Note: Lux Wind Turbines CEDC Limited (the "Issuer") will use the net proceeds of this offering to purchase common shares of Lux Wind Turbines Inc. (Lux) at $1.00 per share. Currently the Issuer owns 60% of Lux. Upon successful closing and after deducting the costs of this Offering and taking into account dynamic options for 20% ownership by management, the Issuer’s fully diluted ownership of Lux would be the following:
Minimum Offering: 72%
Target Offering: 75%
Maximum Offering: 78%
The Company holds an exclusive global license to manufacture and sell the Lux Wind Turbine. It is a unique Vertical Axis Wind Turbine (VAWT) that rotates around a vertical axis and does not require a tower or central column, lowering the total weight to less than half of conventional Horizontal Axis Wind Turbines (HAWTs). The inventor, Glen Lux, has obtained patents in Europe and the United States plus a patent is pending in Canada.
This revolutionary design will reduce not only the capital cost of a wind turbine but it will also reduce installation, operating and maintenance costs by 40% while maintaining comparable energy generation. These savings will bring the Levelized Cost of Energy (LCOE) for a Lux Wind Turbine well below the LCOE for existing HAWTs and will be competitive with non-renewable energy sources.
The design of the Lux Wind Turbine was inspired by Buckminster Fuller’s geodesic dome, an engineering principle of continuous tension and discontinuous compression which distributes the stress across the whole structure. By applying this engineering method the Company is able to manufacture a stronger yet much lighter wind turbine that operates without a central column.
The Lux Wind Turbine has six blades connected to a hub at the top and bottom of the rotor. The blades are connected by cross cables running from blade to blade, forming a hexagon. Our turbine has an extremely low centre of gravity (ideal for floating offshore platforms) because all of our mechanical components are located at the base, a traction drive eliminates the need for an expensive gearbox and our rotor design utilizes wind from any direction which eliminates the need for a yaw system.
We plan on selling our product to the renewable energy industry. In particular we plan to install our turbine on decommissioned chimneys that were used with coal-fired generators by electric utilities. The owners will save the considerable cost of dismantling their chimneys and they will generate additional revenue by installing our turbines on their abandoned assets. This is a niche market where a HAWT simply will not work.
Another source of revenue for our Company is from floating offshore wind projects where our low centre of gravity gives us a competitive advantage. Other target markets include repowering wind farms that were built 15 – 20 years ago in Germany, Denmark, Netherlands, USA, UK & India. Our turbines can be placed closer together thereby generating more energy per square kilometre because wake effect has very little impact on the performance of the Lux Wind Turbine.
Our costs are in Canadian dollars but our revenues will be in U.S. dollars. Given the low Canadian dollar, this will produce very good profit margins for the company.
Power plant owners and operators report to the U.S. Energy Information Administration that 175 coal-fired generators were shut down in the last 4 years in the United States. We estimate that there are over 1,000 abandoned tall chimneys in North America that could be used to install the Lux Wind Turbine and begin generating green energy. The cost to dismantle these chimneys is very high which creates a strong economic rationale for re-deploying these assets. Another key market is re-powering existing wind farms where our turbines can be located much closer together thereby reducing the footprint of large wind farms by 90%. Finally the floating offshore market is in the early stages of development and we expect it will grow in the next 5-10 years to become a significant factor in the market. The design of the Lux Wind Turbine makes it ideal for this market.
Use of Proceeds
We plan to use the proceeds of this raise for the following:
There are a variety of possibilities for an exit, however we believe the three most likely scenarios are: