Industrial Growth Income Corporation Announces Proposed Qualifying Transaction

/Not for distribution to U.S. Newswire Services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. Securities laws./

WINNIPEG, Feb. 23 /CNW/ - Industrial Growth Income Corporation (NEX: IGI.H) ("IGIC" or the "Corporation"), a capital pool company listed on the NEX board (the "NEX") of the TSX Venture Exchange (the "Exchange"), is pleased to announce that it has signed an arm's length letter of intent dated February 18, 2011 (the "Letter of Intent") with Pyrogenesis Canada Inc. ("PyroGenesis") to acquire all of the issued and outstanding shares of PyroGenesis. If completed, the proposed transaction (the "Qualifying Transaction") will constitute the qualifying transaction of IGIC pursuant to Policy 2.4 Capital Pool Companies of the Exchange (the "CPC Policy").

The Qualifying Transaction is not a "Non Arm's Length Qualifying Transaction" within the meaning of the CPC Policy.  Accordingly, the completion of the Qualifying Transaction is not subject to the approval of the shareholders of IGIC in accordance with the CPC Policy.

Terms of the Qualifying Transaction:

Pursuant to the Letter of Intent, the principal terms of the Qualifying Transaction are as follows:

      (a)prior to the Qualifying Transaction, PyroGenesis will complete a brokered private placement (the "Private Placement") of subscription receipts for gross proceeds of a minimum of $3,000,000 and a maximum of $5,000,000;

      (b)prior to the Qualifying Transaction, PyroGenesis will complete a non-brokered private placement (the "Non-Brokered Private Placement") of common shares for gross proceeds of a minimum of $1,750,000 and a maximum of $2,750,000 at the same price as the subscription receipts are issued pursuant to the Private Placement;

      (c)prior to the closing of the Private Placement, PyroGenesis will complete a stock split on the basis of approximately 21.08 for one basis  (the "Stock Split");

      (d)immediately prior to the Qualifying Transaction, IGIC will complete a share consolidation on the basis of approximately 0.3299 common shares of IGIC for each common share in the capital of IGIC previously issued and outstanding (the "Consolidation") and change its name to a name acceptable to PyroGenesis (the "Name Change"). The outstanding options to purchase common shares of IGIC shall be adjusted in accordance with their terms to reflect the Consolidation;

      (e)IGIC will acquire 100% of the issued and outstanding shares in the capital of PyroGenesis after the Stock Split, Consolidation, Private Placement and Non-Brokered Private Placement in exchange for common shares of IGIC and the Qualifying Transaction will result in PyroGenesis becoming a wholly-owned subsidiary of IGIC; and

      (f)the board of directors of IGIC will be increased to up to at least five directors to be reconstituted with at least four nominees of PyroGenesis as well as Gary Coleman, Chairman and CEO of IGIC.

Share Exchange

PyroGenesis and IGIC shall enter into a share exchange agreement (the "Share Exchange Agreement") whereby each post-Stock Split common share of PyroGenesis shall be exchanged for one post-Consolidation common share of IGIC. Upon completion of the Stock Split and completion of the Private Placement and the Non-Brokered Private Placement, assuming the financings are fully subscribed, PyroGenesis shall have approximately 58,437,500 common shares issued and outstanding which shall be exchanged for 58,437,500 post-Consolidation common shares of IGIC issued at a deemed price of $0.80 per share. Currently, there are 4,025,000 common shares of IGIC issued and outstanding which will be consolidated into 1,300,000 common shares of IGIC pursuant to the Consolidation.

Upon completion of the Qualifying Transaction, it is anticipated that the holders of PyroGenesis common shares (including subscribers for the Private Placement and Non-Brokered Private Placement) and current holders of IGIC common shares will own approximately 97.82% and 2.18%, respectively, of the issued and outstanding post-Consolidation common shares of the resulting issuer. The post-Consolidation shares to be issued pursuant to the proposed Qualifying Transaction will be subject to the applicable escrow requirements of the Exchange.

In addition, PyroGenesis currently has an outstanding loan (the "FIER Loan") in the amount of $1,000,000 from FIER Innovation Durable, Société en Commandite that is entitled to be converted into common shares of PyroGenesis at a price equal to the fair market value of the common less an amount of ten percent (10%). It is not known at this time whether or not this loan will be converted prior to closing of the Qualifying Transaction. In the event that the FIER Loan is converted into common shares of PyroGenesis, there will be approximately 1,388,666 additional common shares of PyroGenesis issued and outstanding, after the Stock Split.

