MESSAGE FROM RON CROSS

It is with great pleasure that I produce another MERV Newsletter.

At our last AGM I explained that if we were going to be a success I had to take MERV to the USA like I did with GPS, CourtSmart and VoiceNet. To begin that process I presented a Paper for the Clean Gulf Con-ference in San Antonio November 2011. After my talk I met many oil company and govt oil response peo-ple and organizations. The contacts from those three days led to all you see here.

A lot has happened since that AGM and I am pleased to say we have successfully opened the great North American market for MERV as we had always planned to do.

There are two very important milestone photos in this edition, the one below, when I first paid our Ameri-can Naval Architect Chris Gunter to begin the American Drawings, and the larger one on page four, taken after a corporate meeting at Swift Ships where I showed the MERV concept and outlined our goals. We agreed to work together to bring MERV to the world. That photo shows President of Swift Ships Calvin LeLeux and I shaking hands with members representing our three companies present.

These are long awaited milestones, and as you see in this Newsletter well deserved ones.

I want to give special thanks to a few people that believed in my vision and will now reap the rewards. A big thank you to my wife Lori, and Tammy and Brad who put up with my being away so much; a special thanks to Ken Page, now Vice President of MERV Marine USA Inc, and wife Lorraine for your support.

Thanks to Colin Coverdale and Paul Riley who have provided solid backup in Australia so Ken and I could be here in America, Barb Jamesson who has helped keep our finances in order, Tony Lindley and others

who never failed me, and a host of great investors that were always there when we needed them, you

know who you are, (a few are in the photo with Kens article), I could not have done this without you.

I would like to thank everyone who helped us in two ways, first from Lori and I personally, and second by making MERV the success it deserves to be, to our benefit and the worlds.

MERV Marine USA Inc

Ron Cross gives Chris Gunter of MDG the payment for him to begin designing our first American made MERV.

MERV Marine, MDG

and Swift Ships will

work together to bring

MERV to the world.

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Reports from our Directors

From the MERV Marine USA Vice President Ken Page

Business News—from Ken Page

As is referred to elsewhere in this Newsletter, we have put together an exciting team made up of 3 Companies, all working independently, but very much as the one team, to build the Oil Spill Recovery workboat that will become the benchmark for the Oil Spill Recovery Industry.

After much deliberation we chose SwiftShips to be our Boat Builder and are working very closely with them, In time we will solely use their Production Building No2 for the building of our MERVs. Gary their Engineer works “hand in Glove” with our American Naval Architects, Marine Development Group (MDG) and we couldn’t be happier with both. The MERV Marine Offices are now in the same building as MDG.

Over the week that hurricane Sandy became a “wrecking ball” to New York, New Jersey and close by States, there were 6 men working very closely together in complete harmony and very much with the same sense of purpose, as we move towards the building of the MERV product.

MERV Marine USA Incorporated was formed in June 2012. MERV Marine Limited is a 10% shareholder of MMUSA Inc. We have always said that the USA Market is where we will gain the most business with their almost 4,000 Oil Rigs in the Gulf of Mexico, and as we develop we can see that the US Company will become the world hub for MERV Marine.

Through our association with MDG new opportu-nities are already opening up for us in Venezuela, Brazil and other Countries in South America. Of course the buyers want to see the first MERV completed.

We are being courted by two of the larger work boat operators in North America, Clean Harbours and Moran Enterprises, both of who are looking to replace ageing work boats. Again, once that first MERV is complete we can see multiple or-ders coming almost immediately.

AND SwiftShips have the capability of building multiple MERV’s at the one time. Ken Page

Vice President, MERV Marine USA

From the Chairman and Director of MERV Marine Limited Colin Coverdale Ron Cross has arrived back in Australia after months of hard work in the USA pulling together his much needed in-vention which in my opinion is one of those destined to change the way things are done. As an ex oil man I can say without doubt that the MERV concept is the best recovery apparatus for oil spill and other pollutants that I have been witness to. It has so many other uses as to make it an invaluable tool that will widen its appeal across several key markets.

All of us who have invested with Ron will now realise how tenacious and determined he has been to get MERV off the ground – or should I say into the water! He is one of those people who make the future, not wait for the future to make them.

Despite many doubters and at times adverse circumstances the team I have worked with have been great believers and dedicated people. I am of course referring to Ron Cross the concept founder, Ken Page and Paul Riley a fellow Director, as well as those who have contributed in particular ways. We are where we are now because of their dedi-cation and I look forward as no doubt we all do, to the realisation of Ron’s work which has taken some years of per-severance and courage for which he is to be admired.

Colin Coverdale Chairman MERV Marine Limited

L to R Mike, Andrew, Jason, Robyn, Kathie not showing, Ken and David. Attending but out of the photo are Anders and Lorraine.

Photo taken by Lorraine of Ken speaking to MERV supporters.

A comment to Ron was, ‘we have invested because we believe in your dream and have absolute faith in your ability to succeed’.

