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Gulfstream Acquisition 1 Corp. Announces Proposed Qualifying Transaction With Liberty Defense Holdings, Inc.

Not for Distribution in the United States or to United States Newswires

Toronto, ON – 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 Ontario. 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 incorporating the principal terms of the LOI.

Prior to the completion of the Proposed Transaction, Gulfstream will consolidate all of its issued and outstanding common shares (the “Common Shares”) on the basis of one post-consolidation Common Share for every two and one half pre-consolidation Common Shares (the “Consolidation Ratio”). Pursuant to the Proposed Transaction, the current shareholders of Liberty 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 the 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 effect, among other items, a change of its name to “Liberty Defense Holdings, Inc.”, or such other name as is mutually agreed 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, receipt of applicable regulatory approvals, including the approval of the Exchange for the Proposed Transaction, completion of satisfactory due diligence and the execution of a definitive agreement and related transaction documents.

Capitalization

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 postconsolidation Common Share, such that, following the Amalgamation, but before giving effect to the QT Financing, the shareholders of Liberty 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 “Subscription Receipts”) to raise gross proceeds of up to C$6 million at an issue price of C$0.80 per Subscription Receipt (the “QT Financing”). Each Subscription Receipt will be convertible into units of Liberty upon satisfaction of customary conditions, including the satisfaction of all conditions necessary for the completion of the Transaction. Each Liberty unit shall be comprised of one Liberty common share and one Liberty common share purchase warrant exercisable into one Liberty common share at a price of C$1.10 per Liberty warrant for a period of 24 months from the date the escrow release conditions 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 the listing of the Resulting Issuer’s common shares on the Exchange, the Resulting Issuer will have the option to accelerate the expiry date of the warrants if the daily volume weighted average price of the Resulting Issuer’s common shares is greater than C$2.00 per share for the preceding ten consecutive trading days. Liberty has engaged Canaccord Genuity Corp. 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 explore various venue applications as well as for general working capital purposes.

Trading Halt

Gulfstream has requested a halt in the trading of its common shares until the Proposed Transaction is completed. While halted, the common shares may only trade upon Exchange approval and the filing of required materials with the Exchange, as contemplated by the policies of the Exchange.

About Gulfstream

Gulfstream was incorporated under the Business Corporations Act (Ontario) on June 8, 2012. The Company is listed as a capital pool company on the NEX Board of the Exchange. The Common Shares of Gulfstream were listed for trading on the Exchange on June 14, 2013 and commenced trading at the opening of trading on Tier 2 of the Exchange on June 17, 2013 under the symbol “GFL”. Gulfstream’s business objective is to identify and evaluate assets or businesses with a view to a potential acquisition by completing a Qualifying Transaction (like the Proposed Transaction).

About Liberty

Liberty was incorporated on April 30, 2018 pursuant to the Business Corporations Act (Ontario). Liberty provides security solutions for concealed weapon detection in high volume foot traffic areas and has secured an exclusive license from MIT Lincoln Laboratory, as well as a technology transfer agreement, for patents related to active 3D imaging technology that are packaged into the HEXWAVE product. The system is designed to provide discrete, modular and scalable protection to provide layered, stand-off detection capability. This is intended to provide a means to proactively counter evolving urban threats. The integrated sensor-AI array is designed to detect metallic and non-metallic firearms, knives, explosives and other threats. Liberty is committed to protecting communities and preserving peace of mind through superior security detection solutions.

About the Resulting Issuer

The Resulting Issuer’s business objective will be to commercialize the HEXWAVE product for clients including but not limited to public venues, corporate or secured buildings, ground transportation, schools, hotels, casinos, places of worship, malls and other urban infrastructure.

Upon completion of the Proposed Transaction, the current directors and officers of Gulfstream will resign and the following 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)

Further Information

A comprehensive press release relating to the Proposed Transaction, in accordance with the policies of the Exchange, will follow at a later date.

All information contained in this news release with respect to Gulfstream and Liberty was supplied by the parties respectively, for inclusion herein, and each party and its directors and officers have relied on the other party for any information 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 accordance 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
Telephone: 416-846-5580
Email: cshin@gulfstreamcapital.ca

Liberty Defense Holdings, Inc.
William Jr. Riker, Chief Executive Officer
Telephone: 734-730-4940
Email: briker@libertydefense.com

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, completion of satisfactory due diligence, completion of the QT Financing, execution of a definitive agreement in respect of the Proposed Transaction, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. 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 complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The Exchange has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved of the contents of this release. Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts 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 offer to buy, in the United States or to any “U.S Person” (as such term is defined in Regulation S under the U.S. Securities 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 Act or an applicable exemption from the registration requirements of the 1933 Act.

Forward-Looking Statements

This release includes forward-looking statements regarding Gulfstream, Liberty and their respective businesses. Such statements are based on the current expectations of the management of each entity. The forward-looking events and circumstances 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-looking 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 any forward-looking statement, whether as a result of new information, future events, or otherwise.

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