Lonestar Capital Corp.
TSX VENTURE : LON.P

Lonestar Capital Corp.

February 23, 2009 11:04 ET

Lonestar Capital Corp. Closes Acquisition of Acro Electric, Inc. as Qualifying Transaction and Completes Private Placement Financing

HOUSTON, TEXAS and VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 23, 2009) - 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 closed the previously announced acquisition of Acro Electric, Inc., a California solar integrator ("Acro") and related private placement ("Private Placement"). This transaction, upon receipt of final approval from the Exchange following the filing of certain documents required by the Exchange in connection with the closing, will constitute Lonestar's qualifying transaction ("Qualifying Transaction").

On January 14, 2009, Lonestar received conditional approval of the Qualifying Transaction from the Exchange. Lonestar filed a filing statement dated February 11, 2009 (the "Filing Statement") with the Exchange and on SEDAR.

Acquisition

Pursuant to a Stock Purchase Agreement dated June 29, 2008, as amended on November 20, 2008 and December 30, 2008 (the "Acquisition Agreement"), Lonestar, through its wholly-owned subsidiary, Acro Energy Technologies, LLC, a Texas limited liability company ("Acro Energy Technologies") has acquired all of the issued and outstanding common shares of Acro from the Steven J. Vella Family 2008 Trust (the "Vendor"). The purchase price paid to the Vendor was satisfied by a combination of cash, a promissory note, and 2,600,303 common shares issued from the treasury of Lonestar at a deemed price of CDN$0.68 per share (the "Shares"). An advance of CDN$225,000, as well as an advance of CDN$25,000, as refundable deposits on the cash portion of the purchase price were previously paid by Lonestar to the Vendor on November 28, 2008. Lonestar has further agreed to pay an additional purchase price earn-out in the event that certain prescribed milestones are achieved in the calendar years 2009, 2010 and 2011 following completion of the acquisition.

Options

Effective as of the closing date, the Company will grant to Steven J. Vella and five employees of Acro options to purchase a total of 250,000 Shares in accordance with Lonestar's Stock Option Plan at an exercise price of CDN$0.78, a CDN$0.07 discount from the last daily closing price as listed on the Exchange, with 50% of such options to vest six months from the date of the Acquisition Agreement and the remaining 50% to vest on the first anniversary of the Acquisition Agreement. Upon completion of the Qualifying Transaction and the execution of written employment agreements, the Company will grant to its officers options to purchase a total of 400,000 Shares in accordance with Lonestar's Stock Option Plan at an exercise price of not less than the Discounted Market Price, as defined by Exchange Policy 1.1, on the date of grant, with such options vesting immediately upon issuance.

Private Placement

Lonestar has completed a non-brokered private placement for gross proceeds of CDN$443,655 undertaken in conjunction with the Qualifying Transaction. The private placement consists of the issuance of 652,433 units (the "Units") at a price of CDN $0.68 per Unit. Each Unit is composed of one common share in the capital of Lonestar and one Share purchase warrant (the "Warrants"). Each Warrant will entitle the holder to purchase one Share of the Company at a price of CDN$0.90 per Share between February 24, 2009 and August 23, 2009 and CDN$1.30 per Share between August 24, 2009 and February 23, 2010. Harry Fleming, CEO of Lonestar, participated in the Private Placement for an aggregate of 205,050 Units, representing 31.4% of the Units issued under the Private Placement. The common shares issued as part of the Private Placement, together with the 2,600,303 common shares issued to the Vendor are subject to a hold period ending June 24, 2009.

Following the completion of the Qualifying Transaction and the Private Placement, there are now 19,652,736 Lonestar shares issued and outstanding on a non-diluted basis. On a fully diluted basis, there are 21,605,169 shares of Lonestar issued and outstanding.

Escrow

Pursuant to the terms of an escrow agreement dated February 23, 2009 among Lonestar, Computershare Investor Services, Inc. and the Vendor, the common shares of the Company issued to the Vendor as the Share Consideration pursuant to the Qualifying Transaction have been placed in escrow pursuant to TSX-V Tier 2 surplus security escrow requirements with 5% of the escrowed securities to be released from escrow the date of the issuance of the Final Exchange Bulletin. The balance of such shares will be released in tranches in accordance with the escrow agreement over the 36 months thereafter. Pursuant to the terms of an escrow agreement dated February 23, 2009 among Lonestar, Computershare Investor Services, Inc. and the named escrow security holder, the common shares issued to Mr. Fleming pursuant to the Private Placement have been placed in escrow pursuant to TSX-V Tier 2 value security escrow requirements with 10% of the escrowed securities to be released from escrow the date of the issuance of the Exchange Final Exchange Bulletin. The balance of such shares will be released in tranches in accordance with the escrow agreement over the 36 months thereafter.

Directors and Officers

Effective immediately, the Company has terminated its relationship with Christopher Mulgrew. Douglas Samuelson will act as the Company's interim Chief Financial Officer until a replacement can be named.

Upon completion of the Qualifying Transaction the directors and officers of Lonestar will be:

- Harry Fleming, Chief Executive Officer and Director

- Steven Vella, Chief Operations Officer

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

- Kenneth J. Klein, Director

- David Doherty, Director

- Peter Lynch, Executive Vice President of Strategic Development.

Details of the Qualifying Transaction and Private Placement can be found in the press releases dated July 29, 2008 and November 21, 2008, and the Filing Statement dated February 11, 2009, all of which are available under the Company's profile on SEDAR (www.sedar.com). Shareholders are encouraged to review the filing statement in its entirety.

The Qualifying Transaction is subject to the final approval of the TSX Venture Exchange.

This news release contains "forward-looking statements" within the meaning of applicable securities laws relating to the completion of the Qualifying Transaction, including statements regarding the final approval of the Qualifying Transaction by the Exchange. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risk that Lonestar may not receive final approval from the Exchange. The statements in this news release are made as of the date of this release. The factors identified above are not intended to represent a complete list of the factors that could affect Lonestar. Additional factors are noted under "Risk Factors" in the Filing Statement, a copy of which may be obtained on the SEDAR website at www.sedar.com.

The TSX Venture 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 TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this press release.

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