WEST MOUNTAIN CAPITAL CORP.
TSX VENTURE : WMT.P

October 04, 2007 16:59 ET

West Mountain Capital Corp. and Phase Separation Solutions Inc. to Complete Business Combination

CALGARY, ALBERTA--(Marketwire - Oct. 4, 2007) - WEST MOUNTAIN CAPITAL CORP. ("West Mountain") (TSX VENTURE:WMT.P) is pleased to announce that it has entered into a letter of intent dated September 11, 2007 with PHASE SEPARATION SOLUTIONS INC. ("PS2") and its principal lender that sets out the basic terms and conditions pursuant to which it is intended that West Mountain and PS2 will complete a business combination (the "Proposed Transaction"). The Proposed Transaction is intended to be the Qualifying Transaction of West Mountain pursuant to the Policies of the TSX Venture Exchange (the "Exchange"). West Mountain is at arms' length to PS2.

PS2's business is the thermal treatment of soil, sludge and other solid waste impacted with chlorinated hydrocarbons such as PCBs, dioxins/furans and pesticides, and the thermal treatment of pharmaceutical waste and non-chlorinated industrial sludge at its fixed treatment facility located in Wolseley, Saskatchewan. This facility employs a cost-effective, non-incineration thermal separation technology to eliminate the environmental liability inherent in contaminated waste while recovering valuable hydrocarbons for reuse. PS2 commenced operations in 2005. PS2 is incorporated under the laws of Canada. The shareholders of PS2 at present are companies respectively controlled by Paul Antle of St. John's, NL, President and Chief Executive Officer of PS2, and Stephen Clarke of Miramichi, NB, Vice President Business Development. Each of these company own 50% of the outstanding common shares (the "PS2 Shares") of PS2.

The entering into of a definitive agreement for the Proposed Transaction is subject to the completion of due diligence, by September 28, 2007, by each of West Mountain and PS2 and the approval of the Proposed Transaction by their respective board of directors. The parties anticipate entering into the definitive agreement not later than October 15, 2007. The Proposed Transaction is also subject to there being no material adverse change in the business, results of operations, assets, liabilities, financial conditions or affairs of either West Mountain or PS2 from June 30, 2007 through to the completion of the Proposed Transaction. It is not anticipated that the Proposed Transaction will be subject to the approval of the shareholders of West Mountain.

Pursuant to the Proposed Transaction, the shareholders of PS2 will exchange their PS2 Shares for common shares of West Mountain (the "West Mountain Shares") on a one for one basis at the deemed price of $0.30 per West Mountain Share.

Immediately prior to the closing of the Proposed Transaction, PS2 will complete a brokered private placement ("Private Placement") of a maximum of 7,000,000 PS2 Shares at the price of $0.30 per share for gross proceeds of a maximum of $2,100,000. Acumen Capital Finance Partners Limited ("Acumen") has been engaged to act as PS2's agent for the Private Placement on a commercially reasonable best efforts basis. As partial consideration for acting as agent for the Private Placement, Acumen will be granted compensation options to acquire a number of PS2 Shares equal to 8% of the number of the shares sold, exercisable at $0.30 per share for 18 months, as well as a 24 month right of first refusal and participation in respect of future equity offerings. The proceeds of the Private Placement will be used to fund capital and operational upgrades at PS2's treatment facility in Wolseley and fund business development and general working capital requirements over the next 24 months. In addition, Golden Opportunities Fund Inc. ("GOF") of Saskatoon, SK, PS2's principal lender, has agreed to convert indebtedness owed by PS2 in the amount of approximately $3.45 million into approximately 11.5 million PS2 Shares at the conversion price of $0.30 per share immediately prior to the completion of the Proposed Transaction. The PS2 Shares issued under the Private Placement and to GOF would be exchanged for West Mountain Shares as part of the Proposed Transaction on the same one for one basis as described above.

West Mountain proposes to grant incentive stock options ("Stock Options") to acquire approximately 1.4 million West Mountain Shares on closing of the Proposed Transaction, subject to the approval of the Exchange, to employees, consultants, directors and officers of PS2/West Mountain and its subsidiaries exercisable at $0.30 per share.

It is anticipated that there will be a maximum of approximately 27 million PS2 Shares issued and outstanding immediately prior to the completion of the Proposed Transaction. Approximately 27 million West Mountain Shares will be issued pursuant to the Proposed Transaction in exchange for these PS2 Shares resulting in PS2 becoming a wholly-owned subsidiary of West Mountain. Following the completion of the Proposed Transaction approximately 34 million West Mountain Shares and additional securities convertible into approximately 2.74 million West Mountain Shares are anticipated to be issued and outstanding.

Subject to and following the closing of the Proposed Transaction, the directors and officers of West Mountain are expected to be the following individuals.

Paul G. Antle BSc, MEng, CCEP, President, Chief Executive Officer and Director

Mr. Antle possesses a BSc in Chemistry, a MEng in Chemical Engineering and in 2007 graduated from the Harvard Business School after completing the Owner/President Management Executive Education Program. He is well established in the Canadian environmental industry having created and grown numerous remediation and waste management related businesses, and participated on many industry boards and public policy organizations. Mr. Antle has won many awards for entrepreneurship and volunteer work in the environmental industry and was recognized as one of Canada's Top 40 Under 40TM in 2002.

Mr. Stephen Clarke BA, CCEP, Vice President, Business Development

Mr. Clarke holds a BA in Environmental Sciences and Political Science, completed a Certificate for Environmental Impact Assessment from Lakehead University and is certified as a Canadian Environmental Practitioner by the Canadian Environmental Certification Approvals Board. He has experience in the environmental field having worked in both government and the private sector. Mr. Clarke has worked with thermal treatment technology globally since 1996.

