Alter NRG reports second quarter 2008 activities and financial results



    TSXV - NRG

    CALGARY, Aug. 25 /CNW/ - Alter NRG Corp. (the "Company", the
"Corporation" or "Alter NRG") is pleased to report on its corporate activities
and financial results for the three and six month periods ended June 30, 2008.
The following are the highlights for the second quarter of 2008 and the period
up to August 25, 2008:

    
    Q2 HIGHLIGHTS

    -   Announced Coskata Inc.'s (Coskata) selection of Alter NRG's
        Westinghouse Plasma Corporation (WPC) plasma gasification technology
        for a cellulosic ethanol commercial pilot facility in Madison,
        Pennsylvania. Coskata, which is partnering with General Motors on
        this project, will utilize its proprietary synthesis-gas-to-ethanol
        conversion technology. Synthesis gas (syngas) will be generated by
        our WPC gasifier, using biomass as the feedstock. Alter NRG will earn
        approximately $2.7 million in revenue for operating our gasifier and
        feeding syngas to Coskata's demonstration facility. (April 2008)

    -   Strengthened our executive team with the addition of Ken Willis as
        Vice President of Project Development. Mr. Willis brings over 20
        years of senior power industry experience to Alter NRG. (April 2008)

    -   Closed a bought deal financing of $46 million, including the over-
        allotment option, at a price of $4.40 per share. (April 2008)

    -   Executed engineering service agreements for proposed project in
        Thailand (200 tonnes/day), California (750 US tons/day) and Minnesota
        (100-200 tons/day).

    -   Sale of our Hinton coal lease to a junior TSX Venture mining company
        for $1 million cash and a 5% net profits royalty on future coal
        sales. This represents a 466% cash return on investment in less than
        two years, with significant potential for net profits interest upon
        successful development of the mine. (June 2008)

    -   Created a new subsidiary - Alter NRG Gasification Solutions (AGS) -
        to provide dedicated resources focused on technology sales of plasma
        gasification. (June 2008)

    -   Announced Canada's first Coal-To-Liquids (CTL) project, which also
        involves CO2 capture. Issued preliminary documents, including the Fox
        Creek Public Disclosure Document and Draft Terms of Reference. (July
        2008)

    -   Advanced engineering and logistics on Canada's first Integrated
        Gasification Combined Cycle (IGCC) facility. IGCC is a next-
        generation, low-cost fossil-fuel power facility. The Company expects
        to close on the acquisition of the Bruderheim, Alberta project site
        in September 2008, which has existing infrastructure for development
        of a 100 to 120 MW project. The Company was successful in acquiring
        initial equipment, such as a steam turbine that would normally have a
        two year delivery time frame.

    -   Continued pilot testing and engineering on the NRG Energy Somerset
        Massachusetts coal power plant retrofit which is the first commercial
        scale plasma gasification project to obtain regulatory approval in
        North America. In August 2008, the Department of Environmental
        Protection of Massachusetts overturned an appeal and upheld
        regulatory approval on the project.

    For more information on the Company's activities please visit
www.alternrg.ca or www.sedar.com to view Alter NRG's 2008 Second Quarter
Report.
    

