FSC / Press Release
EnCap Updates Qualifying Transaction with Sustainable Energy Properties Inc.
Vancouver, British Columbia CANADA, January 10, 2011 /FSC/ – EnCap Investments Inc. (ENC.P – TSX Venture), announces an addendum to its Merger Agreement with Sustainable Energy Properties Inc. (“SEP”) and further details of its Qualifying Transaction (the “QT”).
Pursuant to the agreement and plan of merger and reorganization dated July 15, 2010 (the “Merger Agreement”) with SEP, as initially disclosed in the Company’s news release of July 29, 2010, the resulting issuer plans to be involved in the business of clean-tech solutions, sustainable energy, sustainable development and environmental services upon completion of the QT.
SEP
SEP is a clean technology and solutions provider company focused on development and deployment of clean-tech technologies and low carbon energy solutions. SEP assets include business units, technology rights, certain real estate assets and long term property leases for project development. SEP plans to deploy clean-tech technologies and solutions in the development of projects and sustainable low carbon energy complexes within its properties which are strategically located close to waterways, ports, railways, and highways. SEP combines assets and technologies for the purpose of developing sustainable solutions. Its focus is on the production of energy, project development, management and sale of land based mitigation credits and offsets, and manufacturing and assembly of sustainable products.
Two of SEP’s technology licenses are examples of the solution combinations that SEP is planning to offer to the market. are The first is for the exclusive manufacturing, distribution, and marketing licensing rights in North and South America for electric and hybrid urban buses. Other vehicle types are expected to follow and the initial plan is to assemble these vehicles during a ramp up aimed at the demand for electric vehicles and specialty equipment.. The second is for the exclusive manufacturing, distribution, and marketing licensing rights in North and South America for energy efficient LED streetlights and a heat transfer device useful in the thermal management of LED lighting units.
In addition to these two technology sets, SEP has exclusive rights for the manufacturing, distribution, and marketing of a portfolio of clean-tech technologies which are in various stages of development and market acceptance. SEP plans to leverage some of its projects to gain acceptance for newer technologies within this portfolio such as the license for a patented water desalination system. Unlike many other desalination systems, this system requires no chemicals to be added to eliminate marine or micro organism growth, is designed to prevent scaling and can be powered by solar energy. It is designed to operate in capacities from small to large, from individual houses to entire communities.
Other technologies and solution sets in various stages of market development that are part of SEP’s licensed portfolio of sustainable / clean-tech solutions include:
-***-
————————————————————————-
BRIEF DESCRIPTION APPLICATION
————————————————————————-
Atmospheric To harvest electrostatic energy from the
electrical atmosphere and convert it into readily usable
energy harvesting DC and/or AC power.
technology.
————————————————————————-
Active Concentration, storage and recirculation of
thermoregulation high and low temperature liquids for active
technology. thermoregulation of the built environment.
————————————————————————-
Bio-composite Efficient use and processing of recyclable/low
building embedded energy materials into built
components and environments.
system
production
technology.
————————————————————————-
Controlled Utilizing the controlled environmental
environmental infrastructure and distilled water of
horticulture desalination systems to efficiently and
technology. sustainably produce highly nutritional plants.
————————————————————————-
Energy storage Efficient storage of thermal and electrical
technology. energy.
————————————————————————-
Electrowinning of Efficient extraction of precious and rare earth
precious metals, including decontamination.
and rare earth
metals.
————————————————————————-
Centrifugal materials Efficient processing of liquids and powders to
processing system. increase materials efficiency and reduces
energy consumption, including concrete
structure mass reduction.
————————————————————————-
Desalination and Efficient mineral extraction from saline
salt production. solutions without chemical additives to produce
distilled water and pure salt.
————————————————————————-
Hydrofoil assisted Displacement and waterline reduction of marine
marine vessels. vessels to increase their efficiency.
————————————————————————-
Kinetic energy Efficient conversion of environmental kinetic
(water and energy into mechanical, thermal, or electrical
wind) conversion. power.
————————————————————————-
Nano-Carbon Fiber. Production of nano-carbon fiber from waste
biomass with minimal energy consumption.
————————————————————————-
“Skysails” for shipping. High power traction kites to reduce marine
transport costs.
————————————————————————-
Concentrated Efficient conversion of solar radiation into
solar energy thermal and/or electrical energy.
capture and power
conversion.
