Pinetree Capital announces rights offering

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

TORONTO, March 9, 2016 /CNW/ - Pinetree Capital Ltd. (TSX: "PNP") announces that it will be 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 will entitle 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 will be 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 22, 2016 and the rights will expire at 4:00 p.m. (Toronto time) on April 22, 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, subject to certain limitations set out in Pinetree's rights offering circular.

Details of the rights offering will be set out in the rights offering notice and rights offering circular which will be available under Pinetree's profile at www.sedar.com. The rights offering notice and accompanying rights certificate will 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 Standby Commitment 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.

Standby Commitment

In connection with the rights offering, Pinetree has entered into a standby purchase agreement (the "Standby Agreement") with 2507492 Ontario Ltd. (the "Standby Purchaser"), a private company controlled by Peter Tolnai, pursuant to which the Standby Purchaser has agreed to purchase (the "Standby Commitment") 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, the Standby Purchaser will not be obligated to subscribe for any common shares pursuant to the Standby Commitment.  If the Standby Commitment is fulfilled, the Standby Purchaser will own between 30% and 49.9% of Pinetree's outstanding common shares upon completion of the rights offering.

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

(i)

the appointment of Peter Tolnai as Pinetree's Chief Executive Officer and as a director on closing;

(ii)

the resignations on closing of those existing directors of Pinetree, if any, requested by the Standby Purchaser;

(iii)

the submission of a 1-for-100 share consolidation to shareholders for approval at the Shareholder Meeting (described below); and

(iv)

the waiver of the application of Pinetree's shareholder rights plan to the rights offering and the acquisition of common shares by the Standby Purchaser pursuant to the Standby Commitment, which will also be submitted for approval at the Shareholder Meeting described below.

Pinetree will pay a standby fee of $250,000 in cash to the Standby Purchaser on closing of the rights offering out of the proceeds of the rights offering, on the termination of the Standby Commitment by Pinetree if it accepts a "superior offer" or under other circumstances where the Standby Purchaser terminates the Standby Commitment, including if the minimum Standby Commitment 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, shareholders will be asked to approve a 1-for-100 share consolidation (which is also subject to the approval of the Toronto Stock Exchange) and the waiver of the application of Pinetree's shareholder rights plan.  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 standby commitment, 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 standby commitment, 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 standby commitment; (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 standby commitment, 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 standby agreement; (iii) the delay of completion or failure to complete the rights offering or standby commitment for any other reason; (iv) the amount of costs, fees and other expenses incurred in connection with the rights offering and standby commitment; (v) the anticipated timing of the shareholders' meeting; and (vi) the risk that the anticipated effects of the rights offering and standby commitment, if completed, may not result in the outcomes expected by us. 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 standby commitment 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.

SOURCE Pinetree Capital Ltd.

For further information: 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


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