Biomerge Industries Ltd.
NEX BOARD : BIL.H

March 19, 2009 22:57 ET

Biomerge Industries Ltd. Announces Transaction With Total Energy Services Trust

EDMONTON, ALBERTA--(Marketwire - March 19, 2009) - Biomerge Industries Ltd. ("Biomerge") (NEX:BIL.H) is pleased to announce that Biomerge, Total Energy Services Trust ("Total") and Total Energy Services Ltd. ("TESL") have entered into an agreement (the "Arrangement Agreement") pursuant to which, among other things, Total will convert from an income trust to a corporation (the "Conversion"). The Conversion will occur pursuant to a statutory plan of arrangement under Section 193 of the Business Corporations Act (Alberta) (the "Plan of Arrangement") and is expected to become effective prior to May 31, 2009.

Rationale and Benefits To Biomerge and its Securityholders

In September, 2007, Biomerge emerged from its creditor protection proceedings with no operating business and no assets other than cash. Since that time, Biomerge has been seeking financial partners that would invest Biomerge with a new business, assets and capital. The Arrangement Agreement will produce that result for Biomerge and will provide the holders of Biomerge common shares and non-voting shares (collectively, the "Biomerge Securityholders") with liquidity for their shares or the opportunity to participate as shareholders in the future operations of the businesses presently carried on by Total and TESL. Biomerge believes that the proposed transaction is in the best interests of Biomerge and the Biomerge Securityholders.

Details of the Conversion

Under the Plan of Arrangement, Biomerge expects to change its name to Total Energy Services Inc. ("New Total") and Biomerge Securityholders will receive, in exchange for their existing Biomerge Shares, consideration in the form of cash and common shares of New Total of an aggregate value, calculated in accordance with the Plan of Arrangement, not to exceed $3.9 million. Total Unitholders will receive one common share of New Total in exchange for every trust unit of Total held on the effective date of the Conversion. Upon completion of the Conversion, New Total will operate the existing businesses of the Trust and its subsidiaries and the existing board and management of TESL will become the board and management of New Total.

The Conversion is subject to various customary commercial conditions, including the receipt of regulatory approvals which include the approval of The Toronto Stock Exchange and the continuance of Biomerge from British Columbia to Alberta under the Business Corporations Act (Alberta). The Conversion is also subject to the approval of the court and of not less than 66 2/3% of the votes cast by Total Unitholders and Biomerge Securityholders at the respective securityholder meetings called to approve, among other things, the Conversion. The mailing of a joint information circular to the Trust Unitholders and Biomerge Securityholders is expected to occur in April 2009 and the Conversion is expected to occur prior to the end of May 2009.

Complete details of the terms of the Plan of Arrangement are set out in the Arrangement Agreement that will be filed by Biomerge and Total on SEDAR (www.sedar.com).

Conversion Approvals

The board of directors of Biomerge has also unanimously determined that the proposed Arrangement is in the best interests of Biomerge and the Biomerge Securityholders. The board of directors of TESL, as administrator of Total, has also unanimously determined that the Arrangement is in the best interests of Total and the Total Unitholders.

Support Agreement with Nexia

Nexia Biotechnologies Ltd. ("Nexia") has entered into a support agreement with Biomerge and Total, pursuant to which, among other things, Nexia has agreed to vote all of its common shares and non-voting shares of Biomerge in favour of the Conversion. Nexia owns approximately 45% of the issued and outstanding common shares of Biomerge and 100% of the issued and outstanding non-voting shares of Biomerge.

About Total Energy Services Trust

Total Energy Services Trust is a growth oriented oil and gas service income trust involved in contract drilling services, drilling and production rentals and natural gas compression equipment fabrication, sales, rental and service. The trust units of Total are listed and trade on the TSX under the symbol "TOT.UN".

About Biomerge Industries Ltd.

Prior to entering into the Arrangement Agreement, Biomerge was seeking a financial partner who would be interested in utilizing Biomerge's assets as a publicly traded company. On October 23, 2006, after receiving a demand letter from a secured creditor, for the repayment of the long-term debt, Biomerge filed for and received creditor protection under the Companies' Creditors Arrangement Act ("CCAA") pursuant to an order issued by the Supreme Court of British Columbia. Biomerge completed a restructuring plan on September 24, 2007 (the "Restructuring Plan") and as a result of the Restructuring Plan, since such time, Biomerge has had no operating business and no assets other than cash and other incidental assets. Biomerge's principal business activities prior to the Restructuring Plan were the development and commercialization of Biomerge's medical imaging technologies for the detection and localization of cancer in its early stages of development. Biomerge shares trade on the NEX under the symbol "BIL.H".

This press release contains certain forward-looking statements and forward-looking information ("forward-looking information") within the meaning of applicable Canadian securities laws. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "expect", "may", "will", "project", "should" or similar words suggesting future outcomes. In particular, this press release includes forward-looking information relating to plans and objectives, business strategy and anticipated benefits of the Conversion. Biomerge believes the expectations reflected in such forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking information should not be unduly relied upon.

Forward-looking information is based on various assumptions. Those assumptions are based on information currently available to Biomerge, including information obtained from third party industry analysts and other third party sources and include the historic performance of Biomerge's businesses, current business and economic trends, completion of the Conversion and utilization of the tax basis, currency, exchange and interest rates, trading data and cost estimates. You are cautioned that the preceding list of assumptions is not exhaustive.

Forward-looking information is not a guarantee of future performance and involves a number of risks and uncertainties some of which are described herein. Such forward-looking information necessarily involves known and unknown risks and uncertainties, which may cause Biomerge's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking information. These risks and uncertainties include but are not limited to the risks identified in Biomerge's interim and annual Management Discussion and Analysis filed on SEDAR and the risks associated with the availability and amount of the tax basis. Any forward-looking information is made as of the date hereof and, except as required by law, Biomerge assumes no obligation to publicly update or revise such information to reflect new information, subsequent or otherwise.

The TSX Venture Exchange has neither approved nor disapproved of the information contained herein.

Contact Information

  • Biomerge Industries Ltd.
    David Tonken
    President and Chief Executive Officer
    (780) 486-2317
    (780) 486-9411 (FAX)
    Email: tonken@icrossroads.com