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VANCOUVER, Dec. 17, 2012 /CNW/ - Lignol Energy Corporation (TSXV: LEC) ("LEC" or the "Company"), a leading technology company in the advanced biofuels and renewable chemicals sector, is pleased to announce that it has closed its previously announced private placement for gross proceeds of $4,515,040.50 (the "Offering"). Also, in connection with the Offering, Wasabi Energy Limited converted the $2,245,770 convertible debenture it held resulting in the issuance of 14,971,800 common shares of the Company at an exercise price of $0.15 per share. Interest payable under the convertible debenture was settled in cash on the date of the closing of the Offering.
Canaccord Genuity Corp. ("Canaccord" or the "Agent") was engaged to sell up to 26,666,667 Units (the "Units") of the Company at a price of $0.15 per Unit (the "Issue Price") for aggregate gross proceeds of up to $4,000,000 with an option granted to the Agent to offer up to an additional 6,666,667 Units at the Issue Price for additional gross proceeds of $1,000,000. The selling group in the Offering included Global Securities Corp. and Haywood Securities Inc. Each Unit is comprised of one common share of the Company and one-half of one common share purchase warrant (each whole such warrant, a "Warrant"). Each whole Warrant allows the subscriber to purchase one additional common share of the Company for a period of two years from the date of closing at an exercise price of $0.20 per share.
As a part of the private placement, Difference Capital Funding Inc. ("Difference Capital") has subscribed for 9,000,000 Units, which brings their total investment in the Company at the time of closing to 19.8% percent, assuming full exercise of the Warrants purchased by Difference Capital as part of the Units. In addition they have also subscribed for 7,666,667 subscription receipts of the Company (the "Subscription Receipts") at a price of $0.15 per Subscription Receipt. Each Subscription Receipt entitles Difference Capital to receive one Unit for each Subscription Receipt held, for no additional consideration and without further action, upon the Company receiving approval from the shareholders of the Company in respect of: (i) the creation of Difference Capital as a "Control Person" as defined in the TSXV Corporate Finance Manual; and (ii) the waiver of the application of the Shareholder Rights Plan of the Company with respect to Difference Capital being the Beneficial Owner (as defined in the Shareholder Rights Plan) of 20% or more of the outstanding Voting Shares (as defined in the Shareholder Rights Plan) (the "Release Conditions") prior to the earliest to occur of: (i) the next annual general meeting or special meeting of the shareholders of the Company; and (ii) December 17, 2013 (the "Release Deadline"). If the Subscription Receipts are exercised, Difference Capital will hold approximately 25.6% of the common shares of the Company, assuming full exercise of the Warrants purchased as part of the Units. If the Release Conditions are not satisfied by the Release Deadline, the proceeds raised in connection with the Subscription Receipts together with any interest accrued thereon, will be returned to Difference Capital.
As consideration for the services of the Agent in connection with the Offering, LEC has paid the Agent a cash commission equal to 3% of the gross proceeds of the Units on the portion of the Offering subscribers introduced by the Company to the Agent, 3% of the gross proceeds of the Subscription Receipt portion of the Offering and 8% of the gross proceeds on the remaining Unit portion of the Offering. Agent's warrants were also issued, each such warrant exercisable for one common share of the Company for a period of two years from the date of closing at an exercise price of $0.20 per share, equal to 10% of the Units sold on the portion of the Offering subscribers which were not introduced by the Company to the Agent. In addition, the Agent was paid an administrative work fee in cash and 376,252 common shares of the Company as a corporate finance fee.
LEC intends to use the net proceeds from the Offering to fund general working capital and other corporate purposes.
The Units, Subscription Receipts, Agent's warrants and corporate finance fee common shares issued upon the closing of the Offering are subject to a 4-month hold period. The securities offered hereby have not and will not be registered under the United States Securities Act of 1933 (the "1933 Act") and may not be offered or sold in the United States or to U.S. persons (as defined in Regulation S under the 1933 Act) unless the securities have been registered under the 1933 Act, or are otherwise exempt from such registration.