————————————————————————-
Efficient transport Ultra light, efficient transport solution using
technology. high strength materials and efficient energy
storage.
————————————————————————-
Low cost zero Continuous cycle oil reservoir gas injection,
carbon power CO2 sequestration, enriched gas production and
and CO2 sequestration. zero carbon power generation.
————————————————————————-
-****-
SEP continues with its deve
lopment strategy for approximately 4,500 acres of land currently held by a SEP subsidiary, located along the Texas Gulf Coast. These properties are located approximately 30 miles from the port of Houston with a portion of the properties situated directly on the Intracoastal Waterway. SEP, in cooperation with its planned partners and technology providers plans to utilize portions of this property for the development and manufacturing of acquired technologies. SEP, along with its partners, also plans to utilize portions of this property for the creation of mitigation credits.
A subsidiary of SEP has contracted for a long-term lease for up to the entire Tri-State Commerce Park located in Iuka, Mississippi. This site was originally developed to include a nuclear power facility for the Tennessee Valley Authority and other facilities utilized by NASA. The Park has onsite rail and barge access and additional infrastructure with an original cost of over $4 billion. SEP has rights to lease up to all of the approximately 3,500 acre property and intends to use portions of the facilities for manufacturing and development of its clean-tech technologies. SEP and its partners in cooperation with local officials also intend to develop an onsite waste to energy facility. The financial responsibility associated with the lease has been minimized until revenue is generated from the project by structuring a lease with revenue sharing and job creation quotas in lieu of standard annual lease payments.
A subsidiary of SEP has also entered into leases with options to purchase seven properties located on the Bolivar Peninsula, 45 miles Southeast of Houston, Texas. SEP, along with its partners, intends to continue the residential development that has already begun on many of these properties using sustainable development and building techniques. The leases include both beachfront and bayfront properties with substantial infrastructure such as streets, lighting, and sewer lines already in place on many of the properties. SEP has attempted to minimize the financial responsibility associated with each property by establishing flexible payment terms and having the owners of the properties be responsible for maintenance, taxes, and insurance until site specific development begins.
SEP has also secured three properties located throughout Mexico by way of long-term leases with options to purchase each property. Again, with owners of each Mexican property responsible for maintenance, taxes, and insurance until development begins and flexible payment terms including project specific equity, the financial responsibility associated with each property has been minimized while SEP, along with its Mexican partners, explore possible developments and future projects to deploy SEP’s low carbon and sustainable solutions on each property.
Addendum to the Merger Agreement
EnCap and SEP have entered into an Addendum dated as of January 6, 2011. The Addendum provides for a 1:1 share exchange of SEP shares for EnCap shares, subject to final due diligence satisfaction by EnCap. SEP currently has 302,676,033 issued shares.
Principal Shareholders of SEP
The principal shareholders of SEP who each hold more than 10% of the issued and outstanding common shares of SEP are Paul Cox, the President and a founding director of SEP (29%), Scott Jarnagin, the CEO and a founding director of SEP (38%), and Brandon Jarnagin, the Vice President of SEP (13%).
Arm’s Length Transaction
The QT will not constitute a Non-Arm’s Length Qualifying Transaction (as defined in TSX Venture Exchange (the “Exchange”) Policy 2.4 Capital Pool Companies).
No Shareholder Approval Required
As the QT will not constitute a Non-Arm’s Length Qualifying Transaction or a related party transaction (as defined in Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions), EnCap is not required to obtain the approval of its shareholders in order to effect the QT. SEP, however, must obtain shareholder approval of the QT.
Proposed Post-QT Management and Insiders
Upon completion of the QT, the board of directors of the Company will be comprised of Scott Jarnagin, Paul Cox and three additional SEP nominees. Brief biographies of Scott Jarnagin and Paul Cox are detailed below:
Paul Cox
Mr. Cox is a board member and officer of SEP, AllcoGreen Corp., Entropy Power Corp, and Project Green Lonestar 1 Corp., all of which are companies in the renewable energy and clean tech industries. He is also a director of Wind River Energy Corp. (formerly Adcore Capital Inc.) and served as its President, CEO and CFO from 2007 to August 2010. He is also a director of Aegis Investment Management (Golf), Inc. (formerly Avian Capital Inc.) and served as its President, CEO and CFO from 2006 to December 2009. He has been a director and officer of New Power Systems Corp., a company involved in the renewable energy sector which Mr. Cox founded in 2005. From 2003 to 2005, Mr. Cox was founder and CEO of EPT Corp., a Florida-based company marketing debit cards and related services to financial services companies. In 2001 he co-founded RadioWeb Communications Inc., an audio content delivery and technology development company and was their President and a director until 2003. From 1997 to 2002, he was a director, President and co-founder of TeraGlobal Communications Corp., which was listed on the OTCBB and then NASDAQ. Prior to this he held several executive positions with communications technology and commercial real estate companies.
