Alter NRG reports second quarter 2009 activities and financial results



    
    TSX - NRG
    OTCQX - ANRGF
    

    CALGARY, Aug. 14 /CNW/ - (TSX - NRG; OTCQX - ANRGF) - Alter NRG Corp.,
("Alter NRG" or the "Company") is pleased to report on its corporate
activities and financial results for the three and six month period ended June
30, 2009. The following are the highlights for the second quarter of 2009 and
the period up to August 13, 2009.

    Q2 HIGHLIGHTS

    Alter NRG owns an industry leading plasma gasification technology that
can provide clean and renewable energy solutions from a variety of inputs
including all types of waste and biomass. The technology is commercially
proven with facilities operating since 2002. Alter NRG has a unique vision, a
strong team, a leading technology, capable strategic partners and financial
strength - we are well positioned for the opportunities ahead.

    
    -   Substantially completed the construction of Project Lighthouse, a
        commercial demonstration facility developed by Coskata Inc. (Coskata)
        that uses the Westinghouse Plasma Corporation (WPC) gasification
        solution to turn biomass into ethanol. The facility will begin
        operation in Q3 and represents a significant milestone in the
        development of cellulosic ethanol from non-food feedstocks.

    -   Announced the signing of an alliance agreement with Uhde Engineering
        Consulting (Shanghai) Co. to provide engineering services, marketing
        services and jointly pursue business opportunities predominantly in
        the Asia Pacific region, including China. This alliance agreement
        provides Alter NRG presence on the ground in China and Southeast Asia
        through a well respected and capable engineering firm.

    -   Travelled to China to follow up on interest generated from the
        initial visit in Q1 of this year. Alter NRG is currently advancing
        discussions with numerous large, credible Chinese companies and
        advancing a signed memorandum of understanding into a definitive
        agreement. The interest in China and Southeast Asia for the
        Westinghouse technology has been significant and the central
        government has aggressive plans to utilize renewable energy
        solutions.

    -   Continued the commissioning of the world's largest hazardous waste-
        to-energy (WTE) facility in Pune, India. The facility is working
        through commissioning and expects to be operational in late Q3 or Q4
        of this year.

    -   Advanced discussions in the European market with sizeable companies,
        respected engineering firms and governments that are looking for
        renewable energy alternatives. This has resulted in advancing
        submissions into several WTE projects in the UK and EU, being
        shortlisted for plasma projects in advanced stages of regulatory
        approval and also advancing project developments with strategic
        partners in the area. The European market has very favorable
        incentives and regulatory framework.

    -   Advanced commercial discussions for a 75 tonne per day WTE project
        located in Dufferin County, Ontario. Alter NRG submitted into a
        request for proposal process and was selected as the technology
        provider.

    -   Focused engineering efforts on the construction of the Coskata
        facility and the preparation for the testing program of our
        gasification testing facility in Madison, Pennsylvania. This resulted
        in lower second quarter revenues as the testing facility was closed
        and our engineering resources were supporting preparation for the
        upcoming 50 test program in Q3 and Q4 of 2009 estimated at
        approximately $3 million in revenue.

    -   Advanced 14 projects located worldwide which are at the engineering
        stage of the project development. Alter NRG continues to advance
        discussions with industry leading engineering companies and well
        capitalized energy companies and project developers which have
        interest in the industry leading Westinghouse technology (see page
        5).
    

    For more information on the Company's activities please visit
www.alternrg.com or www.sedar.com to view Alter NRG's 2009 Second Quarter
Report.

