AFG FlameGuard Ltd.

AFG FlameGuard Ltd.

April 09, 2012 16:38 ET

AFG FlameGuard Commences Trading on the Canadian National Stock Exchange (CNSX)

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 9, 2012) - AFG FlameGuard Ltd. ("AFG" or the "Corporation"), a technology focused company that supplies innovative fire suppression and prevention products and services, including the revolutionary waterless extinguishers known as Dry Sprinkler Powder Aerosol ("DSPA") generators, is pleased to announce that its common shares have been approved for listing on the Canadian National Stock Exchange ("CNSX") and will commence trading under the symbol "AFG" effective Wednesday, April 11, 2012.

AFG markets and distributes an environmentally friendly non-toxic suite of fire suppression products designed to save lives and reduce property loss. Through an exclusive distribution agreement with AFG Group Nijmegen B.V. ("AFG Group"), AFG is able to market and distribute, on an exclusive basis, AFG Group's wide range of products in Canada, Mexico, Guyana, Panama and Kurdistan. AFG also markets in other territories on a non-exclusive basis, particularly in the United States. The current and potential customers for AFG's products are fire departments, businesses, government agencies, home owners, commercial buildings and the military.

The AFG Group owns 12.6 percent of AFG and is represented on the AFG board of directors by their Chief Executive Officer, Mr. Frans Vogelzangs, who founded the AFG Group over 20 years ago. The AFG Group's wide range of products are sold in 22 countries around the globe, with the primary focus on the DSPA fire extinguishers and the WL brand of fire resistant paints and coatings.

MARKET FOR AFG PRODUCTS

AFG's products apply to many markets both at the manufacturing and new product stage and to any structures or closed spaces already in existence or undergoing revision or upgrade of their fire protection systems. AFG is now prioritizing its target markets which include fire departments, heavy industry, marine and shipping companies, mobile home manufacturers, government institutions and buildings, computer and data facilities, manufacturers, emergency response services, and military markets throughout our territories.

AFG expects that the DSPA-5 can be used by fire departments in approximately 1 in 6 structural fires in Canada. If our DSPA was sold and available to be used for that number of fires, the potential sales to this first responder market of approximately 10,000 DSPA-5 units per year would result in approximately $12 million in revenue. The determination to use a DSPA-5 is often based on the state and type of fire, the opportunity to create a safer environment for the firefighters and the need for containing the spread of the fire.

Thomas Bell, AFG's President and CEO, commented, "AFG has been focused on marketing the DSPA-5 as an introduction of this amazing fire suppression technology to the first responder market and is now poised to begin marketing its full line of products to heavy industry, marine and shipping companies, mobile home manufacturers, hospitals and other government institutions and buildings, computer and data facilities, manufacturers, emergency response services, and military markets. The recent success stories in Canada have established DSPA technology as a credible, effective and a reliable tool for battling fires and will pave the way for the sale of AFG's fixed installation systems. These installed DSPA systems are ideal for virtually any enclosed structure, specifically those lacking water sprinkler systems or where access to fire service is problematic."

AFG believes that its products are in increasing demand because they substantially reduce the damage to structures and contents caused by fires and water which is commonly used to extinguish fires. The data from insurance companies suggests that water, typically applied under high-pressure while extinguishing fires, causes major damage over and above the damage caused by fire. Furthermore, AFG's products are friendly to the environment and cost effective. To date, AFG's products have received positive feedback from insurance companies, governments, industry and the public.

FINANCING AND CAPITALIZATION

AFG currently has 28,653,992 shares issued and outstanding (31,638,920 on a fully diluted basis). There are currently 2,984,928 warrants outstanding, 1,766,670 exercisable at $0.25 and expiring July 11, 2012 and 1,218,258 exercisable at $0.55 and expiring April 11, 2013. The Corporation amalgamated with Orca Power Corp ("Orca") on October 12, 2011. Orca's shares were exchanged on a four to one basis upon the amalgamation. Orca's shares last traded at $0.10 on June 22, 2011 equivalent to $0.40 per share on a post amalgamation basis.

AFG has raised $1,382,777 in two rounds of unit private placement funding comprised of $530,000 at $0.15 per unit, each unit comprised of one share and one-half warrant, each full warrant exercisable at $0.25 and expiring 3 months from the date of listing and $852, 777 at $0.35 per unit, each unit comprised of one share and one-half warrant, each full warrant exercisable at $0.55 and expiring 12 months from the date of listing. Proceeds have been used to fund the initial product roll-out and for working capital. The Corporation plans to raise further funds in respect to the next stage in the marketing plan to expand the DSPA model offering to installed units.

