Canada Jetlines Operations Ltd. (NEO: CJET) (“Canada Jetlines” or the “Company”), Canada’s friendly leisure airline, is pleased to announce that it intends to undertake a non-brokered private placement with a single arm’s length investor to raise $13,500,001 (the “Offering”). The Offering consists of common shares (each a “Share”) issued at $0.1721252 per Share. The investor is Jetstream Aviation Inc. the (“Investor” or “Jetstream”) which is a Canadian corporation.

The Offering is scheduled to close in three separate tranches. The first settlement will occur within two business days of the approval of the Neo Exchange Inc. (the “Exchange”) subject to the satisfaction of other closing conditions. This first tranche will see the Investor purchase 19,598,017 Shares, equal to approximately 19.9% of the issued and outstanding shares of the Company, for an aggregate purchase price of $3,373,313.

The completion of the second tranche and third tranche shall require shareholder approval under the rules and policies of Exchange as it will result in the creation of a new “control person”. The Company intends to obtain shareholder approval for the second and third tranche at a special meeting of shareholders that will be scheduled promptly to occur in Ontario (the “Meeting”).

Assuming shareholder approval is obtained, the second tranche is scheduled to close two business days after the Meeting. The second tranche will see the Investor purchase 29,416,635 Shares, equal to approximately 15% of the current issued and outstanding shares of the Company, for an aggregate purchase price of $5,063,344.

Assuming shareholder approval is obtained, the third tranche is scheduled to close sixty calendar days after the Meeting. The third tranche will see the Investor purchase 29,416,635 Shares, equal to approximately 15% of the current issued and outstanding shares of the Company, for an aggregate purchase price of $5,063,344. Upon completion of all three tranches of the Offering, the Investor will hold 78,431,287 Shares of the Company representing approximately 50% of the current issued and outstanding shares of the Company.

As part of the transaction, the Investor will have the right to nominate two directors to the Board of Directors of the Company. The first director will be nominated concurrent with the closing of the second tranche of the Offering. The second director will be nominated concurrent with the closing of the third tranche of the Offering.

The Company intends to use the net proceeds of the Offering for aircraft acquisition, general corporate and working capital purposes. The closing of the Offering is subject to customary closing conditions, including the receipt of the approval of the Exchange. No brokerage commissions or finder’s fees are payable in connection with the Offering.

Jetstream does not currently hold any Shares. Upon closing of the first tranche of the Offering, Jetstream will hold a total of 19,598,017 Shares, which will represent approximately 19.9% of the Company’s issued and outstanding Shares. Upon closing of the second and third tranches of the Offering, Jetstream will hold 78,431,287 Shares of the Company representing approximately 50% of the issued and outstanding shares of the Company at such time.

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