    PRESIDENT'S MESSAGE

    By all indications, Alter NRG is in the right place, with the right
solution, at the right time. With energy prices escalating - along with the
demand for reliable sources of clean energy - the world is looking to
gasification as an economically and environmentally viable option. Interest in
Alter NRG's commercially proven gasification technology continues to grow. The
bought deal financing in the second quarter provides additional financial
strength as we move forward with our business plan.
    The door is open for Alter NRG to play a leading role in this industry,
and we are tremendously excited. We're currently spearheading two important
firsts: Canada's first Coal-To-Liquids (CTL) project at Fox Creek, Alberta,
and Canada's first Integrated Gasification Combined Cycle (IGCC) facility at
Bruderheim, Alberta. Both projects have potential for strong financial returns
using commercially proven processes that have been operational worldwide for
many years.
    The Fox Creek plant is a project that can profitably provide energy
products from coal in an environmentally sustainable manner. Announced in
July, the project involves gasification of the extensive coal reserves we own
in central Alberta. The 468-million-tonne reserve holds enough coal to produce
40,000 barrels per day of sulfur-free diesel and naphtha for at least
50 years. The location is ideal with excellent infrastructure in place. The
nearby oil fields suitable for enhanced oil recovery will provide an
additional revenue stream through the sale of captured CO2, which will also
reduce the carbon footprint of the project.
    The next stage of Fox Creek development will be finalization of the
strategic partner selection process. Alter NRG is looking to formalize
strategic relationships to support development of the project and determine a
financing plan. This project is large in scale up to $4.5 billion for a
40,000 barrels per day facility and has a long development timeframe with
commercial production expected between 2014 to 2015. The Company intends to
take a phased approach to the project.
    The project at Bruderheim, Alberta represents the first IGCC facility in
North America involving CO2 capture, and is truly the future model for
environmentally sustainable energy production. The facility will turn
petroleum coke (a waste product of upgrading) and refining and oilfield waste
into useful energy, which in this case will be electricity. The project is
expected to produce approximately 100 MW of power, along with CO2 for enhanced
oil recovery. This project is on a fast timeline, with potential for first
cash flow as early as 2010. It is also a manageable size for current market
capitalization, giving us an opportunity to operate the facility ourselves -
another first for Alter NRG.
    A recent provincial government initiative could give our Bruderheim and
Fox Creek projects a significant financial boost. Recently, the Alberta
government created a $2 billion fund to support commercial projects involving
CO2 capture and sequestration. This is indicative of the social and regulatory
push for projects like ours, which provide a smaller environmental footprint
than many conventional energy sources.
    South of the border, another one of our "firsts" is evolving in Somerset,
Massachusetts. In January 2008, the Somerset coal retrofit project became the
first commercial-scale plasma gasification project to receive regulatory
approval. This coal retrofit project continues to be steered through a
regulatory appeal by our partner, NRG Energy, a leading U.S. independent power
producer. We are optimistic that the project will proceed as planned, leading
the way in the development of cleaner coal alternatives.
    The sale of our Hinton coal reserve was our first corporate sale of an
asset. Our analysis showed that the reserve base was not large enough to
support a CTL plant and we determined to focus our efforts on Fox Creek. As
such, the asset was sold at a significant profit to a conventional coal
producer with potential upside through a 5% royalty.
    Another project that demonstrates the commercial viability of our plasma
gasification technology is underway in Madison, Pennsylvania. At our
Westinghouse Plasma Corporation pilot facility, Coskata, a leading developer
of next-generation ethanol production facilities, has chosen Alter NRG's
gasifier to generate synthetic gas for its groundbreaking, biotech-based
syngas-to-ethanol process. The process promises to revolutionize the
efficiency and economy of ethanol production from a variety of renewable,
non-food materials. The project is scheduled for completion in early 2009 and
will then operate for up to one year.
    We are proud to be associated with Coskata on this innovative project,
and delighted to have teamed up with Coskata and its partners, an innovative
group that shares our commitment to creating clean, low-cost energy from
renewable resources.
    Our gasification solution is also proving to be a market leader elsewhere
in the U.S. and in the international arena. This quarter, we added clients
from Thailand, Minnesota and California.
    With so many developments unfolding - and more prospects on the horizon -
our executive team decided to establish Alter NRG Gasification Solutions
(AGS), a new subsidiary of Alter NRG. AGS was created to efficiently deliver
our plasma gasification technology into the energy markets. We expect this
subsidiary to focus and maximize technology sales to provide shorter term cash
flow, which can then be invested in longer-term, high-return development
projects.
    By dedicating resources exclusively to technology sales, we will be
better able to support our clients and their projects, and further strengthen
our position as the leading supplier of plasma gasification technology and
services.
    Alter NRG is excited about the future, and the second quarter
demonstrates successful execution of our business plan through leading-edge
project developments and continued advancement of technology sales. By staying
execution-focused, I am confident we can continue to match or exceed the
milestones we have achieved in our very active second quarter.
    I would like to thank our staff and consultants, who, through their
perseverance and dedication, keep attaining positive results in an
increasingly busy environment. Going forward, we expect solid progress with
projects and technology sales. We will also continue to seek strategic
partnerships to accelerate our growth and prove - and improve - our
capabilities.

    
    FINANCIAL
    RESULTS ($)                                     June 30,     December 31,
                                                       2008             2007
    -------------------------------------------------------------------------

    Total Assets                              $ 120,709,784    $  78,506,274
    Total Liabilities                            21,856,749       21,289,213
    Total Equity                              $  98,853,035    $  57,217,061
    -------------------------------------------------------------------------

                                               Three months     Three months
                                                      ended            ended
                                              June 30, 2008    June 30, 2007
    -------------------------------------------------------------------------

    Revenue, interest and
     other income                             $   2,141,876    $     583,727
    Loss                                         (2,454,308)      (3,603,240)
    Loss per unit/share
     - basic and diluted                      $       (0.04)   $       (0.10)
    -------------------------------------------------------------------------

                                                 Six months       Six months
                                                      ended            ended
                                              June 30, 2008    June 30, 2007
    -------------------------------------------------------------------------

    Revenue, interest and
     other income                             $   3,205,724    $     657,192
    Loss                                         (4,263,441)      (3,914,622)
    Loss per unit/share
     - basic and diluted                      $       (0.08)   $       (0.15)
    -------------------------------------------------------------------------
    

    For the complete financial statements please visit www.alternrg.ca or
www.sedar.com to view Alter NRG's 2008 Second Quarter Report.

