Process Capital Corp.

October 24, 2006 18:39 ET

Process Capital Corp. Announces Private Placements and Financing Commitments to Construct New Commercial 30 Million Litre Waste Oil Micro-Refinery at its Kingston, Ontario Location

TORONTO, ONTARIO--(CCNMatthews - Oct. 24, 2006) - Process Capital Corp. (TSX VENTURE:POR) (the "Company") announces that as of the date hereof, and subject to TSX Venture Exchange (the "Exchange") approval and the receipt of any required regulatory consents, the company has agreed to sell up to 51,500,000 units at a price of $0.05 per unit for total proceeds of up to $2,575,000. (the "Private Placement") Each unit will consist of one common share of the company, and one share purchase warrant, with each full warrant entitling the holder to acquire one common share of the Company, at a price of $0.10 for a period of 18 months from the date of issuance.

The company has signed a letter agreement with EnviroMatrix Technologies Inc.(EnviroMatrix), a private Ontario corporation, wherein EnviroMatrix has agreed, subject to the terms and conditions of the letter agreement, to subscribe for a total of up to 35,500,000 units for total proceeds of up to $1,775,000. Harris Brown & Partners Limited acted as Advisor to EnviroMatrix on this transaction.

H. John Stollery, together with other members of the management team and directors of the Company have indicated their intention to subscribe for up to 16,000,000 units for total proceeds of up to $800,000. The common shares and warrants acquired under these transactions will be subject to a 4-month hold period.

As some of the subscribers to these private placements are insiders of the Company, the Company is required to comply with Policy 5.9 of the Exchange (Insider Bids, Going Private Transactions and Related Transactions) which incorporates Ontario Securities Commission Rule 61-501, unless there is an exemption available. The Company expects to rely upon the Financial Hardship Exemption with respect to these private placements.

The Private Placement is expected to be completed in one or more tranches, with an initial tranche of up to 13,000,000 units, with proceeds of up to $650,000..Funds from the initial tranche will be used by the Company to pay existing debt of the Company, costs associated with the Private Placement, and provide working capital to the Company. Funds from subsequent tranches will be used by the company to pay existing debt and to commence construction of a new commercial 30 million litre micro-refinery to be built at the Company's site in Kingston, Ontario. This will replace the current 8 million litre pilot plant that was developed and used to test and confirm the technology.

Immediately upon completion of the Private Placements, the Company intends to engage Colt Engineering to begin work on the new plant and to de-commission the current pilot plant. Management expects it will take 15 months to put the new refinery into commercial operation.

In addition to the above noted private placements, EnviroMatrix has committed to use its best efforts to arrange, subject to Exchange approval, and the receipt of any necessary regulatory approvals, additional financing for the Company, by way of convertible debentures of up to $3,000,000 (the "Debenture Offering") and a first mortgage in the amount of up to $3,657,000 for a total amount of up to $6,637,500 (the "Additional Financing") to enable the Company to complete construction of the new plant facility. It has been agreed that the Additional Financing will not bear interest at a rate greater than 12% per annum, and must be on reasonable terms, with respect to commissions and/or other terms acceptable to the Board of the Company.

EnviroMatrix has agreed to commit a minimum of $500,000 and act as lead investor in the Debenture Offering. Final terms of the Debenture Offering have not been established at this time.

While Process Capital Corp. will own the new micro-refinery, it has granted to EnviroMatrix, as additional consideration for the private placements and for raising, at a minimum, $5 million of the Additional Financing referred to above, the exclusive rights to build and/or sell these micro-refineries throughout North America for a 10 year period. For each plant that is constructed in North America, Process Capital Corp. will receive a fee of $500,000 and a royalty of $0.02 per litre on all diesel fuel sold. Process will retain the rights to develop and sell these plants throughout the rest of the world, except for China. The rights to China have been retained by Dr. Yu, the inventor of the technology, and a consultant to Process Capital Corp.

If EnviroMatrix is unable to provide this Additional Financing within 12 months, it will result in EnviroMatrix being obligated to offer to sell up to 30,000,000 common shares owned by it to H. John Stollery for a buyer to be determined at a price of $0.035 for a period of six months, and the rights granted to EnviroMatrix to build and/or sell these micro-refineries throughout North America for a 10 year period will be revoked.

There are currently 77,472,574 common shares and 24,451,111 common share purchase warrants of the Company which are issued and outstanding. The price of the Company's common shares as at the close of business on October 23, 2006, the day prior to this announcement was $0.03 per share.

Statements in this release which describe the Company's intentions, expectations or predictions, or which relate to matters that are not historical facts are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performances or achievements of the Company to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. The Company may update or revise any forward-looking statements, whether as a result of new information, future events or changing market and business conditions.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy and accuracy of this release.

Contact Information

  • Process Capital Corp.
    Robert Grimard
    President and CFO
    (416) 622-6600
    (416) 622-6628 (FAX)
    Process Capital Corp.
    H.John Stollery
    Chairman of the Board
    (416) 622-6600
    (416) 622-6628 (FAX)
    EnviroMatrix Technologies Inc.
    Anthony Cosentino
    President & CEO
    (416) 363-0080
    (416) 360-0515 (FAX)
    Harris Brown & Partners
    Jeffrey Phipps
    President and CEO
    (416) 850-1564
    (866) 298-0088 (FAX)