LITTLE ROCK, Ark., Oct. 8 /PRNewswire-FirstCall/ -- ThermoEnergy Corporation (Pink Sheets: TMEN) today announced that, in connection with a restructuring of its outstanding debt and the closing of the first tranche of an anticipated $10.4 million investment by four of its largest shareholders, the Company and The Quercus Trust have filed joint motions for dismissal of the law suits filed by Quercus against the Company in the Delaware Court of Chancery and the U.S. District Court for the Eastern District of Arkansas and that both law suits have been dismissed.
The law suits were dismissed in connection with the closing of the first tranche of an anticipated equity financing of the Company by Quercus, Empire Capital, Focus Fund and Robert S. Trump, four of the Company's largest shareholders. In the first tranche, which closed on September 28, 2009, the investors provided the Company with a total of $1.68 million through the purchase of 8% Convertible Secured Promissory Notes and Common Stock Purchase Warrants. The Notes will convert automatically into shares of the Company's Series B Convertible Preferred Stock, which the Company expects to issue to the investors prior to December 31, 2009. The Warrants have a term of 5 years and entitle the investors to purchase a total of up 6,620,000 shares of the Company's Common Stock at an exercise price of $0.50 per share. As part of the transaction, a total of $4.15 million of outstanding debt from the Company to the investors was restructured on the same terms as the Notes issued to the investors in the new financing.
Dennis C. Cossey, the Chairman and Chief Executive Officer of ThermoEnergy said, "We are grateful for the confidence and continuing support of our major shareholders, which has led to the dismissal of these law suits and the new infusion of capital." "This transaction will allow the Company to focus its attention on milestone projects, such as the New York City Ammonia Recovery Project, as well as provide additional liquidity to meet the Company's obligations to its joint venture partners," said Cossey.
ThermoEnergy, through its subsidiary, ThermoEnergy Power Systems, LLC, recently formed a Limited Liability Company with Babcock Power, Inc. called Babcock-Thermo Carbon Capture, LLC, to finalize the development and commercialization of the Company's zero air emission, carbon capture fossil fuel power plant design. The joint venture is currently designing a 600 Mw reference plant which will be used to design, build and operate a 40 Mw demonstration plant at a host utility site.
About ThermoEnergy:
Founded in 1988, ThermoEnergy is a diversified technologies company engaged in the worldwide commercialization of patented and/or proprietary municipal and industrial wastewater treatment and power generation technologies. The wastewater treatment technologies are consolidated in a wholly-owned subsidiary, CASTion Corporation ("CASTion"), a fast growing developer and manufacturer of innovative wastewater treatment and recovery systems for industrial and municipal clients, with large-scale systems operating in the U.S., Mexico, Canada and Japan. The systems are unique because they meet environmental regulations while providing a rapid return on investment by recovering and reusing expensive feedstocks, reducing contaminated wastewater discharge and reusing wastewater in process operations. CASTion's wastewater treatment systems have application in aerospace, food processing, microelectronics, metal finishing, refineries, pulp & paper, heavy manufacturing and municipal wastewater. All systems are assembled and shipped from a 20,000 square foot fabrication facility in Worcester, Massachusetts. The Company, headquartered in Little Rock, Arkansas, has additional offices in Jacksonville, Florida and New York, NY. Additional information on the Company and its technologies can be found on its website at www.thermoenergy.com, or www.castion.com for specific information on its wastewater treatment systems.
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