Scott Jarnagin
Mr. Jarnagin has been an entrepreneur for over 25 years and serves as CEO and Chairman of SEP. Mr. Jarnagin is also the Chairman of Entropy Partners, LLC, a U.S.-based firm focused in the sustainable energy and environmental technologies sectors. He recently served with Green Atlantic Partners (“GAP”), a boutique hands-on firm who work closely with a select group of clients throughout the world. While at GAP the firm was involved in the public listing of a number of alternative climate change reduction businesses including D1 Oils Plc, a firm specializing in the commercialization of jatropha as a bio-fuels feedstock. Prior to Entropy Partners GAP, Mr. Jarnagin was the Founder, CEO and President of TRC, Inc., a commercial services company operating in Texas, California, Oklahoma, and Louisiana. Mr. Jarnagin currently serves on the board of each of AllcoGreen Corp., Eco Villas Corp., a company which develops low carbon villages, and Alagamentia, a firm that specializes in the deployment of a proprietary technique wherein filamentous algae grow on a floway (the algae biomass is used directly for animal feed or for producing methane-rich biogas in an anaerobic digester).
Complete and updated information on the QT, including management biographies, will be disclosed in the filing statement to be filed with the Exchange in connection with obtaining their approval to close the QT and list the resulting company.
QT Deadline
EnCap’s common shares were listed on the TSX Venture Exchange on January 12, 2009. As a capital pool company, EnCap is required to complete a qualifying transaction (QT) within 24 months of its date of listing, in accordance with Exchange Policy 2.4. While EnCap is working with SEP and the Exchange in order to complete the QT with SEP as soon as possible, this will not occur within the aforesaid 24 month period. In accordance with current Exchange policy, EnCap anticipates receiving a 90 day extension in order to allow the QT to be completed. This extension is not assured until received.
About EnCap
Encap is a capital pool company within the meaning of the policies of the Exchange, was incorporated on August 11, 2008 and was listed on the Exchange on January 12, 2009. EnCap does not have any operations and has no assets other than cash. EnCap’s business is to identify and evaluate businesses and assets with a view to
completing a QT under the policies of the Exchange.
Trading in the common shares of EnCap has been halted on the Exchange since April 17, 2009 and is expected to resume trading on the completion of the QT.
Completion of the QT is subject to a number of conditions including, but not limited to, the completion of ongoing due diligence in order to be able to close the QT and request the final approval by the Exchange. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the QT, any information released or received with respect to the QT may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The Exchange has in no way passed upon the merits of the proposed QT and has neither approved nor disapproved the contents of this press release.
For further information, please contact:
Responsible Officer: Harley D. Sinclair, President
Company Telephone Number: (778) 786-1431
Neither the 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.
FORWARD LOOKING INFORMATION
The statements made in this press release may contain certain forward-looking statements concerning potential developments affecting the business, prospects, financial condition and other aspects of EnCap Investments Inc. These statements include that the resulting issuer will be involved in the business of clean-tech solutions, sustainable energy, sustainable development and environmental services upon completion of the QT, that it plans to utilize portions its property for the development and manufacturing of acquired technologies, that it plans to use portions of its property for the creation of credits and to develop an onsite waste to energy facility, and that it anticipates receiving a 90 day extension from the Exchange within which to complete the QT. The actual results of the specific items described in this release, and the company’s operations generally, may differ materially from what is projected in such forward-looking statements. Although such statements are based upon the best judgments of EnCap Investments Inc. management as of the date of this release, significant deviations in magnitude, timing and other factors may result from business risks and uncertainties including, without limitation, the Company’s dependence on third parties, general market and economic conditions, technical factors, the availability of outside capital, receipt of revenues and other factors, many of which are beyond the control of the Company. EnCap Investments Inc. disclaims any obligation to update information contained in any forward-looking statement.
Source: EnCap Investments Inc. (TSX-V: ENC.P)
Maximum News Dissemination by Filing Services Canada Inc. *
www.usetdas.com