Thermal Energy International Inc.

Thermal Energy International Inc.

October 20, 2005 16:00 ET

Thermal Energy to File Claim in Excess of $2.5 Million Against Ex-CEO: Mediation to Resolve Issues Related to Termination of Thomas V. Hinke Unsuccessful

OTTAWA, ONTARIO--(CCNMatthews - Oct. 20, 2005) - Thermal Energy International Inc. (TSX VENTURE:TMG) ( announced today that voluntary mediation between the Company and its former chief executive officer has ended without resolution.

Thermal Energy has been notified that Mr. Thomas V. Hinke, the company's founder, and former president and CEO, intends to seek damages from the Company surrounding his dismissal.

Thermal Energy now plans to seek damages in excess of $2.5 million from Mr. Hinke by way of a formal court action. The Company has also asked the TSX Venture Exchange to halt trading on the Company's stock. Updates on the trading status of Thermal Energy's stock will be provided to shareholders on a timely basis.

"Thermal Energy is taking these measures to ensure that this outstanding matter is resolved swiftly and completely," said Tim Angus, President and CEO of Thermal Energy. "We are doing this to first and foremost protect our shareholders, and to ensure that our efforts to build a company which maximizes shareholder value can proceed without further distractions."

The Company is preparing a claim seeking damages from Mr. Hinke on a number of fronts including,

1. Negligence;
2. Apparent violations by Mr. Hinke of securities regulations;
3. Withholding material information from company executives and the
Board of Directors;
4. Damage to the Company's reputation; and
5. Breach of Mr. Hinke's employment contract.

On January 18, 2005, Mr. Hinke stepped down from his numerous roles including chairman, president, chief executive officer, chief financial officer of Thermal Energy. On March 17, 2005, Mr. Hinke resigned from the board of directors and as executive vice president and accepted the position of chief technology officer. His ultimate termination from the company was announced on June 23, 2005.

Notwithstanding today's announcement, business activities continue as normal at Thermal Energy. The Company has been actively engaged in completing several current projects and holding numerous discussions with prospective customers in Canada and the U.S. "A number of these discussions are well advanced," said Mr. Angus. "We look forward to providing further details to our shareholders in the near future."

About Thermal Energy

Thermal Energy (TSX VENTURE:TMG) ( is an environmental and energy technology company established in 1986. Headquartered in Ottawa, Canada, TMG is a designer, developer, fabricator, and supplier of proprietary and patented environmental compliance (air) and energy conservation, renewable energy products and technology solutions. Thermal Energy is a fully accredited professional engineering firm, and offers advanced process and applications engineering services. FLU-ACE® and THERMALONOx™ are trademarks of Thermal Energy.


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