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BURNABY, BC, Oct. 26 /CNW/ - Legend Power Systems Inc. (TSX.V: LPS) ("Legend Power") announces that it has completed the second (and final) tranche (the "Second Tranche") of its previously announced brokered private placement (the "Offering") of up to 15,000,000 units (the "Units") at a price of $0.50 per Unit for gross proceeds of up to $7,500,000. Each Unit consists of one common share of Legend Power (a "Share") and one half of one common share purchase warrant (a "Warrant"). Each whole Warrant entitles the holder thereof to purchase one Share at a price of $0.60 per Share for a period of 18 months until April 26, 2011. The first tranche of the Offering resulted in the sale of 8,778,000 Units for gross proceeds of $4,389,000. The Second Tranche resulted in the sale of 1,363,200 Units for gross proceeds of $681,600.
D&D Securities Company (the "Agent") acted as agent in the Offering. In connection with the Second Tranche, Legend Power has paid to the Agent a cash commission equal to $18,896, and has issued to the Agent broker warrants (the "Broker Warrants") to acquire 136,320 Units. Each Broker Warrant is exercisable at $0.50 per Unit until April 26, 2011.
Legend Power previously announced that it had entered into two agreements with Phoenix Alliance Corp. ("Phoenix") - a management consulting agreement (the "Consulting Agreement") and a finder's fee agreement (the "Finder's Fee Agreement"). In accordance with the Consulting Agreement, Legend Power has paid Phoenix $4,540 in cash and issued to Phoenix 68,160 Shares at a deemed price of $0.50 per Share, in connection with the Second Tranche. In addition, and in accordance with the Finder's Fee Agreement, Legend Power paid Phoenix a cash fee of $26,580, in connection with the Second Tranche.
In connection with the Second Tranche, Legend Power also paid $50,000 in cash to a certain eligible finder as a finder's fee (the "Finder's Fee"). The Finder's Fee represents 10% of the total value of Units subscribed for by investors introduced by the finder to Legend Power.
Any fees and expenses payable to the Agent in connection with the Offering have been deducted from any amounts payable to Phoenix in connection with the Offering. The Finder's Fee has been deducted from any amounts payable to Phoenix and the Agent in connection with the Second Tranche.
All securities issued under the Second Tranche, and any securities issuable on the exercise of the Warrants and the Broker Warrants, have a hold period expiring February 27, 2010. In addition, 15% of the Shares issued to Phoenix are subject to a hold period expiring March 27, 2010, 15% of the Shares issued to Phoenix are subject to a hold period expiring April 27, 2010, 15% of the Shares issued to Phoenix are subject to a hold period expiring May 27, 2010, 15% of the Shares issued to Phoenix are subject to a hold period expiring June 27, 2010, 15% of the Shares issued to Phoenix are subject to a hold period expiring July 27, 2010 and 15% of the Shares issued to Phoenix are subject to a hold period expiring August 27, 2010.
The proceeds from the Second Tranche will be used to execute its sales and marketing plan, both in Canada and in the United States, to repay certain notes payable, which will significantly improve Legend Power's balance sheet, and for general corporate purposes.
About Legend Power Systems Inc.
Legend Power Systems Inc. is a leading electrical energy conservation company that manufactures and markets a patented device to help commercial and industrial customers achieve significant energy savings through voltage optimization. Legend Power's Electrical Harmonizer-AVR eliminates inefficiencies by delivering the optimal level of voltage a user needs. Many customers receive higher voltage levels than required at certain points of the grid from electrical utilities delivering higher levels to compensate for line loss across the feeder length. Higher than nominal voltage can affect the lifespan of electrical equipment and result in high monthly utility bills. By delivering the optimal voltage to the user, Legend Power's Electrical Harmonizer-AVR helps companies reduce their electricity bills, maintenance costs and greenhouse gas emissions while increasing the life of electrical equipment. The technology also decreases capital and operating costs for electrical utilities.
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.
This news release does not constitute an offer to sell or the solicitation of an offer to buy any of the Shares in the United States. The Shares have not been and will not be registered under the U.S. Securities Act of 1933 or any state securities laws, and may not be offered or sold in the United States without registration under the U.S. Securities Act of 1933 and all applicable state securities laws, or an applicable exemption from registration requirements.
SOURCE Legend Power Systems Inc.
For further information: For further information: Gerry Gill, Chairman & CEO, Legend Power Systems Inc., (604) 420-1500, firstname.lastname@example.org; LEGEND POWER SYSTEMS INC., 8618 Commerce Court, Burnaby, BC, V5A 4N6, (604) 420-1500, www.legendpower.com