CARBON FRIENDLY SOLUTIONS INC. ANNOUNCES ENTERING INTO LETTER OF INTENT WITH
MICROCOAL INC, THE PROPOSED TRANSACTION AND FINANCING OF ITS PROJECTS

/NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

VANCOUVER, Sept. 23 /CNW/ - Carbon Friendly Solutions Inc. (TSX Venture Exchange: CFQ) ("CFS" or the "Company") is pleased to announce that it has entered into a Letter of Intent ("LOI") with MicroCoal Inc. ("MCI" or "MicroCoal"). MicroCoal is a clean-energy company focused on reducing greenhouse gas ("GHG") emissions in coal-fired plants by its patented clean coal technology to upgrade low-rank coals to match the energy levels of high quality coals for use by power utilities. The deployment of MCI's technology not only allows for significant savings for the utilities but also for the generation of substantial carbon credits in an industry that is one of the world's largest producers of emissions.

On September 17, 2010 the Company entered into a LOI with MCI, whereby CFS and MCI (the "Parties", and each a "Party") intend to complete a Purchase Agreement (the "Definitive Agreement"), where CFS will acquire 100% of the issued and outstanding securities of common stock of MicroCoal (collectively, the "MicroCoal Shares") in exchange for common shares of CFS (the "CFS Shares"), on the terms and subject to the conditions set out in the Definitive Agreement to be entered into between the Parties (the "Proposed Transaction").

The Proposed Transaction is subject to, among other conditions set out below, approval of the TSX Venture Exchange (the "Exchange") and completion of a concurrent brokered private placement of units of CFS ("CFS Units") in the minimum amount of CAD$6 million (the "Concurrent Financing"). The Concurrent Financing will consist of a minimum of 17,142,857 CFS Units at a price per CFS Unit of CAD$0.35. Each Unit will be comprised of one CFS Share and one common share purchase warrant of CFS (a "CFS Warrant"), with each whole CFS Warrant exercisable into an additional CFS Share (a "CFS Warrant Share") for a period of two years from issuance at a price per CFS Warrant Share of $0.50.

In addition to the Concurrent Financing, on or before the completion of the Proposed Transaction, CFS expects to complete a non-brokered private placement of approximately CAD$2 million in CFS Units (the "Non-Brokered Financing"). The Non-Brokered Financing will consist of approximately 5,714,285 CFS Units at a price per CFS Unit of CAD$0.35. Each CFS Unit will comprise of one CFS Share and one CFS Warrant, with each whole CFS Warrant exercisable into a Warrant Share for a period of two years from issuance at a price per CFS Warrant Share of $0.50.

The securities of CFS will be issued by way of private placement exemptions in Canada under National Instrument 45-106 - Prospectus and Registration Exemptions and in other jurisdictions where they can be issued on a private placement basis, exempt from any prospectus, registration or other similar requirements. All CFS securities issued in connection with the Proposed Transaction, the Concurrent Financing and the Non-Brokered Financing will be subject to a statutory hold period of four months plus one day from the date of issuance of such securities, in accordance with applicable securities legislation. Such securities may also be subject to Exchange escrow restrictions.

Trading in CFS's Shares have been halted pending a determination as to whether the Proposed Transaction is a Change of Business under the policies of the Exchange.

Proposed Transaction

The Proposed Transaction will involve an exchange of CFS Shares for 1,411 MicroCoal Shares (the "Vendors' Shares") that will be outstanding at closing of the Transaction (the "Closing"). As consideration for the Vendors' Shares, CFS will issue to the Vendors US$3 million worth of CFS Shares at a deemed price per share of CAD$0.35.

MicroCoal has agreed to be free of all liabilities, liens, charges, restrictions or encumbrances at Closing, which MicroCoal intends to achieve by settling shareholder and other indebtedness with a cash payment of US$1,085,000 (the "Debt Repayment") and the cancellation of certain MicroCoal Shares (the "Share Cancellation"). As part of the purchase consideration, CFS has agreed to make cash payment in the amount of the Debt Repayment at Closing.