Private Placement and Non-Brokered Private Placement

In connection with the Transaction, PyroGenesis has engaged Versant Partners Inc. to lead a syndicate of agents including Canaccord Genuity Corp. and Stonecap Securities Inc. (together, the "Agents") for purposes of an offering, by way of the Private Placement, of subscription receipts for aggregate gross proceeds of up to $5,000,000, but in no case less than $3,000,000, at a price of $0.80 (the "Issue Price") per subscription receipt. Each such subscription receipt will entitle the holder to acquire one common share in the capital of PyroGenesis upon satisfaction of the Release Conditions (as defined below). The Private Placement will be completed on a best efforts basis. The Agents shall receive a cash commission equal to 7.0% of the gross proceeds (the "Agency Fee") and shall receive that number of broker warrants (the "Broker Warrants") that is equal to 7.0% of the number of subscription receipts issued pursuant to the Private Placement. Each Broker Warrant shall entitle the holder to purchase one common share in the capital of PyroGenesis for a period of 12 months from the date of issuance at the Issue Price. PyroGenesis will reimburse the Agents for reasonable fees and disbursements of the Agents' legal counsel and reasonable "out-of-pocket" expenses of the Agents.

The gross proceeds raised in the Private Placement will be deposited into escrow with an escrow agent. Upon receipt of the conditional approval of the Transaction by the Exchange and confirmation from IGIC and PyroGenesis that all conditions under the Share Exchange Agreement have been satisfied or waived (the "Release Conditions"), the Agency Fee and the Agents' expenses shall be paid to the Agents and the remainder of the gross proceeds and any interest payable thereon shall be released to PyroGenesis. In the event that the Release Conditions are not satisfied within 90 days of the closing of the Private Placement, the gross proceeds shall be returned to the subscribers to the Private Placement. If the Private Placement is not completed because PyroGenesis enters into an alternative transaction which prevents the completion of the Transaction, then PyroGenesis shall be required to pay the Agents a fee of $300,000, as well as the reasonable expenses of the Agents incurred to that time.

Concurrent with the brokered Private Placement, PyroGenesis shall undertake the Non-Brokered Private Placement of a minimum of $1.75 million up to a maximum of $2.75 million in common shares of PyroGenesis. The gross proceeds raised from the Non-Brokered Private Placement will be immediately available to PyroGenesis upon closing of the Non-Brokered Private Placement.

Description of PyroGenesis

PyroGenesis, a corporation incorporated in 2006 pursuant to the Canada Business Corporations Act, is a leader in the design, development, manufacture and commercialization of advanced plasma waste destruction and waste to energy systems. In addition to development and engineering services, the Company offers plasma torches, and two distinct systems that use the intense energy of plasma to rapidly and efficiently gasify and vitrify any type of waste without the need for pre-sorting. PyroGenesis' plasma systems serve the marine vessel market and a variety of land-based unit markets, and its end-users include a number of high-profile customers, including the U.S. Navy and the U.S. Air Force. The PAWDS (Plasma Arc Waste Destruction System) of PyroGenesis is an efficient and compact alternative to incineration onboard military and cruise ships. The PRRS (Plasma Resource Recovery System) of PyroGenesis converts waste into an inert rock that can be used for construction and into a combustible gas that gas be used to produce electricity and heat. In addition, PyroGenesis designs and builds its own plasma torches that are at the heart of PyroGenesis' systems.

The only shareholders of PyroGenesis who each hold a controlling interest in PyroGenesis are Photis Peter Pascali of Montreal, Quebec, who is a principal of PyroGenesis and is currently a director and the President and Chief Executive Officer of PyroGenesis and Peter P. Pascali of Cyprus.

Summary of Financial Information

Financial statements of PyroGenesis, as required by the Exchange, were not available at the time of this press release. The financial statements and summary financial information will be disclosed at a later date in accordance with the policies of the Exchange.

Description of IGIC

IGIC was incorporated on September 22, 2005 and began trading on the Exchange on August 16, 2006 as a capital pool company. IGIC was transferred from the Exchange to the NEX on May 27, 2009 for failure to complete its qualifying transaction within the required time period. Upon completion of the Qualifying Transaction, provided all necessary approvals are obtained, IGIC will return to listing on the Exchange as a Tier 2 Technology/Industrial Issuer.