    MANAGEMENT'S DISCUSSION AND ANALYSIS EXCERPTS

    Corporate overview

    Alter NRG provides and pursues alternative energy solutions through
gasification to meet the growing demand for energy in world markets. The
Corporation's vision is to become a leader in the development of economically
viable and environmentally sustainable gasification projects for the
commercial production of energy. Alter NRG creates revenues by selling plasma
gasification technology and through equity participation in gasification
projects that fit its strategic growth plan.
    Alter NRG's mission is to participate in financially accretive projects
in the emerging alternative energy market, through technology sales and
project interests, to maximize returns for its investors. Alter NRG endeavors
to be a leader in innovative gasification related technologies applied to
produce profitable and clean alternative energy solutions.
    The Corporation invests in the skills of its people who will provide the
creativity, determination and passion to generate growth in stakeholder value.
The Corporation continues to strive to be transparent and fair in its
activities and work to form positive relationships with the communities in
which it operates and with all of its stakeholders.
    Alter NRG continues to be focused on project development through its two
core assets, its Plasma Gasification Technology and our Coal Reserves. The
Corporation has the following announced projects which it has an option to
participate or is the operator of the project, as follows:

    Somerset, Massachusetts - NRG Energy is converting a 120 MW coal-fired
power plant in Somerset into a plasma gasification facility which reduces many
harmful emissions such as SOx and Mercury by 95% and NOx by 60%. The project
will gasify both coal and biomass which also will reduce the overall CO2
footprint. The coal power plant retrofit received regulatory approval from the
State of Massachusetts on January 25, 2008 and, subject to an existing appeal,
plans to proceed with the project in the third quarter of 2008. Alter NRG has
an option to invest from 10% to 25% in the $200 million project. Successful
construction would also translate into approximately $40 million in plasma
gasification system technology revenues for the Corporation.

    Bruderheim, Alberta - The Corporation anticipates purchasing a project
site in Bruderheim, Alberta in September 2008 which would be Canada's first
Integrated Gasification Combined Cycle ("IGCC") project with carbon capture.
The site has existing infrastructure to host a plasma gasification facility
which would gasify petroleum coke and oilfield waste from the nearby area and
produce approximately 120 MW of power. The first phase of the project is
expected to cost approximately $130 million which will convert natural gas
into power. The second phase of the project will convert petroleum coke and
oilfield waste into syngas. The lower cost syngas will replace the natural gas
as the feedstock at approximately $2 per gigajoule as compared to a current
price of approximately $8 per gigajoule. The Corporation intends to sequester
the CO2 produced by the project for use in nearby conventional oilfields for
enhanced oilfield recovery.

    Fox Creek, Alberta - Alter NRG has direct ownership of 468 million tonnes
of sub-bituminous coal in the Fox Creek area of Alberta and in July of 2008
filed its public disclosure document providing details on Canada's first
coal-to-liquids project (see reserve report and public disclosure document
filed at www.sedar.com). The coal reserve is capable of producing 40,000
bbls/d of liquid fuels (diesel fuel and naphtha) for over 50 years through a
successful gasification and coal to liquids project. The project involves CO2
sequestration and sale to nearby oilfields for enhanced oil recovery. The
Corporation is currently formally engaged in a strategic partner selection
process with a major investment baking representative to find suitable project
partners and structure to move forward with a large scale coal gasification
project. The Corporation expects to complete this process in late 2008.

    St Lucie County, Florida - Geoplasma LLC continues to advance the
waste-to-energy ("WTE") project in St. Lucie, Florida. The WTE facility will
use Alter NRG's plasma gasification technology and is to be located on an
existing landfill site. The ground lease with St. Lucie County and an off take
agreement for the syngas, steam or power are currently being finalized. The
operator of the project has been experiencing operational difficulties and
Alter NRG is taking a more active role in the project at this time to
determine its viability. Alter NRG has an option to participate up to a 25%
equity investment in this project. The Corporation has a leading plasma
gasification technology solution which provides additional benefits including:

    
    -   Near term cash flows from technology sales; - Operational control of
        the technology for Alter NRG projects;

    -   The opportunity to invest (as a project partner) in additional
        projects that plan to use the Alter NRG plasma gasification
        technology; and

    -   Ability to license the technology and create joint ventures worldwide
        with companies that provide financial strength, existing market
        knowledge, and project development expertise.

