ELK GROVE VILLAGE, Ill., Sept. 10, 2001 – Electric City Corp. announced today that it has closed on a $16 million convertible preferred stock issuance with CIT, Duke Capital Partners, LLC, EP Power Finance, LLC, a subsidiary of El Paso Corporation and affiliates of Morgan Stanley.
The closing followed approval of the Series A Convertible stock transaction by a majority of Electric City’s shareholders at the company’s annual shareholders meeting held on August 30th.
“The investment by Duke, El Paso, CIT and Morgan Stanley represents one of the largest strategic investments in a small-cap company since the downturn in the economy,” said John Mitola, CEO of Electric City. “Our strategic investors are leaders in their industry and their investment serves as the most significant endorsement of Electric City and our EnergySaverà¢â€ž- technology to date. We are already beginning to see the strategic benefits of this investment.”
Mitola emphasized several key points at the Annual Shareholders meeting: Electric City is the only public company solely focused on energy saving technologies and power management. It has more than 300 clients in a wide variety of markets and includes nationally recognized entities such as California State University, City of Chicago Park District, Chicago Public Schools, Sands Convention Center – Las Vegas, SportMart/Gart Sports, Worthington Steel, Frito-Lay and Curtis Wright Corp.
– The company believes that the closing of the Series A Convertible Preferred Stock issuance with CIT, Duke, El Paso and Morgan Stanley provides an important validation to prospective customers who previously needed testing periods prior to making scalable purchasing decisions, thereby reducing the current sales cycle for larger scale projects.
– The trading restrictions that the strategic investors agreed to underscore their confidence in the long-term growth potential of Electric City. Senior management of the company remains fully committed to Electric City’s long-term business plan and has also voluntarily agreed to comply with the long-term trading restrictions.
– Electric City has now received sales agreements, in the form of definitive purchase contracts, and sales prospects, in the form of non- binding letters of intent and memorandums of understanding, for more than $20 million in EnergySaver sales that incorporate the company’s leasing plans and Shared Savings program.
– Portions of CIT’s initial $100 million in funding for the Shared Savings Program have been committed via contract and non-binding memorandums of understanding or letters of intent. The program allows customers to install the EnergySaver with no upfront capital expenditure and simply share the savings each month with CIT.
– The company is consistently expanding its reference list of satisfied EnergySaver customers every day and is bringing on new customers each month.
– The company expects to be working closely with its strategic investors on the many ways Electric City may integrate its product sales with their respective organizations.
About Electric City
Electric City is a developer, manufacturer and integrator of energy savings technologies and custom electric switchgear. The company currently markets the EnergySaverà¢â€ž-, the GlobalCommander, TP3 and custom switchgear. Electric City is based in Elk Grove Village, Illinois and is traded on The American Stock Exchange under the symbol ELC. Additional information is available at the company’s web site at www.elccorp.com.