Mosaic Capital Corporation Announces $15 Million Public Offering of Convertible Unsecured Senior Subordinated Debentures

/THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT AUTHORIZED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./

CALGARY, Nov. 4, 2016 /CNW/ - Mosaic Capital Corporation ("Mosaic") (TSX-V Symbols: M and M.PR.A) is pleased to announce that, in connection with the proposed public offering of convertible unsecured senior subordinated debentures previously announced on November 1, 2016, it has entered into an agreement with a syndicate of underwriters (the "Underwriters") led by Canaccord Genuity Corp., pursuant to which the Underwriters will purchase $15 million aggregate principal amount of 7.0% convertible unsecured senior subordinated debentures (the "Debentures") of Mosaic due December 31, 2021 at a price of $1,000 per Debenture. Mosaic has granted the Underwriters an over-allotment option to purchase up to $2.25 million additional aggregate principal amount of Debentures, exercisable, in whole or in part, at any time until 30 days following the closing of the Offering. If the over-allotment option is exercised in full, the gross proceeds of the Offering will be $17.25 million.

Mosaic will use the net proceeds of the Offering for general corporate purposes including future acquisitions, paying down existing credit facilities and working capital.

The Offering is expected to close on or about November 10, 2016 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange (the "TSX Venture").

The Debentures will mature on December 31, 2021 (the "Maturity Date") and will accrue interest at the rate of 7.0% per annum payable semi-annually in arrears on June 30 and December 31 in each year, commencing June 30, 2017. The June 30, 2017 interest payment will represent accrued interest for the period from the closing date to June 30, 2017. At the holder's option, the Debentures may be converted into common shares of Mosaic ("Common Shares") at any time prior to the close of business on the earlier of the business day immediately preceding (i) the Maturity Date, (ii) the date fixed for redemption of the Debentures or (iii) if called for repurchase in the event of a change of control where the consideration consists of 10% or more in (a) cash, (b) equity securities that are not traded or intended to be traded immediately following such transaction on a stock exchange, or (c) other property that is not traded or intended to be traded immediately following such transaction on a stock exchange, the payment date for such repurchase.  The conversion price (the "Conversion Price") will be $9.00, subject to adjustment in certain circumstances.

The Debentures will be direct, unsecured obligations of Mosaic subordinate to all liabilities, except liabilities which by their terms rank in right of payment equally with or subordinate to the Debentures.

The Debentures will not be redeemable at the option of Mosaic on or before December 31, 2019 (the "First Call Date").  After the First Call Date and prior to December 31, 2020 (the "Second Call Date"), the Debentures may be redeemed in whole or in part from time to time at the option of Mosaic on not more than 60 days and not less than 30 days prior notice, at a price equal to their principal amount plus accrued and unpaid interest, provided the volume weighted average trading price of the Common Shares on TSXV for the 20 consecutive trading days ending on the fifth trading day preceding the date on which notice of redemption is provided is at least 125% of the Conversion Price. On or after the Second Call Date, the Debentures may be redeemed in whole or in part from time to time at the option of Mosaic, at a price equal to their principal amount plus accrued and unpaid interest. Mosaic shall provide not more than 60 nor less than 30 days' prior notice of redemption of the Debentures.

Subject to specified conditions, Mosaic will have the right to repay the outstanding principal amount of the Debentures, on maturity or redemption, through the issuance of Common Shares. Mosaic will also have the option to satisfy its obligation to pay interest through the issuance and sale of Common Shares.

A preliminary prospectus supplement for the Offering was previously filed with the securities regulatory authorities in all provinces of Canada, except Québec on November 1, 2016. A final shelf prospectus supplement is expected to be filed with the securities regulatory authorities in all provinces of Canada, except Québec, as soon as possible.

The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This news release does not constitute an offer for sale or the solicitation of an offer to buy Securities in the United States or in any jurisdiction in which such offer, solicitation or sale would be unlawful.

ABOUT MOSAIC CAPITAL CORPORATION

Mosaic is a Canadian investment company that owns a portfolio of established businesses which span a diverse range of industries and geographies. Mosaic's strategy is to create long-term value for its shareholders through accretive acquisitions, long-term portfolio ownership, sustained cash flows and organic portfolio growth. Mosaic achieves its objectives by maintaining financial discipline, acquiring businesses at attractive valuations, performing extensive acquisition due diligence, utilizing optimal transaction structuring and working closely with subsidiary businesses after acquisition.

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

FORWARD LOOKING INFORMATION

This news release contains forward-looking information and statements within the meaning of applicable Canadian securities laws (herein referred to as "forward-looking statements") that involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. All information and statements in this news release which are not statements of historical fact may be forward-looking statements. The words "believe", "expect", "intend", "estimate", "anticipate", "project", "scheduled", and similar expressions, as well as future or conditional verbs such as "will", "should", "would", and "could" often identify forward-looking statements. In particular, forward-looking statements in this news release include, but are not limited to, statements regarding expectations and assumptions respecting timing and the expected closing of the Offering. Such statements or information are only predictions and reflect the current beliefs of management with respect to future events and are based on information currently available to management. Actual results and events may differ materially from those contemplated by these forward-looking statements due to these statements being subject to a number of risks and uncertainties.

Undue reliance should not be placed on these forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature forward-looking statements involve assumptions and known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions and other forward-looking statements will not occur. Some of the assumptions made by Mosaic, upon which such forward-looking statements are based include, but are not limited to: future market conditions will not be materially different than anticipated by Mosaic; there will be no material changes to government and environmental regulations affecting Mosaic or its operations; and the business operations of the operating businesses of Mosaic will continue on a basis consistent with prior years.

A number of factors could cause actual results to differ materially from those expressed or implied by the forward-looking statements, including, but not limited to: the possible failure to obtain necessary regulatory approvals or to satisfy conditions necessary to complete the Offering; prevailing economic conditions; unexpected changes in the financial markets (including in the trading price of the securities of Mosaic); and changes in the general economic and business conditions of one or more of Mosaic and its subsidiaries. Should any of the risks or uncertainties facing Mosaic and its subsidiaries materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance, activities or achievements could vary materially from those expressed or implied by any forward-looking statements contained in this news release. Readers are cautioned that the foregoing list of risks is not exhaustive. Additional information on these and other factors that could affect the operations or financial results of Mosaic and its subsidiaries are included in the Prospectus Supplement, the Base Shelf Prospectus and Mosaic's annual information form for the year ended December 31, 2015, a copy of each of which is available under Mosaic's profile on SEDAR (www.sedar.com).

Although Mosaic believes that the expectations represented by any forward-looking-statements contained herein are reasonable based on the information available to it on the date of this news release, management cannot assure investors that actual results, performance or achievements will be consistent with these forward-looking statements. Any forward-looking statements herein contained are made as of the date of this news release and Mosaic does not assume any obligation to update or revise them to reflect new information, events or circumstances, except as required by law.

SOURCE MOSAIC CAPITAL CORPORATION

For further information: Allan Fowler, Chief Financial Officer, Mosaic Capital Corporation, 400, 2424 - 4th Street SW, Calgary, AB T2S 2T4, T: (403) 270-4663, E: afowler@mosaiccapitalcorp.com

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MOSAIC CAPITAL CORPORATION

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