    PRESIDENT'S MESSAGE

    The commercialization of a breakthrough technology in an emerging market
is an exciting opportunity but also presents execution challenges. Our
strategy is to work with industry leading partners that are well capitalized
and who also bring significant technical expertise and execution capability.
We announced an additional partner this quarter in a new market which adds to
our already substantial list of credible industry partners.
    Increasing public awareness about utilizing both waste and biomass energy
and the many associated environmental benefits is playing a key role in
promoting the adoption of the renewable energy concept on a large scale. This
is evidenced in the unveiling of the "The American Clean Energy and Security
Act" on May 15th of this year. This Act includes credits for both waste and
biomass to create renewable energy solutions and illustrates the commitment to
sustainable development in the United States.
    North America, however, is still playing catch up to the European Union
which has favorable credits and incentives for clean and renewable energy
solutions. The recent clean energy policies are a great advantage at a time
when concerns about the United States dependence on foreign oil are rapidly
increasing. However, despite recognizing the benefits of renewable energy,
governments in North America have been slow to develop this as a primary
energy source. We are making progress, but it takes time to bridge the gap
between concept and action.
    The Asian and European markets have recognized the development of
efficient, sustainable energy as an environmental and economic imperative. It
makes sense for us to continue our pursuit of those markets and aim for a
presence on the ground in China and Southeast Asia. At the end of Q2, we
successfully negotiated an alliance agreement with a well respected and
capable engineering firm, Uhde Engineering Consulting (Shanghai) Co. Ltd who
will license, market and promote the Alter NRG technology in waste-to-energy
projects and other developments. This agreement will increase our sales
pipeline and will help to reduce the capital cost of our plasma gasification
systems worldwide.
    Reflecting on our Company strategy is a key part of our growth and
movement forward. At the outset we committed to being an aggregator of
commercially proven but still emerging technology in the alternate energy
space. It has been our objective to have working relationships with
strategically important partners and, to regularly review and refresh these
relationships. We are continuing that focus by evaluating and considering how
other technology in the alternative energy space could potentially accelerate
and strengthen our balance sheet.
    Alter NRG continues to grow, and we are maintaining focus on our
strategic relationships and the strength of our team. We remain confident that
Alter NRG has an exciting future and we thank our loyal shareholders for their
confidence in us amid these most challenging economic times.

    
    FINANCIAL RESULTS ($)
                                            June 30, 2009  December 31, 2008
    -------------------------------------------------------------------------

    Total assets                            $ 109,968,453      $ 120,709,784
    Total liabilities                          23,664,397         21,856,749
    Total equity                            $  86,304,056      $  98,853,035
    -------------------------------------------------------------------------

                                       Three months ended Three months ended
                                            June 30, 2009      June 30, 2008
    -------------------------------------------------------------------------
    Revenue, interest and other income      $     354,733      $   1,363,471
    Loss                                       (6,087,592)        (2,454,308)
    Loss per share - basic and diluted      $       (0.11)     $       (0.04)
    -------------------------------------------------------------------------

                                         Six months ended   Six months ended
                                            June 30, 2009      June 30, 2008
    -------------------------------------------------------------------------
    Revenue, interest and other income      $   1,605,197      $   2,427,320
    Loss                                       (9,033,141)        (4,263,441)
    Loss per share - basic and diluted      $       (0.16)     $       (0.08)
    -------------------------------------------------------------------------
    

    For the complete consolidated financial statements please visit
www.alternrg.com or www.sedar.com to view Alter NRG's 2009 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 clean 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 participation in gasification projects
that fit its strategic growth plan.
    Alter NRG's mission is to maximize returns for its investors by
participating in financially accretive projects in the emerging alternative
energy market, through technology sales and project interests. 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 strives to be transparent and fair in its activities and works
to form positive relationships with the communities where it operates and with
all of its stakeholders.
    Initially, the Corporation is focusing its efforts on technology sales
and developing a strategic portfolio of customers with the capability to
advance projects from internally generated cash flow. The focus will be to
increase near term cash inflows by generating operational revenues and
reducing capital expenditures by limiting the working interest we hold in
projects and slowing project timelines.
    The Corporation owns Westinghouse Plasma Corporation (WPC). WPC has
proprietary technology that the Corporation believes is an industry leading
technology with the following broad advantages:

    
    -   Commercially proven - the technology has been commercially applied,
        for six years, in facilities in Japan for gasification of waste. The
        plasma torches, which are core to the overall technology, have been
        commercially used for over 20 years.
    -   Environmentally responsible - the technology has the capability to
        reduce emissions significantly as compared to other conventional
        fossil fuel technologies.
    -   Flexible technology - the technology can handle a wide range of
        feedstocks, including many types of waste (municipal, commercial,
        industrial, and hazardous), biomass, coal and petroleum coke. The
        flexibility to accept a variety of feedstocks gives the technology a
        range of uses and markets to which it can be applied.
    -   Scalable technology - the technology is ideal for projects with total
        capital between $50 million and $500 million. The technology is
        larger scale than most other plasma gasification technologies, and
        has a longer commercial operating history.
    