About Lignol Energy Corporation ("LEC")
LEC (TSXV: LEC) currently owns a 14.9%(1) stake in Australian Renewable Fuels Ltd (ASX: ARW) and owns 100% of the issued and voting shares of Lignol Innovations Ltd. ("Lignol"). LEC also intends to invest in, or otherwise obtain, equity interests in energy related projects which have synergies with its biorefining technology.
ARW is the largest biodiesel producer in Australia owning three plants with a total nameplate capacity of 150 million litres per annum. ARW's three plants were built at an aggregate cost of approximately A$150 million. ARW has made significant changes in recent years to become a cost effective producer of high quality biodiesel to address growing biofuel demand in the Australian market.
|(1)||On November 15, 2012, ARW announced a transaction which will provide approximately AUD $14 million in cash to ARW in exchange for the issuance of ordinary shares of ARW, which upon closing of such transaction is expected to reduce LEC's equity interest in ARW to approximately 10% of ARW.|
More information on ARW can be found at their website; www.arfuels.com.au.
Lignol is a 100% owned subsidiary of LEC. Lignol is a leading technology company in the advanced biofuels and renewable chemicals sector undertaking the development of biorefining technologies for the production of advanced biofuels, including fuel-grade ethanol, and other renewable chemicals from nonfood cellulosic biomass feedstocks. Lignol's modified solvent based pretreatment technology facilitates the rapid, high-yield conversion of cellulose to ethanol and the production of value-added biochemical co-products, including high purity HP-LTM lignins. HP-LTM lignin represents a new class of high purity lignin extractives (and their subsequent derivatives) which can be engineered to meet the chemical properties and functional requirements of a range of industrial applications that until now has not been possible with traditional lignin byproducts generated from other processes. Lignol is executing on its development plan through strategic partnerships to further develop and integrate its core technologies on a commercial scale. For more information please visit Lignol's website at www.lignol.ca.
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.
Caution concerning forward-looking statements:
Certain statements contained in this document may constitute forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information include, without limitation, statements or information about the conversion of the Subscription Receipts into Units through the approval of the shareholders of the Company of the Release Conditions, the transaction entered into by ARW and the resulting change to the LEC equity interest in ARW and to continue as a going concern and to raise additional financing to fund the operations of LEC and Lignol, the development status of Lignol's fully integrated pilot scale biorefinery in Burnaby, British Columbia, the planning and development of a commercial plant, Lignol's ability to complete project deliverables which are funded in part by government agencies, obtaining strategic partnership investments and government funding for initial commercial projects. Often, but not always, forward looking statements or information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations of such words and phrases or words and phrases that state or indicate that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.
Such statements or information reflect LEC's current views with respect to future events and are subject to certain risks, uncertainties and assumptions including, without limitation, our ability to establish the validity of Lignol's technology at the fully integrated biorefinery pilot plant scale, Lignol's ability to satisfy the conditions of existing government grants and to obtain new additional grants, our ability to continue to finance our operations and to finance and complete the development of a commercial project, Lignol's ability to work with Novozymes to produce cellulosic ethanol at production costs competitive with gasoline and corn ethanol, Lignol's ability to develop products and to obtain off-take agreements, our ability to obtain requisite regulatory approvals and our ability to enter into agreements with strategic partners on terms acceptable to us, the inability to influence the strategy, operations and financial performance of Australian Renewable Fuels Limited ("ARW"), the reliance on publically available information of ARW in the Company's evaluation of its acquisition of shares in ARW, the potential inability to divest the ARW ordinary shares due to modest trading volumes, the cost of future ARW capital investment, the fluctuation of biodiesel and feedstock prices on ARW, the effect on ARW of changes in government policy relating to the environment, and incentives for renewable fuels. Many factors could cause LEC'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, the technological challenges that remain to be surpassed in obtaining the necessary operating data from Lignol's fully integrated biorefinery pilot plant that is required prior to completing the next scale-up of the technology, financial market conditions which will impact our ability to finance our operations and to finance the construction and operation of a commercial plant, the price of gasoline and demand for ethanol, the market pricing and demand for renewable chemicals, risks relating to the protection of Lignol's core technology from infringement and those risk factors which are discussed elsewhere in documents that LEC 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. Except as required by law, 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.
SOURCE: Lignol Energy Corporation
For further information:
Lignol Energy Corporation
Chief Financial Officer