Internal Hydro Also Agrees to Acquire WESCO's Mobile, Alabama
Plant for $2 Million
TAMPA, Fla., March 16, 2006 (PRIMEZONE) -- Internal Hydro International Inc. (OTCBB:IHDR) (www.InternalHydro.com) today announced that it has entered into a second area of alternative energy and waste recycling to add to its superior small hydro technologies, soon to be commercially available. Specifically, IHDR announced it has entered into a Letter of Intent with World Environmental Solutions Company, Inc. (WESCO), a wholly-owned subsidiary of EarthFirst Technologies, Incorporated (OTCBB:EFTI), to purchase WESCO's Catalytic Activated Vacuum Distillation (CAVD) waste tire and solid waste remediation plant currently in operation in Mobile, Alabama for total consideration of $2 million. Based on forecasted output by WESCO, each plant is expected to generate up to $2.5 million in profit per year. Collectively, this represents up to $50 million in potential annual profits for IHDR following development of all 20 plants.
Pursuant to the Letter of Intent (LOI), Internal Hydro has agreed to enter into a definitive agreement, pursuant to which it shall pay WESCO a one-time license fee of $500,000 for exclusive rights to deploy WESCO's Catalytic Activated Vacuum Distillation (CAVD) technology in the European Union. A $100,000 down payment on the initial licensing fee has been paid to WESCO by Internal Hydro. The agreement will also provide for WESCO to be paid a continuing royalty of $100,000 for each European country in which Internal Hydro intends to establish an operational CAVD plant. In addition, Internal Hydro will pay WESCO a one-time license fee of $250,000 per state for rights to deploy the technology in Alabama and West Virginia, as well as a royalty stream equal to 5% of gross revenue per plant (projected at $5.2 million per year in gross revenue), excluding carbon credits and tire tipping fees. Further, Internal Hydro will maintain the right of first refusal to Tennessee, Illinois, Louisiana and Minnesota at a predetermined license arrangement of $250,000 per state.
With the assistance of WESCO to train new operations personnel that we have already identified and the Mobile facility serving as a training and operating facility, IHDR has the basis for establishing a second operating division focused on its renewable energy philosophy.
IHDR's soon-to-be-deployed Energy Commander's core technology and variations notably complement WESCO's CAVD technology, thus promoting strong synergy and use of IHDR's core technologies in the same facilities.
IHDR has identified European sources as potential financing partners in the transaction, which contemplates sub-licensing arrangements for European deployments. Further, under an asset purchase agreement, IHDR intends to use debt to acquire the Mobile plant. Funding for development of plants in Alabama and West Virginia will come from pre-determined domestic funding sources.
Craig Huffman, CEO of Internal Hydro noted, "After first meeting the WESCO team over 18 months ago and gaining meaningful insight into their pioneering solid waste remediation solutions, we were immediately impressed with the people, the construction and engineering expertise behind their technology and the exciting revenue opportunities that partnering with them presented. Nonetheless, we committed the time and resources to conduct in-depth research into alternative remediation and reclamation technologies, but found that WESCO's CAVD process is far superior."
Previously, Internal Hydro had erroneously quoted Phil Rappa, President of WESCO, as giving the following statement, whereas the statement was given by John Stanton, Chairman and CEO of EarthFirst Technologies.
"Given Internal Hydro's expanding presence in the global environmental industry, we believe we have found an ideal partner to help EarthFirst and WESCO capitalize on our pioneering technology. We look forward to working with Craig and his team to rapidly progress the due diligence process and move to definitive agreements as quickly as possible," stated John Stanton, Chairman and CEO of EarthFirst Technologies.
Concluding, Huffman added, "Based on strong interest expressed by our business connections and strategic relationships in Europe, we are very anxious to expand Internal Hydro's alternative energy business interests into solid waste remediation and believe that it represents a powerful and lucrative area of growth for our Company. In this regard, we will take all necessary steps to expedite the signing of final agreements with WESCO."
The CAVD technology was developed by EarthFirst to recycle tires and other waste by heating the material without burning it. The technology evolved from the Company's close working relationship with Oak Ridge National Laboratory and scientists from the newly independent states of the former Soviet Union. Based on the CAVD technology, EarthFirst's proprietary tire processing system produces usable energy and a broad range of valuable by-products, including steel, carbon, oils similar to kerosene and diesel fuel, and an energy-dense gas. EarthFirst burns tires in a vacuum at a third of the typical pyrolysis temperature, preserving tire components and satisfying even the strictest emissions regulations (as verified by Oak Ridge). The EarthFirst process relies on proprietary catalysts to convert tires at rapid rates. From a typical 20-pound passenger tire, EarthFirst's CAVD technology can recover nine pounds of carbon, for the manufacture of polymers; one gallon of oils, which can be used as fuels or industrial process oils; two pounds of steel; and 30 cubic feet of combustible gases to generate electricity. The Company's prototype, fully operational plant is located in Mobile, Alabama.
Subject to necessary due diligence and board approvals, definitive agreements are expected to be executed within 120 days.
About EarthFirst Technologies, Incorporated
EarthFirst Technologies, http://www.earthfirsttech.com, is a specialized holding company engaged in researching, developing and commercializing technologies for the production of alternative fuel sources and the destruction and/or remediation of liquid and solid wastes, and in supplying electrical contracting services to commercial and government customers internationally. Through its subsidiary World Environmental Solutions Company (WESCO), EarthFirst markets solid waste remediation plants utilizing a proprietary Catalytic Activated Distillation (CAVD) process, which is a superior technology developed by EarthFirst to recycle rubber tires and other waste by heating the material without burning it. Through its subsidiary Electric Machinery Enterprises, Inc., http://www.e-m-e.com, the Company provides electrical contracting services both as a prime contractor and as a subcontractor, electrical support for industrial and commercial buildings, power generation stations, and water and sewage plants in the US and abroad. Through its subsidiary EarthFirst Americas, Inc., the Company is engaged in the global development, marketing and distribution of biofuels.
About Internal Hydro International, Incorporated
Internal Hydro International, Inc. is an alternative energy company that developed a clean energy power system, the Energy Commander Systems, which utilizes a patented technology using waste water, fluid or gas flow from any source where flow pressure is present, and yet wasted, to create electricity. Internal Hydro has grown into a multi-national enterprise with international contracts spanning over three continents. Internal Hydro is well positioned to gain major market share and dominate the niche of hydro energy and expansion into other renewable energy areas in the fragmented alternative energy marketplace. For more information, please visit the company's Web site at www.InternalHydro.com.
Investors are cautioned that certain statements contained in this document as well as some statements in periodic press releases and some oral statement of IHDR officials are "Forward-Looking Statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions, which include words such as "believes," "anticipates," "intends," "plans," "expects," and similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future IHDR actions, which may be provided by management, are also forward-looking statements as defined by the Act. Forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to materially differ from any future results, performance, or achievements expressed or implied by such forward-looking statements and to vary significantly from reporting period to reporting period. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual future results will not be different from the expectations expressed in this report. These statements are not guarantees of future performance and IHDR has no specific intention to update these statements.