North Coast Solar Stocks

September 21, 2009

DayStar Technologies Executes Letter of Intent With EPOD Solar, Inc. and Enters Into Bridge Financing Agreement

Filed under: DSTI — Tags: , , , — Jason @ 3:49 pm

Monday September 21, 2009, 3:49 pm EDT

SANTA CLARA, Calif., Sept. 21 /PRNewswire-FirstCall/ — DayStar Technologies, Inc. (DSTI; “DayStar”), a developer of solar photovoltaic products based on CIGS thin-film deposition technology, announced today that it has executed a letter of intent (“Letter of Intent”) with EPOD Solar Inc., a British Columbia corporation (“EPOD Solar”), regarding a proposed transaction or series of related transactions intended to result in the combination of the businesses of EPOD Solar and DayStar (the “Transaction”). Simultaneously with the execution of the Letter of Intent, and in connection with the Transaction, DayStar has also entered into a Purchase Agreement and Security Agreement with Mr. Peter Alan Lacey to provide a bridge loan of $2,000,000.

Upon successful completion of negotiations and due diligence, the parties intend to sign definitive agreements and complete the Transaction as soon as practicable following any required approval by the holders of DayStar’s common stock.

EPOD Solar is a vertically integrated developer, owner and operator of solar parks throughout Europe and North America. EPOD Solar also manufactures amorphous silicon thin film modules for the sole purpose of supplying its developed solar projects. EPOD Solar has 35MW of annual PV panel production capacity and expects to expand to 90MW by Q3 2010. EPOD Solar has more than 150MW of solar park projects in its development pipeline.

The Transaction is premised on the mutual understanding of EPOD Solar and DayStar that their businesses are complementary. EPOD Solar has 35 MW of manufacturing capacity for its amorphous silicon technology, and its research and development arm is poised to deploy double and triple junction technology PV module manufacturing. Amorphous silicon PV modules are best suited for large utility-scale ground mount projects at competitive costs. DayStar’s CIGS technology represents a high-potential thin-film technology.

Key benefits of the Transaction include:

* The combined company will utilize its collective financial and research and development resources to bring the CIGS technology to commercial production. This approach will allow parallel tracks to benefit from both technologies for the future growth of the fully integrated business model.
* The combined company will result in a vertically integrated solar company with existing, low cost manufacturing capability and a technology roadmap that leverages DayStar’s CIGS PV technology.
* The combined company’s growth plan is driven by the development of solar parks, which will be owned and operated as independent power producers.
* Immediate availability of EPOD Solar’s low cost a-Si modules combined with the expansion of the technology portfolio to include DayStar’s CIGS will result in long-term certainty for lower system installed costs to drive higher IRR for company-owned solar parks.
* Establishes a long-term technology road map to higher module efficiency and lower cost-per-watt with technology-compatible R&D and production facilities.

The Transaction

It is anticipated that as part of the Transaction, DayStar will purchase substantially all of the assets of EPOD Solar. Pursuant to the Letter of Intent, the total value of the Transaction will be approximately $300 million. DayStar will authorize and issue a new series of preferred shares to the shareholders of EPOD Solar. Each preferred share will be convertible into one share of DayStar common stock at a conversion price of $1.80 per share. In addition to receiving such preferred shares, such holder will also be entitled to receive a warrant to purchase 50% of the total number of shares of DayStar common stock issued upon such conversion. The warrant will have an exercise price of $1.80 per share. DayStar will either (a) enter into a registration rights agreement with respect to the registration of any DayStar Stock issued to EPOD Solar with the Securities and Exchange Commission granting both demand and piggyback registration rights to the holders of such DayStar Stock or (b) file a Registration Statement on Form S-4 with respect to the Transaction registering the issuance of any DayStar Stock to EPOD Solar.

Simultaneously with the execution of the Letter of Intent, and in connection with the Transaction, DayStar has also entered into a Purchase Agreement and Security Agreement with Mr. Peter Alan Lacey to provide a bridge loan of $2,000,000 for purposes of funding DayStar’s ongoing research and development and related business operations during the negotiation of the Transaction. DayStar has issued to Mr. Lacey a Secured Convertible Promissory Note (the “Note”) in the aggregate principal amount of the Loan, a first warrant to purchase 1,500,000 shares of DayStar common stock, and a second warrant to purchase 1,666,667, upon the satisfaction of certain conditions. The Note will be convertible into shares of DayStar common stock based on a $0.60 conversion price and the Warrants will have an exercise price of $0.50 per share and are subject to adjustment for certain dilutive transactions.. The common stock that may be issued under the Note and Warrants are to be registered pursuant to a Registration Rights Agreement between DayStar and Mr. Lacey

Upon completion of the bridge loan, Michael Matvieshen has been appointed Chief Executive Officer of DayStar Technologies, Inc. Mr. Robert G. Aldrich will remain in his role as Chairman.

Further details of the Letter of Intent and Bridge Loan will be disclosed in a Form 8-K to be filed with the Securities and Exchange Commission.

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