TORONTO, Nov. 11 /CNW/ - Luxell Technologies Inc. (TSX:LUX) (the
"Company" or "Luxell") announced today that it has completed a 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 will
make available approximately $5,000,000 in new working capital. In addition,
Luxell issued 1,772,800 common share warrants.
The structured transaction will provide the funds necessary to execute
the Company's five-point business plan. The plan's principal objective is to
bring the Company to profitability in fiscal 2006 and position the Company to
exploit its Black Layer(TM) technology as the organic light emitting diode
market moves to commercialization in 2007 or 2008. This investment comes at a
critical period in the Company's development and provides it with the
resources needed to pursue newly emerging Black Layer(TM) technology business
opportunities and pursue new production contracts for the Aktelux display
design and engineering division.
Included in the agreement is an option for Luxell to re-acquire the
transferred IP at the then-prevailing fair market value ("FMV") by or before
December 31, 2008. Common shares of Luxell will be issued at the then-
prevailing market price to re-acquire the transferred IP only to the extent
that the FMV of the transferred IP exceeds $26,000,000. The number of common
shares issued cannot exceed 20% of the then-outstanding common shares, and any
excess amounts owing on the re-acquisition of the IP will be paid through the
issuance of a debenture. The debenture will bear interest at 8% for the first
five years of its term and is convertible into shares of Luxell upon
shareholder approval. It is the Company's plan to re-acquire the IP in 2008.
Integral to the agreement with Lux Partnership is the Company's continued
business development of the Black Layer(TM) technology and its display design
and engineering expertise. A goal of both the Company and Lux Partnership is
to have Luxell exercise the option to re-acquire the transferred IP within a
period of 28 months. The transaction has received the required regulatory
approval.
Pursuant to the transaction, the Company announced that Ken Kivenko and
Thomas A. Di Giacomo have tendered their resignations as Directors of the
Board, freeing them to pursue increasing demands in other business areas.
Nominated to fill the vacated positions as representatives of Lux Partnership
and approved by the Board are John MacDonald, Founder and Principal of John
MacDonald & Associates, Professional Accountants based in Oakville Ontario,
and David Pasieka, President of eFunds Canada Corporation.
John Wright, President and Chief Executive Officer of Luxell said "The
Company's recent sales growth validates the investment strategy we have mapped
out and with the additional working capital, we now have the resources to
aggressively pursue our plans. On behalf of the entire Board, I extend our
thanks to Ken and Tom for their tireless work in steering the Company through
its difficult years. Similarly, I welcome our new Board members, who bring us
new resources and energies, important to our continuing growth."
This financing was led by John MacDonald & Associates and involved
WeirFoulds LLP, Collins Barrow Chartered Accountants, Thorsteinssons LLP and
Taylor Leibow LLP Accountants and Advisors. It is the second of five steps to
address the issues of shareholder value while executing the Company's business
plan and involve:
1) introducing new board members with skills and relationships able and
keen to drive the business forward
2) securing the necessary working capital to execute the Company's
strategic and sales and marketing plans
3) establishing a new oversight structure to assist in the successful
implementation of the Company's strategic plan
4) the refinement and enhancement of the sales and marketing plan,
necessary to maximize the commercial value of the Company's products
and technologies
5) driving the Company forward to achieve the goal of increasing
shareholder value through achieving profitability in the Aktelux
subsidiary in fiscal 2006, together with the realization of the true
value of Black Layer(TM) enhanced Original Equipment Manufacturer
products in the marketplace
About Luxell Technologies Inc.
Based in Mississauga, Ontario, Luxell Technologies Inc. is a leader in
the design, manufacture and licensing of flat panel display technologies and
solutions for the defence and aerospace industries through its operating
divisions Aktelux and Luxell Research. Luxell's Organic Light Emitting Diode
(OLED) technology featuring Black Layer(TM) is drawing attention in Southeast
Asia for its readability, reliability, and cost efficiency over current
display technology. More information can be found at www.luxell.com,
www.aktelux.com and www.luxellresearch.com.
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