Israeli Company To Go Pubic on Toronto Stock Exchange

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Vesta Capital Corp. (TSXV:VES.P)
Announces the Signing of a Letter of
Intent for Its Proposed Qualifying
Transaction
TORONTO, ONTARIO--(Marketwire - Nov. 10, 2008) - Vesta Capital Corp. ("Vesta")
(TSX VENTURE:VES.P) is pleased to announce that on October 30, 2008, it entered into
a letter of intent ("LOI") with 3GSolar, Ltd. ("3G"). The LOI provides that Vesta will
enter into a share exchange transaction with each of 3G's shareholders, which will result
in 3G becoming a wholly-owned subsidiary of Vesta (the "Transaction"). The
Transaction is intended to constitute Vesta's "qualifying transaction" under TSX Venture
Exchange ("TSXV") policies. If the Transaction it successfully completed, it is believed
that 3G would be the first Israel-based business listed on a Canadian stock exchange.
About 3G
3G (formerly, Orionsolar Photovoltaics Ltd.) is a developer of dye solar cell ("DSC")
photovoltaic modules. DSC technology is a cost-effective alternative to silicon and thin
film-based systems, providing a low-cost solar energy solution that produces electricity
efficiently even in low light conditions. 3G focuses its efforts to develop DSC modules to
serve off-grid markets, mainly in developing countries where in excess of two billion
people live without electricity.
3G was incorporated June 24, 2004 under the laws of the State of Israel. Its business
operations are conducted through its facility in Jerusalem, Israel. Upon completion of the
Transaction, it is anticipated that the resulting issuer will be classified as a research and
development issuer by the TSXV.
The issued shares of 3G are owned by thirty-four (34) shareholders. Dr. Jonathan
Goldstein (of Jerusalem, Israel), 3G's founder, its president and a director, owns
approximately 11% of 3G's shares (fully diluted). Seventeen (17) shareholders (including
three 3G employees who own less that 3% of 3G's shares, fully diluted) are individual
Israel residents or Israel corporations controlled by Israel residents, who collectively own
approximately 22% of 3G's shares (fully diluted). The remaining sixteen (16)
shareholders own approximately 66% of 3G's shares (fully diluted). Fifteen (15) of these
remaining shareholders are limited liability companies formed under the laws of
Delaware (U.S.A.) and controlled by U.S. residents, and one (1) shareholder is an Ontario
corporation controlled by a resident of Ontario. Other than Dr. Goldstein, the only
shareholder who holds in excess of 10% of 3G's shares is DG-OSP, LLC, a Delaware
(U.S.A.) limited liability company, controlled by The Quercus Trust (Newport Beach,
California) which owns approximately 17% of 3G's shares (fully diluted).
To date 3G has engaged in the research and development of DSC photovoltaic
technology. 3G employs seventeen (17) professionals at its facility.
3G has provided Vesta with audited financial statements (prepared in accordance with
Israel auditing standards) for the years ended December 31, 2007 and 2006, which
financial statements have been reconciled to Canadian GAAP (both presented in United
States dollars). 3G has also provided unaudited financial statements for the 6 month
period ended June 30, 2008, which financial statements are also being reconciled to
Canadian standards. As at December 31 2007, 3G had total assets of USD$1,514,175 and
total liabilities of USD$202,330. For the year ended December 31, 2007, 3G had a net
loss of USD$967,255 of which USD$741,079 represented R&D expenditures incurred
during the period. As at June 30, 2008, 3G had total assets of USD$1,293,891 and total
liabilities of USD$262,390. For the 6 month period ended June 30, 2008, 3G had a net
loss of USD$655,726 of which USD$289,435 represented R&D expenditures incurred
during the period.
Terms of the Transaction
Vesta is proposing to issue 25,000,00 common shares to holders of 3G shares pro rata
(based on the number of 3G shares held) at a deemed price of $0.40 per share, in
exchange for 100% of the issued shares of 3G. Upon completion of the Transaction,
Vesta will own 100% of 3G. 3G's current business (as heretofore described) will become
the business of the resulting issuer.