    The current economic and capital market conditions provide a challenging
environment to navigate. To mitigate the challenges, Alter NRG is focusing on
technology sales to parties that bring the capital, skill and expertise to
develop energy projects. A core part of the corporate strategy is the use of
strategic alliances and partnerships to commercialize the technology into
different geographic regions and markets.

    HIGHLIGHTS

    Technology Sales

    Alter NRG has a strategic focus for technology sales to large waste and
energy companies with the ability to advance plasma gasification projects in
this challenging market environment. The Corporation is initially focusing on
opportunities in North America, the European Union and Southeast Asia.
Discussions have advanced with numerous companies with strong balance sheets
and a focus on renewable energy solutions. Alter NRG has significant strategic
customers and alliances with NRG Energy, a leading independent power producer
in the US, Air Products, a world leader in industrial gasses, Coskata Inc., a
leading cellulosic ethanol developer, and also credible engineering firms such
as Uhde Shanghai, Saipem, and SMS Infrastructures Ltd.
    In the first half of 2009, the Corporation announced the signing of a
Joint Development Agreement with Air Products to pursue renewable energy
opportunities in North America and Europe. Air Products is a leading
industrial gas provider and a Fortune 500 Company, with annual revenues of
over $10 billion, operations in more than 40 countries and 21,000 employees.
The non-exclusive agreement allows Air Products to license and incorporate
Alter NRG's proprietary Westinghouse Plasma Gasification technology in
renewable energy projects. Air Products will initially focus on developing
energy facilities using renewable feedstock to generate synthesis gas (syngas
- a mixture of hydrogen and carbon monoxide) for power, heat or steam
generation.
    Alter NRG continued to advance Project Lighthouse, a commercial
demonstration facility developed by Coskata Inc. (Coskata) that uses the WPC
gasification solution to turn biomass into ethanol. This breakthrough
technology will use non-food biomass (waste biomass) to create ethanol at a
market leading low cost, which is expected to be under $1.25 per gallon.
Coskata, a leading second generation ethanol company, was recently named
number one in the "50 Hottest Companies in Bioenergy". Project Lighthouse is
expected to generate approximately $3 million in revenues for use of our
plasma centre and has attracted international interest from leading energy
companies and developers from around the world. Coskata is also advancing
engineering on their first commercial facility which is expected to generate
approximately $50 million in engineering services and equipment sale revenues.
    NRG Energy, another strategic partner, continues work on multiple
projects using plasma gasification. The Somerset project operated by NRG
Energy will convert coal and biomass into 120 MW of power. This project
received regulatory approval from the Department of Environmental Protection
of Massachusetts on January 25, 2008, but was subject to various regulatory
appeals. Management understands that NRG Energy anticipates commencing
construction during 2010 and currently this would result in an approximately
$40 million sale of equipment. The Corporation also supports NRG Energy's
project development efforts on other waste-to-energy (WTE) projects and coal
retrofit opportunities.
    The Corporation announced the signing of an alliance agreement with Uhde
Engineering Consulting (Shanghai) Co. Ltd. Uhde is one of the world's leading
engineering companies in the design and construction of chemical, refining and
other industrial plants with over 2000 plants to its credit. The non-exclusive
alliance agreement allows Uhde to license, market as well as promote the Alter
NRG technology in waste-to-energy projects and other developments. The
alliance agreement includes a preferred engineering relationship for
engineering and procurement support for the projects requiring the syngas
conditioning and gasification expertise that Uhde Shanghai and Alter NRG,
respectively, can provide its customers in the China and Southeast Asian
market.
    During the first half of 2009, management continued its marketing efforts
in Europe and China for discussions with companies advancing renewable energy
projects. The response was very positive and resulted in commercial
discussions with several different companies. This includes two developers
entering proposals for a waste project, entering final round technology
discussions for several projects in Spain and signing an initial MOU with a
company in China. Further details will be available when binding contracts are
executed.
    The Company continued to advance 14 projects to the engineering stage.
Nine opportunities are located in the United States, three in Europe and two
in Southeast Asia. An average plasma gasification equipment sale would result
in approximately $10 million to $100 million of revenues upon successful
development.

