Utilisource Corp. Reincorporates in California amid Plans to Enter Energy Conservation Market, Initiates Merger Talks with Element Service, Inc.

EL SEGUNDO, Calif. -- Utilisource Corp. (Pink Sheets:UTLS), an energy and energy conservation products provider, has announced it has reincorporated in California and will seek shareholder approval in coming weeks for a merger into the California corporation as part of its plan to expand into the energy conservation and distributed energy generation markets.

As a part of its efforts to acquire operating assets in California, Utilisource officials reported they are in merger discussions with Element Service, Inc., of El Segundo, California, a full-service mechanical HVACR company.

"The net result is we fully expect Utilisource, originally incorporated as a Florida corporation, to position itself as one of the leaders in the energy efficiency and distributed generation industry in California," said Jim Lezie, CEO of Utilisource.

"Because of this reorganization, we are asking all Utilisource shareholders to update their contact information - including name, name on the certificate, share certificate number, mailing address and telephone number via e-mail to [e-mail]," Lezie said.

He added that shareholders currently holding shares in the name of a brokerage firm, sometimes called a margin account, are encouraged to obtain certificates in their own name and hold these shares personally in light of a number of upcoming shareholder actions.

"Contact your brokerage firm and ask that the certificate be immediately transferred back into your name," Lezie said. He added that Interwest Transfer Company, Inc. of Utah (telephone [phone] or www.interwesttc.com), the transfer agent for Utilisource, also can assist shareholders with this.

He said approximately 34 million shares of stock currently are outstanding, with more than 11 million subject to cancellation and return to authorized shares due to failure of consideration dating from transactions associated with California's abandoned efforts at electric deregulation.

Element Service, Inc., is located at 121 Sierra Street in El Segundo.

For more information on Element Service, Inc., contact the company at [phone] or visit the company's web site at www.elementservice.com.

For more information on Utilisource, visit the company's web site at www.utilisource.com.