The Closing of the Proposed Transaction, following the conclusion of satisfactory due diligence investigations and negotiations between the Parties will be no later than December 31, 2010 (the "Closing Date"), or on such other date as agreed to in writing by the Parties prior to Closing (the "Extension"). The Proposed Transaction is subject to Exchange approval, the approval of by both parties and the following conditions:

    
    1)  the execution of the Definitive Agreement, which will contain
        representations and warranties customary to transactions of this
        type, on or before October 1, 2010;

    2)  completion of the Concurrent Financing by the Closing Date or the
        mutually agreed upon Extension;

    3)  obtaining all requisite regulatory, administrative, governmental,
        shareholder or third party authorizations and consents, including
        approval of the Exchange;

    4)  absence of a material adverse change in the condition (financial or
        otherwise) of MicroCoal and CFS;

    5)  absence of pending or threatened litigation, claims, investigations
        or other matters affecting the Definitive Agreement;

    6)  physical inspection by a representative of CFS and an independent
        third party assessment of MicroCoal's properties and operations;

    7)  independent valuation as may be required by any regulatory authority;

    8)  review by MicroCoal of the financial statements and budgets of CFS as
        well as any due diligence activity that MicroCoal deems is necessary;

    9)  completion of the Debt Repayment and the Share Cancellation; and

    10) receipt by CFS of general releases from certain shareholders and
        creditors.
    

The LOI will terminate upon mutual agreement or the failure by the parties to execute and deliver the Definitive Agreement on or before October 1, 2010 or to complete the Concurrent Financing within 90 days of the date of the Definitive Agreement, subject to the Extension.

Pursuant to the LOI, MicroCoal has agreed to terminate any existing discussions or negotiations with, and shall cease to provide information to or otherwise cooperate with, any party other than CFS with respect to the Proposed Transaction. In addition, until the termination of the LOI, MicroCoal, and its representatives, will not encourage, solicit, initiate, have or continue any discussions or negotiations with or participate in any discussions or negotiations with or provide any information to or otherwise cooperate in any other way with, any other person concerning any merger, joint venture, recapitalization, reorganization, sale of substantial assets, investment or similar transaction involving MicroCoal or any subsidiary or division of MicroCoal.

The Financings

Pursuant to the Concurrent Financing and the Non-Brokered Financing (the "Financings"), CFS expects to issue up to a maximum of 22,857,143 CFS Units at a price per CFS Unit of CAD$0.35. Each Unit will be comprised of one CFS Share and one CFS Warrant, with each whole CFS Warrant exercisable into a CFS Warrant Share for a period of two years from issuance at a price per CFS Warrant Share of CAD$0.50.

The Financings are subject to a number of conditions, including receipt of all necessary corporate and regulatory approvals, including Exchange approval, as well as the negotiation and execution of certain documentation, including an agency agreement for the brokered portion of the Financings. A finder's fee will be paid in connection with the Financings, in accordance with the policies of the Exchange.

The net proceeds anticipated from the Financings (up to approximately CAD$7,200,000) will be utilized, in part: (a) to provide for the anticipated costs (legal, accounting, sponsorship and regulatory) associated with the Proposed Transaction of approximately CAD$250,000; (b) to provide for debt repayment of US$1,085,000 (approximately CAD$1,120,480); (c) to provide for MicroCoal's minimum required development costs during the next 18 months from Closing of approximately US$2,000,000 (approximately CAD$2,065,400); (d) to provide for general working capital and new corporate development costs of CFS of approximately US$500,000 for the 12 months from Closing (approximately CAD$516,350); and (e) approximately CAD$3,247,770 will be utilized by CFS for ongoing working capital and the development of existing Company business

TSX Venture Exchange Approval

The Proposed Transaction is subject to Exchange approval as a reviewable acquisition by CFS. CFS does not believe that shareholder approval of the Proposed Transaction or a sponsor is required since the Proposed Transaction will not result in the creation of a new Control Person (as defined in the policies of the Exchange), no securities of CFS will be issued to a Non-Arm's Length Party (as defined in the policies of the Exchange) as part of the Proposed Transaction, and the Proposed Transaction does not constitute a Change of Business (as defined in the policies of the Exchange).

