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File: Gulfstream - Press Release Announcing QT - Clean.docx
GULFSTREAM ACQUISITION 1 CORP.
ANNOUNCES PROPOSED QUALIFYING TRANSACTION WITH LIBERTY DEFENSE HOLDINGS, INC.
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
TORONTO, ONTARIO, November 30, 2018 - Gulfstream Acquisition 1 Corp. (TSXV-NEX: GFL.H) ("Gulfstream" or the "Company"),
--->a capital pool company, is pleased to announce that it has entered into a letter of intent dated November 29, 2018 (the
--->"LOI") with Liberty Defense Holdings, Inc. ("Liberty"), a private company existing under the laws of the Province of Ont
--->ario. The LOI outlines the general terms and conditions pursuant to which Gulfstream and Liberty will effect a business
--->combination and reverse takeover transaction that will result in Gulfstream acquiring all of the issued and outstanding
--->securities of Liberty in exchange for equity in Gulfstream (the "Proposed Transaction"). The transaction will constitute
---> Gulfstream's "Qualifying Transaction" under the policies of the TSX Venture Exchange (the "Exchange").
All amounts referred herein are in Canadian dollars unless otherwise indicated.
Terms of the Proposed Transaction
Pursuant to the terms of the LOI, Gulfstream and Liberty will negotiate and enter into a definitive agreement incorporat
--->ing the principal terms of the LOI.
Prior to the completion of the Proposed Transaction, Gulfstream will consolidate all of its issued and outstanding commo
--->n shares (the "Common Shares") on the basis of one post-consolidation Common Share for every two and one half pre-consol
--->idation Common Shares (the "Consolidation Ratio"). Pursuant to the Proposed Transaction, the current shareholders of Li
--->berty will receive 46,686,525 post-consolidation Common Shares at a deemed issue price of $0.80. In addition, a finders'
---> fee (the "Finders' Fee") of 2.5% of the aggregate value of the Proposed Transaction, not inclusive of the QT Financing
--->(as defined below), is payable in common shares in the capital of Gulfstream to one or more finders in connection with t
--->he Proposed Transaction. Further, participants in the concurrent private placement, as described in further detail below
--->, will on closing of the Proposed Transaction become securityholders of the Resulting Issuer. Gulfstream will further e
--->ffect, among other items, a change of its name to "Liberty Defense Holdings, Inc.", or such other name as is mutually ag
--->reed upon (the "Resulting Issuer") and will also apply to change its stock symbol.
The final structure for the Proposed Transaction is subject to satisfactory tax, corporate and securities law advice on
--->the part of both Gulfstream and Liberty.
Completion of the Proposed Transaction is subject to a number of conditions, including completion of the QT Financing, r
--->eceipt of applicable regulatory approvals, including the approval of the Exchange for the Proposed Transaction, completi
--->on of satisfactory due diligence and the execution of a definitive agreement and related transaction documents.
Gulfstream currently has 8,055,159 common shares and 805,500 incentive stock options issued and outstanding.
Under the terms of the LOI, the issued and outstanding shares of Gulfstream will be consolidated in accordance with the
--->Consolidation Ratio, which will result in approximately 3,544,263 Common Shares outstanding on a fully diluted basis.
Liberty currently has, following the completion of its most recent private placement financing, 46,686,525 common shares
---> issued and outstanding. Each Liberty common share will be exchanged on the Amalgamation for one post-consolidation Comm
--->on Share, such that, following the Amalgamation, but before giving effect to the QT Financing, the shareholders of Liber
--->ty are expected to hold, in the aggregate, 46,686,525 post-consolidation Common Shares.
Assuming completion of the Proposed Transaction, and before giving effect to the QT Financing and the Finders' Fee, the
--->Resulting Issuer is expected to have approximately 50,230,788 Common Shares outstanding.
Proposed Private Placement
It is a condition of the LOI that Liberty will complete a brokered private placement of subscription receipts (the "Subs
--->cription Receipts") to raise gross proceeds of up to C$6 million at an issue price of C$0.80 per Subscription Receipt (t
--->he "QT Financing"). Each Subscription Receipt will be convertible into units of Liberty upon satisfaction of customary c
--->onditions, including the satisfaction of all conditions necessary for the completion of the Transaction. Each Liberty un
--->it shall be comprised of one Liberty common share and one Liberty common share purchase warrant exercisable into one Lib
--->erty common share at a price of C$1.10 per Liberty warrant for a period of 24 months from the date the escrow release co
--->nditions are satisfied. The Liberty common shares and warrants comprising the Liberty units will be ultimately exchanged
---> into common shares and warrants of the Resulting Issuer pursuant to completion of the Proposed Transaction. Following t
--->he listing of the Resulting Issuer's common shares on the Exchange, the Resulting Issuer will have the option to acceler
--->ate the expiry date of the warrants if the daily volume weighted average price of the Resulting Issuer's common shares i
--->s greater than C$2.00 per share for the preceding ten consecutive trading days. Liberty has engaged Canaccord Genuity Co
--->rp. and GMP Securities L.P. as co-lead managers and co-bookrunners to assist in the QT Financing.