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MERV Marine Limited

MERV Workboat

Newsletter Last quarter 2012

News & facts about

MERV and the Marine Environment

Industry

Australia MERV Marine Ltd

Forest Lake Queensland

Canada

MERV Marine Canada Toronto Ontario

United States

MERV Marine USA Corporate Pascagoula Mississippi

MERV Marine USA

Development Morgan City Louisiana

Contact

Product / Sales

Ron Cross ron@merv-marine.com

Business / Finance

Ken Page ken@merv-marine.com

Australian

Management Colin Coverdale

Paul Riley

“At last we dare to hope, now that we are seeing how that success can happen”

Well how refreshing it is to see the things we have worked so hard for in recent years now starting to bear fruit. I don’t need to re-iterate what has already been said in respect of Ron’s American sojourn – he will reveal the detail of his many positive achievements in engaging serious US expertise and interest in the Merv Marine concept.

A year ago, mired in negative perceptions of our direction, we fought to convince detractors and supporters alike that despite some well publicised setbacks we were still working and confident that the concept would succeed.

While many still believed in the Oil Spill recovery concept – we were never short of advice (all well meaning of course) on how to make it work. Strangled by the perception that we had stalled and it should have been “done and dusted” by now, we struggled to make our first vessel an Australian reality and to convince people we knew how to. I never imagined it would be easy but needed to conceal my own doubts and weaknesses under the weight of such negative perception.

Not so for Ron Cross; founder, believer and builder of visions; his seemingly in-exhaustible supply of belief and tenacity was fuelling a change of strategy. A quick sidestep around the Australian-based set-backs to hook up in the States where he said the grass was greener; he had done it before and we would do it again. 8 months later – a new direction, and a renewed hope of success. At last we dare to hope, now that we are seeing how that success can happen.

I would like to thank Ken Page and Colin Coverdale in their respective roles for their superb support of Ron; Ken for packing up and going to the US to support and assist Ron directly in the last few months and Colin for assiduously attending to matters of corporate legislature at home and explaining how the proposed cor-porate structures will work within the law.

I look forward to working with Ron, Ken and Colin to build the Australian Com-pany Merv Marine Ltd in the next 12 months. Our success will now be predicated on the US Company Merv-Marine USA who will launch and pioneer the first full-scale Merv; as fate would have it at the site of the first oil rig ever built, now a museum, ironically within sight of MERV’s new offices in Morgan City Louisiana.

We look forward to Ron’s address to the AGM on the 23rd

November and to a more prosperous year in 2013.

On behalf of all of who kept the bench warm in Oz while Ron was in the US I would like to thank him once again for showing the way and never giving up and also special thanks to our Victorian investors who financed the US trip at a time when we were running low on funds, faith and goodwill.

Paul Riley, Director, Merv Marine Limited

From Director of MERV Marine Limited Paul Riley

In this photo I am showing

MERV Marine Limited

Directors Colin

Coverdale and

Paul Riley the Drawings

of the first American de-signed MERV

to be built at Swift Ships and exported World Wide.

Colin Coverdale, Paul Riley Ron Cross

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Below are the management of Swift Ships, MDG and MERV Marine after our meeting

In the glass case is a Navy ship built here at Swift Ships, you can see their life boat launch at the back. They have an impressive record of innovation in the Marine Industry, an example, they developed MIG welding for Aluminum in the 50’s. Swift Ships were interested in what I was showing them from the start, a very good sign in business. In this photo Calvin LeLeux and Ron Cross shake hands with Jeff LeLeux behind, sealing their agreement to work together with MDG to bring MERV to the world. With us from Ron left to right are: Terry Dover SS, Dan Gifford MMUSA, Chris Gunter MDG, David Rothbart MMUSA, Gary Stansbury SS

Marine Development Group, MDG, are a small but strong com-pany of Naval Architects and Partners in Florida, Connecticut, Venezuela and England. Chris Gunter heads the Morgan City branch and is our direct contact, Simon Dreher is working with our project, George von Fedak heads the Venezuelan office.

1. The first need in America was to find a good, capable and honest Naval Architect

When Ken and I first met with Chris and George it was easy to see we would be compatible, we all have ground breaking ideas and needs and they have worked in similar areas and build great innovative ships. Including oil spill recovery ones.

For the last few weeks Chris and I have worked on the plans based on the re-search I did and how he can turn those ideas into our multi purpose MERV, We did many whiteboard drawings and notes and now CAD drawings for Swift Ships to build our MERV’s from.

We were discussing how SS would be able to build multiple boats at once so Chris showed this chart of the Swift Ships number 2 ship yards on the Teche River.

The chart shows the layout of the south fabrication building at the bottom with MERVs in different levels of construction. The top building is fitting and finishing, a large yard for storage of completed MERV’s, and an Administration office building.

On the river is a boat launching ramp and docks on a secluded section of the Teche river, just perfect to do our sea trials.

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Page

From Swift Ships WebPages: Swiftships has a long history of designing and building the most reliable mid-sized vessels in the world. Known for workmanship of the highest quality, shipping vessels from Swift-ships continue to play a vital role in military and commercial applications around the globe.

