Wednesday, June 23, 2010

TSX Wind Stocks; Industrial Growth Income Corporation Announces Proposed Qualifying Transaction

TSX Wind Stocks; Industrial Growth Income Corporation Announces Proposed Qualifying Transaction

WINNIPEG, June 23 TSX Wind Stocks( cleantech stocks blog) Industrial Growth Income Corporation (NEX: IGI.H) ("IGIC"), a capital pool company listed on the NEX board (the "NEX") of the TSX Venture Exchange (the "Exchange"), is pleased to announce that it has signed an arm's length letter of intent (the "Letter of Intent") dated June 17, 2010 with IQwind Ltd. ("IQwind") to acquire all of the issued and outstanding shares of IQwind.

If completed, the proposed transaction (the "Qualifying Transaction") will constitute the qualifying transaction of IGIC pursuant to Policy 2.4 Capital Pool Companies of the Exchange (the "CPC Policy").

IGIC was incorporated on September 22, 2005 and began trading on the Exchange on August 16, 2006 as a capital pool company. IGIC was transferred from the Exchange to the NEX on May 27, 2009 for failure to complete its qualifying transaction within the required time period. Upon completion of the Qualifying Transaction, provided all necessary approvals are obtained, IGIC will return to listing on the Exchange.

About IQwind:
IQwind is a developer and manufacturer of components for the wind turbine industry. IQwind is a private company incorporated on August 28, 2007 pursuant to the laws of the State of Israel. To date IQwind has been focused on technology development and has not reached the revenue stage.
IQwind was founded with the vision of reducing the cost of energy generated by wind turbines through an efficient and reliable mechanical gear that would increase performance and reduce the cost of wind turbines. IQwind has become an innovator in the wind energy industry focused on leveraging its proprietary variable gear technology, called the IQgear, to reduce the cost of energy generated by existing and newly-built wind turbines.

The IQgear technology is the basis for the IQgearbox, a breakthrough in wind turbine gearbox design. The IQgearbox represents an industry innovation: a variable speed turbine built around a fully-mechanical variable speed drivetrain.

A press release containing additional details regarding the business of IQwind as well as certain financial information regarding IQwind will be released by IGIC as soon as such information is available.
Terms of proposed qualifying transaction:


Pursuant to the Letter of Intent, IGIC will acquire 100% of the issued and outstanding shares in the capital of IQwind and the Qualifying Transaction will result in IQwind becoming a wholly-owned subsidiary of IGIC. IQwind currently has issued and outstanding: (i) 100,000 Ordinary Shares; (ii) 66,667 A-1 Shares; (iii) 161,499 A-2 Shares; (iv) 23,000 options to purchase Ordinary Shares; and (v) 1,520 A-2 warrants (collectively, the "IQwind Securities"). In consideration for the IQwind Securities, IGIC will issue to the securityholders of IQwind 100,000,000 common shares of IGIC ("Common Shares") at a deemed price of $0.20 per Common Share for a total purchase price of $20,000,000. As additional consideration for the IQwind Securities, IGIC has agreed to issue: (i) 1,500,000 options to purchase Common Shares at a price of $0.20 per Common Share to individuals who will be directors, officers, employees or consultants of the issuer resulting from completion of the Qualifying Transaction, which options shall be exercisable for a period of five years from the date of issuance; and (ii) 114,000 warrants to purchase Common Shares at a price of $0.20 per Common Share, which warrants shall be exercisable for a period of two years from the date of issuance.

It is a condition of the Qualifying Transaction that IQwind must complete a brokered private placement (the "Private Placement") of a minimum of 35,000,000 ordinary shares of IQwind at a minimum price of $0.20 per share for minimum gross proceeds of $7,000,000. These shares will be exchanged for Common Shares on a one for one basis pursuant to the Qualifying Transaction. Versant Partners Inc. will lead a syndicate of agents (together, the "Agents") for the Private Placement. The Agents will be paid 6.5% of the gross proceeds of the Private Placement, and in addition, the Agents will receive broker warrants in the amount of 6.0% of the number of securities issued in the Private Placement, with a strike price equal to the subscription share price of the Private Placement and exercisable for a period of time to be determined between IQwind and the Agents, subject to Exchange requirements.

The use of proceeds will be targeted for R&D purposes, sales and marketing and working capital and general corporate purposes.

The sole control person of IQwind is Terra Venture Partners. The controlling shareholder of Terra Venture Partners is Astorre Modena.

IGIC currently has 4,025,000 Common Shares issued and outstanding as well as 320,000 options to purchase Common Shares at a price of $0.20 per Common Share. Upon completion of the Qualifying Transaction, assuming completion of the minimum Private Placement, IGIC will have the following securities issued and outstanding: (i) 139,025,000 Common Shares; (ii) 1,820,000 options to purchase Common Shares at a price of $0.20 per Common Share; (iii) 114,000 warrants to purchase Common Shares at a price of $0.20 per Common Share; and (iv) 2,100,000 broker warrants to purchase Common Shares at a price of $0.20 per Common Share for a period of time to be determined between IQwind and the Agents, subject to Exchange requirements.

The Qualifying Transaction is not a "Non Arm's Length Qualifying Transaction" within the meaning of the CPC Policy. Accordingly, the completion of the Qualifying Transaction is not subject to the approval of the shareholders of IGIC in accordance with the CPC Policy.

