Last updated on April 18, 2014 at 15:02 EDT

Lignol Announces Private Placement Financing of $4.0 million and Conversion of $2,245,770 Convertible Debenture

November 16, 2012


VANCOUVER, Nov. 16, 2012 /CNW/ – Lignol Energy Corporation (TSXV: LEC)
(“LEC” or the “Company”), a leading technology company in the advanced
biofuels and renewable chemicals sector, is pleased to announce that it
has engaged Canaccord Genuity Corp. (“Canaccord” or the “Agent”) to
sell, on a commercially reasonable efforts basis, up to 26,666,667
Units (the “Units”) of the Company at a price of $0.15 per Unit (the
“Issue Price”) for aggregate gross proceeds of up to $4,000,000 (the
“Offering”). The Offering will include Global Securities Corp. and
Haywood Securities Inc. Each Unit will comprise of one common share of
the Company and one-half of one common share purchase warrant (each
whole such warrant, a “Warrant”). Each whole Warrant will allow the
subscriber to purchase one additional common share of the Company for a
period of two years from the date of closing at an exercise price of
$0.20 per share.

The Company has granted the Agent an option to offer up to an additional
6,666,667 Units of the Company, at the Issue Price, for additional
gross proceeds of up to $1,000,000, exercisable in whole or in part at
any time up to 48 hours prior to the closing date of the Offering.

Upon closing of the Offering, Wasabi Energy Limited has agreed to
convert the convertible debenture it currently holds which will result
in the issuance of 14,971,800 common shares of the Company at an
exercise price of $0.15 per share. Accrued interest of 7.0% per annum
from the date of issuance of the convertible debenture (August 27,
2012) to closing of the Offering will be paid in common shares at the
market price (as defined in the TSX Venture Exchange Corporate Finance
Manual) on the date of the closing of the Offering.

“This financing, together with the conversion of the Wasabi debenture,
improves our balance sheet and enables us to accelerate the
commercialization of our technology  while enhancing our ability to
obtain equity interests in energy related projects that have commercial
and technical synergies with our business” said Ross MacLachlan,
Lignol’s CEO.

It is anticipated that insiders of the Company may subscribe for greater
than 25% of the Offering. The issuance of Units to insiders pursuant to
the Offering is considered to be a related party transaction subject to
TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101. LEC
intends to rely on exemptions from the formal valuation and minority
shareholder approval requirements provided under sections 5.5(a) and
5.7(a) of Multilateral Instrument 61-101 on the basis that
participation in the Offering by insiders will not exceed 25% of the
fair market value of the Company’s market capitalization.

LEC intends to use the net proceeds from the Offering to fund general
working capital and other corporate purposes.

The Offering is expected to close on or about December 7, 2012.  The
Units issued upon the closing of the Offering will be subject to a
4-month hold period. The securities offered hereby have not and will
not be registered under the United States Securities Act of 1933 (the
“1933 Act”) and may not be offered or sold in the United States or to
U.S. persons (as defined in Regulation S under the 1933 Act) unless the
securities have been registered under the 1933 Act, or are otherwise
exempt from such registration.  The Offering is subject to receipt of
all necessary regulatory approvals, including the TSX Venture Exchange.

About Lignol Energy Corporation (“LEC”)

LEC (TSXV: LEC) currently owns a 14.9%((1)) stake in Australian Renewable Fuels Ltd (ASX: ARW) and owns 100% of the
issued and voting shares of Lignol Innovations Ltd. (“Lignol”). LEC
also intends to invest in, or otherwise obtain, equity interests in
energy related projects which have synergies with its biorefining

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.

    (1) On November 15, 2012, ARW announced a transaction which will
        provide approximately AUD $14 million in cash to ARW in exchange
        for the issuance of ordinary shares of ARW, resulting in LEC's
        equity interest, post closing, to be approximately 10% of ARW.

More information on ARW can be found at their website; www.arfuels.com.au.

Lignol is a 100% owned subsidiary of LEC. Lignol 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.
Lignol’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. Lignol 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 our ability to work with
Canaccord and to close on a private placement financing, the conversion
of the convertible debenture held by Wasabi Energy Limited, the
transaction entered into by ARW and the resulting change to the LEC
equity interest in ARW and to continue as a going concern and to raise
additional financing to fund the operations of LEC and Lignol, the
development status of Lignol’s fully integrated pilot scale biorefinery
in Burnaby, British Columbia, the planning and development of a
commercial plant, Lignol’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 Lignol’s technology at the fully integrated biorefinery
pilot plant scale, Lignol’s ability to satisfy the conditions of
existing government grants and to obtain new additional grants, our
ability to continue to finance our operations and to finance and
complete the development of a commercial project, Lignol’s ability to
work with Novozymes to produce cellulosic ethanol at production costs
competitive with gasoline and corn ethanol, Lignol’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 Limited (“ARW”), the reliance on publically
available information of ARW in the Company’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 prices
on ARW, the effect on ARW of changes in government policy relating to
the environment, and incentives for renewable fuels. Many factors could
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 Lignol’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 Lignol’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, the Company 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