Burnaby, British Columbia – Legend Power Systems Inc. (TSX.V: LPS) (“Legend Power” or “the Company”) (formerly Texas Gas & Oil Inc. before the reverse takeover of July 2, 2008), a leading provider of energy conservation technology, today announced financial results for Texas Gas & Oil Inc.for the third quarter ended June 30, 2008 and provided an update on the Company’s operations.
As the reverse take over of Texas Gas & Oil Inc. did not complete until after the quarter end of June 30, 2008, the financial results are presented on a pre-RTO basis for Texas Gas & Oil Inc.
Units of Legend Power Systems Inc. started trading on the TSX-Venture Exchange at the opening on July 3, 2008 under the symbol LPS. The common shares of Texas Oil & Gas Inc. have since been delisted.
Legend Power manufactures, sells and installs a patented energy conservation device consisting of an Electrical Harmonizer and an Automatic Voltage Regulator (AVR) (together, the “Electrical Harmonizer-AVR”) that has been proven to help reduce electricity consumption by seven to ten percent through voltage optimization. Commercial and retail customers that can benefit from this technology include “big box” retailers, department stores, warehouses, office buildings/complexes, hotels, theme parks, military bases, casinos and other high electrical consumption facilities.
“This last quarter was a monumental period for Legend Power,” said Gerry Gill, Chairman and CEO of Legend Power. “In addition to completing our reverse take over of Texas Gas & Oil and listing on the TSX-Venture Exchange, we have established a solid foundation for strong sales growth through our relationships with provincial utilities and flexible financing options that are now available to customers through a newly established relationship with Royal Bank of Canada (RBC). We are looking forward to a very vibrant period for Legend Power.”
· Texas Gas & Oil Inc. reported a net loss of approximately $63,177 ($0.02 per share) for the third quarter ended June 30, 2008, compared to a loss of $5,975 ($0.00 per share) for the same period last year. Full financial statements can be viewed on SEDAR.
· Consolidated pro-forma financial statements as of June 30, 2008 for Texas Gas & Oil Inc. and Legend Power Systems Inc. show assets of $3,553,298, liabilities of $1,348,868 and shareholders’ equity of $2,204,430. Legend Power has working capital of approximately $1.44 million.
· Legend Power obtained a $605,000 order from Canada Post for eight Electrical Harmonizer-AVR installations at three of their Ontario facilities on March 3, 2008. Under the terms of its sales contract, Legend Power does not recognize revenue until an installation is complete. Six of the Canada Post Electrical Harmonizer-AVRs have been installed with the remaining two units scheduled for installation by the fourth quarter of fiscal 2008 ending September 31, 2008.
· Legend Power anticipates total revenues will reach approximately $670,000 for fiscal 2008.
· To date, Legend Power has completed 22 Electrical Harmonizer installations in British Columbia and two in California. B.C. installations include Canada Post in Vancouver and Victoria, BC Hydro’s facilities on Dunsmuir in Vancouver, Edmonds in Burnaby and their Nanaimo facility, IKEA in Richmond, shopping malls such as Il Mercato and Sunshine Hills, schools and other facilities. These installations have saved over $1 million in power consumption and eliminated over 10,000 tones of greenhouse gas emissions.
· In February 2008, Legend Power’s Electrical Harmonizer-AVR was approved for incentive funding under the BC Hydro Power Smart Partners’ Program in British Columbia. Under this program, BC Hydro will pay up to 60 per cent of the cost of the technology which dramatically improves the payback incentive for companies. The Electrical Harmonizer-AVR also qualifies for incentive funding in Ontario of up to 40 per cent under the Building Owners and Manager’s Association’s (BOMA) Conservation and Demand Management (CDM) program.
· Legend Power’s plan over the next 12 months is to focus on B.C. and Ontario markets because of their urgent need to meet specific conservation targets and the incentive funding that they are providing. The company intends to open an Ontario sales office in first half of calendar 2009, with plans to expand into the U.S. market in late 2009/early 2010.
· Under the Public Sector Energy Conservation Agreement, BC Hydro and the B.C. Government are conducting energy audits of 6,500 government buildings in the province including an assessment of voltage levels. The inclusion of voltage level testing in the energy audit would allow Legend Power to quickly pre-qualify and target high potential government buildings that need to implement energy management solutions. The Company has submitted a proposal to the B.C. government to conduct a voltage optimization assessment of B.C. schools and hospitals to identify those facilities that would most benefit from Legend Power’s Electrical Harmonizer-AVR technology. The Company is awaiting formal response from the provincial government to its proposal.
· Legend Power has secured a $2.0 million conditional operating line of credit from the Royal Bank of Canada (RBC), as well as a $300,000 revolving lease line of credit that will allow the Company to lease capital assets. In addition, RBC’s leasing department has agreed to provide qualified Legend Power customers with capital leases for up to 100 per cent of the cost of an Electrical Harmonizer-AVR net of rebates and grants for lease terms ranging from 24 to 60 months. Financing can include equipment and extended warranty. In conjunction with available incentive funding, this financing program will enable most Legend Power customers to offset their lease payments through energy savings making the transaction cash neutral.
· Legend Power has been awarded $252,915 in funding contributions over a two-year period under the National Research Council’s Industrial Research Assistance Program (IRAP) towards the Company’s R&D program. This is a matching funding program that will enable Legend Power to stay at the forefront of energy conservation technological innovation.
· The Company’s R&D efforts continue to be focused on the further refinement of the existing AVRs and on developing new products that reduce power consumption and improve power quality. The Company’s latest product innovation, the AVR1000, will allow the company to target higher consumption commercial facilities than the existing AVR500 . The Electrical Harmonizer-AVR’s are offered in the following configurations:
Electrical Harmonizer: AVR:
400 amp AVR500
500 amp AVR500
750 amp AVR1000
1500 amp (future development)
· Legend Power will be attending the ENEX 2008, Energy Excellence conference in Ontario September 23-24, 2008. The Company’s Chairman and CEO, Gerry Gill, will participate in a Technological Breakthrough panel discussion on September 24th hosted by Energy Management Magazine.
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-Automatic Voltage Regulator (AVR) eliminates inefficiencies by delivering the optimal level of voltage a user needs. Most customers receive higher voltage levels than required at certain points of the grid from electrical utilities. 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.
Forward Looking Information
This release and referenced materials contain forward looking statements, within the meaning of the “safe-harbour” provisions of the Private Securities Act of 1995, which are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in our forward looking statements. Factors that could cause actual results to differ materially include: rapid technological and/or market changes in the industry including actual electrical billing rates; the adequate protection of the Company’s proprietary rights; and other factors described in the Company’s regulatory filings. Although we believe the expectations reflected in our forward looking statements are reasonable, individual results may vary, and we cannot guarantee future results, levels of activity, performance or achievements.
For further information, please contact:
Corporate Development Manager
Legend Power Systems Inc.
Living Communications Inc.
604 657 8234
Ross Sullivan/Stephanie Thatcher
604 689 5559
LEGEND POWER SYSTEMS INC.
8618 Commerce Court
Burnaby, BC V5A 4N6
604 420 1500