Proposed Management and Board of Directors

IGIC's management team is currently comprised of Gary Coleman, Chairman, Chief Executive Officer and a director and Earl Coleman, Chief Financial Officer. In addition to Gary Coleman, IGIC's board of directors includes David Filmon and Ab Freig. Upon completion and closing of the Qualifying Transaction, it is anticipated that John Kubricky, Photis Peter Pascali, Alan Curleigh, Gillian Holcroft, Aline Belanger and Gary Coleman shall be the ongoing directors of the resulting issuer. David Filmon and Ab Freig will resign as directors.

Following the closing of the Qualifying Transaction, it is anticipated that the following individuals will serve as directors and/or officers of the resulting issuer:

Photis Peter Pascali (proposed President, Chief Executive Officer and director) of Montreal, Quebec

Mr. Pascali is the original founder of PyroGenesis and is the President and Chief Executive Officer and a director of PyroGenesis. In this capacity, he is responsible for the overall vision of PyroGenesis as well as the day-to-day development and execution of its business strategy. Prior to his involvement with PyroGenesis, Mr. Pascali spent 12 years in the investment banking business. Mr. Pascali holds a Bachelor of Science and an MBA from McGill University.

Gillian Holcroft (proposed Chief Operating Officer and director) of Beaconsfield, Quebec

Ms. Holcroft joined PyroGenesis in 2003 and currently serves as the Chief Operating Officer and a director of PyroGenesis. Ms. Holcroft oversees PyroGenesis's team of engineers and technicians in the execution of its various contracts. Ms. Holcroft is also responsible for furthering strategic growth, partnerships and new business opportunities at PyroGenesis. Prior to joining PyroGenesis, Ms. Holcroft worked for over 12 years at Noranda Inc. (now Xstrata), in which she was involved in many aspects of the company's operations, including the start up of a $750 million production facility. Ms. Holcroft holds Bachelor's and Master's degrees in Chemical Engineering from McGill University.

Pierre Carabin (proposed Chief Engineer) of Montreal, Quebec

Mr. Carabin joined PyroGenesis in 1998 as an R&D Engineer and was instrumental in the original development, design and engineering of the company's waste to energy systems. Presently serving as Chief Engineer of PyroGenesis, Mr. Carabin is responsible for building and motivating the company's engineering team, as well as overseeing the process engineering product design at PyroGenesis. Mr. Carabin has 20 years of experience in the chemical process and process development. He has authored nearly 40 technical papers and presentations. Mr. Carabin holds a Bachelor's and Master's degree in chemical engineering from McGill University.

Aida Kaldas (proposed Technology Development Manager) of Verdun, Quebec

Ms. Kaldas joined PyroGenesis in 2001 and is the Technology Development Manager at PyroGenesis. In this capacity, Ms. Kaldas leads the technology development activities for both marine and land-based plasma gasification systems. Her responsibilities include assessing new ideas for process improvement, managing all of the contract research activities and providing recommendations to the engineering team for improvement to PyroGenesis' commercial installations. Ms. Kaldas has over 20 years of technology development experience and is the author of numerous technical publications. Prior to joining PyroGenesis, Ms. Kaldas spent many years managing development programs for Orica (formerly ICI Explosives) where she led a team of engineers, scientists and technicians in the research, development and implementation of technologies. Ms. Kaldas holds a Bachelor's degree in chemical engineering from Cairo University and a Master's degree in engineering science from the University of Western Ontario.

Alan Curleigh (proposed Chairman, Acting CFO and director) of Pointe Claire, Quebec

Mr. Curleigh has managed the responsibilities of the Chair of the Board of the Canadian Commercial Corporation for seven years until November, 2009. During this term, he, together with ten board colleagues, oversaw the affairs of this federal Crown Corporation. Mr. Curleigh is currently the Chair of the Audit Committee for the Department of Veterans Affairs Canada. Mr. Curleigh also sits on the board of Northstar Trade Finance Inc., a Canadian financial institution engaged in the financing of Canadian export transactions. Mr. Curleigh has spent many years as a senior executive and board member of a major Canadian engineering contracting firm and has participated in representing Canadian exporter interests in Canada's evolving international trade agenda which led to his engagement as a board member and then chair of one of Canada's leading manufacturing and international trade advocacy groups. Mr. Curleigh has also sat on the steering committee of the Public Enterprise Governance Centre in Ottawa and has been a member of the Advisory Board of the Business Faculty of the University of New Brunswick, his alma mater, and is a visiting faculty member at the Directors College, a corporate governance institution established through the collaboration of the Conference Board of Canada and McMaster University. Mr. Curleigh received a Bachelor of Business Administration from the University of New Brunswick in 1966.

