ThermoEnergy Corporation Restructures Senior Debt

WORCESTER, Mass., Jan. 18, 2011 /PRNewswire/ -- ThermoEnergy Corporation (OTC Bulletin Board: TMEN), a leading supplier of wastewater recovery technology and systems, announced today that it has restructured its senior debt with a syndicate of lenders including Spencer Trask Specialty Fund, Massachusetts Technology Development Corporation, and Boston Community Venture Fund.

(Logo:  http://photos.prnewswire.com/prnh/20100816/CL50460LOGO )

"We are pleased to have reached this major milestone in improving our balance sheet," said Cary Bullock, CEO.  "This restructuring provides a path to extend repayment of the debt, and also provides mechanisms for the Company to convert the debt to equity. Management believes the transaction will make the Company more attractive for the future acquisition of capital."

Kevin Kimberlin, Chairman of Spencer Trask, said, "We're very pleased with this development.  While we remain a creditor and always happy to have debt paid down, we also remain a major shareholder in ThermoEnergy.  This restructuring is a vote of confidence in the changes being made by the new management."  

Bob Crowley, CEO of Massachusetts Technology Development Corporation, said "The Company has made tremendous progress in the past twelve months, having raised significant equity while securing a $27.1M contract with the City of New York."

"ThermoEnergy is doing important work by bringing innovative and sustainable energy and water technologies to market.  We are delighted to see these technologies being adopted by new industries," said Sharon Shepard, Managing Director of Boston Community Venture Fund.

In the restructuring, the lenders converted a portion of their debt into shares of the Company's convertible preferred stock and extended to February 29, 2012 the maturity date of the remaining debt.  The major features of the transaction are described in an 8-K filing made by the Company with the SEC.

About ThermoEnergy

Founded in 1988, ThermoEnergy, is a diversified technologies company engaged in the worldwide commercialization of patented and/or proprietary municipal and industrial wastewater treatment and power generation technologies.  Additional information on the Company and its technologies can be found on its website at www.thermoenergy.com, or www.castion.com.

About Spencer Trask

Spencer Trask is a network of private investors who have backed some of the most influential ventures in technology and healthcare. Spencer Trask develops innovative ideas into world-changing companies.  The company is the legacy of Mr. Spencer Trask, the financier who backed Thomas Edison and invested in the light bulb, the first electric grid and the phonograph.  Modern day Spencer Trask has the same entrepreneurial spirit, recognizing new ideas that are having a profound impact in their respective industries, such as: Myriad Genetics; Ciena; Osiris Therapeutics; Health Dialog and InnoCentive.

About Massachusetts Technology Development Corporation

Massachusetts Technology Development Corporation (MTDC) is a leading edge venture capital firm that addresses the "capital gap" for start-up and expansion of early-stage technology companies operating in the Commonwealth of Massachusetts. MTDC has invested in many of Massachusetts' most promising new technology-based companies. More information is available at www.mtdc.com.

About Boston Community Venture Fund

Boston Community Venture Fund (BCVF) is a leading community development venture capital fund that invests throughout the Northeast in high-potential businesses that create a "double bottom line" of financial and social returns.  In addition to providing capital, the company is actively engaged with its portfolio companies to help them achieve their growth objectives.  BCVF is affiliated with Boston Community Capital, an organization focused on building stronger communities where lower-income people live and work.

THIS PRESS RELEASE INCLUDES STATEMENTS THAT MAY CONSTITUTE "FORWARD LOOKING" STATEMENTS, USUALLY CONTAINING THE WORDS "ESTIMATE", "PROJECT", "EXPECT" OR SIMILAR EXPRESSIONS. FORWARD LOOKING STATEMENTS INHERENTLY INVOLVE RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM CURRENT EXPECTATIONS. BY MAKING THESE FORWARD LOOKING STATEMENTS, THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE THESE STATEMENTS FOR REVISIONS OR CHANGES.

SOURCE ThermoEnergy Corporation