Lonestar Capital Corp.

Lonestar Capital Corp.

November 21, 2008 16:46 ET

Lonestar Capital Corp. Announces Modifications to Qualifying Transaction and Details of Private Placement

HOUSTON, TEXAS and VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 21, 2008) - Lonestar Capital Corporation (TSX VENTURE:LON.P) ("Lonestar" or the "Company"), a capital pool company listed on the TSX Venture Exchange (the "Exchange"), is pleased to announce that it has entered into an amendment to the previously announced agreement to acquire Acro Electric, Inc., a leading California solar company (the "Acquisition"). It is anticipated that the Acquisition will constitute the Company's Qualifying Transaction under the Exchange's Policy 2.4 - Capital Pool Companies (the "Qualifying Transaction"). The Company has decided not to pursue the previously announced acquisition of NextEnergy Corp. as part of its Qualifying Transaction. The Company has also engaged Research Capital Corporation to act as its sponsor in connection the Qualifying Transaction.

The Acquisition and the Vendor

Effective June 29, 2008, Acro Energy Technologies, LLC, a Texas limited liability company and wholly-owned subsidiary of Lonestar ("Acro Energy Technologies") entered into a Stock Purchase Agreement, as amended on November 13, 2008, (collectively, the "Acquisition Agreement"), to acquire all of the issued and outstanding common shares of Acro Electric, Inc., a California corporation ("Acro"), for an aggregate purchase price of USD$5,658,261.50 (the "Purchase Price"). The Acquisition Agreement, sets forth the terms and conditions pursuant to which Lonestar, through Acro Energy Technologies, proposes to acquire all of the issued and outstanding common shares of Acro. Pursuant to the Acquisition Agreement, the Purchase Price payable to Acro will be satisfied by a combination of cash, a promissory note, and shares issued from the treasury of Lonestar (the "Shares") in the following manner:

(a) USD$1,304,662 in cash will be delivered to the vendor of Acro (the "Vendor") at closing of the Acquisition (the "Cash Consideration");

(b) USD$1,414,565.40 in the form of Shares based on a price of CDN$0.68 per Share (the "Share Consideration");

(c) USD$2,939,034.10 in the form of a convertible demand promissory note to be issued from Lonestar to the Vendor (the "Promissory Note").

A portion of the Cash Consideration will be from the proceeds of a proposed private placement (the "Private Placement") to close concurrently with the Acquisition, and a portion will be from available cash on hand of the Company. Simultaneously at closing, the Vendor shall apply part of the Cash Consideration to pay an outstanding shareholder loan of $304,662.

The number of Shares to be issued as the Share Consideration will be determined based on the currency exchange rate between the U.S. and Canadian dollars on the closing date. Based on an assumed exchange rate of CDN$1.00 equals USD$0.85, the number of Shares to the Vendor are estimated at 2,447,345.

The Promissory Note will be payable on or before January 1, 2010 (the "Maturity Date") and carry an interest rate of 11%, payable monthly. At its sole option at any time between January 1, 2009 and December 31, 2009, the Vendor will have the right to convert the principal amount of the Promissory Note to Shares, (the "Conversion Right"). The Conversion Right will be exercisable at the price of CDN$0.68 per Share. The Vendor will give written notice of such exercise to Lonestar, and surrender the Promissory Note. The Shares issued to the Vendor under upon exercise of the Conversion Right will be subject to the limitations on free assignability required by the policies, rules and regulations of the Exchange. The Vendor may alternatively elect to demand payment on the Promissory Note at any time between April 1, 2009 and April 30, 2009. In such event Lonestar will have sixty (60) days to fund payment. If Lonestar fails to fund the full balance of the Promissory Note within this 60 day period, then, Lonestar shall pay off the Promissory Note at the rate of $50,000 principal and interest per month commencing on the 15th day of the first month following expiration of the foregoing 60 day period.

Under the Acquisition Agreement, the Company has further agreed to pay an additional purchase price earn out in the event that certain prescribed milestones are achieved in the twelve-month period following completion of the Acquisition. To the extent the gross sales of the Company for the period from July 1, 2008 to June 30, 2009 exceed USD$7,800,000 Seller shall be entitled to an additional amount equal to ten percent (10%) of the excess multiplied by six up to a maximum of USD$1,600,000.00. If earned, the earn-out shall be paid to the Vendor in cash within 120 days following June 30, 2009.

