SmartCool Systems Inc. (TSXV: SSC) is pleased to announce that it has concluded the acquisition from Abbotly Technologies, Inc. ("Abbotly USA"), a Missouri USA corporation, of the exclusive rights to distribute the Energy Savings Module ("ESM") throughout the USA, CANADA, MEXICO, and the CARIBBEAN.

 

Abbotly USA has assigned to the Company's wholly owned US subsidiary, SmartCool Systems USA Inc. ("SmartCool USA") all of its rights, and SmartCool USA has assumed all of its obligations, under a license agreement with Abbotly Technologies Pty Limited of Australia ("Abbotly Australia").

Abbotly Australia is the owner and manufacturer of the ESM, which is specifically designed to reduce electric usage on air conditioning and refrigeration compressors. Abbotly Australia has consented to the assignment of the license agreement between Abbotly USA and Abbotly Australia to SmartCool USA.

SmartCool USA is now the master distributor of the ESM in North America, Mexico and the Caribbean and assumes the existing distributor network and the client base already involved in the sales process. Previously, SmartCool and SmartCool USA were subdistributors of Abbotly USA and held the exclusive distribution rights for the ESM in Canada and in 13 of the United States.

George Burnes, President of SmartCool, stated that "in reviewing the sales initiatives already underway by the distributors throughout all geographical regions in the territory, we should see revenue growth in the near term. The profile of the client base crosses national retail chains, cold storage and distribution centers owned and operated by international corporations, state and local government facilities and numerous small and medium business opportunities. It is clear that the ongoing pressure on energy rates continues to focus companies on developing strategies to reduce energy consumption and by acquiring these rights, SmartCool is positioned to take advantage of this increasing demand to install technology that address the concerns of the market place."

Pursuant to an Assignment and Assumption Agreement between Abbotly USA and SmartCool USA, the consideration payable by SmartCool USA to acquire these exclusive distribution rights for all of North America, Mexico and the Caribbean consists of cash and a royalty payable by SmartCool USA to Abbotly USA on product purchased from Abbotly Australia. SmartCool USA will also be required to meet the minimum purchase obligations under the terms of license agreement with Abbotly Australia which has been assigned to it by Abbotly USA.

In addition, the Company has granted a share purchase warrant to Abbotly USA to purchase up to 500,000 common shares of the Company at a price of $0.27 for a period of two years ending March 27, 2008.

SmartCool USA has also entered into a consulting agreement with Abbotly USA to provide sales and marketing support for a term of two years.

This transaction has been accepted for filing by the TSX Venture Exchange and has received consent from Abbotly Australia.

As previously announced by the Company (February 1, 2006), the Company intends to continue to explore the opportunity to acquire the business and assets of Abbotly Australia. The acquisition of the exclusive rights to North America, Mexico and the Caribbean from Abbotly USA have taken much of management's time over the past two to three months, and as a result, there has been little progress in the negotiations with Abbotly Australia. It is management's intention to continue discussions with Abbotly Australia on a non-exclusive basis.

About Smartcool

Smartcool Systems Inc. (TSX-V: SSC) delivers cutting edge energy efficiency and cost reduction solutions for businesses around the world. The ESM™ and ECO3™ are Smartcool’s unique retrofit technologies that reduce the energy consumption of compressors in air conditioning, refrigeration and heat pump systems. Energy savings achieved by the ESM™ and ECO3™are quantifiable and the products can qualify for government and utility rebates. The technology has been validatedby rigorous third party testing, government organizations and private business installations.

Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.

 

Investor Inquiries

Mike Kordysz
Tel: +1 604 904 8632
mike.kordysz@smartcool.net

TSX-V: SSC
OTC: SSCFF
Frankfurt: R3W

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