Summus Capital Corp.
TSX VENTURE : SS.P

November 16, 2009 13:55 ET

Summus Capital Corp. Enters Into Letter of Intent to Acquire ReNvision Biofuels Inc.

CALGARY, ALBERTA--(Marketwire - Nov. 16, 2009) - Summus Capital Corp. ("Summus" or the "Corporation") (TSX VENTURE:SS.P) is pleased to announce that effective November 5, 2009 it has entered into a binding letter of intent (the "Letter to Intent") to acquire (the "Acquisition") all of the issued and outstanding Class "A" shares (the "ReNvision Shares"), being all of the issued and outstanding shares of ReNvision Biofuels Inc. ("ReNvision"), a private Alberta company actively engaged in the pursuit of the production, sale and marketing of biofuels and related byproducts and the construction of a production facility in support of the same in southern Alberta.

The acquisition of all of the ReNvision Shares will be satisfied through the issuance of 2,000,000 common shares of Summus (the "Summus Shares") at a deemed price of $0.25 per share for total consideration of $500,000. Additionally, the parties have agreed that, subject to regulatory approval, concurrent with the closing of the Acquisition, Summus shall issue performance warrants to the ReNvision Shareholders ("Performance Warrants") to purchase up to an aggregate of 6,000,000 Summus Shares, which Performance Warrants shall be issued pro rata in proportion to the ReNvision Shareholder's ownership percentages of the ReNvision Shares as at the date of the Letter of Intent. Each Performance Warrant shall entitle the holder thereof to purchase one (1) Summus Common Share for every $0.25 received by ReNvision pursuant to the Government of Alberta's "Nine-Point Bio-Energy Plan" at any time in between closing of the Acquisition and March 31, 2011 at an exercise price of $0.01, which Performance Warrants shall be for an identical term.

An equity financing of up to $15 million (the "Financing") is intended to be completed in conjunction with the Acquisition. Summus expects to provide further details with regards to the Financing in the near future once details regarding the same are available.

The Acquisition is expected to constitute the qualifying transaction (the "Qualifying Transaction") of Summus as defined in the policies of the TSX Venture Exchange Inc. ("TSXV") and the Acquisition and the Financing and all related transactions remain subject to the approval of the TSXV. It is expected that Summus will qualify for listing on the TSXV as a Technology and Industrial Issuer subsequent to the Qualifying Transaction.

ReNvision Biofuels Inc.

ReNvision is a Calgary, Alberta-based company that has identified the location for the construction and commercialization of a biodiesel production facility in southern Alberta that will have a planned initial production capacity of up to 35 million liters using proven, environmentally-friendly technologies. The production facility, once in operation, is expected to provide ReNvision the flexibility to utilize various sources of feedstock to produce biodiesel. ReNvision anticipates that its primary sources of feedstock will include, among others, animal fats, canola and other oilseeds. ReNvision intends to initially focus on animal fats as the main source of feedstock for its biodiesel production.

Biodiesel is a clean burning alternative fuel, produced from domestic, renewable resources. It contains no petroleum, but can be blended at any level with petroleum diesel to create a biodiesel blend. Biodiesel can be used in compression-ignition (diesel) engines with little or no modifications. It is biodegradable, nontoxic, and essentially free of sulfur and aromatics. Additionally, biodiesel contains no carcinogenic benzene, contributes virtually no sulfur emissions when used as a fuel, reduces greenhouse gas omissions when replacing regular petroleum diesel, requires no special handling or storage and meets or exceeds all major Canadian and U.S. emission standards.

ReNvision was incorporated in July 2008 pursuant to the Business Corporations Act (Alberta). Since that time, its activities have been focused on market research, seeking government and third party financing arrangements and negotiations with third party engineering and construction firms for the design and construction of its planned biofuels facility. To date, ReNvision has earned no revenues and is in the start up phase of its business plan.

Recently, ReNvision was awarded a grant from the Government of Alberta pursuant to Alberta's "Nine-Point Bio-Energy Plan" in the amount of up to $1,500,000, which grant shall be provided to ReNvision in phases. Additionally, ReNvision has recently executed a turnkey design and build contract with a third party engineering firm to provide the necessary equipment, technology and design engineering services for the construction of ReNvision's proposed biodiesel facility. This firm has considerable experience in the design and construction of complete biodiesel facilities and associated systems.