The Transaction is subject to a number of conditions including but not limited to: (i) both
3G and Vesta completing their mutual due diligence of one another, which due diligence
is to be completed within 30 days of the date of the LOI, (ii) negotiation of acceptable
definitive share exchange agreement(s) (or other suitable arrangements) between Vesta
and each holder of 3G shares, (iii) receipt of all required regulatory approvals (including
TSXV approval as noted below), and (iv) Vesta raising sufficient additional funds which,
which combined with Vesta's existing funds, will allow it to meet the TSXV's minimum
listing requirements upon completion of the Transaction.
There are no persons who are Control Persons (as defined in TSXV policies) in both
Vesta and 3G and no director, officer or insider of Vesta owns any shares of 3G and no
director, officer or insider of 3G owns any shares of Vesta. As such, the proposed
Transaction does not constitute a "Non-Arms Length Qualifying Transaction" (as defined
in TSXV policies). Therefore, subject to TSXV confirmation, the Transaction will not
require the approval of Vesta's shareholders.
Agency, Fiscal Advisory and Sponsorship Arrangements
To satisfy the condition set out in (iv) above, concurrent with the closing of the
Transaction, Vesta will conduct a public offering of common shares by way of prospectus
in Canada and in other jurisdictions pursuant to available exemptions, seeking to raise
between $4,000,000 and $6,000,000 of funds (the "Offering"). Subscribers to the
Offering will receive common shares of Vesta at a price of $0.40 per share.
Vesta has engaged Canaccord Capital Corporation ("Canaccord") to act as lead agent in
connection with the Offering. Canaccord has agreed to lead a syndicate of agents
(collectively, the "Agents"), including Sandfire Securities Inc. ("Sandfire").
In connection therewith, the Agents will be paid a cash commission of 8% of the funds
raised and will receive that number of brokers warrants which is equal to 10% of the
number of common shares sold. Each brokers warrant will entitle the holder to purchase
one common share of Vesta at a price of $0.40 per share, for a period of 24 months from
the closing of the Offering.
Canaccord has agreed to act as sponsor in connection with the Transaction, however
Vesta expects that it will be exempt from the TSXV formal sponsorship requirements
provided a portion of the Offering is completed by way of prospectus signed by a duly
qualified agent (such as Canaccord). An agreement to sponsor should not be construed as
any assurance with respect to the merits of the Transaction or the likelihood of
completion. The financing and the sponsorship are subject to the completion of
satisfactory due diligence by Canaccord.
Vesta has also engaged Canaccord to provide fiscal advisory services in connection with
the Transaction. In connection therewith, Vesta has agreed to pay Canaccord a monthly
work fee of $25,000 plus G.S.T. for up to four months.
In addition to the above, upon completion of the Offering, Vesta has agreed to issue as a
success fee, 1,350,000 common shares (assuming the minimum Offering is sold) up to a
maximum of 1,575,000 common shares (assuming the maximum Offering is sold) to
Canaccord (which amounts will be reduced by up to 250,000 shares in lieu of any
sponsorship fees and any monthly work fees paid to Canaccord, to a maximum of
$100,000 at a price of $0.40 per share) and 150,000 common shares (assuming the
minimum Offering is sold) up to a maximum of 175,000 common shares (assuming the
maximum Offering is sold) to Sandfire.
About the Resulting Issuer
Following completion of the Transaction the resulting issuer will continue 3G's business.
Upon completion of the Transaction and the anticipated minimum offering described
above, 3G's shareholders would own approximately 60% of the issued shares of the
resulting issuer. It is not anticipated that any single shareholder of 3G will own in excess
of 10% of the shares of the resulting issuer.
It is anticipated that the directors and officers of the resulting issuer will be as follows:
Barry N. Breen is currently the Chief Executive Officer and a director of 3G. Upon
completion of the Transaction, Mr. Breen will be added as a director and named Chief
Executive Officer and President of Vesta. Mr. Breen served 16 years in senior positions
at AVX Corporation (listed on NYSE). Prior to AVX, Barry was an engineer at General
Electric (listed on NYSE). Mr. Breen holds a B.Sc. in Nuclear Engineering from the
Massachusetts Institute of Technology. Mr. Breen was awarded the Kaplan Prize in 1994
for excellence in industrial development. In 1998, he was awarded the Kyocera
Corporation President Award for outstanding achievement in product & business
development.