    Alter NRG's most significant achievements in the year to date include:

    -   A $2 million plasma torch system sale to Kiplasma Industries and
        Trade Inc. which will be used in their waste facility in Turkey,
        scheduled for completion in 2009;

    -   Receipt of regulatory approval and advancement of NRG Energy, Inc.'s
        Somerset, Massachusetts coal powered retrofit project for which Alter
        NRG will supply gasification systems and in which Alter NRG has the
        option to participate from 10% to 25%;

    -   Selection of the Westinghouse Plasma Corporation ("WPC") plasma
        gasification pilot facility for a cellulosic ethanol commercial
        demonstration project. The project will utilize Coskata Inc.'s
        ("Coskata") proprietary synthesis gas-to-ethanol conversion
        technology. In the third quarter of 2008, Coskata, in partnership
        with General Motors, plans to begin construction of a 40,000-gallon
        per year commercial demonstration facility. The WPC pilot plant is
        expected to generate approximately $2.5 million in revenues in 2009;

    -   Closing a bought deal financing for $46 million in gross proceeds,
        including the over-allotment option, at a price of $4.40 per share;

    -   Execution of engineering services agreements for proposed projects in
        Greece, Minnesota, Florida, Kentucky, Thailand and Southern
        California;

    -   Initiated the regulatory process, and a strategic partner selection
        process and filed its public disclosure document for the Fox Creek
        polygeneration project, which will utilize the Corporation's
        468 million tonne coal reserves. This will be Canada's first coal-to-
        liquids project;

    -   Continuing to make gasification design and engineering advancements
        to our proprietary gasification systems, resulting in the Company
        applying for two additional patents;

    -   Sale of our Hinton coal lease to a junior TSX Venture mining company
        for $1 million cash and a 5% net profits royalty on future coal
        sales. This represents a 466% cash return on the investment in less
        than two years and the potential for significant net profit royalties
        upon successful development of the mine;

    -   Creation of a new subsidiary, Alter NRG Gasification Solutions
        ("AGS"), to provide dedicated resources focused on plasma
        gasification technology sales.
    

    The Corporation is also pursuing various site acquisition opportunities
in Canada for Alter NRG operated WTE projects and further strategic
partnerships in various market segments.

    
    Results from plasma system sales and services

                                                Three month      Three month
                                               period ended     period ended
                                              June 30, 2008    June 30, 2007
    -------------------------------------------------------------------------
    Sales revenue                             $     853,305    $     448,820
    Direct cost of sales                           (390,354)        (152,235)
    -------------------------------------------------------------------------
    Gross margin                              $     462,951    $     296,585
    -------------------------------------------------------------------------

                                                  Six month        Six month
                                               period ended     period ended
                                              June 30, 2008    June 30, 2007
    -------------------------------------------------------------------------
    Sales revenue                             $   1,564,892    $     448,820
    Direct cost of sales                           (835,252)        (152,235)
    -------------------------------------------------------------------------
    Gross margin                              $     729,640    $     296,585
    -------------------------------------------------------------------------
    

    Plasma technology sales and service revenues during the three and six
month periods ended June 30, 2008 are from engineering services provided for
reactor design and process engineering, replacement parts for existing
gasification customers and plasma gasification testing services at the
Corporation's U.S. testing centre pilot facility.
    Revenues for the three month period ended June 30, 2008 increased over
the prior year period by 90% or $404,485. These revenues consisted of $87,078
in plasma torch parts sales and $766,227 in engineering and testing services.
Revenues for the three month period ended June 30, 2007 are primarily related
to a sale of four plasma torches completed in 2007.
    Revenues for the six month period ended June 30, 2008 include $194,335 in
plasma torch parts sales and $1,370,557 for engineering and testing services.
Revenues for the six month period ended June 30, 2007 include sales from the
date the Corporation acquired its commercially operating U.S. subsidiary on
April 17, 2007 to June 30, 2007 and therefore revenues for the six month
period ended June 30, 2007 are not comparative to the current year period.
    Going forward, management expects revenues to increase as increased
sales, marketing and business development processes move forward and as the
plasma gasification market grows. The Corporation has a portfolio of customers
that have projects in various stages of development. The project development
timeframe extends over several years and the first project to receive
regulatory approval was a coal power plant retrofit project in Massachusetts
in January of 2008. This project is expected to begin construction in late
2008; however, it remains subject to a regulatory appeal process and final NRG
Energy board approval. The coal power plant retrofit is expected to be an
approximate $40 million technology sale, with equipment being ordered as soon
as late 2008, and revenues earned over a period of about 18 months. During
2008, the Corporation also expects to continue to advance pilot plant testing,
engineering services, and has the potential for licensing income.
    The sale of a single plasma gasification island would generate
approximately $30 to $35 million in revenues for the Corporation. However, the
majority of revenues are not realized until the point in time the sale of
equipment occurs after regulatory approval of a project and project financing
has been received. As such, plasma gasification island sales have a long lead
time. The Corporation has consistently increased its customers under contract
over the last year from five, when it purchased WPC in April 2007, to more
than 18 today. The Corporation also works with other project developers
worldwide that are in the early stages of developing plasma gasification
projects.
    Direct costs of sales relate to direct materials and expenditures for
products and services and reflect standard rates. Costs for the three and six
month periods ended June 30, 2008 were $390,354 and $835,252, respectively,
versus costs of $152,235 during the three month period ended June 30, 2007.
The increase in direct cost of sales is consistent with the increase in sales.
Cost of sales for the six month period ended June 30, 2008 includes $145,675
for plasma torch parts and $689,577 for engineering and testing services.

