Hunter Hall Investment Management Limited Announcement Regarding Participation in Private Placement of Special Warrants of BlueScout Technologies

SYDNEY, Aug. 27, 2012 /CNW/ - On August 24, 2012, Hunter Hall acquired control or direction over 20,000,000 special warrants ("Special Warrants") of Catch the Wind Ltd., doing business as "BlueScout Technologies" ("BlueScout") pursuant to a private placement of Special Warrants completed by BlueScout. The Special Warrants were purchased for Australian investment funds ("Funds") of which Hunter Hall is the Responsible Entity.

Each Special Warrant entitles the holder to acquire, subject to adjustment and without additional consideration, one common share ("Common Share") of BlueScout ("Special Warrant Share") and one Common Share purchase warrant of BlueScout ("Special Warrant Purchase Warrant"). Each Special Warrant Purchase Warrant entitles the holder to acquire one Common Share at a price of $0.10 per share until 5:00 p.m. (Toronto time) on August 24, 2015. Each Special Warrant may be exercised any time on or after August 24, 2012 and shall be deemed to be exercised on the earlier of ("Deemed Exercise Date"): (i) four months and a day after August 24, 2012; and (ii) three business days following receipt for a final prospectus qualifying the distribution of the Special Warrant Shares and Special Warrant Purchase Warrant issuable on exercise or deemed exercise of the Special Warrants ("Prospectus Qualification"). If the Prospectus Qualification has not occurred prior to 5:00 p.m. (Toronto time) on October 8, 2012, each unexercised Special Warrant will entitle the holder thereof to acquire 1.10 Special Warrant Shares and 1.10 Special Warrant Purchase Warrants (instead of one Special Warrant Share and one Special Warrant Purchase Warrant, respectively) without further payment on the Deemed Exercise Date ("Penalty Securities").

As a result, by virtue of its acquisition of 20,000,000 Special Warrants Hunter Hall has acquired control or direction over up to 40,000,000 Common Shares assuming the exercise of all Special Warrants and underlying Special Warrant Purchase Warrants (and assuming that no Penalty Securities are issued), or approximately 32.65% of the currently issued and outstanding Common Shares of BlueScout (not including the issuance of any Common Shares issuable on exercise of the Special Warrants (or any underlying Special Warrant Purchase Warrants) issued under the offering).

Of the amount of Special Warrants acquired by Hunter Hall, Hunter Hall Value Growth Trust ("HHVGT"), one of the Funds, acquired beneficial ownership of 13,000,000 Special Warrants, or 26,000,000 Common Shares if all Special Warrants and underlying Special Warrant Purchase Warrants are exercised into Common Shares (assuming that no Penalty Securities are issued), representing approximately 21.22% of the currently issued and outstanding Common Shares of BlueScout (not including the issuance of any Common Shares issuable on exercise of the Special Warrants issued under the offering).

Following this acquisition, Hunter Hall now has control or direction over approximately: (a) 48,457,945 Common Shares (representing approximately 39.55% of the total outstanding Common Shares of BlueScout as at the date hereof); and (b) 5,074,679 warrants (convertible into the same number of Common Shares) and 20,000,000 Special Warrants, convertible in the aggregate into up to 40,000,000 Common Shares (assuming the exercise of all Special Warrants and underlying Special Warrant Purchase Warrants held by Hunter Hall, but assuming that no Penalty Securities are issued) ("HH Convertible Securities"), resulting in a total of 93,532,624 Common Shares assuming the exercise of all HH Convertible Securities ("HH Aggregate Securities"). This would represent approximately 55.81% of the total outstanding Common Shares of BlueScout as at the date hereof (assuming: (a) the exercise of all HH Convertible Securities; and (b) that no outstanding convertible securities of BlueScout, including Special Warrants held by other holders, other than the HH Convertible Securities are exercised).

Of this amount, HHVGT beneficially owns: (a) 31,488,085 Common Shares (representing approximately 25.70% of the total outstanding Common Shares of BlueScout as at the date hereof); and (b) 3,438,679 warrants (convertible into the same number of Common Shares) and 13,000,000 Special Warrants, convertible in the aggregate into up to 26,000,000 Common Shares (assuming the exercise of all Special Warrants and underlying Special Warrant Purchase Warrants, but assuming that no Penalty Securities are issued) ("HHVGT Convertible Securities"), resulting in a total of 60,926,764 Common Shares assuming the exercise of all HHVGT Convertible Securities ("HHVGT Aggregate Securities"). This would represent approximately 40.10% of the total outstanding Common Shares of BlueScout as at the date hereof (assuming: (a) the exercise of all HHVGT Convertible Securities; and (b) that no outstanding convertible securities of BlueScout, including Special Warrants held by other holders, other than the HHVGT Convertible Securities are exercised).

However, because all Special Warrants issued under the offering will be automatically exercised into Common Shares (being 51,081,154 Special Warrants in the aggregate, including those issued to Hunter Hall), the total number of outstanding Common Shares of BlueScout following exercise of the Special Warrants would be 173,594,768. Of this amount: 

a)		Hunter Hall's 93,532,624 Common Shares would represent approximately 47.08% of the total outstanding Common Shares of BlueScout as at the date hereof (assuming: (a) the exercise of all HH Convertible Securities; (b) the exercise of all Special Warrants issued by BlueScout; and (c) that no outstanding convertible securities of BlueScout, including Special Warrant Purchase Warrants held by other holders, other than the HH Convertible Securities are exercised); and
b)		HHVGT's 60,926,764 Common Shares would represent approximately 30.01% of the total outstanding Common Shares of BlueScout as at the date hereof (assuming: (a) the exercise of all HHVGT Convertible Securities; (b) the exercise of all Special Warrants issued by BlueScout; and (c) that no outstanding convertible securities of BlueScout, including Special Warrant Purchase Warrants held by other holders, other than the HHVGT Convertible Securities are exercised).

All of the Special Warrants were acquired by Hunter Hall on behalf of the Funds in the ordinary course of business as passive investments only and not for the purpose of influencing management or exercising control over BlueScout. Hunter Hall continually reviews the investment portfolios of the Funds, and other funds that it manages, and may purchase or sell additional securities of BlueScout through open market purchases or privately negotiated transactions for investment purposes.

Hunter Hall has concurrently filed with the applicable Canadian security regulators an early warning report pursuant to applicable Canadian securities laws in respect of its control or direction over the securities disclosed herein.

 

SOURCE: Hunter Hall Investment Management Limited

For more information or a copy of the related early morning report, please contact:

Jeremy Freeman
Company Secretary
Hunter Hall Investment Management Limited
Level 2, 60 Castlereagh Street
Sydney, NSW 2000  Australia
Tel:  [phone]