BOARD OF DIRECTORS AND SENIOR MANAGEMENT

Thomas Bell, President and Chief Executive Officer, Director

Mr. Bell has extensive executive, business, operational and regulatory experience that he gained in the position of Executive Vice President, Corporate Development at Great Canadian Gaming Corporation, a TSX listed company, where he was employed from 1993 to 2009. Mr. Bell has broad public company, corporate finance and operational expertise and has served as an officer and director of numerous public and private companies in the gaming, financial services, mining exploration and renewable energy industries.

Patrick Lavin, Chief Financial Officer, Director

Mr. Lavin is a certified general accountant and has over 20 years of diversified experience in the areas of corporate finance, public company regulatory and financial administration and senior management. Mr. Lavin has domestic and international business management experience and has worked on numerous acquisitions and divestitures in the technology, mining and exploration, gaming, sales and marketing and renewable energy industries.

Donald Gordon, Vice President Corporate Development, Director

Mr. Gordon has operated a corporate finance consulting practice representing issuers and investment dealers for the past 12 years acting as consultant in the successful listing and financing of issuers representing various industries. Mr. Gordon is the Vancouver based Senior Advisor for the Canadian National Stock Exchange. He is also an Executive Director of the Canadian Listed Company Association. Previously, Mr. Gordon held stock exchange management positions over a 17 year career and was a commercial banker prior to that. Mr. Gordon holds BA and MBA degrees from the University of British Columbia and is a CFA charter holder.

Frans Vogelzangs, Director

Mr. Vogelzangs started with a Dutch based company Flame Guard BV in 1990, which he transformed into a consortium of companies known as the AFG Group BV. All companies in the AFG Group are in the fire safety industry and are synergistic to each other. Mr. Vogelzangs is the Chief Executive Officer of the AFG Group BV. Products from the AFG Group BV are highly innovative. Mr. Vogelzangs has a degree in chemistry and physics from the University of Nijmegen.

AFG PRODUCTS: INNOVATION IN LIFE SAFETY

AFG's product line includes dry sprinkler powdered aerosol systems ("DSPA"), NOFIQ fire suppression systems ("NOFIQ"), intumescent (fire resistant) paints, coatings and fabric sprays and photoluminescent products.

DSPA - DRY SPRINKLER POWDER AEROSOL - AFG's DSPA systems can extinguish fires in their incipient stage or knockdown fully developed fires in a contained environment within seconds. The DSPA-5 model is one of a series of model variations but the only handheld or mobile version and has been introduced most effectively as a first response tool by firefighters for initial attack purposes and to protect firefighters from flashover and backdraft. The DSPA-5M model is specifically designed for marine applications which is a market significantly impacted by the Halon ban and is seeking a safe alternative system which the DSPA-5M provides. DSPA-5 utilization as an initial response attack tool is changing the way fires are fought - not just putting fires out faster, but also allowing first responders to develop strategies for small crews in light vehicles to arrive on fire scenes more rapidly.

DSPA extinguishing systems act volumetrically, in which an area or a compartment is filled with a specific amount of extinguishing material and propelled through a chemical reaction that is released by heat or flame. The solid material of the DSPA (as opposed to gas systems) enables the release of aerosol particles directly onto the flames, not the surrounding oxygen, thereby rapidly extinguishing the flames. DSPA systems can be used for Class A, B, C and K fires and are successful in early stage or fully developed fires.

DSPA installed systems were developed so that the temperature level for triggering automatic detonation can be set by a thermostat, and thus setup for automatic or manual detonation.

AFG offers a number of DSPA handheld and installed models suitable for various applications.

DSPA Installed Systems: Installations can be customized to protect spaces of any size, without any risk of harm to equipment or inventory in the event of a deployment. Installed systems can protect warehouses, industrial and manufacturing environments, computer/electrical equipment, water and land-based transportation systems, technical rooms in hotels and high-rise buildings, power plants, construction and development projects. Installed model systems vary in size and capacity depending on the volume of area to be protected and the classification of the fire to be suppressed, including Class A, B, C and K fires- a DSPA can deal with each class.

The AFG Group is currently having the fixed installation DSPA units tested by a world recognized independent testing agency, KIWA Netherlands (Kiwa N.V. and Kiwa Nederland B.V., http://www.kiwa.nl). KIWA is accredited to certify the performance of the DSPA fixed models in accordance with Underwriters laboratory Standard 2775: FIXED CONDENSED AEROSOL EXTINGUISHING SYSTEM UNITS. AFG may apply the results of the European tests to obtain UL certification in North America and will benefit by time and cost savings by being able to use the AFG Group results. That certification enables the next phase of the Company's marketing plan to develop beyond the first responder market.