    Customer Projects Under Construction

    Continuing projects that align with Alter NRG's strategic focus include
the following:

    
    -   Project Lighthouse is a 40,000 gallon per year ethanol commercial
        demonstration project developed by Coskata. Coskata expects to
        complete the project, located at the Alter NRG pilot facility in
        Madison, Pennsylvania, in the summer of 2009. The existing plasma
        gasifier provides the syngas that will then be converted to ethanol
        through the Coskata proprietary conversion process. The Corporation
        expects this ethanol commercial demonstration project to result in
        $3.0 million in total revenues in 2009 and 2010. Further, the
        Corporation expects a successful demonstration will attract key
        customers with a focus on renewable energy to the Alter NRG pilot
        facility in 2009.

    -   SMS Infrastructure Limited (SMSIL) consists of two hazardous WTE
        facilities under construction in India. The first facility in Pune
        has undergone initial commissioning and is resolving several
        integration challenges. The first facility became operational in the
        second quarter of 2009 and is currently undergoing further gasifier
        design changes. Both facilities will use Alter NRG plasma
        gasification technology to convert approximately 68 tonnes per day of
        hazardous waste into power. The facilities are owned and operated by
        SMSIL, central India's largest civil engineering and infrastructure
        development company. These facilities will increase the number of
        commercial facilities processing waste using Alter NRG's technology
        from two to four and provide commercial experience for smaller scale
        industrial waste solutions that can be replicated.

    Alter NRG Project Development

    As a means to reduce Alter NRG's capital requirements the Corporation has
adopted a staged approach for internally led projects under development, as
described below:

    -   Fox Creek, Alberta is a coal-to-liquids project expected to produce
        up to 40,000 barrels per day of diesel fuel and naphtha from Alter
        NRG's existing coal reserves. Alter NRG is reducing project
        development expenditures to less than $1.5 million in 2009 on work
        defining the project scope. The delayed timeline will postpone
        completion of the development until late 2015, subject to successful
        partner selection by the end of 2009.

    SELECTED FINANCIAL INFORMATION

    FOR THE THREE MONTHS ENDED JUNE 30                   2009           2008
    -------------------------------------------------------------------------
    Total revenues, interest and other income     $   354,733    $ 1,363,471
    Gain on sale                                        2,352        778,404
    Expenses                                        4,764,774      4,968,033
    Write down of assets held for sale              1,866,000              -
    Loss                                           (6,087,592)    (2,454,308)
    Comprehensive loss                             (8,048,276)    (2,670,791)
    Loss per Unit/Share - basic and diluted             (0.11)         (0.04)
    Cash used in operations                        (2,800,230)    (2,326,796)
    -------------------------------------------------------------------------

    FOR THE SIX MONTHS ENDED JUNE 30                     2009           2008
    -------------------------------------------------------------------------
    Total revenues, interest and other income     $ 1,605,197    $ 2,427,320
    Gain on sale                                        2,352        778,404
    Expenses                                        9,161,436      8,177,164
    Write down of assets held for sale              1,866,000              -
    Loss                                           (9,033,141)    (4,263,441)
    Comprehensive loss                            (10,255,715)    (3,484,531)
    Loss per Unit/Share - basic and diluted             (0.16)         (0.08)
    Cash used in operations                        (6,131,830)    (3,523,080)
    -------------------------------------------------------------------------

    AS AT JUNE 30                                        2009           2008
    -------------------------------------------------------------------------
    Total assets                                $ 109,968,453  $ 120,709,784
    Total liabilities                              23,664,397     21,856,749
    Shareholders' equity                           86,304,056     98,853,035
    -------------------------------------------------------------------------


