Dynex Power Inc. Calls a Special Meeting of Shareholders


Lincoln, England, (January 3rd, 2008) Dynex Power Inc. (“Dynex”) announced today that it is calling a special meeting of shareholders to be held at 10:00 am on January 30, 2008 in Toronto. Notices and meeting materials will be sent to shareholders of record as of December 28, 2007.

Currently, DSL has long term indebtedness of £2,094,270 of which £1,820,000 was borrowed from Daniel Owen (£610,000) and David Banks (£1,210,000), each of whom is a director of Dynex. Of that total, £863,762 is convertible at the lender’s election into shares of DSL. It has been proposed by Dynex, and Messrs. Owen and Banks have agreed, that the convertible portion of these loans should henceforth be convertible into shares of Dynex at a fixed exchange rate of Canadian $2.28 to £1 Sterling and at a conversion price of $0.1585 per share. This exchange rate and conversion price were the rate and conversion price used to calculate the conversion rate into DSL shares at the time the loans were first made. This is the transaction for which shareholder approval will be sought at the special meeting.

Mr Banks has elected to convert £289,666.67 of his loans into 4,166,814 shares of Dynex as soon as shareholders have approved the transaction and Mr Owen has elected to convert £144,833.33 of his loans into 2,083,407 shares of Dynex as soon as shareholders have approved the transaction. Shareholders are therefore being asked to approve the immediate issuance of 6,250,221 common shares to satisfy these conversions. Following these conversions, Mr Banks will own 24.85% of the outstanding common shares and Mr Owen will own 17.22% of the outstanding common shares.

The TSX Venture Exchange has provided conditional approval of this conversion and change in conversion rights, the principal condition being the approval of the Dynex shareholders.

Dr. Paul Taylor, President and Chief Executive Officer said, “We are enthusiastic to submit this resolution to our shareholders and very pleased that Daniel Owen and David Banks agreed to it. We think the change in the basis of the conversion will improve the marketability of our shares and the conversion will lower our interest costs in the future.”

Further detail about the proposed conversion and changes will be set out in the materials sent to shareholders with the notice of special meeting.