The net proceeds raised from the QT Financing will be used to develop and deploy Liberty's security technology, to explo
--->re various venue applications as well as for general working capital purposes.
Gulfstream has requested a halt in the trading of its common shares until the Proposed Transaction is completed. While h
--->alted, the common shares may only trade upon Exchange approval and the filing of required materials with the Exchange, a
--->s contemplated by the policies of the Exchange.
Gulfstream was incorporated under the Business Corporations Act (Ontario) on June 8, 2012. The Company is listed as a ca
--->pital pool company on the NEX Board of the Exchange. The Common Shares of Gulfstream were listed for trading on the Exch
--->ange on June 14, 2013 and commenced trading at the opening of trading on Tier 2 of the Exchange on June 17, 2013 under t
--->he symbol "GFL". Gulfstream's business objective is to identify and evaluate assets or businesses with a view to a poten
--->tial acquisition by completing a Qualifying Transaction (like the Proposed Transaction).
Liberty was incorporated on April 30, 2018 pursuant to the Business Corporations Act (Ontario). Liberty provides securit
--->y solutions for concealed weapon detection in high volume foot traffic areas and has secured an exclusive license from M
--->IT Lincoln Laboratory, as well as a technology transfer agreement, for patents related to active 3D imaging technology t
--->hat are packaged into the HEXWAVE product. The system is designed to provide discrete, modular and scalable protection t
--->o provide layered, stand-off detection capability. This is intended to provide a means to proactively counter evolving u
--->rban threats. The integrated sensor-AI array is designed to detect metallic and non-metallic firearms, knives, explosive
--->s and other threats. Liberty is committed to protecting communities and preserving peace of mind through superior securi
--->ty detection solutions.
About the Resulting Issuer
The Resulting Issuer's business objective will be to commercialize the HEXWAVE product for clients including but not lim
--->ited to public venues, corporate or secured buildings, ground transportation, schools, hotels, casinos, places of worshi
--->p, malls and other urban infrastructure.
Upon completion of the Proposed Transaction, the current directors and officers of Gulfstream will resign and the follow
--->ing individuals are expected to be appointed to the board of directors and senior management of the Resulting Issuer:
John McCoach (Director)
Corby Marshall (Director)
Sam Parrotta (Director)
David Sidoo (Executive Chairman, Director)
Bill Riker (Chief Executive Officer, Director)
Damian Towns (Chief Financial Officer, Corporate Secretary and Director)
Aman Bhardwaj (President & Chief Operating Officer)
Bart Smudde (Chief Technology Officer)
A comprehensive press release relating to the Proposed Transaction, in accordance with the policies of the Exchange, wil
--->l follow at a later date.
All information contained in this news release with respect to Gulfstream and Liberty was supplied by the parties respec
--->tively, for inclusion herein, and each party and its directors and officers have relied on the other party for any infor
--->mation concerning the other party.
A filing statement in respect of the Proposed Transaction will be prepared and filed on SEDAR at www.sedar.com in accord
--->ance with Policy 2.4 of the Exchange no less than seven business days prior to the closing of the Proposed Transaction.
--->A press release will be issued once the filing statement has been filed.
For further information regarding the Proposed Transaction, please contact:
Gulfstream Acquisition 1 Corp.
Charles Shin, Chief Executive Officer
Liberty Defense Holdings, Inc.
William Jr. Riker, Chief Executive Officer
Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, completion o
--->f satisfactory due diligence, completion of the QT Financing, execution of a definitive agreement in respect of the Prop
--->osed Transaction, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shar
--->eholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obt
--->ained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Proposed
---> Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or compl
--->ete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly specu
The Exchange has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved o
--->f the contents of this release.
Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) acce
--->pts responsibility for the adequacy or accuracy of this press release.
This press release does not constitute and the subject matter hereof is not, an offer for sale or a solicitation of an o
--->ffer to buy, in the United States or to any "U.S Person" (as such term is defined in Regulation S under the U.S. Securit
--->ies Act of 1933, as amended (the "1933 Act")) of any equity or other securities of Gulfstream or Liberty. The securities
---> of Liberty or the Resulting Issuer to be issued in connection with the QT Financing have not been registered under the
--->1933 Act and may not be offered or sold in the United States (or to a U.S. Person) absent registration under the 1933 Ac
--->t or an applicable exemption from the registration requirements of the 1933 Act.
This release includes forward-looking statements regarding Gulfstream, Liberty and their respective businesses. Such sta
--->tements are based on the current expectations of the management of each entity. The forward-looking events and circumsta
--->nces discussed in this release, including completion of the QT Financing, the Amalgamation and the Proposed Transaction,
---> may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the
---> companies, including risks affecting the companies, economic factors and the equity markets generally. No forward-looki
--->ng statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only
--->as of the date on which they are made and Gulfstream and Liberty undertake no obligation to publicly update or revise an
--->y forward-looking statement, whether as a result of new information, future events, or otherwise.
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