Mr. William Crossland reports

THERMAL ENERGY INTERNATIONAL INC. RECEIVES AN ADDITIONAL $1.6 MILLION ORDER TO DELIVER CUSTOMIZED HEATSPONGE HEAT RECOVERY UNITS TO THE ARCTIC

Thermal Energy International Inc. has received a $1.6-million order to supply eight custom-engineered HeatSponge heat recovery units manufactured by its wholly owned subsidiary, Boilerroom Equipment Inc. (BEI), to a remote mining operation in the Arctic. This order follows a previously unannounced order from this customer to deliver and commission two units this past summer for approximately $400,000. All figures are shown in Canadian dollars.

"This project is one of the largest and most technically challenging HeatSponge orders in BEI's history," said William Crossland, chief executive officer of Thermal Energy. "All 10 units were engineered by BEI to withstand the demands of reciprocating engine environments, which, unlike traditional boiler systems, are characterized by much hotter temperatures, higher pressure and relentless vibration. Pre-existing heat exchangers on site were buckling under the strain, threatening potential loss of heat and power in a region where temperatures of minus-40 C can be routine. We're proud that this customer chose Thermal Energy and BEI for this very demanding application. This is also an excellent example of the strong synergies and collaboration between Thermal Energy and BEI, with the Thermal Energy sales team focusing their efforts on larger strategic opportunities with key customers."

Smart engineering meets Arctic logistics

"This project exemplifies our commitment to solving complex energy challenges in the world's most demanding environments," said Vincent Sands, president of Boilerroom Equipment. "We're proud to support the resilience and sustainability of Arctic operations through innovative engineering."

In addition to the demanding operating conditions the heat recovery units need to withstand, BEI had to overcome unprecedented logistical constraints. The mine is accessible by road only during a brief period each year. For the remainder of the year, all supplies must be flown in by cargo aircraft. To avoid using more expensive heavy-lift specialty cargo aircraft, the project will employ modular construction techniques so that the units can be shipped as aircraft-friendly components. The units will be built in match-marked sections at BEI's facility, disassembled and sized to fit standard cargo aircraft, eliminating reliance on rare and costly heavy-lift planes.

Replacement of the pre-existing units with the new HeatSponge units will also have to happen within a narrow window of time as the generator will not be available during the changeout, reducing the redundancy of generators available. Pre-engineered modules designed for rapid deployment allow on-site plant staff to reassemble units without specialized contractors or equipment.

Key innovations include:

• Modular build: match-marked sections sized for standard cargo aircraft;
• Plug-and-play assembly: on-site crews can reassemble without specialized tools;
• 22-per-cent efficiency boost: rectangular square-pitch, counterflow heat exchanger;
• Durable casing: reinforced stainless steel resists vibration and thermal stress;
• Leak-proof design: dual-layer access doors reduce exhaust leakage;
• Custom finned tubes: tailored to site constraints and ease of cleaning.

The revenue from this order is expected to be earned within 12 months. The company expects the gross margin for the project to be in line with historical amounts for its projects. Details on Thermal Energy's gross margins are available in its quarterly disclosure materials.

About Thermal Energy International Inc.

Thermal Energy International provides energy-efficiency and emissions reduction solutions to Fortune 500 and other large multinational companies. The company saves its customers money by reducing their fuel use and cutting their carbon emissions. Thermal Energy's proprietary and proven solutions can recover up to 80 per cent of energy lost in typical boiler plant and steam system operations while delivering a high return on investment with a short, compelling payback.

Thermal Energy is a fully accredited professional engineering firm with engineering offices in Ottawa, Canada, Pittsburgh, United States, as well as Bristol, United Kingdom, with sales offices in Canada, the United Kingdom, the United States, Germany, Poland and Italy. By providing a unique mix of proprietary products, together with process, energy and environmental engineering expertise, Thermal Energy can deliver unique, site-specific turnkey and custom engineered solutions with significant financial and environmental benefits for the company's customers.

Thermal Energy's common shares are traded on the TSX Venture Exchange under the symbol TMG and on the OTCQB under the symbol TMGEF.

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