John Kubricky (proposed director) of Ellicott City, Maryland

Mr. Kubricky presently serves as a member of the scientific advisory board of NanoInk, Inc., an emerging growth technology company specializing in nanometer-scale manufacturing and applications development for the life sciences, engineering, pharmaceutical, and education industries. Mr. Kubricky is the former U.S. Deputy Under Secretary of Defense (Advanced Systems and Concepts), a position he held from 2006 to 2009. During his tenure, Mr. Kubricky was responsible for the U.S. Department of Defense applied technology programs that demonstrated urgently needed defense capabilities, comparative tests of domestic and foreign defense systems, technology transition and acceleration programs, and defense manufacturing research and development. Previously, he served as the U.S. Department of Homeland Security's Director of Systems Engineering and Development within the Science & Technology Directorate. In this position, he was responsible for integrating technologies into systems for demonstration, operational test and evaluation, and pre-production prototypes. He also served as the Director of the U.S. Homeland Security Advanced Research Projects Agency, which manages more than 100 advanced technology programs under contracts with the private sector. Mr. Kubricky received a Bachelor of Science from Johns Hopkins University in 1980.

Gary Coleman (proposed director) of Winnipeg, Manitoba

In addition to his positions with IGIC, Mr. Coleman has been the Chief Executive Officer of Big Freight Systems Inc., a transportation company headquartered in Steinbach, Manitoba, since 1997. Mr. Coleman was also the President, Chairman and a director of Global Fortress Inc. from May 25, 2000 until April 23, 2003 when it completed its qualifying transaction pursuant to the policies of the Exchange and transformed into Lakeview Real Estate Investment Trust by way of a plan of arrangement.

Conditions to closing

The execution and delivery of the Share Exchange Agreement and the completion of the Qualifying Transaction shall be subject to the satisfaction of a number of conditions, including, but not limited to: i) completion of satisfactory due diligence investigations; ii) delivery of legal opinions, officer's certificates and other standard closing documentation; iii) conditional approval of the Qualifying Transaction by the Exchange; iv) the approval of the Stock Split by a special majority of the shareholders of PyroGenesis and the approval of the Consolidation and Name Change by a special majority of shareholders of IGIC; v) receipt of all required regulatory and third party approvals, consents, waivers and compliance with all other applicable regulatory requirements and conditions; vi) the completion of the Private Placement and the Non-Brokered Private Placement; and vii) the absence of any material adverse effect on the financial and operational conditions or the assets of PyroGenesis or IGIC.


IGIC has not yet engaged a sponsor for the Qualifying Transaction and will apply to the Exchange for an exemption from the requirement to obtain a sponsor. The granting of such an exemption is within the discretion of the Exchange and there can be no assurance that it will be granted.

Trading Halt:

The Corporation's shares are currently halted from trading on the NEX and will remain halted until such time as determined by the Exchange, which, depending on the policies of the Exchange, may or may not occur until the completion of the Qualifying Transaction.

The Corporation will provide further details in respect of the Qualifying Transaction by way of press release including summary financial information regarding PyroGenesis, in accordance with the policies of the Exchange.

Completion of the transaction is subject to a number of conditions, including, but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the 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.

Neither the TSX Venture Exchange, Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) has in any way passed upon the merits of the Transaction and neither of the foregoing entities has in any way approved or disapproved of the contents of this press release.

Cautionary Statements

Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Corporation's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, this release contains forward-looking information relating to the intention of the parties to enter into the Share Exchange Agreement, the completion of the Stock Split, Private Placement and Non-Brokered Private Placement and the completion of the Consolidation and Name Change. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the Corporation. The material factors and assumptions include the parties to the Share Exchange Agreement being able to obtain the necessary director, shareholder and regulatory approvals; Exchange policies not changing; and completion of satisfactory due diligence. Risk factors that could cause actual results or outcomes to differ materially from the results expressed or implied by forward-looking information include, among other things: conditions imposed by the Exchange, the failure to obtain the required directors' and shareholders' approval to the Qualifying Transaction; changes in tax laws, general economic and business conditions; and changes in the regulatory regulation. The Corporation cautions the reader that the above list of risk factors is not exhaustive. The forward-looking information contained in this release is made as of the date hereof and the Corporation is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

SOURCE Industrial Growth Income Corporation

For further information:

Gary Coleman, Chairman and Chief Executive Officer. Tel: (204) 977-2825

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Industrial Growth Income Corporation

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