Highlights of ReNvision's proposed facility are:

- Based on the proven design and refining principles of comparable facilities already in operation in North America;

- The technology expected to be used in the facility results in an increase in efficiency and reduction in costs when compared to other biodiesel facilities, greater yields and a higher quality of biodiesel;

- The design allows flexibility to choose different feedstocks - most other plants are limited to using low free fatty acid (FFA) feedstocks and rely on food sources as their primary input;

- Construction and commissioning of the plant will take approximately 12 months-16 months;

- The proposed facility will have an initial annual capacity of up to 35 million liters; and

- The facility will meet BQ 9000 and American Society for Testing and Material (ASTM) standards, which standards are set by the National Biodiesel Accreditation Program (NBAP) in the United States. NBAP is a cooperative and voluntary program for the accreditation of producers and marketers of biodiesel fuel, which focuses on overall quality management systems of biodiesel facilities.

The principal holders of ReNvision Shares are Namir Virjee, Jastaig Chahal, Charet Chahal and Avi Bhambra, all of Calgary, Alberta. On closing of the Acquisition it is expected that Namir Virjee will become an officer and director of Summus and Jastaig Chahal will become an officer of Summus.

Summus Capital Corp.

Summus, a capital pool company within the meaning of the policies of the TSXV, was incorporated on December 17, 2007 and was listed on the TSXV on October 20, 2008. Summus does not have any operations and has no material assets other than cash. Summus' business is to identify and evaluate businesses and assets with a view to completing a Qualifying Transaction under the policies of the TSXV.

Conditions to the Completion of the Qualifying Transaction

Pursuant to the Letter of Intent, the obligations of Summus and ReNvision to consummate the Acquisition shall be subject to, among other things:

(a) the receipt of all necessary regulatory and TSXV approvals, including, without limiting the generality of the foregoing, the approval by the TSXV of the acquisition of ReNvision by Summus as Summus' Qualifying Transaction and, if required, the approval of the Acquisition by the shareholders of Summus as required by the CPC Policy, applicable securities laws and applicable corporate laws;

(b) the required audited and unaudited financial statements of Summus and ReNvision being true and correct and having been prepared in accordance with generally accepted accounting principals;

(c) there shall be no adverse material change in the business, affairs, financial condition or operations of either Summus or ReNvision between the date of the latest available financial statements and the date of closing of the Acquisition;

(d) the review, to the sole satisfaction of ReNvision, of the financial condition, business, properties, title, assets and affairs of Summus;

(e) the review, to the sole satisfaction of Summus, of the financial condition, business, properties, title, assets and affairs of ReNvision and the review, to the sole satisfaction of Summus, of the title of the holders of ReNvision Shares to their ReNvision Shares;

(f) the approval of the Acquisition by the board of directors of each of Summus and ReNvision;

(g) the entering into of a definitive agreement regarding the Acquisition among Summus, ReNvision and if applicable, the ReNvision Shareholders, containing representations and warranties in connection with the Acquisition as are reasonably required by counsel to Summus and counsel to ReNvision, and in such form as is mutually agreeable to the parties;

(h) ReNvision providing to Summus for inclusion in Summus' filing statement, or information circular and/or prospectus, audited, comparative consolidated financial statements (or such other financial statements as required by TSXV and applicable securities laws), as well as such additional unaudited interim financial statements as may be required by TSXV, applicable securities laws and applicable corporate laws along with corresponding management discussion and analysis;

(i) the entering into of such form of escrow agreement by such holders of ReNvision Shares as required by the TSXV in accordance with TSXV Policy 5.4 and the entering into of an identical form of escrow agreement by such holders of ReNvision Shares not required by the TSXV to be subject to escrow, but whose ReNvision Shares will nevertheless be subject to escrow provisions, as agreed upon between Summus and ReNvision pursuant to the Acquisition;

(j) the Financing shall have closed for gross proceeds of a minimum of $10 million; and

(k) such other conditions as counsel for each of Summus and ReNvision may reasonably require.

