Fiber Optic Systems Technology, Inc.

Fiber Optic Systems Technology, Inc.

March 17, 2005 09:00 ET

FOX-TEK Announces Results For Year End 2004


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: FIBER OPTIC SYSTEMS TECHNOLOGY, INC.

TSX VENTURE SYMBOL: FOX

MARCH 17, 2005 - 09:00 ET

FOX-TEK Announces Results For Year End 2004

TORONTO, ONTARIO--(CCNMatthews - March 17, 2005) - Fiber Optic Systems
Technology, Inc. (TSX VENUTURE:FOX)(the "Company" or "FOX-TEK"), a
developer of patented fiber optic sensing products, today announced its
consolidated financial results for the quarter and year ended December
31, 2004.

2004 Financial Highlights

FOX-TEK's cash position increased to $3.2 million at December 31, 2004,
from $77,000 at December 31, 2003, primarily due to its receipt of $2.8
million in net proceeds from a private placement of 6.6 million special
warrants in March 2004 and the issuance in October 2004 of 5.5 million
common shares in an initial public offering for net proceeds of $2.3
million. FOX-TEK's working capital increased to $3.1 million compared
with a deficit of $91,000 in 2003; the Company has no debt, compared to
convertible debentures of $801,000 at the end of 2003.

"These financings reflect a strong sign of confidence from the investor
community that our proprietary technology is scientifically sound and
has readily apparent real world applications, especially in the oil and
gas industry," said Gary W. Jolly, President and CEO, FOX-TEK. FOX-TEK
commenced trading on the TSX Venture Exchange under the symbol "FOX" on
October 22, 2004. At year end, there were approximately 24 million
shares outstanding.

For the year ended December 31, 2004, the net loss increased to $2.2
million from losses of $1.4 million in the year ending December 31,
2003. The higher loss reflects the overall costs associated with the
beginning of the Company's commercialization stage and the significant
costs associated with being a reporting issuer. Consequently, increased
spending on staffing and patents in research and development ($827,000
in 2004 compared with $692,000 in 2003); higher sales activities
generated increased expenses for selling ($334,000 in 2004 compared with
$108,000 in 2003) and related professional and IR fees in general and
administrative activities ($911,000 in 2004 compared with $452,000 in
2004).

The Company had modest revenues of $49,000 from product sales in the
2004 year as its investment in marketing efforts targeted at the oil and
gas industry are in the early stages of delivering returns.

More details are contained in the Company's related SEDAR filing.

Oil and Gas Industry Focus

FOX-TEK's near term plan is to focus its sales and marketing activities
on the oil and gas industry for which its fiber optic sensing products
are uniquely suited.

"As part of our continuing strategy in the oil and gas industry, FOX-TEK
is currently in discussions with numerous owners or operators of
refinery, pipeline and bitumen processing projects", said Mr. Jolly.
"These discussions relate to initial on-site trials for FOX-TEK's
products and to test new applications for our technology."

FOX-TEK continues to expand its strategic relationships on a global
basis. FOX-TEK has entered into an agreement with Al-Yusr Townsend &
Bottum Co. Ltd. (AYTB) which has been appointed as the exclusive agent
to provide installation, training and maintenance services for FOX-TEK's
products in Saudi Arabia. AYTB is part of the AYTB Group of Companies
that provides engineering, procurement, construction and related
services to the oil and gas industry and other major industrial sectors
in the Gulf region of the Middle East.

About Fiber Optic Systems Technology

Established in 2000, FOX-TEK has developed patented fiber optic sensing
products that deliver a cost-effective solution for companies to
continually monitor their critical infrastructure and detect and prevent
high-consequence or catastrophic occurrences. The company's primary
market is the global oil and gas industry, for the monitoring of
pipelines and refineries. In addition to its monitoring systems, FOX-TEK
delivers a full range of professional services to its customers,
including engineering design services, training, supervision of on-site
installation and turnkey fiber optic sensing systems. FOX-TEK is
headquartered in Toronto, Ontario and is traded on the TSX Venture
Exchange under the symbol "FOX".

This press release contains forward looking statements based on
assumptions, uncertainties, and management's best estimates of future
events. Actual results may differ materially from those currently
anticipated. Investors are cautioned that such forward-looking
statements involve risks and uncertainties. Important factors that could
cause actual results to differ materially from those expressed or
implied by such forward looking statements are detailed from time to
time in FOX-TEK's periodic reports filed with the Ontario Securities
Commission and other regulatory authorities. FOX-TEK has no intention or
obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.



Canadian office: US Office:
Fiber Optic Systems Technology, Inc. Fiber Optic Systems Technology
4580 Dufferin Street, Suite 402 850 Penns Way
Toronto, Ontario West Chester, Pennsylvania
M3H 5Y2 19382
Telephone: 416.665-2288



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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Fiber Optic Systems Technology, Inc.
    Gary Jolly
    President and Chief Executive Officer
    gjolly@fox-tek.com
    http://fox-tek.com
    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.