    PLASMA TECHNOLOGY SALES AND SERVICES

                                FOR THE THREE MONTHS      FOR THE SIX MONTHS
                                          ENDED                   ENDED
                                         JUNE 30                 JUNE 30
                                    2009        2008        2009        2008
    -------------------------------------------------------------------------
    Sales revenue
      Engineering and
       testing services      $   250,527 $   783,661 $ 1,294,045 $ 1,387,992
      Parts and other sales       47,361      69,644     117,985     176,900
    -------------------------------------------------------------------------
                                 297,888     853,305   1,412,030   1,564,892
    -------------------------------------------------------------------------
    Direct cost of sales
      Engineering and
       testing services           83,846     338,722     484,807     705,446
      Parts and other sales       20,588      51,632      83,002     129,806
    -------------------------------------------------------------------------
                                 104,434     390,354     567,809     835,252
    -------------------------------------------------------------------------
    Gross margin             $   193,454 $   462,951 $   844,221 $   729,640
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Plasma technology sales and service revenues result from engineering
services provided for reactor design and process engineering, replacement
parts for existing gasification customers and plasma gasification testing
services provided at the Corporation's testing centre pilot facility located
in the United States (US).
    Direct costs of sales relate to direct materials and expenditures for
products and services and reflect standard rates. Margins in 2009 are higher
than 2008 due to the reduced amount of direct labor spent on engineering
products.
    The Corporation's revenue generating projects are advancing as expected
and will generate revenues that vary from one quarter to the next. Revenues
for the three months ended June 30, 2009 decreased over the prior period by
65% or $555,417. This is attributed to the shut down of the pilot facility for
third party testing services and allocation of our engineering resource to
prepare for Coskata Project Lighthouse. The Coskata Project Lighthouse has
contracted to do 50 pilot tests between September 2009 and June 2010 which is
expected to generate approximately $3 million in revenues. In the second
quarter of 2008, the majority of revenue was derived from testing services
conducted by WPC.
    Revenues for the first six months of 2009 decreased by $152,862 or 10%
with the majority of the decrease related to the reasons described above
related to Project Lighthouse.
    Alter NRG anticipates a key revenue stream from equipment sales of a
plasma torch or a plasma gasification island. Plasma torches are one component
of the plasma gasification island and the sale of torches used in a small
scale gasification facility generates approximately $1.5 million to $3.0
million in revenue. The Corporation plans to sell a full scope gasification
solution, the plasma gasification island, to third party project developers
which would generate revenues of approximately $25 million each. Alter NRG has
devoted significant efforts expanding its product offering while completing
the engineering studies and product design enhancements required to construct
the plasma gasification island.
    The Corporation works with project developers worldwide in the early
stages of planning and developing plasma gasification projects. Engineering
services are required in the preliminary planning phase and equipment is
ordered only after a project has received regulatory approval and project
financing thus these sales have a long lead-time.
    Since the Corporation purchased WPC it has tripled its number of
customers. Key customers advancing commercial projects include SMSIL, Coskata,
NRG Energy, and Air Products (see the Highlights section). These companies
indicate they expect to order equipment in 2010 to support their development
activities. Alter NRG also has 14 engineering sales for customer projects in
various stages of development (see the Business Conditions and Risks section).

    
    INTEREST AND OTHER INCOME

                                                                 FOR THE
                                   FOR THE THREE MONTHS     SIX MONTHS ENDED
                                       ENDED JUNE 30             JUNE 30
    -------------------------------------------------------------------------
                                       2009       2008       2009       2008
    -------------------------------------------------------------------------
    Interest income               $  56,845  $ 509,943  $ 192,761  $ 787,744
    Other income                          -        223        406     74,684
    -------------------------------------------------------------------------
    Total interest and other
     income                       $  56,845  $ 510,166  $ 193,167  $ 862,428
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Interest income relates to funds invested in short-term, interest-bearing
investments with a Canadian chartered bank and decreased by 76% for the six
months ended June 30, 2009 versus the six months ended June 30, 2008. The
decrease reflects the average interest rate earned on investments of
approximately 0.8% and 0.5% for the current six month and three month periods
versus the average 3.5% and 3.1% earned on investments for the same periods in
2008. The decrease in interest income also was due to lower levels of
investments on hand during the current periods.
    In July of 2009, the Corporation moved its investment to investment grade
fixed income investments that provide for an improved rate of return.

