closing of the Proposed Transaction.  

In conjunction with, and prior to the closing of the Proposed Transaction, Titanium intends to complete a non-brokered private placement of subscription receipts for gross proceeds of a minimum of $3 million and a maximum of $5 million (the "Private Placement") at a price of $1.50 per subscription receipt. Upon satisfaction of the relevant release conditions, each subscription receipt will be automatically exchanged for a unit of Titanium (a "Unit"), each such Unit being comprised of one common share and one warrant.  Each warrant will entitle the holder to acquire a common share at the exercise price of $2.50 per share for a period of up to 36 months following the closing of the Private Placement.  Proceeds of the financing will be used to fund further acquisitions and for general working capital purposes.  

Titanium is a leading asset-based transportation and logistics company servicing Canada and the United States, with over 625 trailers, 191 power units and 250 employees. Titanium provides truckload long-haul, dedicated, and cross-border trucking services, freight logistics, and warehousing and distribution to over 600 customers.

Titanium is a recognized consolidator of asset-based transportation companies in Ontario, having completed and integrated five asset-based trucking acquisitions since 2011. Titanium has also been ranked by PROFIT magazine as one of Canada's Fastest Growing Companies for six consecutive years. 

Mr. Ted Daniel, CEO of Titanium commented, "Titanium has a proven track record of acquiring asset-based transportation companies, extracting significant synergies, and utilizing leading edge technologies to service its customers. We are excited to announce Titanium's next phase of growth as a publicly traded company, and believe that Titanium is uniquely positioned to benefit from the ongoing consolidation of the trucking and logistics sector in eastern Canada."

Cormark Securities Inc. ("Cormark") has agreed to act as sponsor in connection with the Proposed Transaction.¹

1. Subject to completion of satisfactory due diligence. Cormark's agreement to sponsor should not be construed as any assurance with respect to the merits of the Proposed Transaction or the likelihood of its completion.

The LOI contemplates the satisfaction of several material conditions prior to the execution of a definitive agreement between Northeastern, Titanium and 905400, including customary due diligence, the negotiation and execution of a definitive agreement and board approvals being obtained. Until these and other conditions are satisfied, the likelihood of closing the transaction is uncertain and trading in the securities of Northeastern would be highly speculative.  Completion of the Proposed Transaction will also be subject to a number of conditions, including, but not limited to the receipt of all necessary regulatory, corporate and third party approvals, compliance with all applicable regulatory requirements, and the completion of the Private Placement for gross proceeds of not less than $3,000,000. Further disclosure concerning the terms and conditions of the Proposed Transaction, including management, directors and advisors will be disclosed once the conditions precedent have been fulfilled and a definitive agreement is entered into.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance. There can be no assurance that the transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon.

Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Cautionary statement regarding forward-looking statements

Certain statements contained in this press release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking statements are provided for the purposes of assisting the reader in understanding the Company's financial position and results of operations as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking information may relate to the Company's future outlook and anticipated events, including the completion of the Proposed Transaction and Private Placement, and may include statements regarding the financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes and plans and objectives of or involving the Company. Particularly, statements regarding future results, performance, achievements, prospects or opportunities for the Company or the industry in which it operates are forward-looking statements. In some cases, forward-looking information can be identified by terms such as "may", "might", "will", "could", "should", "would", "occur", "expect", "plan", "anticipate", "believe", "intend", "seek", "aim", "estimate", "target", "project", "predict", "forecast", "potential", "continue", "likely", "schedule", or the negative thereof or other similar expressions concerning matters that are not historical facts.

Forward-looking statements necessarily involve known and unknown risks and uncertainties, that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, many of which are beyond the Company's control, affect the operations, performance and results of the Company and its business, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to, completion of satisfactory due diligence, non-receipt of shareholder and regulatory approval and the risks discussed in the Company's materials filed with Canadian securities regulatory authorities from time to time on www.sedar.com. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements as there can be no assurance that actual results will be consistent with such forward-looking statements.

Information contained in forward-looking statements is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management's perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances. While management considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect.

The forward-looking statements made in this press release are dated, and relate only to events or information, as of the date of this press release. Except as specifically required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

SOURCE: Titanium Transportation Group Inc.

Ted Daniel, CPA, CA, Chief Executive Officer, Titanium Transportation Group Inc., [phone], [email protected]