WebTech Wireless Inc.
TSX : WEW

WebTech Wireless Inc.

October 29, 2007 08:55 ET

WebTech Wireless to Restate Unaudited Q2 and Q3 Results

No Impact to Net Income as Restated Revenues Were Previously Written Off

BURNABY, BRITISH COLUMBIA--(Marketwire - Oct. 29, 2007) - WebTech Wireless Inc. (TSX:WEW) (the "Company"), a leading supplier of mobile telematics, announces that it will restate its unaudited second and third quarter FY 2007 financial statements, and that the restated unaudited financial statements, together with the Company's audited financial statements for the fiscal year ended July 31, 2007 will be released after the close of markets on Monday, October 29, 2007 as previously announced.

The restatement relates to previously reported revenue from the Company's former Value Added Reseller in Brazil, Crown Telecom and the write-off of that revenue. The effect of the restatement on the reported Net Income of the Company is nil.

The board of directors of the Company took the decision to restate the unaudited financial statements for the second and third quarters on the recommendation of management and the auditors for the Company following a review conducted in the course of the annual year-end audit.

In December 2006, the Company received orders for its products from its Value Added Reseller ("VAR") in Brazil, Crown Telecom, who at the time was known to require financing. The Company provided a loan of up to US$12 million to its VAR (the "Loan"), and provided various other forms of assistance. The proceeds from the Loan were used by the VAR to pay the Company for the products delivered. The Company understood that the VAR had sold a substantial portion of the products to a third party, that it had been paid for those sales, and that it would be collecting monthly service revenues from its customers. As such, the Company believed that the VAR was capable of servicing its debt and paying for product shipped. In the course of Q3 it became apparent that the VAR would not be able to pay the entire amount owed to the Company, and ultimately in the financial results for the quarter ended April 30, 2007, the Company wrote down the Loan and determined that accounts receivable from the VAR would be uncollectible. The decision to write off the amounts owing as uncollectible was ultimately made after certain financing alternatives available to the VAR expired as previously announced on May 11, 2007.

As a result of a number of factors, including the fact that the VAR failed to pay for product shipped to it, including product reported as paid for with the amounts borrowed under the Loan, the Company has determined that the better view is that the Company should not recognize the revenue from any sales to the VAR in the second or third quarter. The Company has further concluded that revenue from this VAR in the first quarter was properly recognized. The Company had already determined not to recognize certain revenue from the VAR in Q3.

As a result of the restatement, unaudited Q2 and Q3 revenue will be significantly reduced, however in light of the fact that the entire amount of the Loan, together with the receivable from the VAR had already been written down in Q3, the effect of restatement on the reported Net Income of the Company is nil.

The Company will be filing its audited financial results for fiscal year 2007 today, October 29, 2007 and will be holding a conference call at 5 PM Eastern Time to discuss the results. A recording of the conference call will be posted on the Company's website within 24 hours of the call at www.webtechwireless.com. Interested parties may participate in the call by dialing 1-877-331-7860 or 416-620-2418 (international callers). For further details, please view the Company's financial statements and management's discussion and analysis at www.sedar.com.

About WebTech Wireless Inc.

WebTech Wireless Inc. (TSX:WEW) is a global Telematics, location-based services provider that develops, manufactures, and delivers turnkey wireless solutions designed to improve productivity and profitability. WebTech Wireless products include wireless hardware and software services running on cellular and satellite networks, and include Automatic Vehicle Location, Mapping, Reporting, Vehicle Diagnostics, Driver Status, In-vehicle Telemetry, Messaging, In-vehicle Navigation, and wireless application and Internet connectivity. WebTech Wireless is currently providing devices and services worldwide in eight languages to over forty-one countries covering five continents. WebTech Wireless' scalable solutions are used by a broad range of small, medium and Fortune 500 companies and by governments. For more information, please visit www.webtechwireless.com.

Forward Looking Statements

This press release contains forward-looking statements involving risks and uncertainties pertaining to, but not limited to product plans, timing, content, and pricing of products, market and industry expectations, the wireless communications industry, the mobile fleet industry, and general economic and political conditions. Given the risks and uncertainties inherent in the markets and industries referred to in this press release, WebTech Wireless cannot guarantee that any forward looking statements will be realized.

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.

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