January 4, 2011 -
VICTORIA, BRITISH COLUMBIA, CANADA (January 4, 2011) – Carmanah Technologies Corporation (“the Company”) (TSX: CMH), a leader in solar LED lighting and power systems for a range of industrial applications, today announced that it has filed a lawsuit in the Vancouver Registry of the Supreme Court of British Columbia, Canada against Lightech Electronic Industries Inc., seeking restitution against Lightech in the Canadian Dollar equivalent of USD $625,000 plus interest and costs. Carmanah reserves all rights to sue for more damages at the appropriate time.
Carmanah and Lightech entered into an Agreement and Plan of Merger (“the Merger Agreement”) dated as of September 21, 2010 in which Carmanah and Lightech agreed to a business combination whereby Carmanah would acquire Lightech, subject to completion of a number of conditions precedent as applicable to each party. The Merger Agreement provided that all steps and transactions required to effect the Merger Agreement be completed by December 31, 2010 (the “Termination Date”) and could be terminated or abandoned by either party if the conditions precedent were incapable of being satisfied on or before the Termination Date. One condition precedent in favour of Carmanah was the successful completion of a public offering of its securities yielding an amount of at least USD $15 million. Despite Carmanah’s reasonable commercial efforts, this condition precedent was incapable of being satisfied on or before the Termination Date, due to events that were not under Carmanah’s control. Please refer to a press release dated October 25, 2010. As a consequence, on November 10, 2010, Carmanah gave notice of termination of the Merger Agreement to Lightech.
As part of the aggregate consideration for the merger, Carmanah made an advance payment of USD $625,000 (the “Signing Payment”). Half of this amount was paid in cash to Lightech on execution of the Merger Agreement as a payment advance (the “Advance Amount”) pending the closing and subject to other terms of the Merger Agreement. The second half of the Signing Payment was transferred in trust to an interim escrow agent to be held subject to the provisions of the Merger Agreement (the “Signing Escrow Amount”). Carmanah paid the Signing Payment as specified by the Merger Agreement. Upon termination pursuant to terms in the Merger Agreement for the failure of the condition precedent, Carmanah is entitled to the repayment of the full amount of the Signing Payment.
Carmanah is seeking (i) a declaration that Lightech, is holding the Signing Payment in trust for Carmanah, (ii) an Order directing return of the Signing Payment to Carmanah, and (iii) restitution in the Canadian dollar equivalent of USD $625,000. Alternatively, Carmanah is seeking damages from Lightech in the Canadian dollar equivalent of USD $625,000 plus interest and costs. With this lawsuit, Carmanah is claiming, that Lightech has been unjustly enriched by retaining the Signing Payment following termination of the Merger Agreement. Alternatively, it is claimed that Lightech has converted the Signing Payment for its own use and deprived Carmanah of the use of these funds.
“Carmanah has always dealt with Lightech in good faith. We used reasonable commercial efforts to complete the transaction. Unfortunately, circumstances beyond our control prevented us from completing the condition precedent equity raise in the required timeline. In light of this, we have subsequently tried to conclude with Lightech on the termination remedies that were agreed to in the now stale dated Merger Agreement to no avail. We therefore regret the necessity of taking this action.” said Ted Lattimore, President & CEO, Carmanah.
To view the previous press releases relating to the Lightech transaction, please visit carmanah.com
About Carmanah Technologies Corporation
Since 1996, Carmanah has been engineering some of the most advanced solar LED lighting on the market. With over 300,000 installations worldwide, Carmanah technology has been put to the test in virtually every environment on Earth. Featuring a patented energy management system that provides enhanced autonomy and system performance, reliable off-grid lighting is something Carmanah is known for. Carmanah is a publicly traded company, with common shares listed on the Toronto Stock Exchange under the symbol “CMH”. Carmanah is backed by a worldwide network of lighting professionals. For more information, visit carmanah.com.
Carmanah Technologies Corporation
Roland Sartorius, Chief Financial Officer
For further information:
Investor Relations: Roland Sartorius, CFO
Public Relations: David Davies
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, 2009, 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.