    
    General and administrative expenses

                                                Three month      Three month
                                               period ended     period ended
                                              June 30, 2008    June 30, 2007
    -------------------------------------------------------------------------
    General & administrative expenses ("G&A") $   2,914,666    $   1,714,441
    -------------------------------------------------------------------------

                                                  Six month      Three month
                                               period ended     period ended
                                              June 30, 2008    June 30, 2007
    -------------------------------------------------------------------------
    General & administrative expenses         $   4,868,249    $   2,047,081
    -------------------------------------------------------------------------
    

    Consolidated G&A increased by $1,200,225 and $2,821,168, respectively,
for the three and six month periods ended June 30, 2008 versus the prior three
and six month periods ended June 30, 2007. The increase in G&A reflects the
growth of Alter NRG, which included WPC as of April 17, 2007. The major
components of G&A include additions to the Alter NRG team for salaries and
wages from increased staffing as part of Alter NRG's corporate growth
strategy; increased rent for the new head office space (lease acquired August
2007) to accommodate growth; management investment in its U.S. business
operations; and consulting fees related to recruitment and business
development activities. At June 30, 2008, the Alter NRG team included 37 full
time employees, 21 in the Calgary office and 16 at the Corporation's facility
in the United States. As at August 21, 2008 staffing has increased to 23 full
time employees in Calgary and 17 in the United States. The increase in staff
is consistent with Alter NRG's corporate growth and strategy.
    The largest G&A expenses in the six month periods ended June 30, 2008
relate to salaries and accrued bonuses of $2,625,829; consulting costs of
$560,684 and professional fees of $405,866 primarily for corporate growth and
business development efforts; office costs of $612,893; and travel costs of
$315,999 for business development and investor relations. The remaining G&A is
for information technology costs, public reporting and the general costs of
setting up and maintaining an office.

    
    Interest and other income

                                                Three month      Three month
                                               period ended     period ended
                                              June 30, 2008    June 30, 2007
    -------------------------------------------------------------------------
    Interest income                           $     510,166    $     134,907
    Other income                                          -                -
    -------------------------------------------------------------------------
    Total interest and other income           $     510,166    $     134,907
    -------------------------------------------------------------------------

                                                  Six month        Six month
                                               period ended     period ended
                                              June 30, 2008    June 30, 2007
    -------------------------------------------------------------------------
    Interest income                           $     787,967    $     208,372
    Other income                                     74,461                -
    -------------------------------------------------------------------------
    Total interest and other income           $     862,428    $     208,372
    -------------------------------------------------------------------------
    

    Interest income relates to funds invested in short-term, interest-bearing
investments with a major Canadian chartered bank. Interest income increased by
278% for both the three and six month periods ended June 30, 2008 versus the
prior three and six month periods ending June 30, 2007. The increase reflects
interest earned on a significantly higher average cash balance in 2008 from
equity issuances net proceeds in the second and fourth quarter of 2007 and the
second quarter of 2008 (refer to the "Liquidity and Capital Resources"
section).
    Other income relates to Jacoby Energy's contribution, equal to general
and administrative costs, to the joint venture for the six month periods ended
June 30, 2008. No income was incurred for the three month period ended
June 30, 2008 as the Jacoby Energy joint venture license became non-exclusive
and under the amended agreement Jacoby Energy is required to contribute a
total of $1 million USD of general and administrative costs, which had been
fulfilled by March 31, 2008. There were no amounts recorded as other income
for the prior period ended June 30, 2007 as the joint venture was not
established until August 2, 2007. Alter NRG will retain its interest in any
joint venture projects developed to date, including a 25% option in the WTE
project in St. Lucie, Florida.

    Gain on sale

    The Corporation sold one of its non-core coal resource properties located
in the Hinton area of Alberta for cash consideration of $1,000,000 and a 5%
royalty on any net profits earned from the property in the future. The
carrying value of the property was $221,596 for a gain of $778,404 on the
disposition. The consideration excluded the future 5% royalty as the amount
and potential realization of this royalty is dependent on successful mine
construction and will be recognized as revenue at the point in time it is
received.

