Lignol Reports Fiscal 2009 First Quarter Financial Results



    VANCOUVER, Sept. 29 /CNW/ - Lignol Energy Corporation (TSX-V: LEC)
("Lignol" or "the Company"), a leading technology company in the cellulosic
ethanol and biorefining sector, today reported its financial results for the
three-month period ended July 31, 2008 ("Q1 FY09"). (All figures are in
Canadian dollars).

    
    Q1 FY09 Highlights:

    -   Commenced construction of industrial-scale biorefinery pilot plant;
    -   Strengthened senior management team;
    -   Awarded $1.96 million from British Columbia's Innovative Clean Energy
        Fund;
    -   Named "Early Stage Company of the Year - Industrial and
        Agricultural" at BIOTECanada Gold Leaf Awards;
    -   Received "Most Promising Pre-Commercial Technology" award from the
        British Columbia Technology Industry Association.

    Additional Subsequent Event Highlights:

    -   Appointment of Stephen H. White, President and Chief Executive
        Officer of Fort Chicago Energy Partners, to Lignol Board of
        Directors;
    -   Reported continued commitment of development work for HP-L(TM)
        High Purity Lignin ("HP-L(TM) lignin") applications with Huntsman
        International LLC;
    -   Lignol and HA International announced Joint Product Development
        Agreement for applications using HP-L(TM) lignin;
    -   Graduated to Tier 1 listed company status on The TSX Venture Exchange
        from Tier 2 issuer status.
    

    "We continue to make strong progress in advancing our technology
commercialization plan. Lignol's new state-of-the-art facility includes an
industrial-scale biorefinery pilot plant which has now commenced staged
commissioning. Once fully commissioned, we will move ahead with scheduled
trials to optimize current engineering designs for commercial scale plants. We
will also accelerate work underway with companies seeking to evaluate their
leading-edge enzymes and novel organisms in an industrial setting. Further,
our production trials on a range of feedstocks will also produce industrial
quantities of HP-L(TM) lignin and other biochemical co-products to support the
development of applications and markets for these compounds with both new and
existing partners," said Ross MacLachlan, President and Chief Executive
Officer of Lignol.
    For the three-month period ended July 31, 2008 the company reported a net
loss of $1.90 million or $(0.04) per share (basic and fully diluted) compared
to a net loss of $0.99 million or $(0.03) per share (basic and fully diluted)
for the same period a year ago. When stock-based compensation is excluded,
Lignol's Q1 FY09 net loss was $1.59 million compared to $0.82 million in the
first quarter of fiscal 2008. This increase in net loss was mainly due to
increased research and development activities in Q1 FY09.
    Research and Development ("R&D") expenses in the consolidated statement
of income for Q1 FY09 totaled $1.53 million, compared to $0.64 million for the
same period a year ago. This increase in total R&D expenses is primarily the
result of expanded research activities as represented by both the Company's
research facility and the new industrial-scale biorefinery pilot plant.
    General and Administrative ("G&A") expenses for Q1 FY09 totaled $0.91
million, compared to $0.64 million in the first quarter a year ago. This
increase was primarily attributable to additional costs to support the
Company's continuing corporate growth, which included additional staffing
costs, legal and other professional fees.
    Government grants and research funding for Q1 FY09 totaled $0.52 million,
compared to $0.27 million for the same period a year earlier. The relative
amount of increased funding from government grants and research contracts is
directly related to the associated increase in eligible R&D expenses which
occurred during the first quarter of fiscal 2009 compared to the corresponding
quarter a year ago.
    As at July 31, 2008, the Company had cash, cash equivalents and
short-term investments of $12.5 million and a current working capital surplus
of $11.4 million, which represents a $3.1 million decrease from a current
working capital surplus of $14.5 million as at April 30, 2008. The decreases
reflect the cash used in operations and for capital additions in the quarter
ended July 31, 2008.
    Lignol's complete financial statements for the quarter ended July 31,
2008 and the related Management' Discussion & Analysis of Financial Condition
and Results of Operations is available at the Company's website,
www.lignol.ca, or at www.sedar.com under the Company's profile.

    About Lignol

    Lignol (TSX-V: LEC) is a Canadian company undertaking the development of
biorefining technologies for the production of fuel-grade ethanol and other
biochemical co-products from non-food cellulosic biomass feedstocks. Lignol's
modified solvent based pre-treatment technology, originally developed by a
former affiliate of General Electric, and then further developed and
commercialized for wood-pulp applications by a subsidiary of Repap Enterprises
Inc., facilitates the rapid, high-yield conversion of cellulose to ethanol and
the production of value-added biochemical co-products, including HP-L(TM) High
Purity Lignin. Lignol is executing on its development plan through strategic
partnerships to further develop and integrate the core technologies on a
commercial scale. Lignol also intends to invest in, or otherwise obtain,
equity interests in energy related projects which have synergies with its
biorefining technology. For more information about Lignol, please visit our
website at www.lignol.ca.

    Caution concerning forward-looking statements:

    Certain statements contained in this document may constitute
"forward-looking statements". When used in this document, the words "may",
"would", "could", "will", "intend", "plan", "anticipate", "believe",
"estimate", "expect", "investigate", "looking at" as they relate to Lignol or
its management, are intended to identify forward-looking statements or
information. Such statements or information reflect Lignol's current views
with respect to future events and are subject to certain risks, uncertainties
and assumptions. Forward-looking statements and information are necessarily
based upon a number of estimates and assumptions that, while considered
reasonable by management, are inherently subject to significant business,
economic and competitive uncertainties and contingencies. Many factors could
cause Lignol's actual results, performance or achievements to be materially
different from any future results, performance or achievements that may be
expressed or implied by such forward-looking statements or information,
including among other things, those risk factors which are discussed elsewhere
in documents that Lignol files from time to time with securities regulatory
authorities. Should one or more of these risks or uncertainties materialize,
or should assumptions underlying the forward-looking statements or information
prove incorrect, actual results may vary materially from those described
herein as intended, planned, anticipated, believed, estimated or expected. The
Company expressly disclaims any intention or obligation to update or revise
any forward looking statements and information whether as a result of new
information, future events or otherwise. All written and oral forward-looking
statements and information attributable to us or persons acting on our behalf
are expressly qualified in their entirety by the foregoing cautionary
statements.

    
    The TSX Venture Exchange Inc. has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.
    

    %SEDAR: 00004360E




For further information:

For further information: Lignol Energy Corporation: Paul Hughes, Vice
President - Corporate Development and Communications, Tel: (604) 222-9800 ext.
110, Email: phughes@lignol.ca, Email: info@lignol.ca; The Equicom Group: Bruce
Wigle, Investor Relations, Tel: (416) 815-0700 ext. 228, Email:
bwigle@equicomgroup.com

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Lignol Energy Corporation

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