TORONTO, Jan. 10 /CNW/ - Luxell Technologies Inc. (TSX:LUX) (the "Company" or "Luxell") announced today that it has completed and closed the previously announced windup of the 2005 transaction whereby the Company's patented and non-patented intellectual properties ("IP") were transferred to Lux Operating Limited Partnership (the "Lux Partnership") in exchange for promissory notes and cash. The structured transaction provided the Company with approximately $5,000,000 in new working capital.
The 2005 transaction agreement included an option for Luxell to re-acquire the transferred IP at the then-prevailing fair market value ("FMV") after the end of 2007. An agreement to exercise the option, wind up the Lux Partnership and to return the IP to Luxell was approved by the independent members of the Board of Directors on July 10, 2007 following an independent appraisal of the value of the Lux OLP Units. Approval of this transaction was considered essential for Luxell to be able to raise critically required equity in July 2007 and allow for further conventional financing as the company continues to grow its sales.
The windup was accomplished without any cost to the Company as the Lux OLP Units were exchanged for the Promissory Notes outstanding. The return of the IP will result in a significant tax benefit to the corporation in the form of future Capital Cost Allowance which do not expire.
New Working Capital Facility
Additionally, the Corporation today announced that it has reached a financing agreement with Mercantile Finance Services Ltd., based in Toronto, to provide working capital financing supported through the Export Development Corporation. Under this facility, which can be expanded as sales increase, Luxell will have ready access to working capital for inventory purchases and accounts receivable financing for orders originating outside of Canada.
Jean-Louis Larmor, CEO of Luxell, commented "We are pleased to have completed this wind up as it improves the Company's ability to attract more conventional forms of both equity and working capital financing by returning ownership of our IP directly to Luxell and by simplifying our capital structure."
About Luxell
Luxell designs, manufactures and licenses flat panel display technologies and solutions for defence and avionics industries. More information can be found at www.luxell.com. (C) Luxell Technologies Inc., Luxell and Black Layer are trademarks of Luxell Technologies Inc. All other company and/or product names are trademarks and/or registered trademarks of their respective manufacturers.
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