    
    Depreciation and amortization

                                                Three month      Three month
                                               period ended     period ended
                                              June 30, 2008    June 30, 2007
    -------------------------------------------------------------------------
    Depreciation                              $      73,804    $      13,883

    Amortization                                    369,929          332,046

    Amortization of deferred compensation
     expense                                              -        1,632,150
    -------------------------------------------------------------------------
    Total depreciation and amortization       $     443,733    $   1,978,079
    -------------------------------------------------------------------------

                                                  Six month        Six month
                                               period ended     period ended
                                              June 30, 2008    June 30, 2007
    -------------------------------------------------------------------------
    Depreciation                              $     105,647    $      18,684

    Amortization                                    737,661          332,046

    Amortization of deferred compensation
     expense                                              -        1,632,150
    -------------------------------------------------------------------------
    Total depreciation and amortization       $     843,308    $   1,982,880
    -------------------------------------------------------------------------
    

    Depreciation for the six month period ended June 30, 2008 relates to
corporate assets, including computer equipment and furniture, and the U.S.
facility upgrade completed in the first quarter of 2008. For the three month
period ended June 30, 2007, deprecation was on corporate assets only.
Amortization is on the intangible assets acquired on purchase of the
Corporation's U.S. subsidiary on April 17, 2007. The deferred compensation
also stemmed from the acquisition and was fully amortized over an eight month
period ending December 2007.

    
    Loss and cash flow used in operations

                                                Three month      Three month
                                               period ended     period ended
                                              June 30, 2008    June 30, 2007
    -------------------------------------------------------------------------
    Loss                                      $   2,454,308    $   3,603,240
    -------------------------------------------------------------------------
    Cash flow used in operations              $   2,326,796    $   1,535,106
    -------------------------------------------------------------------------

                                                  Six month        Six month
                                               period ended     period ended
                                              June 30, 2008    June 30, 2007
    -------------------------------------------------------------------------
    Loss                                      $   4,263,441    $   3,914,622
    -------------------------------------------------------------------------
    Cash flow used in operations              $   3,523,080    $   2,139,669
    -------------------------------------------------------------------------
    

    The consolidated loss for the three month period ended June 30, 2008 was
lower by $1,148,932 versus the three month period ended June 30, 2007 and
higher by $348,819 for the six month period ended June 30, 2008 versus the
same period ended June 30, 2007. The decrease in the loss for the three month
period is due to the gain on sale of the Corporation's Hinton property, the
increase in revenue and interest, and the decrease in non-cash depreciation
and amortization as deferred compensation from the WPC acquisition was fully
amortized in 2007; which offset increases in G&A and non-cash stock-based
compensation. Income taxes were consistent for the three month periods ended
June 30, 2008 and June 30, 2007. The increase in the loss for the six month
period ended June 30, 2008 versus the same period ended June 30, 2007 is due
to the overall increase in G&A expenditures from corporate growth since the
acquisition of its U.S. subsidiary which over a six month period offset the
gain on sale, increase in revenue and interest as compared to the six month
period ended June 30, 2007. The six month period ended June 30, 2007 only
includes the acquired U.S. subsidiaries operations from April 17, 2007 to
June 30, 2007.
    Consolidated cash flow used in operations for the three and six month
periods ended June 30, 2008 was $2,326,796 and $3,523,080, respectively. This
represents an increase of $791,690 and $1,383,411 in the cash flow used for
the three and six month period ended June 30, 2008 versus June 30, 2007. The
increase is due to increased cash expenditures on G&A which offset cash
received from increased net sales revenues and interest income. Refer to the
respective sections for G&A, plasma technology sales and services (revenue and
cost of sales), interest and other income and gain on sale.

    
    Capital expenditures

    A breakdown of the capital additions for the three and six month periods
ended June 30, 2008 and June 30, 2007 is as follows:

                                                Three month      Three month
                                               period ended     period ended
                                              June 30, 2008    June 30, 2007
    -------------------------------------------------------------------------
    Deferred costs                            $     376,499    $           -
    Internally generated intangible assets          299,930          347,891
    Resource properties                             341,340          133,804
    Property, plant and equipment                 4,876,436          112,390
    -------------------------------------------------------------------------
    Total capital expenditures                $   5,894,205    $     594,085
    -------------------------------------------------------------------------

                                                  Six month        Six month
                                               period ended     period ended
                                              June 30, 2008    June 30, 2007
    -------------------------------------------------------------------------
    Deferred costs                            $   1,047,949    $           -
    Internally generated intangible assets          604,694          585,687
    Resource property assessment                    708,532          203,941
    Property, plant and equipment                 5,501,631          125,598
    -------------------------------------------------------------------------
    Total capital expenditures                $   7,862,806    $     915,226
    -------------------------------------------------------------------------
    

