Capstock Announces Proposed Qualifying Transaction
CAPSTOCK FINANCIAL INC.
6975 Balaclava Street Vancouver, B.C. V6N 1M4 Telephone: (604) 689-4733 Fax: (604) 251-1721
NEWS RELEASE
CAPSTOCK ANNOUNCES PROPOSED QUALIFYING TRANSACTION
Vancouver, B.C., March 8, 2010 – CAPSTOCK FINANCIAL INC. (TSX-V: CPK.P) (the “Company”) announces that it has entered into a non-binding letter of intent (the “LOI”) dated March 5, 2010 with Instream Energy Systems Corp. (“Instream”), pursuant to which the parties intend to conduct due diligence and negotiate the proposed acquisition by Capstock of all the issued and outstanding shares of Instream (the “Transaction”). Instream is a non-reporting issuer incorporated under the laws of the Province of British Columbia and carries on the business of increasing global electrical generated capacity through the development and operation of hydrokinetic conversion systems.
The Transaction is subject, amongst other things, to the completion of satisfactory due diligence, the negotiation and execution of a definitive agreement, applicable shareholder and regulatory approval and the satisfaction of certain other conditions precedent. The Transaction, if completed, will constitute Capstock’s Qualifying Transaction under the policies of the TSX Venture Exchange (the “Exchange”). The Transaction is an arm’s length transaction and shareholder approval from Capstock’s shareholders will not be required by the Exchange.
Terms of the Non-Binding Letter of Intent
Pursuant to the terms of the LOI, both parties have agreed, subject to the completion of their respective due diligence investigations and conditions precedent, to negotiate the terms and conditions and execute a definitive agreement with respect to the Transaction on or before March 31, 2010. The closing of the Transaction is subject to customary conditions, including definitive documentation, required shareholder approval, financing and receipt of all required regulatory approval including the approval of the Exchange.
The common shares of Capstock will remain halted until such time as the Exchange provides its permission to resume trading. The Company will issue a further comprehensive press release on the Transaction as required by Exchange policy if the parties enter into a definitive agreement for the Transaction.
About Capstock Financial Inc.
The Company is designated as a Capital Pool Company by the Exchange. The Company has not commenced commercial operations and has no assets other than cash. Any proposed Qualifying Transaction must be approved by the Exchange and, in the case of a non arm’s length Qualifying Transaction, must also receive majority approval of the minority shareholders. Until the completion of a Qualifying Transaction, the Company will not carry on any business other than the identification and evaluation of businesses or assets with a view to completing a proposed Qualifying Transaction. For further information regarding the Company and the Company’s management team, see the Prospectus filed with the Company’s disclosure documents on SEDAR at www.sedar.com.
ON BEHALF OF THE BOARD
(signed) “R.A. Bruce McDonald”
R.A. Bruce McDonald President, Chief Executive Officer and a Director
For further information, please contact:
Capstock Financial Inc.
R.A. Bruce McDonald, President and Chief Executive Officer Tel: (604) 689-4733
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange 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 of filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may no be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
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.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.