Established in 1947 as Sewart Seacraft, the company adopted the Swiftships name in 1969 to herald the production of hundreds of Swift Boats deployed by the US Navy for combat during the Vietnam era. Over the course of the last 63 years, Swiftships has produced thousands of hulls, incorporating over 125 pro-prietary designs for 41 global customer nations.

In these competitive times, Swiftships continues to provide its customers with world-class products, con-sistently exceeding all quality & satisfaction requirements.

2. The second need in America was to find a good, capable and honest Shipbuilder

Below are photos when Gary showed us their Swift Ships Site 2 yard on the Bayou Teche River in Louisiana

The Swift Ships Site 2 is used for overflow jobs from the Morgan City shipyards, but we plan to build all of our MERVS there and when busy enough we will try to have the whole yard for MERV’s.

It’s a big property with large buildings, here are the photo notes: 1. The South Fabricating Building is partly partitioned, partly open 2. The layout Jig from the last job is still bolted to the floor. 3. The property backs onto the Teche river with a boat ramp 4. The North Building is for finishing, with a boat trailer still there 5. At the back there is a large office building, with the river behind

One of the advantages of this location is the secure launch ramp and trial area, this can be seen on Google Earth at:

29 58’ 20.00 N and 91 44’42.00 W

I had almost given up finding a suitable shipyard in the south when one of our new shareholders Bob Parker said he knew a very good one, in Morgan City. He arranged a meeting, and I visited them a few times, each time becoming more sure that they would be our builders. When I told them that I did not have a good Naval Architect they suggested I meet Chris and George from MDG. So all of this progress is the result of a meeting I had at the Clean Gulf Conference in San Antonio, Nov 2011.

Swift Ships are world class builders specialising in aluminum boats of every size and all types as seen below. 115 ft Patrol Boat 175 Crew Supply 53 ft Pilot Boat

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MERV Milestones over the last couple of years, by Ron Cross

I was invited to speak at the prestigious Clean Gulf Conference, San Anto-nio Texas, the Paper was well received, MERV began the move to America.

Results from this talk were meetings with the Oil Spill Response School in Corpus Christi, with oil industry names like BP, Chevron, Clean Harbors, US Coast Guard, all wanting info and now waiting to try our first MERV.

At the Last AGM I reported that we were now in the position to take MERV world wide, instead of building one in Australia and selling off that.

After the AGM a few of Australian investors financed our move to the USA.

March 2012, I moved to the USA. I needed to find the best location to settle and where I found the Navel Architect and Ship Builder would select that.

I researched from Vancouver to Boston where I met Erik Kent, to Corpus Christi and settled in the central Gulf coast in Mississippi where we began our formal company move. Erik offered to help with our fabricating needs.

Formed MERV Marine USA Inc in Mississippi to work as Americans

June 2012, met Swift Ship in Louisiana and saw they were just what I was looking for, an honest family company with great history and skills.

Ken Page came over to help me.

Aug 2012, Swift Ships Introduced us to Chris and George of MDG.

Sept 2012, Traded letters of intent with Swift Ships and MDG.

All agreed on contract and I gave MDG payment to do American drawings.

Sept 2012, Had Board room meeting with Swift Ships, MDG, MERV, all agreed to work together to develop and bring MERV to the world.

Chris of MDG asked me if we wanted offices in their new building, we moved in the next week and now have bases in 2 states, 3 countries and Swift Ships also has a world wide agent system. We need that in place when we launch and turn on our Web pages and begin producing MERV’s

The 25 ft MERV we have begun will become our demonstration model, but we will very quickly build in Australia and Canada and abroad.

Pa

An interesting aside to all of this is our new office location. As you see by this report below it took some time with lots of twists and turns to meet with Chris and be offered an office at 506 First Street, Morgan City.

This is how I explained our journey from a start-up Austra-lian company in Forest Lake Qld to Mr Charlie, Louisiana.

I first met Wayne at the Clean Gulf conference last year, who introduced me to Bob in Lafayette who introduced me to Jeff, Terry and Gary and Swift Ships, they introduced us to MDG and the Naval Engineers Chris, George and Simon.

We had worked all morning on the MERV design at our new Morgan City offices that they so graciously offered us, and were talking about how I wanted a MERV for oil rigs and Chris said, 'do you know you can see the very first off shore oil rig ever built, right here in Morgan City'? We walked out front and he pointed out the derrick peering over a building.

The first off shore oil rig ever built, Mr. Charlie is now a Mu-seum, you can see it from the front of our offices.

Could there be any better sign that we have found the right people to bring MERV to the world with and the best base for us in the USA, than to be near this historic site.

The very first off shore oil rig was build right here in Morgan City. They call it ‘Mr Charlie’ and it is now a museum, you can walk there from the MERV Marine USA Morgan City Louisiana offices.

Ken, Erik, Lorraine and I

Our Board Room, love that map

Who is Mr Charlie?

Ken, Erik and Chris

Gary, Chris and David

Simon, Ken, Chris, and Erik