    Capital expenditures for deferred costs relate to potential acquisition
costs expected to be realized by the end of 2008. Potential acquisition costs
will be amortized upon successful completion of an acquisition; if an
acquisition is unsuccessful, the costs will be written off at that time. No
deferred acquisition costs have been written off up to this point in time.
Internally generated intangible assets consist of internal project development
work on plasma gasification systems and will be amortized at the point in time
a project is in commercial operations.
    Resource property expenditures for the six month period ended June 30,
2008 were higher than costs incurred for the same period ended June 30, 2007
due to the Fox Creek core hole program completed in the first quarter of 2008
and environmental assessment costs incurred in the second quarter of 2008.
These costs have been incurred to advance the coal resource asset owned by the
Corporation, Fox Creek. The Corporation has initiated the regulatory approval
process and is progressing with a formal partner selection process in 2008 to
further advance the Fox Creek coal-to-liquids project.
    For the three and six month periods ended June 30, 2008, property, plant
and equipment spending consisted of plant and facility costs of $4,825,530 and
$5,339,462 (June 30, 2007 - $nil and $nil) and corporate asset spending of
$50,906 and $162,169 (June 30, 2007 - $112,390 and $125,598). Plant and
facility costs related to an upgrade on the Corporation's U.S. facility
upgrade completed in February 2008 and a turbine purchased in June 2008 for
approximately $4.8 million for the Bruderheim IGCC project. Corporate asset
costs, including office and computer equipment, have increased in line with
the increase in personnel at the Corporation's U.S. facility and the head
office in Calgary (see "G&A" section).

    
    Deferred costs

    A break down of deferred costs incurred for the three month period ended
June 30, 2008 is as follows:

                        Balance as at     Six month period     Balance as at
                    December 31, 2007  ended June 30, 2008     June 30, 2008
    -------------------------------------------------------------------------
    Deferred project
     development costs      $  99,323         $  1,047,949      $  1,147,272
    -------------------------------------------------------------------------
    

    Deferred project development costs incurred in the six month period ended
June 30, 2008 relate to professional fees incurred for potential acquisitions.
The majority of costs relate to due diligence, site holding costs and
preliminary engineering for Bruderheim and costs incurred for a potential WTE
site in Ontario. Alter NRG is performing due diligence on the Bruderheim site
which is expected to be completed and the purchase finalized early in the
third quarter of 2008.

    
    Quarterly information
                                                  2006
                                Q2           Q3          Q4          Total(*)
    -------------------------------------------------------------------------
    Capital expenditures $ 514,822  $ 1,484,248  $  804,267     $  2,803,337
    Total revenues,
     interest and
     other income                -       32,724      50,642           83,366
    Interest income              -       32,724      50,642           83,366
    Loss                  (384,038)    (428,985)   (844,868)      (1,657,891)
    -------------------------------------------------------------------------
    Net loss per Unit
     basic and diluted   $   (0.04) $     (0.03) $    (0.06)    $      (0.16)
    -------------------------------------------------------------------------
    (*) Period from inception (March 9, 2006) to June 30, 2006. The Fund had
        no significant activity in Q1 2006 from inception on March 9 to
        March 31, 2006.


                                              2007
                      Q1         Q2(*)        Q3(*)          Q4        Total
    -------------------------------------------------------------------------
    Capital
     expendit-
     ures      $ 321,141  $   594,085  $   637,753  $ 1,155,482  $ 2,708,461
    Total
     revenues,
     interest
     and other
     income       73,465      583,727    1,156,115      777,563    2,590,870
    Interest
     and other
     income       73,465      134,907      210,388      627,255    1,046,015
    Loss        (311,382)  (3,276,859)  (3,467,523)  (4,460,779) (11,516,543)
    -------------------------------------------------------------------------
    Loss per
     Unit/Share
     - basic
     and
     diluted   $   (0.02) $     (0.10) $     (0.09) $     (0.11) $     (0.35)
    -------------------------------------------------------------------------
    (*) Q2 and Q3 have been amended for the impact of the reallocation of
        goodwill to intangible assets and the related cumulative translation
        adjustment and amortization, net of taxes.


