Mr. William Crossland reports

THERMAL ENERGY CHURNS OUT $656,000 HEAT RECOVERY CONTRACT FROM A LEADING DAIRY SUPPLIER

Thermal Energy International Inc. has received a signed contract for a heat-recovery system valued at approximately $656,000 from a long-established and leading dairy operation in one of the company's key markets. The contract is expected to be fulfilled and revenue earned over the next six months.

"This is the fifth heat-recovery system we have announced, and our third from the food and beverage industry, since Dec. 1, 2014," said William Crossland, chief executive officer of Thermal Energy. "The food and beverage industry is a great fit for our energy-efficiency solutions. Our proprietary products can save money for dairies, food processors, breweries, bottling and other food-packaging plants, and many other food and beverage operations."

Mr. Crossland added: "This new customer, like most of our customers, uses primarily natural gas. While oil prices have dropped to five-year lows in the last few months, this is not the case for natural gas. As such, we continue to experience good demand for our products, and low oil prices are not having a material impact on our revenues."

The heat recovery system to be installed is expected to provide the customer with annual gas savings of approximately $400,000, resulting in a payback period of under two years.

Thermal Energy's order backlog currently stands at approximately $5.5-million, of which approximately $500,000 is related to long-term contracts and is not expected to be reflected in revenue within the next 12 months. Thermal Energy includes in order backlog all purchase orders received for products or services that have not yet been reflected as revenue in the company's published financial statements.

We seek Safe Harbor.