Arm's Length Transaction

The control persons of ReNvision are not (and their associates and affiliates are not) control persons of Summus. Accordingly, the acquisition by Summus of all the issued and outstanding ReNvision Shares is not a Non-Arm's Length Qualifying Transaction for the purposes of TSXV policies. As a result, the Acquisition will not be subject to approval of the shareholders of Summus and therefore no meeting of the shareholders of Summus is expected as a condition to the completion of the Acquisition.

Proposed Directors and Officers

In connection with the Acquisition, it is expected that Jason Krueger and Gord Harris, being two of the five current directors of Summus, will continue as members of the Board of Directors of Summus and Peter Lubey, Larry Parks and Alan Withey will resign from the board of directors. It is also expected that Namir Virjee, a current director and officer of ReNvision, will become a director of Summus upon closing of the Acquisition. It is also expected that each of Paul Crilly, Peter Sydoruk and an additional person independent of Summus and independent of ReNvision, will become directors of Summus upon closing the Acquisition. It is expected that the Board of Directors and the officers of Summus following completion of the Acquisition will include the following individuals:

Gord Harris, Chairman of the Board and a Director

Mr. Harris is the current Managing Director, Mergers, Acquisitions and Business Development for Primera Energy Resources Ltd. Prior thereto, Mr. Harris was the Senior Vice President and Chief Operating Officer of Buffalo Resources Corp., a public company listed on the TSX Venture Exchange. From February 2004 to August 2007, Mr. Harris was the President and Chief Executive Officer of Choice Resources Corp. until its merger with The Buffalo Oil Corporation. From September 1999 to July 2003, Mr. Harris was President of Roseland Resources Ltd. (now Rival Energy Ltd.), a public company whose shares previously traded on the Alberta Stock Exchange (as it then was) and from August 1997 to February 1999, he was the Vice-President of Vermillion Resources Ltd., a company whose shares previously traded on the Toronto Stock Exchange. Mr. Harris held various management and senior management positions at Canadian Occidental Petroleum in Canada, Europe and the Middle East from 1987 to 1997. Mr. Harris holds an M.B.A. from Queen's University, Kingston, Ontario and is a member of the Association of Professional Engineers, Geologists and Geophysicists of Alberta since 1981.

Namir Virjee, President and a Director

Mr. Virjee has been the Chief Executive Officer of ReNvision since its inception and is responsible for the development of ReNvision's business plan and its execution to date. Namir completed a Bachelor of Arts degree in Economics with a concentration in applied energy economics at the University of Calgary. Namir has worked on contract with Petro-Canada, TransCanada and Shell in capacities related to supply chain management, logistics, and cost controls.

Jason Krueger, Chief Executive Officer and a Director

Mr. Krueger has more than 17 years of experience in investment-related positions with a number of private and public corporations, and has been the President of Redwood Capital Corporation since 2000. Redwood Capital Corporation provides corporate finance advisory and strategic planning services for publicly traded energy and energy service companies. Mr. Krueger graduated from the University of Calgary with a Bachelor of Commerce degree in Finance. He has held the professional designation of Chartered Financial Analyst (CFA) since 2001.

Jastaig Chahal, Chief Operating Officer

Jastaig Chahal has been involved with business development and engineering design for ReNvision since its inception. He has completed a Bachelor of Science in Chemical Engineering at the Schulich School of Engineering. He worked with TAQA North as an exploitation engineer involved in advanced recovery techniques, and waterfloods in the Montney and at PrimeWest Energy as an exploitation and acquisitions and divestments engineer.

Peter Sydoruk, VP Operations and a Director

Mr. Sydoruk has over 16 years of leadership experience designing and manufacturing alternative fuel processing equipment and engineering for continuous and batch biodiesel plants. Mr. Sydoruk has planned and executed the development of energy optimization projects in the oil and gas and manufacturing sectors. My Sydoruk was the President and Chief Executive Officer of Optimax Energy Solutions Inc. a company engaged in the supply of electrical energy efficient products for AC induction motors, industrial and commercial lighting solutions and industrial grade, biodegradable and environmentally friendly lubrication solutions from 2001 to 2005 and since 2005 has been the President of BioFuel Canada Ltd. which designs and manufactures continuous and batch biodiesel plants. As a previous executive in the bio-fuels industry, Mr. Sydoruk brings considerable business, networking, engineering, logistic, infrastructure and engineering expertise to our senior management team. Mr. Sydoruk is a member of APEGGA and former Director of the Alberta Biodiesel Association.