                                                    2008
                                     Q1               Q2               Total
    -------------------------------------------------------------------------
    Capital expenditures   $  1,968,600     $  5,894,205        $  7,862,805
    Total revenues,
     interest and other
     income                   1,063,849        2,141,875           3,205,724
    Interest and other
     income                     352,262          510,166             862,428
    Gain on sale                      -          778,404             778,404
    Loss                     (1,809,133)      (2,454,308)         (4,263,441)
    -------------------------------------------------------------------------
    Loss per Share -
     basic and diluted     $      (0.04)    $      (0.04)       $      (0.08)
    -------------------------------------------------------------------------
    

    The loss for the three and six month periods ended June 30, 2008 relates
primarily to G&A expenditures of $2,914,666 and $4,868,249, respectively;
amortization of intangible assets acquired through the purchase of the
Corporation's U.S. subsidiary of $369,929 and $737,661; stock based
compensation of $1,219,280 and $1,630,355; and depreciation of $73,804 and
$105,647. The loss is offset by sales revenue for the three and six month
periods ended June 30, 2008 of $853,305 and $1,564,892 (less related cost of
sales of $390,354 and $835,252), interest income of $510,166 and $787,967,
income from the joint venture of $74,461 and an income tax recovery of
$371,850 and $707,999. These results are higher than the three and six month
periods ended June 30, 2007 due to the acquisition of WPC and growth
consistent with Alter NRG's corporate strategy occurring after the first
quarter of 2007. Looking forward, management is implementing sales, marketing
and business development processes to increase technology revenues from WPC in
the short-term. Over the long-term management plans to generate income from
gasification projects, technology sales and has opportunities in both areas,
as described in the Corporate Overview.

    Credit facility

    The Corporation has a line of credit agreement with a major bank in the
United States for $500,000 USD. The line of credit is due on demand and
secured by the assets of its U.S. subsidiary, WPC. The credit facility bears
interest at the lender's rate. No amounts have been drawn on the credit
facility as at June 30, 2008.

    Liquidity and capital resources

    At June 30, 2008, the Corporation had $62,638,188 in cash and cash
equivalents which is an increase in cash of $32,545,705 from December 31,
2007. The increase is attributed to a private placement common share financing
on April 3, 2008 in which the corporation received net proceeds of $43 million
offsetting this increase is cash spending on capital, G&A and direct cost of
sales, net of revenues received and deferred revenues for future projects. The
net working capital surplus of $62,084,745 is primarily attributable to the
cash and cash equivalents balances. The working capital balance provides the
Corporation with capital to continue to invest in its resource base, provide
for general and administrative support for its team, fund engineering
development to provide a strong technical foundation, to evaluate investment
opportunities and allow for potential strategic acquisition opportunities.

    Equity

    As at June 30, 2008 the Corporation had 56,131,384 shares and 4,659,934
options outstanding and as at August 21, 2008, 56,161,051 shares and 4,612,934
options outstanding.
    The Corporation entered into an agreement with a syndicate of
underwriters for a $40 million financing, which included an over-allotment for
an additional $6 million exercisable within 30 days after closing. On April 3,
2008, the deal was closed, including the over-allotment, for 10,454,545 common
shares at $4.40 per common share and gross proceeds of approximately
$46 million.
    At June 30, 2008 the Corporation had 4,659,934 stock options outstanding,
of which 883,500 were granted and 76,166 exercised at a weighted average
exercise price of $5.53 and $2.20 per share, respectively, in the three and
six month periods ended June 30, 2008.
    The authorized share capital of the Corporation consists of an unlimited
number of Common Shares.
    For the complete management's discussion and analysis please visit
www.alternrg.ca or www.sedar.com to view Alter NRG's 2008 Second Quarter
Report.

    
    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.
    

    ADVISORIES: Certain statements in this disclosure may constitute
"forward-looking" statements which involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Corporation, or industry results, to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. When used in this
disclosure, such statements use such words as "may", "would", "could", "will",
"intend", "expect", "believe", "plan", "anticipate", "estimate", and other
similar terminology. These statements reflect the Corporation's current
expectations regarding future events and operating performance and speak only
as of the date of this disclosure. Forward-looking statements involve
significant risks and uncertainties, should not be read as guarantees of
future performance or results, and will not necessarily be accurate
indications of whether or not such results will be achieved. A number of
factors could cause actual results to differ materially from the results
discussed in the forward-looking statements. Although the forward-looking
statements contained in this disclosure are based upon what Management
believes are reasonable assumptions, the Corporation cannot assure investors
that actual results will be consistent with these forward-looking statements.
These forward-looking statements are made as of the date of this disclosure,
and, subject to applicable securities laws, the Corporation assumes no
obligation to update or revise them to reflect new events or circumstances.
This disclosure may contain forward-looking statements pertaining to the
following: capital expenditure programs; supply and demand for the
Corporation's services and industry activity levels; commodity prices; income
tax considerations; treatments under governmental regulatory regimes.





For further information:

For further information: Mark Montemurro, President and Chief Executive
Officer, (403) 806-3877, mmontemurro@alternrg.ca; Daniel Hay, Chief Financial
Officer, (403) 806-3881, dhay@alternrg.ca; Investor Relations, (403) 806-3875,
info@alternrg.ca

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Alter NRG Corp.

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