Vancouver, British Columbia--(Newsfile Corp. - September 24, 2014) - Lignol Energy Corporation (TSXV: LEC) (“LEC” or the “Company”), reports that although management was engaged in discussions with Difference Capital Financial Inc. (“DCF”) with respect to the terms of a proposed financing and the possible sale of the assets of the Company, DCF discontinued negotiations and appointed The Bowra Group Inc. (the “Receiver”) as Receiver of the Company on August 22, 2014. The Receiver is currently in possession and control of the Company’s assets and undertaking.
The Company’s management, directors and certain shareholders have been in a position for the past few months to provide sufficient bridge finance to the Company for the next several months during which time it was hoped to be able to close a larger financing or a merger or sale transaction. However, management has been unsuccessful in negotiating the terms under which its largest shareholder and secured note holder, DCF, would accommodate such new funding. Furthermore, last week management presented to DCF the conditional terms of a proposed transaction in which the assets and operations of LEC and its subsidiaries would be sold, and if successfully completed, would leave LEC debt free and with a modest equity value. The proposed transaction also provided for the retirement of the DCF note at a discount to its current face value. LEC and DCF were in the process of negotiating the allocations of the consideration between debt and equity late last week, when DCF broke off negotiations and announced the appointment of the Receiver.
The Board of LEC sincerely regrets that neither the terms of a suitable financing nor an agreement on the terms for a sale of the assets of the Company have been successfully agreed to with DCF. Stephen White has resigned from the Board of Directors of the Company. It is the intention of the remaining five members of the Board and the executive officers of the Company, who have not resigned at this time, for the time being, to work diligently with the Receiver in an effort to achieve value for all stakeholders, although there can be no assurance that a similar transaction to the one rejected by DCF is still possible.
In addition, LEC will not be in a position to file audited financial statements for the year ended April 30, 2014 that are due to be filed on August 28, 2014. The Company will advise the market as further developments unfold.
The Bowra Group Inc. is located at Suite 430, Bentall One, 505 Burrard Street, Vancouver, BC V7X 1M3, Tel: (604) 689 8939.
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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 LEC’s ability to be a going concern given the fact that the Company has been placed in Receivership by DCF, that the Company is immediately able to secure an injection of sufficient bridge finance to finance the Company’s operations until a transaction can be concluded, the company’s ability to conclude a financing, or complete one or more commercial transactions, that range from the sale or merger of each of the Company’s respective holdings, to that of a sale or merger with LEC, or the licensing of certain assets, the ability of the Company to conclude a transaction with a third party involving the sale of the assets of the Company which would provide for non-dilutive funding of all of LEC’s operations until closing, retirement of all of trade payables, leave LEC with a modest equity value, retire the DCF note at a discount to its current face value and potentially provide further payments to DCF based upon the future performance of the assets acquired, (although there can be no assurance that such transaction can be concluded), and the ability of the current management and the remaining board members to work with the Receiver in an effort to achieve value for all shareholders and to negotiate a successful outcome of a transaction, (however there can be no assurances that any transaction will be forthcoming or that the remaining board members or the executive officers will wish to continue to remain in office), LEC’s ability to retain ownership of its assets, LIL’s ability to satisfy certain project deliverables and related funding conditions from existing and potential future government grants so as to enable LIL to receive future grant hold-backs, 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, LEC’s ability whilst in Receivership to immediately raise additional capital to fund operations and to support the capital requirements of its affiliates, and to complete a transaction which may range from the sale or merger of each of the Company’s respective holdings, to that of a sale or merger with LEC or one or more of its affiliates, or the licensing of certain assets of the Company.
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, financial market conditions which will impact LEC’s ability to finance its operations and to meet future capital and investment requirements, the demand for the market price of liquid fuels including gasoline, biodiesel, ethanol, the market price and demand for renewable chemicals, risks relating to the protection of technology from infringement and those risk factors which are discussed elsewhere in documents that LEC files from time to time with securities and other 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, LEC 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.
For further information, contact:
Lignol Energy Corporation
Ross MacLachlan
Chairman of the Board & CEO
Tel: 604-453-1240
Email: rmaclachlan@lignol.ca