Sid Dutchak QC - Chairman of the Board and Director

Sid has acted in various senior public company management and executive roles. Most recently Sid was President of Cordy Oilfield Services Inc. (TSX-V: CKK) He has served on several boards of directors of companies listed on the TSX and TSX-V and continues to provide public company management services.

Anthony Vysniauskas, Director

Anthony has a PhD in chemical engineering and previously earned a Masters Degree in chemical engineering with an environmental focus. He was the co-founder and CEO of Hyprotech Ltd. a successful Calgary based process simulation and engineering software company. Hyprotech was a leading international software company with a global network of offices in all energy sectors. Hyprotech was sold to the Atomic Energy Authority (AEA) of the U.K. in 1997. Hyprotech earned several awards for excellence due to its innovative developments in the chemical engineering field.

Dr. John D. Wiebe, Director

Dr. Wiebe has a PhD in biochemistry, and is an expert on environmental and economic issues. He has acted as senior advisor to governments and industry over the past 35 years. Dr. Wiebe is currently President and CEO of the Globe Foundation of Canada, an organization that engages Canadian industries, government agencies and financial institutions in environmental and energy business opportunities and projects around the world. He has been the recipient of the Governor General's Meritorious Service Medal which recognizes individual achievement which has brought honour to Canada. Dr. Wiebe is the former President and CEO of the Asia Pacific Foundation of Canada.

Grant Kook, Director

Mr. Kook is President and CEO of Saskatchewan based fund manager, Westcap Mgt. Ltd., overseeing the investment and management of approximately $170 million. Mr. Kook is CEO and Chairman of Golden Opportunities Fund, the largest provincial retail venture capital fund and presently PS2's principal lender, and serves as President and CEO of Cheung On Investments Group Ltd., an international investor syndicate fund.

Brian Kohlhammer, CA - Chief Financial Officer

Mr. Kohlhammer is a Chartered Accountant and was a founding director of West Mountain Capital Corp. He will serve as acting CFO for a period of time until a replacement has been hired at which time it is anticipated that he will be appointed as a director. He is and will continue to be CFO of Delphi Energy Corp., a Calgary-based company that explores, develops and produces oil and natural gas in Western Canada that trades on the Toronto Stock Exchange under the symbol DEE.

Steven Thompson P. Eng, Director

Mr. Thompson co-founder of Calgary based Triumph EPCM, which is a 90 person engineering firm providing engineering, procurement and construction management services in the resource development area of Western Canada. Triumph's work includes environmental facilities design.

The following is a summary of the unaudited financial statements of PS2 for the years ending December 31, 2005 and 2006 and the unaudited management prepared financial statements for the six month period ending June 30, 2007. Readers are cautioned that this financial information has been provided to West Mountain by management of PS2. There is no assurance that the financial information provided in this press release is accurate prior to the completion of an independent audit. Management of West Mountain has not verified the accuracy of this information.



For the Six Month
Period Ended For the Year Ended For the Year Ended
June 30, 2007 December 31, 2006 December 31, 2005
Income Statement ($) ($) ($)
----------------- ------------------ ------------------- -------------------

Revenue 515,074 1,162,530 630,040

Net loss 755,275 1,463,560 355,112


As at As at As at
June 30, 2007 December 31, 2006 December 31, 2005
Balance Sheet ($) ($) ($)
----------------- ------------------ ------------------- -------------------

Current Assets 195,257 214,653 488,640

Capital Assets, net 3,222,652 3,572,732 3,703,727

Current Liabilities 637,739 684,679 873,103

Long-term Liabilities 4,052,750 3,920,010 3,725,937

Shareholders' Equity (1,572,580)(1) (817,304) (406,673)

(1) Following June 30, 2007, shareholders loans' in the aggregate amount of
$300,000 were converted into PS2 Shares resulting in an increase in
shareholders' equity to ($1,272,580).


Additional information regarding the Proposed Transaction and PS2 will be announced by West Mountain in due course.

The Corporation has made application to the Exchange for an exemption from the sponsorship requirements in connection with the Proposed Transaction. There is no assurance that such exemption will be granted. Trading in West Mountain Shares will remain halted until such time as the sponsorship exemption has been granted or, if not granted, a sponsor has been engaged and initial sponsorship materials have been filed with and satisfactorily reviewed by the Exchange.

The Corporation has advanced $25,000 to PS2 as an unsecured deposit. The Corporation intends to also advance an additional maximum amount of $175,000 to PS2 by way of a secured loan. The advance of the $175,000 to PS2 is subject to acceptance by the Exchange in accordance with the requirements of Policy 2.4 Capital Pool Companies of the Exchange. PS2 will use the aggregate amount of $200,000 for continued expansion of the pharmaceutical waste processing capability of its facility located in Wolseley, Saskatchewan.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, Exchange approval and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

READER ADVISORY

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

Statements in this press release may contain forward-looking information including expectations of future production, operating costs, commodity prices, administrative costs, commodity price risk management activity, acquisitions and dispositions, capital spending, access to credit facilities, income taxes, regulatory changes, and other components of cash flow and earnings. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of West Mountain. These risks include, but are not limited to, the risks associated with the waste treatment industry. The reader is cautioned not to place undue reliance on this forward-looking information.

The TSX Venture Exchange has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved of the contents of this press release.

The TSX Venture Exchange does not accept responsibility for the accuracy or adequacy of this release.

Contact Information

  • West Mountain Capital Corp.
    Curtis Dutchak
    Director and Officer
    (403) 862-1616