Sofame Converts Unsecured Debts to Common Shares

MONTREAL, Aug. 12 /CNW Telbec/ - Sofame Technologies Inc. (TSX-V: SDW), a leading manufacturer of environmentally efficient industrial hot water systems and cost effective heat recovery equipment, has reached agreement in principle to convert unsecured debentures to common shares. The transaction being negotiated so far includes $1,375,000 in total principal of the aggregate $1,525,000 of convertible debentures which were issued on May 16, 2007 and which matured on May 16, 2010. Other unsecured lenders are also considering converting their loans to common shares of Sofame, raising the total value of liabilities under consideration for conversion to equity to potentially about $2,000,000, or approximately one half of Sofame's current liabilities. The minimum conversion price is $0.05 cents per share according to the rules of the TSX Venture Exchange, and the new shares will be subject to a mandatory 4-month hold period. The proposed transaction is subject to approval by the TSX Venture Exchange.

"The conversion of unsecured debentures to common shares eliminates an important element of uncertainty for our investors. It also represents a reduction in future interest expense and a dramatic improvement in Sofame's balance sheet. This gesture helps ensure that all available cash will support ongoing operations rather than debt service and repayment of loans. It is a vote of confidence," stated John Gocek, Sofame's President and CEO.

About Sofame

Sofame Technologies Inc. custom engineers and manufactures unique, high-efficiency direct-contact industrial hot water systems which extract up to 99 percent of heat from flue gases depending on the application, and return the energy in the form of high-temperature hot water or pre-heated make-up air. Sofame's products help hospitals, food processing plants, universities, central heating plants and utilities to reduce fuel costs and greenhouse gas emissions. Using world-leading, patented green technology, Sofame serves industrial, institutional and commercial markets through a network of dedicated engineering representatives. For more information, visit www.sofame.com.

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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For further information: Brian Edelstein, Stone Communication Services, [phone], [email protected], www.stoneco.com