    
    GENERAL AND ADMINISTRATIVE EXPENSES

                                  FOR THE THREE             FOR THE SIX
                              MONTHS ENDED JUNE 30      MONTHS ENDED JUNE 30
    -------------------------------------------------------------------------
                                 2009         2008         2009         2008
    -------------------------------------------------------------------------
    Employee costs,
     net of recoveries    $ 1,418,904  $ 1,511,225  $ 2,757,760  $ 2,415,824
    Office costs              505,650      336,907      976,948      573,294
    Repairs and
     Maintenance              419,350       52,815      469,788       79,043
    Professional and
     consulting fees          382,654      513,309      932,074      966,550
    Travel costs              199,100      186,142      374,966      315,999
    Bad debts                 120,620            -      120,620            -
    Business development
     costs                     80,792      126,937      173,466      173,610
    Other costs                50,135      137,615      389,368      296,194
    Board of Directors fees    23,112            -       43,112            -
    -------------------------------------------------------------------------
    General and
     administrative
     expenses             $ 3,200,317  $ 2,864,950  $ 6,238,102  $ 4,820,514
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Employee costs increased due to the increased number of staff required to
enact the Corporation's corporate growth strategy. At June 30, 2009, the team
included 46 full time employees - 28 in the Calgary office and 18 in the US -
compared to 29 employees at June 30, 2008. The Corporation does not expect
significant changes to the current headcount for the remainder of 2009.
    Office costs for the three and six months ended June 30, 2009 increased
by $168,743 and $403,654, respectively. Both increases are due to increased
expenditures for rent and insurance costs as the Corporation continues to ramp
up its sales efforts in North America.
    Repairs and maintenance for the three and six months ended June 30, 2009
increased by $366,535 and $390,745, respectively. The increase is due to one-
time expenditures related to preparations for Project Lighthouse.
    Professional and consulting fees consist primarily of audit and
accounting fees, external recruiting fees and consulting and legal fees for
business development. A portion of these fees are paid in US dollars,
resulting in an increase in costs for the first six months of 2009 due to the
strengthened US dollar compared with the same six months in 2008.
    Travel costs for the three and six months ended June 30, 2009 increased
by $12,958 and $58,967, respectively. Both increases are due mostly to
expenditures related to trips to the European Union and China to meet with
potential strategic partners.
    The Corporation has recorded a provision in the amount of $120,620 at
June 30, 2009 (December 31, 2008 - nil) after the completion of its review of
all outstanding accounts receivable to assess whether the amounts are
recoverable. A significant portion of the trade accounts receivable
outstanding for greater than 90 days has been collected subsequent to June 30,
2009. The Corporation believes the remaining amounts will be collected.
    Business development costs include the costs of acquiring and developing
strategic partnerships for project development efforts.
    Other costs include public reporting costs, IT-related costs,
advertising, promotion and banking charges and are consistent with the
increase in personnel.
    Total general and administrative costs for 2009 are expected to be
approximately $13 million, which reflects staffing at current levels for a
full year and associated costs to support the current activity levels. Should
prolonged negative market conditions persist or customer activity decline in a
significant way, general and administrative costs will be evaluated and
reduced.

    
    FOREIGN EXCHANGE LOSS, NET

    Foreign exchange relates mostly to US dollar amounts loaned to the US
subsidiary. The increase in foreign exchange losses for both the three and six
months ended June 30, 2009 compared to the prior year is mostly due to the
strengthening of the Canadian dollar during the first six months of the year.

    DEPRECIATION AND AMORTIZATION

                              FOR THE THREE MONTHS        FOR THE SIX MONTHS
                                   ENDED JUNE 30             ENDED JUNE 30
    -------------------------------------------------------------------------
                                 2009         2008         2009         2008
    -------------------------------------------------------------------------
    Depreciation          $    59,768  $    73,804  $   145,358  $   105,647
    Amortization              427,385      369,929      883,406      737,661
    -------------------------------------------------------------------------
    Total depreciation
     and amortization     $   487,153  $   443,733  $ 1,028,764  $   843,308
    -------------------------------------------------------------------------
    

    The increase in depreciation for the six months ended June 30, 2009 over
the same period in 2008 reflects a full six months of depreciation on the US
facility upgrade, completed at the end of the first quarter of 2008. No
depreciation was recognized on this asset in the first quarter of 2008.
    Amortization relates to the intangible assets acquired on the purchase of
the US subsidiary on April 17, 2007. The intangible asset is being amortized
on a straight-line basis over an estimated useful life of thirty years.