Lonestar has also agreed, and subject to the approval of the Exchange, to make an initial advance of CDN$225,000 on the Purchase Price to Acro to fund certain immediate working capital requirements relating to the purchase and securing of high demand solar panel inventory required to meet installation orders that have been made for 2009. The initial advance is refundable in the event of non-completion of the Acquisition.

Acro is a full service solar integrator specializing in the design and installation of residential and commercial photovoltaic (PV) solar energy systems. Acro is headquartered in Oakdale, California with gross revenues of approximately USD$7.05 million for the 12 month period ending June 30, 2008 and adjusted EBITDA of approximately USD$805,000. Steve Vella is the President and sole shareholder of Acro. Upon completion of the Acquisition, Mr. Vella will become Chief Operations Officer of Lonestar.

Upon completion of the Acquisition the directors and officers of Lonestar will be:

- Harry Fleming, Chief Executive Officer and Director

- Christopher Mulgrew, Chief Financial Officer

- Steven Vella, Chief Operations Officer

- Douglas Samuelson, Executive Vice President, General Counsel and Director

- Kenneth Klein, Director

- David Doherty, Director

- Peter Lynch, Executive Vice President of Strategic Development

Private Placement and Use of Proceeds

Concurrent with completion of the Qualifying Transaction, Lonestar intends to complete a non-brokered private placement of 605,536 units (the "Units") at a price of CDN$0.68 per Unit, for aggregate gross proceeds to Lonestar of CDN$411,765. Each Unit will be composed of one Share and one Share purchase warrant (the "Warrants"). Each Warrant will entitle the holder to purchase one Share of the Company at a price of $0.90 per Share between the 1st to 6th month following the closing date and $1.30 per Share between the 7th to 12th months following the closing date. The Company intends to use a portion of the net proceeds of the Private Placement to satisfy the Cash Consideration portion of the Purchase Price. A portion of the proceeds of the Private Placement not used to fund the Cash Consideration will be used to pay for the costs and expenses associated with the Private Placement and the Qualifying Transaction, with the balance, if any, to be used to identify potential future acquisitions and for general corporate purposes.

No registered dealer or advisor has been retained by the Company to act as the agent for the Private Placement. While the Company does not currently anticipate engaging any such agent for the Private Placement, the Company expressly reserves the option and the right to do so, subject to the approval of the Exchange.

Completion of the Qualifying Transaction is subject to the satisfaction or waiver of a number of conditions, including but not limited to: (1) completion of the Private Placement; and (2) approval of the Qualifying Transaction by the Exchange and the listing for trading on the Exchange of Shares of the Company issuable in connection with the Qualifying Transaction, and all other necessary regulatory, director, or other approvals as may be required. There can be no assurance that the proposed Qualifying Transaction (or any part thereof) will completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement to be prepared by the Company in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying Transaction may not be accurate or complete and should therefore not be relied upon by investors. Trading in the securities of a capital pool company such as those of the Company should be considered highly speculative.

This press release contains forward looking statements within the meaning of applicable securities laws and are subject to risks, uncertainties and assumptions. Such forward-looking information includes, among other things, information with respect to the Company's beliefs, plans, expectations, anticipations, estimates and intentions, the completion of the Private Placement, the Acquisition, as well as the activities, operations, strategy and financial performance of the Company, Acro Energy Technologies and Acro. These statements can generally be identified by use of words such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe", "continue" as well as the negatives thereof and similar variations.

Although the directors of the Company currently believe that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct, and the results or events anticipated or predicted in any such forward-looking information may differ materially from actual results or results. Forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations and are based on assumptions that may prove to be incorrect. Some of the factors and risks which could affect future results and could cause results to differ materially from those expressed in the forward-looking statements contained herein include the impact of general economic conditions, industry conditions, government regulation, environmental risks, competition from other industry participants, stock market volatility, the ability to access sufficient capital from internal and external sources. A full description of these risks and uncertainties with regards to a capital pool company can be found in the Company's prospectus dated February 28, 2008 which is available electronically at www.sedar.com.

The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included herein are made as of the date hereof and is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While the Company may elect to do so, it does not undertake any obligation to, any time, publicly update such forward-looking statements to reflect new information, subsequent events or otherwise.

About Lonestar Capital Corp.

Lonestar is a capital pool company listed on the TSX Venture Exchange. The principal business of Lonestar is the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction. The Company has not commenced commercial operations and has no assets other than cash.

The Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release. The Exchange does not accept responsibility for the adequacy or accuracy of this press release.

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