Paul Crilly, Director

Mr. Crilly is currently President and CEO of Norex Exploration Services Inc. (TSX-NRX). Mr. Crilly has 17 years of senior management roles in energy services and equipment businesses. Prior to Norex, he held the position of President and CEO of RAM Cementers Inc. an oilfield cementing company based in western Canada. Mr. Crilly was also Vice-President Finance and CFO of Global Thermoeletric Inc. and Senior Vice-President of Finance and CFO of Ryan Energy Technologies Inc. Mr. Crilly is a Chartered Accountant and holds a Bachelor of Commerce degree from the University of Saskatchewan.

Arif Shivji, VP Finance and Chief Financial Officer

Mr. Shivji was the Chief Financial Officer of Petroglobe Inc. (TSXV - PGB) from October 2007 until April 2008. Prior thereto, Mr. Shivji was a Manager with PricewaterhouseCoopers Transaction Services where he assisted clients with M&A activity in Canada and the United Kingdom. He also has experience in a diverse range of areas including treasury, income tax, and public reporting. He holds a Bachelor of Commerce degree from University of Calgary and a Masters of Business Administration from the Richard Ivey School of Business. Mr. Shivji is a member of the Institute of Chartered Accountants of Alberta and is a charter holder with the Chartered Financial Analyst Institute.

Syd Abougoush, Corporate Secretary

Mr. Abougoush is an associate at the law firm of Burnet, Duckworth & Palmer LLP, located in Calgary, Alberta. Mr. Abougoush specializes in securities law with a focus in both private and public offerings and merger and acquisitions activities. Mr. Abougoush received an LL.B from Queen's University in 2005.

Sponsorship

Summus has requested that the TSXV exempt the requirement for a Sponsorship Report in connection with the Qualifying Transaction. There are no guarantees that the TSXV will accept Summus' request to exempt the Sponsorship Report requirement, in which case Summus will engage a Sponsor to prepare such a report.

Resumption of Trading and Further News

Trading of the common shares of Summus has been halted and will not resume until the TSXV has accepted all requisite documentation in connection with the proposed Qualifying Transaction, and until an exemption from the sponsorship requirement has been granted by the TSXV, or a Sponsor has been engaged.

Cautionary Statements

As indicated above, completion of the transactions is subject to a number of conditions, including but not limited to, TSXV acceptance. There can be no assurance that the transactions will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement or other disclosure document to be prepared in connection with the Acquisition, 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 TSXV has in no way passed upon the merits of the proposed transaction and has neither approved or disapproved the contents of this press release.

Except for statements of historic fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements such as references to ReNvision's planned construction activities, timing of completion of the biodiesel facility, feedstock sources, capital expenditures, lack of necessity for shareholder approval and financing activities, and timing of such items are based on the opinions and estimates at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements including, but not limited to: delays in the construction process, changes to the design of the biodiesel facility, increase in costs relating to the biodiesel facility, failure to complete the Financing or to raise sufficient funds, failure to receive necessary approvals, including regulatory approval, the requirements to obtain shareholder approval, failure to receive Government grants on time or at all and changes to the Government of Alberta's incentive plans for biofuels companies. There are uncertainties inherent in forward-looking information, including factors beyond ReNvision's and Summus' control, and no assurance can be given that the programs will be completed on time, on budget or at all. In addition, there are numerous uncertainties inherent in the construction process, including many factors beyond ReNvision's and Summus' control, and no assurance can be given that the business plan of ReNvision will be realized. Summus undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. Additional information identifying risks and uncertainties that could affect financial results is contained in Summus' filings with Canadian securities regulators, which filings are available at www.sedar.com.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.

Contact Information

  • Summus Capital Corp.
    Jason Krueger, CFA
    President, Chief Executive Officer and Director
    (403) 374-1234
    jason@redwood-capital.com