The Letter of Intent has been approved by the boards of directors of each of IGIC and IQwind. It is subject to the satisfaction of a number of customary conditions for closing the Qualifying Transaction, including approval of the Qualifying Transaction and related matters by the Exchange and the filing of a filing statement by IGIC, as well as due diligence by both IGIC and IQwind and the completion of the Private Placement for gross proceeds of at least $7,000,000.
Proposed management:


IGIC's management team is currently comprised of Gary Coleman, Chairman, Chief Executive Officer and a director and Earl Coleman, Chief Financial Officer. In addition to Gary Coleman, IGIC's board of directors includes David Filmon and Ab Freig. Upon completion and closing of the Qualifying Transaction, it is anticipated that Gary Coleman, Gideon Ziegelman and Astorre Modena shall be the ongoing directors of IGIC. It is also anticipated that David Filmon and Ab Freig will resign as directors of IGIC as a condition of the closing of the Qualifying Transaction.

Following the closing of the Qualifying Transaction, it is anticipated that the following individuals will serve as directors and/or officers of IGIC:

Gideon Ziegelman, Chairman and CEO - Mr. Ziegelman is a founder and Chief Executive Officer of IQwind. Mr. Ziegelman is an entrepreneur with over 15 years of experience in the high-tech and alternative energy industries. He was a co-founder of a $75 million alternative energy mutual fund and a technology startup focusing on electricity storage solutions for the wind energy market. Mr. Ziegelman holds an MBA from INSEAD, Fontainebleau, France and a BSc in electrical engineering from the Technion, Israel.

Astorre Modena, Director - Dr. Modena is a board director and general partner in Terra Venture Partners, a cleantech ventures fund and a major shareholder in IQwind. Before founding Terra, he was a Principal at Israel Seed Partners, a seed-stage venture capital in Israel with more than $260 million under management. Prior to Israel Seed, Mr. Modena was with McKinsey & Co., where he consulted to leading Italian, French and Israeli manufacturing and financial corporations. He holds a B.Sc. in Physics and a Ph.D. in Plasma Physics from Imperial College in London.

Gary Coleman, Director - In addition to his positions with IGIC, Mr. Coleman has been the Chief Executive Officer of Big Freight Systems Inc., a transportation company headquartered in Steinbach, Manitoba, since 1997. Mr. Coleman was also the President, Chairman and a director of Global Fortress Inc. from May 25, 2000 until April 23, 2003 when it completed its qualifying transaction pursuant to the policies of the Exchange and transformed into Lakeview Real Estate Investment Trust by way of a plan of arrangement.

Erez Baron, Chief Financial Officer and Corporate Secretary - Mr. Baron brings 15 years of management, finance and operation experience in the technology industry to his position as CFO at IQwind. Before joining IQwind, Mr. Baron served as a CFO of HelioFocus, a company that develops high efficiency solar-thermal systems to provide high temperature heat. Before joining HelioFocus, Mr. Baron served as a CFO of Samsung Semiconductor Israel, previously known as TransChip, there he was deeply involved in the first acquisition of Samsung Electronics in Israel done in 2007. Before that, Mr. Baron served as Director of Finance in Orckit Communications (NASDAQ: ORCT). Mr. Baron also spent several years as CPA with PricewaterhouseCoopers Israel. Mr. Baron received his BA degree in Accounting and Economics and an MBA, both, from Tel Aviv University. Erez is a Certified Public Accountant and also he is a Certified Mediator from Law Office of State of Israel.
Nimrod Eitan, Chief Technology Officer - Mr Eitan is a founder and CTO of IQwind. A mechanical engineer with over 30 years experience in product development and R&D management, he served as Chief Engineer of a technology startup, which matured into Cycle Group Inc., an international producer of industrial and agricultural products. Mr. Eitan also served as a Technical Manager for several companies in the United States and Israel and holds a BSc in mechanical engineering from the Technion, Israel.
Doron Simon, Business Development Officer - Mr. Simon has 25 years of experience in high level executive positions. Mr. Simon served as Tower Semiconductor (NASDAQ: TSEM) VP marketing and president of Tower USA, a company with $500 million in annual revenue. In recent years Mr. Simon gained significant experience in growing early stage technology companies to revenue growth phase. Mr. Simon received his MBA degree from Heriot-Watt business school, Edinburgh, UK and a BSc. in Industrial Engineering from the Technion, Israel.


IGIC has not yet engaged a sponsor for the Qualifying Transaction and will apply to the Exchange for an exemption from the requirement to obtain a sponsor. The granting of such an exemption is within the discretion of the Exchange and there can be no assurance that it will be granted.
Trading Halt:

The common shares of IGIC will remain halted pending receipt of satisfactory documentation by the Exchange and an additional press release by IGIC providing further information regarding IQwind.

Mr. Ziegelman, the Chief Executive Officer of IQwind, states "We are excited about the opportunity that the transaction with IGIC provides our company. The transaction with IGIC will provide IQwind with the opportunity to grow and accelerate its development plans thus becoming a major player in the alternative energy space by bringing its IQgear technology to market quicker than originally planned."

Completion of the transaction is subject to a number of conditions, including, but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. 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 management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction 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 TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

For further information: Gary Coleman, Chairman and Chief Executive Officer, Tel: (204) 977-2825
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