David Anthony is currently a director of 3G. Upon completion of the Transaction, Mr.
Anthony will be added as a director and named Chief Financial Officer and Secretary of
Vesta. Mr. Anthony, is Managing Partner of New York venture capital firm, 21Ventures,
LLC. Mr. Anthony currently serves as a director on the boards of public companies
Worldwater & Solar Technologies Corp. (listed on OTCBB) and Open Energy
Corporation (listed on OTCBB), and private companies Agent Video Intelligence Ltd,
BioPetroClean Ltd., Juice Wireless, Inc. and VoIP Logic, LLC. Mr. Anthony teaches
business management at the New York Academy of Sciences where he is an Adjunct
Professor. Mr. Anthony received an MBA from The Tuck School of Business at
Dartmouth College in 1989 and a BA in economics from George Washington University
in 1982. He is an entrepreneurship mentor at the Land Center for Entrepreneurship at
Columbia University Graduate School of Business. In 2002, Mr. Anthony was awarded
the Distinguished Mentor of the Year Award from Columbia University.
Harold Wolkin is currently the President, Chief Financial Officer, Secretary and a
director of Vesta. Upon completion of the Transaction, Mr. Wolkin will resign from all
offices held by him and remain as an independent director of Vesta. Mr. Wolkin is a
designated chartered financial analyst and Vice Chairman, Sandfire Securities Inc.
(subject to regulatory approval), a full service, boutique investment bank. From August
1983 until his retirement in January 2008, Mr. Wolkin was employed with BMO Capital
Markets, serving as the Managing Director, Diversified Industries, Investment and
Corporate Banking. Mr. Wolkin received his B.A. from York University in 1975, his
M.A. from the University of Toronto in 1976 and became a member of the Chartered
Financial Analyst Institute in 1980. Since April 2008, Mr. Wolkin has served as a
director of Grandview Gold Inc., a Toronto Stock Exchange and Over-The-Counter
Bulletin Board listed company. Since November 2005, Mr. Wolkin has also served as a
director of Brighter Minds Media Inc. (formerly Road Runner Capital Corporation), a
TSX Venture Exchange listed company.
Frank Bellotti, is a current director of Vesta. Upon completion of the Transaction, Mr.
Bellotti will remain as an independent director of Vesta. Mr. Bellotti served as is the Vice
President and Director of Prime City One Capital Corp., a TSX Venture Exchange listed
company. Mr. Bellotti is also the President of Kingside Mortgage Corporation, a position
he has held since January 1989. Mr. Bellotti served as a director of BDE Equities from
June 2006 to March 2008 and served as a director of Kingsdale Capital from June 2001 to
June 2006.
Dr. Jonathan Goldstein, is the President and a director of 3G. It is anticipated that Dr.
Goldstein will be appointed to the Vesta board some time following completion of the
Transaction. Dr. Goldstein has been President and Chief Scientist of 3G since its
founding. He served as a senior scientist at LUZ Industries, a pioneering company in the
solar energy industry. From 1977 to 1989, Dr. Goldstein served as the senior battery
scientist at Tadiran Ltd., Israel's flagship electronics company. Dr. Goldstein received his
Ph.D in Chemistry from City University, London, UK. He holds 38 granted US patents,
and has published/delivered more than 30 scientific papers.
TSXV Approval
Completion of the transaction is subject to a number of conditions, including but not
limited to, TSXV acceptance and if applicable pursuant to TSXV requirements, majority
of the minority shareholder approval. Where applicable, the transaction cannot close until
the required shareholder approval is obtained. 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 management information circular
or filing statement or prospectus to be prepared in connection with the Transaction, any
information released or received with respect to the 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.
For Investors
This press release may include statements about expected future events and/or financial
results that are forward-looking in nature and subject to risks and uncertainties. Vesta
cautions that actual performance will be affected by a number of factors, many of which
are beyond its control. Future events and results may vary substantially from what Vesta
currently foresees. Discussion of the various factors that may affect future results is
contained in Vesta's recent filings, available on SEDAR.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed
transaction and has neither approved nor disapproved the contents of this press release.