Free Energy International Inc.
TSX VENTURE : FFX

Free Energy International Inc.

May 18, 2011 16:21 ET

Free Energy Announces Second Quarter Operating Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 18, 2011) - Free Energy International Inc. ("Free Energy" and/or the "Company") (TSX VENTURE:FFX) today announced its consolidated operating and financial results for the three and six month periods ending February 28, 2011.

For the three-month period ending February 28, 2011, Free Energy reported no revenue compared with revenues of $4,925 for the same period last year. The net loss for the period was $281,856 or ($0.02) per share versus a net loss of $160,581 or ($0.01) per share for the same period last year.

For the six month period ending February 28, 2011, Free Energy reported revenues of $65,511 compared with revenue of $50,227 for the same period last year. The net loss for the period was $459,285 or ($0.04) per share versus a net loss of $325,236 or ($0.03) per share for the same period last year.

The following table sets forth a comparison of revenues, earnings, major expense category for the quarter ended February 28, 2011:

Three Months EndedSix Months Ended
February 28, 2011February 28, 2010February 28, 2011February 28, 2010
Sales$-$4,925$65,511$50,227
Cost of Sales-1,59940,65738,950
Gross Profit-3,32624,85411,277
Expenses
Research and Development44,69912,19458,16840,484
Marketing and Promotion4,8518,8795,27916,295
Stock Compensation38,829-38,829-
Expense
Amortization2,041-4,082-
General and Administrative118,75088,301222,464202,89
8
Net loss before other items(209,170)(106,048)(303,968)(248,400)
Other items
JV Investment Valuation Adj.--(10,000)-
Interest expense(75,668)(54,533)(150,787)(81,544)
Interest income2,982-5,4704,708
Net loss for the period(281,856)(160,581)(459,285)(325,236)
Basic and diluted loss per share$(0.02)$(0.01)$(0.04)$(0.03)

The Company was delinquent in filing its interim financial statements and interim management discussion and analysis for the period ending February 28, 2011. The Company underwent a transition of its Chief Financial Officer (CFO) during the second quarter of 2011. In addition, the new CFO underwent a family emergency which caused a delay in the release of the Company's interim financial statements. As a result, the Company's shares were suspended from trading. The Company takes its financial reporting obligations seriously and believes this will not occur again. The Company has made application to have the Company's shares resume trading.

About Free Energy International Inc.

Free Energy International Inc. is a British Columbia corporation with its head office in Vancouver, British Columbia. The Company is listed on the TSX Venture Exchange as a Tier 2 company. The Company has a total of 13,102,526 common shares issued and outstanding, of which 3,780,000 shares are subject to escrow arrangements.

Additional information on Free Energy may be found on SEDAR at www.sedar.com or the Company's website at www.freeenergysolutions.ca.

ADVISORY: This press release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the forgoing, these statements concerning the anticipated closing date of the Placement, the anticipated use of the net proceeds of the Placement and all statements in the first two paragraphs of "About Free Energy International Inc" are forward looking statements. Although Free Energy believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because Free Energy can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The closing of the Private Placement could be delayed if Free Energy is not able to obtain the necessary regulator and stock exchange approvals on the timelines it has planned. The Placement will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied. Accordingly, there is a risk that the Placement will not be completed within the anticipated time or at all. The forward looking statements contained in this press release are made as of the date hereof and Free Energy undertakes no obligations to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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