Last updated on April 17, 2014 at 1:21 EDT

Lignol Reports Fiscal 2013 First Quarter Financial Results

September 28, 2012

VANCOUVER, Sept. 28, 2012 /CNW/ – Lignol Energy Corporation (TSXV: LEC)
(“LEC” or “the Company”), a leading technology development company in
the advanced biofuels and renewable chemicals sector, today announced
its consolidated financial results for the three months ended July 31,
2012 (all figures in Canadian dollars, unless otherwise noted).


        --  Completed successful enzyme optimization work with Novozymes
        --  Continued development and expansion of intellectual property
        --  Joined the Oak Ridge Carbon Fiber Composites Consortium, a
            group of industry leaders who are dedicated to the development
            and commercialization of new carbon fiber and composite
        --  Developed a number of strategic investor opportunities that led
            to closing a $2.4 million private placement and the acquisition
            of an 11.2 percent interest in Australian Renewable Fuels

The Company’s wholly owned subsidiary, Lignol Innovations Ltd. (“LIL”)
is presently one of only a handful of companies with an operational,
integrated pilot-scale biorefinery capable of producing a clean,
reactive cellulose for both cellulosic ethanol and a range of high
value cellulose applications such as dissolving pulp. LIL has completed
an engineering design package for a commercial-scale biorefinery that
would produce up to 80 million litres of cellulosic ethanol
(approximately 20 million U.S. Gallons) and 55,000 tonnes of High
Performance Lignin (HP-L(TM) lignin) derivatives annually.

During Q1 FY13, LIL continued to operate its pilot plant and research
facilities to accelerate a major body of work related to enzyme
optimization with Novozymes, and to produce a range of pre-hydrolysates
from a number of different feedstocks to enhance hemicellulosic sugars
recovery.  These process optimization activities have the potential to
increase the amount of ethanol produced and improve plant economics.
This is a key part of the extended work plan which is supported by
Sustainable Development Technology Canada (“SDTC”).  It was recently
announced on September 6, 2012, that this major body of work had been
successfully completed with Novozymes, showing performance improvements
of up to 35%, as compared to previously best achieved results.

Subsequent Events

On August 27, 2012 the Company announced that it had completed a
non-brokered private placement of 30.75 million common shares of the
Company, at a price of $0.08 per common share, to raise gross proceeds
of $2.46 million (the “Private Placement”), and had acquired from
Wasabi Energy Limited (ASX/AIM: WAS) (“Wasabi”), 275 million ordinary
shares of Australian Renewable Fuels Limited (ASX: ARW) (“ARW”), for a
total purchase price of $4.27 million.  The total purchase
consideration was comprised of $0.5 million in cash, 19 million LEC
common shares issued at $0.08 per share for $1.52 million and a
10-month secured convertible debenture for $2.25 million convertible
into Lignol common shares at $0.15 per share.

Financial Results

For the three months ended July 31, 2012 (“Q1 FY13″), and the three
months ended July 31, 2011 (“Q1 FY12″) LEC reported a net loss of
($1.0) million, or ($0.02) per share (basic and fully diluted).  Total
operating expenses and government funding amounts were both reduced by
$0.7 million in the current quarter.

Total expenses were $1.3 million for Q1 FY13 compared $2.0 million in Q1
FY12, as a result of a $0.7 million overall reduction in research and
development expenses. This cost reduction was largely due to a
reduction in headcount and headcount related costs.

At the same time, total government funding was reduced to $0.3 million
for Q1 FY13 compared to $1.0 million in Q1 FY12, as a result of the
completion of certain grant programs before the start of the current
year, and as a result of the reduction in eligible research and
development expenses.

Going Concern, Liquidity and Capital Resources

LEC’s consolidated financial statements have been prepared on a going
concern basis which assumes that LEC will continue its operations and
those of LIL for the foreseeable future and contemplates the
realization of assets and the settlement of liabilities in the normal
course of business. On August 27, 2012 LEC completed a non-brokered
private placement (“Private Placement”) to raise gross proceeds of
$2.46 million.  Of the total proceeds, $0.5 million was used as part of
the total consideration given for an acquisition of an 11.2 percent
equity interest in Australian Renewable Fuels Limited (“ARW”) from
Wasabi Energy Limited (“Wasabi”). In assessing its current cash
projections, LEC has not factored in potential additional funding from
government awards currently being negotiated by its subsidiary, LIL, or
the impacts of its recent acquisition of shares in ARW. Accordingly,
LEC currently forecasts that its working capital requirements for the
next twelve months may exceed the combination of its current working
capital and those funds which are expected to be received in the future
from LIL’s existing government grants and corporate relationships. The
ability of LEC to continue as a going concern is dependent upon its
ability to continue to fund its stated business objectives. There can
be no assurance that LEC will be able to obtain further financing on
favourable terms and in such event, LEC’s working capital may not be
sufficient to meet its stated business objectives.

LEC’s consolidated financial statements and the accompanying
Management’s Discussion and Analysis do not reflect adjustments to the
amounts and classification of assets and liabilities that may be
necessary if the going concern assumptions were not appropriate and
such adjustments could be material should LEC be unable to continue as
a going concern.

LEC has historically financed its working capital requirements and the
research and development activities, capital expenditures and
operations undertake by its subsidiary LIL, largely through public and
private sales of equity securities, government and corporate
contributions, and interest income. At July 31, 2012, the LEC had $0.7
million in cash and short-term investments currently available, and up
to $2.3 million in future funding receivable, from contracted
government and corporate funding agreements, and $1.3 million in
current liabilities. As of July 31, 2012 LEC had an accumulated deficit
of $29.8 million and a $0.8 million net deficit in shareholders’

The Company continues to manage and defer non-priority expenditures,
while at the same leveraging all available funding sources to extend,
as much as is possible, the overall availability of its resources.

