Victoria, British Columbia, Canada - January 2, 2008 - Carmanah Technologies Corporation (TSX: CMH) is pleased to announce that the Company and Mr. David Egles have signed a definitive agreement whereby Mr. Egles has purchased the inventories and other assets of Carmanah's solar home power business. This transaction follows Carmanah's announcement on November 22, 2007 declaring the Company's plan to narrow its focus. Mr. Egles has resigned as a member of the Carmanah Board of Directors in order to pursue this opportunity as a private business. The transaction was accepted and ratified by Carmanah's Board of Directors, with a closing date of December 28, 2007.
According to the agreement, David Egles, or an incorporated company controlled by him, will pay $1.5M to Carmanah Technologies Corporation with $1.15M attributed to Carmanah's solar home power inventory and $350k for equipment and fittings at the business's leased facility in Barrie, Ontario as well as access to marketing material, customer and vendor lists, and an amendment to his non-compete agreement that permits him to return only to the solar home power business.
The $1.5M deal includes cash payments of $500K and a common share buy-back by Carmanah of $1M of the Company's shares owned by Mr. Egles. A payment of $200K was paid by Mr. Egles in cash on December 28, 2007. A further $1M equivalent in common shares (calculated using a deemed per common share market price equal to the simple average of the closing price of the common shares on the Toronto Stock Exchange for each of the last 20 business days) will be purchased by the company from Mr. Egles on January 9, 2008. A final cash payment of $300K will be paid by him on March 15, 2008. Following the transaction, Mr. Egles will maintain an equity position in Carmanah, representing approximately 1% of the total common shares outstanding.
According to Carmanah CEO Ted Lattimore, this arrangement offers an attractive outcome for all stakeholders. "As Carmanah's new strategic direction no longer includes the home power market, we're pleased to see this arrangement in place," said Lattimore. "It's a great opportunity for Dave to remain involved in a market in which he has played a large role over the past 20 years, and it's also an easy transition for home power customers looking for smaller scale solutions for their home or cottage. Lastly, by selling the assets and obligations of our home power division, we can efficiently and effectively recapture and redirect our capital to our core strategic markets," added Lattimore. "All of this helps in our commitment to deliver quality solar-powered technology, while continuing to grow revenue, margin and market share from a portfolio of more closely aligned offerings. This transaction does not restrict Carmanah from re-entering the solar home power market at any point in the future."
About Carmanah Technologies Corporation
With more than 250,000 installations worldwide, Carmanah is one of the world's premier suppliers of renewable and energy-efficient technologies, including solar-powered LED lighting, solar power systems & equipment and LED illuminated signage. From its global headquarters in Victoria, British Columbia, Canada, Carmanah oversees a network of branch offices and sales representatives across Canada, the United States and the United Kingdom.
Carmanah is a publicly traded company, with common shares listed on the Toronto Stock Exchange under the symbol "CMH" and on the Berlin and Frankfurt Stock Exchanges under the symbol "QCX". For more information, visit www.carmanah.com.
Carmanah Technologies Corporation
Chief Financial Officer
For further information, please contact:
Tel: (250) 380-0052
Public Relations: David Davies
Tel: (250) 382-4332
This release may contain forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "expects," "plans," "estimates," "intends," "believes," "could," "might," "will" or variations of such words and phrases. Forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of Carmanah to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties which are described under the caption "Note Regarding Forward-looking Statements" and "Key Information - Risk Factors" and elsewhere in Carmanah's Annual Report for the fiscal year ended December 31, 2006, as filed on SEDAR at www.sedar.com. The risk factors identified in Carmanah's Annual Report are not intended to represent a complete list of factors that could affect Carmanah. Accordingly, readers should not place undue reliance on forward-looking statements. Carmanah does not assume any obligation to update the forward-looking information contained in this press release.