Capital Reserve Canada Ltd. has entered into a long-term agreement with Genoil Inc. on behalf of its wholly-owned subsidiary, Two Hills Environmental Inc. This agreement extends Genoil's lease on the Two Hills site into a long-term contract for industrial waste recycling and disposal. In this 15 year agreement, Two Hills will build-out the infrastructure for deep well disposal and develop a salt cavern facility for recycling and permanent disposal of industrial waste over the next 12 months. The agreement outlines the 15 year partnership between the two companies to operate and manage a waste disposal business. The Two Hills plant is located 10 kilometres north of Two Hills, Alberta on the west side of Highway 36 and is strategically located to sources of oilfield waste that is being generated in northern Alberta's Fort McMurray and Cold Lake regions. Genoil has agreed to pre-pay the 15 year lease, and in preparation of this deal has upgraded the infrastructure on the Two Hills site over the past year. Genoil's plant infrastructure is fully operational and ready to receive industry waste and provide upgrading service for the partnership.

Genoil Inc. reported unaudited consolidated earnings results for the second quarter and six months ended June 30, 2009. For the quarter, the company reported loss from operations of CAD 1,410,627 and net loss of CAD 1,410,627 or CAD 0.005 loss per share compared to the loss from operations of CAD 1,148,092 and net loss of CAD 1,133,718 or CAD 0.005 loss per share on revenues of CAD 13,932 for the same quarter year ago. Cash flows used by operating activities was CAD 1,370,777 compared to the CAD 298,838 for the same quarter year ago. Purchase of equipment was CAD 1,669 compared to the CAD 2,209 for the same quarter year ago. For the six months period, the company reported loss from operations of CAD 2,862,221 and net loss of CAD 2,862,202 or CAD 0.009 loss per share compared to the loss from operations of CAD 4,636,085 and net loss of CAD 4,597,359 or CAD 0.019 loss per share on revenues of CAD 36,109 for the same period year ago. Cash flows used by operating activities was CAD 1,721,189 compared to the CAD 2,049,686 for the same period year ago. Purchase of equipment was CAD 3,130 compared to the CAD 14,098 for the same period year ago.

Genoil Inc. has announced the signing of a term sheet with a multi-billion fund for a $15 million financing for the Clarendon Genoil Crystal Sea joint venture. The off balance sheet financing will not be dilutive to current shareholders of Genoil. These funds will be utilized solely for the Clarendon Genoil joint venture company to finance the rollout of the Crystal Sea Units to various Ports. The proceeds of the financing shall be used to implement the utilization of Genoil's oily water separation technology to treat and clean bilge water. More specifically, the proceeds will be used for Crystal Sea installations on formal finalization of the MOUs at the three ports that have signed MOU's with Genoil-the Tangshan Port, Tianjin and Qinhuangdao Port. The proceeds can also be utilized for other Ports that the Clarendon team is in negotiations with. These three ports mentioned are some of the busiest in China. The Genoil and Clarendon executives are currently working on converting the term sheet into a contract to cover all the specific legal details and nuances of the financing terms.