    WRITE DOWN OF ASSETS HELD FOR SALE

    During the three months ended June 30, 2009, the Corporation determined
that it would discontinue development of the Bruderheim property and began to
actively market the property and equipment to potential buyers. The property
consists of land, a building and a steam turbine.
    During the three months ended June 30, 2009, the Corporation recognized
an impairment of $1,866,000 to write down the Bruderheim property to its fair
value less costs to sell the assets. The write-down was based on an assessment
of the latest market conditions for each of the assets held for sale.

    
    LOSS

                              FOR THE THREE MONTHS        FOR THE SIX MONTHS
                                    ENDED JUNE 30             ENDED JUNE 30
    -------------------------------------------------------------------------
                                 2009         2008         2009         2008
    -------------------------------------------------------------------------
    Loss                  $ 6,087,592  $ 2,454,308  $ 9,033,141  $ 4,263,441
    -------------------------------------------------------------------------
    

    The increased loss for the six months ended June 30, 2009 related
primarily to lower interest income earned during the period and a write down
of assets held for sale as well as increases in general and administration
costs and depreciation and amortization. Profitability is a function of sales
timing, type and margin as described in the "Plasma Technology Sales and
Services" section and can be affected by various operating issues as outlined
further in the "Business Conditions and Risks" section.


    
    QUARTERLY INFORMATION

                                                 2009
    -------------------------------------------------------------------------
                     Q1           Q2                                Total
    -------------------------------------------------------------------------
    Capital
     expend-
     itures $ 1,398,152  $ 1,652,023                            $  3,050,175
    Total
     revenues,
     interest
     and other
     income   1,250,464      357,085                               1,607,549
    Interest
     and other
     income     136,322       56,845                                 193,167
    Gain on
     sale             -        2,352                                   2,352
    Write down
     of assets
     held for
     sale             -    1,866,000                               1,866,000
    Loss     (2,945,549)  (6,087,592)                             (9,033,141)
    Loss
     per Share
     - basic
     and
     diluted $    (0.05) $     (0.11)                           $      (0.16)
    -------------------------------------------------------------------------


                                             2008
    -------------------------------------------------------------------------
                     Q1           Q2           Q3          Q4          Total
    -------------------------------------------------------------------------
    Capital
     expend-
     itures $ 1,968,600  $ 5,894,939  $ 5,450,365  $1,472,406  $  14,786,310
    Total
     revenues,
     interest
     and other
     income   1,063,849    2,141,875      780,348     861,671      4,847,743
    Interest
     and other
     income     352,262      510,166      462,074     356,639      1,681,141
    Gain on
     sale             -      778,405            -           -        778,405
    Loss     (1,809,133)  (2,454,308)  (4,414,367) (4,246,478)   (12,924,286)
    Loss per
     Share -
     basic
     and
     diluted $    (0.04) $     (0.04) $     (0.08) $    (0.08) $       (0.24)
    -------------------------------------------------------------------------
    

    The increase in the loss from the first quarter of 2009 to the second
quarter of 2009 was due primarily to the further write-down of assets
allocated to the Bruderheim project ($1,866,000) to their fair values less
costs to sell the assets and to lower interest income earned on account of
lower interest rates.
    Sales revenue related to engineering and testing services were nil in the
second quarter compared to $810,970 in the first quarter.

    CREDIT FACILITY

    The Corporation's US subsidiary has a line of credit agreement with a
major bank in the US for $500,000 US (June 30, 2008 - $500,000 US). The line
of credit is due on demand and secured by the subsidiary's assets. The credit
facility bears interest at a rate that is equal to the US prime rate. No
amounts have been drawn on the credit facility as at June 30, 2009.