Lignol’s complete financial statements for the three months ended July
31, 2012 and the related Management’s Discussion & Analysis of
Financial Condition and Results from Operations are available at the
Company’s website, www.lignol.ca, or at www.sedar.com under the
Company’s profile. These financial statements were prepared in
accordance with the required adoption of International Financial
Reporting Standards.

About Lignol Energy Corporation (“LEC”)

LEC (TSXV: LEC) owns an 11.2% stake in Australian Renewable Fuels Ltd
(ASX: ARW) and owns 100% of the issued and voting shares of Lignol
Innovations Ltd. (“LIL”). LEC also intends to invest in, or otherwise
obtain, equity interests in energy related projects which have
synergies with its biorefining technology.

ARW is the largest biodiesel producer in Australia owning three plants
with a total nameplate capacity of 150 million litres per annum.  ARW’s
three plants were built at an aggregate cost of approximately A$150
million. ARW has made significant changes in recent years to become a
cost effective producer of high quality biodiesel to address growing
biofuel demand in the Australian market.  More information on ARW can
be found at their website; www.arfuels.com.au

LIL is a leading technology company in the advanced biofuels and
renewable chemicals sector undertaking the development of biorefining
technologies for the production of advanced biofuels, including
fuel-grade ethanol, and other renewable chemicals from nonfood
cellulosic biomass feedstocks. LIL’s modified solvent based
pretreatment technology facilitates the rapid, high-yield conversion of
cellulose to ethanol and the production of value-added biochemical
co-products, including high purity HP-L(TM) lignins.  HP-L(TM) lignin represents a new class of high purity lignin extractives (and
their subsequent derivatives) which can be engineered to meet the
chemical properties and functional requirements of a range of
industrial applications that until now has not been possible with
traditional lignin byproducts generated from other processes. LIL is
executing on its development plan through strategic partnerships to
further develop and integrate its core technologies on a commercial
scale. For more information please visit Lignol’s website at www.lignol.ca.

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.

Caution concerning forward-looking statements:

Certain statements contained in this document may constitute
forward-looking information within the meaning of applicable securities
laws. Such forward-looking statements or information include, without
limitation, statements or information about LEC’s ability to continue
as a going concern and to raise additional financing to fund the
operations of LEC and its wholly owned subsidiary Lignol Innovations
Ltd. (“LIL”), the development status of LIL’s fully integrated
pilot-scale biorefinery in Burnaby, British Columbia, the planning and
development of a commercial plant, LIL’s ability to complete project
deliverables which are funded in part by government agencies, obtaining
strategic partnership investments and government funding for initial
commercial projects. Often, but not always, forward-looking statements
or information can be identified by the use of words such as “plans”,
“expects” or “does not expect”, “is expected”, “budget”, “scheduled”,
“estimates”, “forecasts”, “intends”, “anticipates” or “does not
anticipate”, or “believes” or variations of such words and phrases or
words and phrases that state or indicate that certain actions, events
or results “may”, “could”, “would”, “might” or “will” be taken, occur
or be achieved. Such statements or information reflect LEC’s current
views with respect to future events and are subject to certain risks,
uncertainties and assumptions including, without limitation, our
ability to establish the validity of LIL’s technology at the fully
integrated biorefinery pilot plant scale, LIL’s ability to satisfy the
conditions of existing government grants and to obtain new additional
grants, LIL’s ability to continue to finance our operations and to
finance and complete the development of a commercial project, LIL’s
ability to work with Novozymes to produce cellulosic ethanol at
production costs competitive with gasoline and corn ethanol, LIL’s
ability to develop products and to obtain off-take agreements, our
ability to obtain requisite regulatory approvals and our ability to
enter into agreements with strategic partners on terms acceptable to
us, the inability to influence the strategy, operations and financial
performance of Australian Renewable Fuels (“ARW”), the reliance on
publically available information of ARW in LEC’s evaluation of its
acquisition of shares in ARW, the potential inability to divest the ARW
ordinary shares due to modest trading volumes, the cost of future ARW
capital investment, the fluctuation of biodiesel and feedstock on ARW,
the effect on ARW of changes in government policy relating to the
environment, and incentives for renewable fuels. Many other factors
could also cause LEC’s actual results, performance or achievements to
be materially different from any future results, performance or
achievements that may be expressed or implied by such forward-looking
statements or information, including among other things, the
technological challenges that remain to be surpassed in obtaining the
necessary operating data from LIL’s fully integrated biorefinery pilot
plant that is required prior to completing the next scale-up of the
technology, financial market conditions which will impact our ability
to finance our operations and to finance the construction and operation
of a commercial plant, the price of gasoline and demand for ethanol,
the market pricing and demand for renewable chemicals, risks relating
to the protection of LIL’s core technology from infringement and those
risk factors which are discussed elsewhere in documents that LEC files
from time to time with securities regulatory authorities. Should one or
more of these risks or uncertainties materialize, or should assumptions
underlying the forward-looking statements or information prove
incorrect, actual results may vary materially from those described
herein as intended, planned, anticipated, believed, estimated or
expected. Except as required by law, LEC expressly disclaims any
intention or obligation to update or revise any forward looking
statements and information whether as a result of new information,
future events or otherwise. All written and oral forward-looking
statements and information attributable to us or persons acting on our
behalf are expressly qualified in their entirety by the foregoing
cautionary statements.

SOURCE Lignol Energy Corporation

Source: PR Newswire