Carbon Friendly Solutions Inc.

CFS provides solutions and products for companies, organizations and individuals looking to reduce or offset their global warming impact caused by greenhouse gas ("GHG") emissions, while including the generation of carbon credits for sale in the global voluntary and compliance markets. Through its subsidiaries, Global CO2 Reduction Inc., CO2 Reduction Poland Sp. z o.o. and Pacific Briquetter's Inc., CFS is focusing on removing and offsetting GHG emissions from the development of reforestation projects, biomass energy products and renewable energy technology projects that are independently validated and verified to globally recognized standards and methodologies. CFS's website address: www.carbonfriendly.com

MicroCoal Inc.

MicroCoal Inc. is a clean energy company focusing on commercializing the use of its patented technologies to decontaminate and upgrade low-rank coals to match the energy levels of high-rank coals for use by power utilities. MicroCoal Inc.'s proprietary on-site process not only cleans up coal at the power plant prior to combustion by significantly reducing contaminants, but it also reduces GHG emissions and improves fuel efficiency. The reduction in emissions allows for the generation of substantial carbon credits in an industry that is one of the world's largest producers of emissions. The deployment of MCI's technology offers utilities significant economic, environmental as well as operational benefits. MicroCoal's website address: www.microcoal.com

Nature of CFS Business Activities

CFS is a project proponent in the business of developing projects that produce carbon credits, offsets and CO(2) emission reductions (collectively called "Verified Emission Reductions" or "VER's") that can be sold in the voluntary and compliance marketplace to generate revenues for CFS. CFS generates VER's by investing in and developing emission reduction projects, whereby the methodologies for quantifying documenting and reporting CO(2) or equivalent emissions are independently validated to industry accepted standards.

Licensing MicroCoal's clean-coal technology to utilities is consistent with the other projects of which CFS's development portfolio is comprised. MicroCoal's technology, among other things, significantly reduces emissions at coal-fired plants, therefore qualifying for VER's and equivalent offsets.

Securities Outstanding

As of the date hereof, CFS has:

    
    (1) 27,508,427 CFS Shares issued and outstanding, 2,722,500 of which are
        subject to Tier 2 value securities escrow provisions;

    (2) 1,505,000 stock options exercisable at $0.23 per CFS Share until
        October 6, 2010, 75,000 stock options exercisable at $0.27 per CFS
        Share until April 20, 2012, 1,150,000 stock options exercisable at
        $0.36 per CFS Share until December 16, 2014; and

    (3) 1,540,000 share purchase warrants exercisable at $0.35 per CFS Share
        until December 3, 2011, 4,065,000 warrants exercisable at $0.35 per
        CFS Share until December 11, 2011, 2,072,200 warrants exercisable at
        $0.35 per CFS Share until November 30, 2011 and 2,072,500 share
        purchase warrants exercisable at $0.75 per CFS Share until August 29,
        2012.
    

As of the date hereof, MicroCoal has 2,424 MicroCoal Shares issued and outstanding, with no options, warrants or convertible securities outstanding.

Upon completion of the Proposed Transaction, the Concurrent Financing and the Non-Brokered Financing, there will be maximum 59,717,283 issued and outstanding CFS Shares, of which 8,851,714 (approximately 14.82%) will be held by the Vendors.

CFS will issue a follow-up news release on the Proposed Transaction in due course.

    
    On behalf of the Board of Directors
    Carbon Friendly Solutions Inc.

    Stan Lis
    President
    

Certain statements included in this News Release contain forward-looking statements, including disclosure concerning possible or assumed future results of operations of the Company. Forward-looking statements typically are preceded by, followed by or include the words - "believes," "expects," "anticipates," "estimates," "intends," "plans," "or similar expressions. Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions, and the Company's results could differ materially from those anticipated in these forward-looking statements. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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