    LIQUIDITY AND CAPITAL RE

SOURCES The Corporation's working capital balance was approximately $41.2 million at June 30, 2009, a decrease of $8.2 million from the year ended December 31, 2008 ($49.4 million). Working capital provides funds for the Corporation to meet its operational and capital requirements. These funds will allow Alter NRG to focus on increasing its operational cash flows through sales revenues and prevail through the current economic downturn without relying on raising additional debt or equity financing in a volatile market. CASH USED IN OPERATIONS FOR THE THREE MONTHS FOR THE SIX MONTHS ENDED JUNE 30 ENDED JUNE 30 ------------------------------------------------------------------------- 2009 2008 2009 2008 ------------------------------------------------------------------------- Cash used in operations $ 2,800,230 $2,326,796 $6,131,830 $3,523,080 ------------------------------------------------------------------------- ------------------------------------------------------------------------- The increase in cash used in operations reflects the growth in the Company operations through its expansion in sales and marketing, engineering and administration personnel, related office operating expenses, costs for public filings and business development activities. Cash flow used in operations is expected to decrease as Alter NRG secures equipment sales contracts and license revenue. The timing of these cash flows is a function of sales timing, type and margin and can be affected by various operating issues as outlined further in the "Business Conditions and Risks" section. CAPITAL EXPENDITURES FOR THE THREE MONTHS FOR THE SIX MONTHS ENDED JUNE 30 ENDED JUNE 30 ------------------------------------------------------------------------- 2009 2008 2009 2008 ------------------------------------------------------------------------- Resource property $ 346,642 $ 341,340 $ 406,988 $ 708,532 ------------------------------------------------------------------------- Property, plant and equipment 801,972 4,876,436 1,493,602 5,502,365 Internally generated intangible assets 503,409 676,429 1,149,585 1,652,642 ------------------------------------------------------------------------- Total capital expenditures $ 1,652,023 $ 5,894,205 $ 3,050,175 $ 7,863,539 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Internally generated intangible assets consist of internal project development work on the Corporation's plasma gasification island. These costs are not currently amortized, as the related projects have not reached commercial operation. These costs will be amortized when a project begins commercial construction, which management expects to be in late 2009 or 2010. Resource property expenditures for the six months ended June 30, 2009 include costs incurred for the Fox Creek core-hole program. Property, plant and equipment costs relate primarily to the facility upgrades for the Coskata Lighthouse project. Alter NRG expects to expand its overall product offering during 2009 and to incur costs on the Fox Creek resource of approximately $1.5 million. The actual expenditures that will be incurred may vary significantly from this estimate as the Corporation regularly reviews its spending in light of current market conditions, opportunities and the estimated timing and cost of development projects. In addition, new projects may arise during the year that will require capital expenditures. EQUITY The number of common shares and options outstanding as of August 13th, 2009 was 56,198,051 and 5,242,933, respectively. 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 Exchange does not accept responsibility for the adequacy or accuracy of this release. Advisory Respecting Forward-Looking Statements: This news release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "confident", "might" and similar expressions are intended to identify forward- looking information or statements. In particular, but without limiting the foregoing, this news release contains forward-looking information and statements pertaining to the following: currency exchange rate fluctuations; environmental risks; unanticipated reclamation expenses; ability to finance; risk of obtaining regulatory approvals; ability to find joint venture partners; engineering and design risk; fluctuation in commodity prices and other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about possible future events, conditions, results of operations or performance. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties including but not limited to: unexpected events during construction, and start- up; variations in feedstock grade; delay or failure to receive board or government approvals; timing and availability of external financing on acceptable terms; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of commodities; failure of plant, equipment or processes to operate as anticipated; delays in the completion of development or construction activities, as well as those factors discussed in or referred to under the heading "Risk Factors" in the Company's Annual Information Form dated July 8, 2008 available at www.sedar.com which could cause actual results to differ materially from those anticipated and described in the forward-looking statements. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements. The Company cautions that the foregoing list of assumptions, risks and uncertainties is not exhaustive. The forward-looking information and statements contained in this news release speak only as of the date of this news release, and the Company assumes no obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable securities laws.

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

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Alter NRG Corp.

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