Burnaby, British Columbia – July 30, 2009 – Legend Power Systems Inc. (TSX.V: LPS) (“Legend Power”) announces that it has arranged, with the assistance of Phoenix Alliance Corp. (“Phoenix”), subject to regulatory approval, a 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 will consist of one common share of Legend Power (a “Share”) and one half of one common share purchase warrant (a “Warrant”). Each whole Warrant will entitle the holder thereof to purchase one Share at a price of $0.60 per Share for a period of 18 months following the closing of the Offering.
D&D Securities Company (the “Agent”) is acting as lead agent for the Offering and will offer the Units on a reasonable best efforts basis. The Units will be made available by way of private placement exemptions in the provinces of British Columbia, Alberta, Ontario and Quebec.
Closing of the Offering is subject to a number of conditions, including the receipt of all necessary corporate and regulatory approvals, including the TSX Venture Exchange, as well as the negotiation and execution of certain documentation, including an agency agreement between the Agent and Legend Power.
At closing, Legend Power will pay the Agent a cash commission equal to 6% of the gross proceeds of the Units sold (up to $450,000), and will issue to the Agent broker warrants (the “Broker Warrants”) to acquire that number of Units equal to 10% of the Units sold under the Offering (up to 1,500,000 Broker Warrants). Each Broker Warrant will be exercisable at $0.50 per Unit for a period of 18 months following the closing of the Offering. Legend Power will also reimburse the Agent for reasonable fees and expenses incurred in connection with the Offering.
Legend Power previously announced, on June 23, 2009, that it had entered into two agreements with Phoenix – a management consulting agreement (the “Consulting Agreement”) and a finder’s fee agreement (the “Finder’s Fee Agreement”). At closing, Legend Power will also pay Phoenix up to $168,750 in cash and issue to Phoenix up to 750,000 Shares at a deemed price of $0.50 per Share, in accordance with the Consulting Agreement. As previously disclosed, Legend Power has already paid Phoenix $25,000 pursuant to the Consulting Agreement. In addition, and in accordance with the Finder’s Fee Agreement, Legend Power will pay Phoenix a cash fee equal to 5% of the value of the subscriptions paid by investors in the Offering who were introduced to Legend Power by Phoenix (up to $375,000). Any fees and expenses payable to the Agent in connection with the Offering will be deducted from any amounts payable to Phoenix under the Consulting Agreement or the Finder’s Fee Agreement.
Net proceeds from the Offering will be used by Legend Power 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. All securities issued in connection with the Offering will be subject to a statutory hold period of four months plus one day from the date of completion of the Offering, in accordance with applicable securities legislation. In addition, any Shares issued to Phoenix will be subject to a hold period ranging in length from four months plus one day from the date of issuance up to ten months plus one day from the date of issuance.
Legend Power expects to provide an update on its previously announced non-brokered private placement shortly.
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.
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.
Forward Looking Information
Statements contained herein that are not based on historical or current fact, including without limitation statements containing the words “anticipates,” “believes,” “may,” “continues,” “estimates,” “expects,” and “will” and words of similar import, constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, both nationally and in the regions in which the Company operates; history of losses and uncertainty of revenues; ability to obtain required financing; technology changes and/or market changes, including actual electrical billing rates; adequate protection of the Company’s proprietary rights; competition; changes in business strategy or development plans; and other factors referenced in the Company’s filings with Canadian securities regulators. Although the Company believes that expectations conveyed by the forward-looking statements are reasonable based on the information available to it on the date such statements were made, no assurances can be given as to the future results, levels of activity, performance or achievements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company does not assume the obligation to update any forward-looking statements except as otherwise required by applicable law.
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.
For further information, please contact:
Gerry Gill, Chairman & CEO
Legend Power Systems Inc.
+ 1 604 420 1500