BlueScout Technologies Completes Financing

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

CHANTILLY, VA, Aug. 27, 2012 /CNW/ - BlueScout Technologies (TSXV: SCT), providers of the BlueScout OCS-210™ for optimized wind energy generation, is pleased to announce that it has successfully completed its previously announced financing and has raised proceeds of $4.3 million dollars. The financing was a blend of equity (special warrants), at $3.1 million dollars, and convertible debt of $1.2 million dollars.

Jo Major, Chief Executive Officer of BlueScout, comments, "This financing allows BlueScout to progress to its next step by providing the resources to support data collection and turbine integration necessary to capture our first volume orders and to support our cost reductions efforts required to achieve profitability."

The entire management team of the Company participated in the offering, acquiring 7,680,000 special warrants in the aggregate, representing approximately 15% of the special warrants issued. If a receipt for a final prospectus in respect of the special warrants is obtained within 45 days following closing, the Company believes that, following the exercise of the special warrants, these parties will collectively have beneficial ownership of, or control or direction over, approximately 8,027,000 common shares of the Company, which would represent approximately 5% of the then total number of outstanding common shares of the Company, assuming the exercise of all outstanding special warrants.

Hunter Hall entities, which collectively have beneficial ownership of, or control or direction over, common shares of the Company carrying more than 10% of the voting rights attached to all outstanding voting securities of the Company, acquired 20,000,000 special warrants, representing approximately 39% of the special warrants issued. If a receipt for a final prospectus in respect of the special warrants is obtained within 45 days following closing, the Company believes that, following the exercise of the special warrants, these parties will collectively have beneficial ownership of, or control or direction over, approximately 68,457,945 common shares of the Company, which would represent approximately 39% of the then total number of outstanding common shares of the Company, assuming the exercise of all outstanding special warrants.

Financing structure
BlueScout issued 51,081,154 special warrants at a price of $0.06 per special warrant and 1,200 debenture units at a price of $1,000 per debenture unit.

Special Warrant Offering
The special warrants are exercisable (for no additional consideration) into common shares and warrants of the Company (with each underlying warrant entitling the holder to purchase one common share of the Company for  a three year period at a price of $0.10 per share) at any time following the closing, and all unexercised special warrants will be deemed to be exercised on the earlier of: (a) the date that is four months and one day following the closing, and (b) the third business day after a receipt is issued for a final prospectus in each of the provinces of Canada where special warrants were sold qualifying the distribution of the common shares and warrants (and underlying warrant shares) issuable on exercise of the special warrants. If a receipt for a final prospectus is not obtained within 45 days following closing, a holder of special warrants will be entitled to receive (for no additional consideration) an additional 10% of the special warrants it holds. Until a receipt is issued for the final prospectus, the special warrants (and any underlying securities) will be subject to a hold period under applicable Canadian securities laws until December 25, 2012.

Debenture Unit Offering
Each debenture unit consists of one 10% unsecured convertible subordinated debenture and warrants to purchase 2,500 common shares. The debentures will mature on August 24, 2015, and are convertible at the holder's option into common shares at any time before the maturity date at a price of $0.10 per share. The debentures will automatically convert into common shares at this price if, at any time between the first and third anniversaries of closing, the closing price of the Company's common shares exceeds $0.12 for 30 consecutive trading days. The warrants forming part of the debenture units bear a three year term and are exercisable at a price of $0.10 per share. All securities issued under the debenture unit offering (including underlying securities) will be subject to a hold period under applicable Canadian securities laws until December 25, 2012.

Agent Compensation
The Company retained Stifel Nicolaus Canada Inc. and Fraser Mackenzie Limited (the "agents") to act as agents on the offerings, and paid the agents a cash fee equal to 6% of the gross proceeds of the offerings, as well as broker warrants to purchase: (a) units consisting of common shares and warrants of the Company equal to 6% of the total number of special warrants sold, exercisable for a two year period at a price of $0.06 per unit, with each underlying warrant bearing terms substantially similar to those of the warrants forming part of the special warrants; and (b) 720,000 common shares, exercisable for a three year period at a price of $0.10 per share. All securities issued to the agents (including underlying securities) will be subject to a hold period under applicable Canadian securities laws until December 25, 2012.

The financing is subject to certain conditions including, but not limited to, the final approval of the TSX Venture Exchange.

The participation of the management team and Hunter Hall in the offering constitutes a related party transaction under Canadian Multilateral Instrument 61-101 ("MI 61-101"), but the offering is exempt from the formal valuation and minority approval requirements of MI 61-101.

About BlueScout
BlueScout Technologies (TSXV: SCT) increases energy production and decreases operating costs by applying groundbreaking microgeographical wind flow sensing to turbine control systems that increases the effectiveness and availability of wind turbines. BlueScout combines precise, optically based wind forecasting with advanced predictive control architectures to ready the turbine for the imminent wind inflow changes - optimizing energy production and reducing the harmful effects of wind turbulence on the turbine. With extensive operating data on multiple wind turbine models, BlueScout is the leading, value-added innovator in wind turbine performance and optimization.

The team consists of experienced high-tech, R&D and manufacturing engineers, innovative entrepreneurs, and proven leaders. The BlueScout team has unique expertise and shares a firm commitment, as part of the wind power industry, to continuously improve the reliability of wind power generation through innovation. For more information, visit www.BlueScout.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE: BlueScout Technologies

BlueScout Technologies, Inc.
John E. Green
CFO & Treasurer
[phone]
[email protected]

TMX Equicom
Philip Dale        
Investor Relations
416-815-0700 ext. 253
[email protected]