SAN CLEMENTE, CA, Dec. 20 /PRNewswire-FirstCall/ - Reclamation
Consulting and Applications, Inc. (RCAI) (OTCBB: RCAA), a world leader in
productivity-enhancing, environmentally-friendly anti-stick release agents
and lubricants for the mining and aggregates sector, announced today that
it has entered into a secured convertible debenture agreement to receive up
to $5 million financing from Pala Investments Holdings Limited. Pala
Investments Holdings Limited is a US$1 billion multi-strategy alternative
investment company with a particular focus on mining and natural resource
companies in both developed and emerging markets.
"Pala is an ideal partner for RCAI," said Paul Hughes, Chief Financial
Officer. "As a sophisticated investor within the mining services sector,
Pala has excellent access to many of the world's mining companies that we
are targeting. This capital infusion allows us to concentrate on our
rapidly growing commercial activities within the mining, asphalt and cement
industries. It also provides us with the growth capital to accelerate our
market penetration globally."
"In addition to this capital infusion," Mr. Hughes continued, "We are
also finalizing an important distribution agreement with Pala that we
anticipate will not only increase our activities within the mining sector
but will further accelerate our path to profitability".
Commenting on the investment in RCAI, Joseph Belan, Managing Director
of Switzerland-based Pala Investments AG, which advises Pala Investments
Holdings Limited on an exclusive basis said, "We are delighted to be able
to partner with RCAI at this exciting stage in its development. Pala's
investment in RCAI is a continuation of its active investment strategy in
the mining consumables and services area. We look forward to working with
management to execute its strategy, including the substantial expansion of
the volume and global reach of RCAI sales."
Under the terms of the transaction, Pala has invested three million
dollars initially and has committed another two million dollars to be
funded on or before the end of 2008, subject to RCAI meeting certain
performance benchmarks, or which Pala may otherwise invest at its
discretion. Pala's two-tranche investment is structured as a three-year
convertible debenture and allows Pala to convert their investment into
RCAI's common stock at $0.14. They also received three million warrants
under the terms of the first investment tranche and are to receive an
additional two million shares on the funding of the second tranche. The
warrants have a term of three years and an exercise price of $0.21 per
share. Pala has demand registration rights on the shares underlying the
warrants and Pala's conversion rights.
The terms of the transaction require RCAI to effect a 2 for 1 reverse
stock split and to increase its authorized shares of common stock from 150
million to 200 million shares. The agreement also imposes certain
restrictions on RCAI's ability to incur additional debt without Pala's
approval and provides Pala with a right of first refusal on RCAI's future
financings. RCAI has also agreed to enter into a non-exclusive distribution
agreement with Pala.
In connection with Pala's investment, RCAI's management and three
largest shareholders entered into an agreement with Pala to vote their
shares to elect a director designated by Pala and to provide Pala with a
right of first refusal on the sale of any of their RCAI stock.
More detail regarding the transaction is disclosed in RCAI's Current
Report on Form 8-K filed with the SEC on December 18, 2007 and available on
the SEC's web site at www.sec.gov.
"The Pala funding comes at an important time," said Gordon Davies,
President of RCAI. "As the mining and aggregate sectors come to better
understand the significant efficiency gains that our Alderox(R) product has
demonstrated it can deliver, we expect to see continued growth in sales
volumes to existing customers, as well as substantial growth in our
business development activities and associated scheduled field trials.
Pala's investment and strategic involvement will greatly assist us in
accelerating our aggressive geographic roll-out".
Pala Investments Holdings Limited, based in Jersey, Chanel Islands, is
a US$1 billion multi-strategy alternative investment company with a
particular focus on mining and natural resource companies in both developed
and emerging markets. Pala Investments' exclusive investment advisor, Pala
Investments AG, is a Switzerland-based team with extensive experience
within the mining and natural resource sectors. Pala Investments AG also
advises Pala Assets Holdings Limited, a US$700 million alternative
investment company focused primarily on earlier-stage natural resource
companies in emerging markets. Both Pala Investments and Pala Assets seek
to assist companies in which they have long-term shareholdings by providing
strategic advice and innovative financing solutions.
Headquartered in San Clemente, California, RCAI manufactures and
globally markets its Alderox(R) line of release agents and lubricants to
heavy industry. The company's patented Alderox(R) formulations, which are
100% environmentally-friendly, biodegradable, non-hazardous and non-toxic,
are used to reduce or eliminate the significant problems associated with
the build-up of materials in asphalt and mining haul truck beds, on mining
and asphalt handling equipment and on concrete forms and molds.
Safe Harbor Statement under the Private Securities Litigation Reform
Act of 1995: The statements contained herein which are not historical are
forward-looking statements that are subject to risks and uncertainties that
could cause actual results to differ materially from those expressed in the
forward-looking statements, including, but not limited to, certain delays
beyond the company's control with respect to market acceptance of new
technologies or products, delays in testing and evaluation of products, and
other risks detailed from time to time in the company's filings with the
Securities and Exchange Commission.
Certain of the statements in the news release are forward-looking. Such
statements relating to the Company's future business and the success of its
products are based on Management's beliefs and opinions and also on
assumptions made by and information currently available to the company.
Such statements are subject to certain risks, uncertainties and the
correctness of assumptions, and should be read with this cautionary
statement in mind.
CONTACT: Mike Davies at RCAI directly at tel. (949) 542-7440; or visit
the Company online at www.rca-inc.com
SOURCE Reclamation Consulting and Applications Inc.