NOFIQ FIRE SUPPRESSION SYSTEMS - NOFIQ fire suppression systems combine the aerosol technology, carbon monoxide gas detection and wireless radio signaling to alert on the occurrence of gas emitted from smoldering electric wires, and ability to douse a fire on occurrence of flames. NOFIQ is ideal for electric boxes and control panels.

INTUMESCENT FIRE RESISTANT PAINTS AND COATINGS - AFG other products include a line of safe, non-toxic and easy to apply intumescent (fire resistant) paints, coatings, fire retardants and fabric sprays. These are appropriate for a wide variety of applications where fire prevention is critical, including industrial, schools, and remote/difficult to access locations.

Intumescent coatings act to protect surfaces from heat. When subjected to sufficient heat, the intumescent coating swells to over sixty (60) times its original thickness and creates a "char" that insulates the surface from heat, allowing a flammable surface such as wood to resist flames for long periods of time.

AFG's paints and coatings, marketed under the brand name "HCA", are fire and building code compliant, environmentally friendly, and guaranteed effective. When applied to gyproc, panel board, plywood, OSB board, or dimensional lumber, HCA paints and coatings prevent flame spread and thermal damage for at least 30 minutes. The HCA WL thin-coat paint has recently been listed with QAI and has the longest heat resistant rating in the industry for flame retardant properties.

The AFG HCA coatings have been tested by Intertek Testing Services and certified to have passed the Can/ULC-S102-M88 standard for the Canadian market and the ASTM E84 standard for the United States market. The coatings also comply with European standards.

AFG is a Quality Auditing Institute (QAI) listed company. The AFG HCA coatings are certified to the U.S. flame spread requirement - ASTM E84 "Standard Test Method for Surface Burning Characteristics of Building Materials" and the Canadian flame spread requirement - CAN/ULC S102-M88 "Standard Test Method for Surface Burning Characteristics of Building Materials and Assemblies", the CAN/ULC S101-07 "Standard Methods of Fire Endurance Tests of Building Construction and Materials", and ASTM E-119-08a "Standard Methods for Fire Tests of Building Construction and Materials" (NFPA 251-2008).

Code compliance requires a number of design considerations including a combination of fire separations, sprinklers and coatings. AFG's HCA-branded WL + TR products are highly effective thin coat intumescent coatings that react to fire or heat by expanding many times their original dry film thickness. A "Class A" rating on the substrates mentioned above can be achieved with a coating as thin as 250 microns.

Applying HCA intumescent paint to drywall during wall assemblies meets fire code ratings for fire separations; and as such has created a market in new construction. AFG will market to architects, engineers, code consultants and the commercial and residential building industries.

For more information, please visit AFG's website at www.afg5.com and view AFG's disclosure record on the CNSX website at www.csnx.ca and on SEDAR at www.sedar.com. Follow AFG on Twitter at twitter.com/afgflameguard.

FORWARD LOOKING STATEMENTS

Except for statements of historical fact contained herein, the information presented in this news release constitutes "forward-looking statements" or "information" (collectively "statements"). These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. In some cases, forward-looking statements can be identified by terminology such as "anticipate", "believe", "continue", "estimate", "expect", "forecast", "intend", "likely", "may", "outlook", "plan", "potential", "predict", "should", "will", or the negative of these terms or other comparable terminology. The reader should not place undue reliance on forward-looking statements and information because they involve assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements and information. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements and information include, but are not limited, risks related to our limited operating history and history of no earnings, competition from other companies in various consumer industries, changes to government regulations, dependence on key personnel, general economic conditions, local economic conditions, including the marketing of similar products and services in close proximity to licensed territories of the Corporation, timely introduction of these newly licensed Corporation's products or services; the uncertainties in acceptance of such products or services by the market, approvals the Corporation may require in having the agreements and interests being assigned to them, interest rates, availability of equity and debt financing, increased development costs, including costs of labor, equipment and environmental compliance and other risks factors described from time to time in the documents filed by the Corporation with applicable securities regulators and the CNSX, including in the Form 2A Listing Statement under the heading "Risk Factors", which is filed on the CNSX website.

Neither the Canadian National Stock Exchange (the "CNSX") nor its Regulation Services Provider (as that term is defined in the policies of the CNSX) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • AFG FlameGuard Ltd.
    Thomas Bell
    President and Chief Executive Officer
    604-658-2040
    604-658-2045 (FAX)
    www.afg5.com