SOURCE: INFRAX Systems, Inc.

February 24, 2011 08:00 ET

Infrax Systems (IFXY) Reports Quarterly Results

Company Continues Path to Secure the Smart Grid

ST. PETERSBURG, FL--(Marketwire - February 24, 2011) - Infrax Systems, Inc. (OTCBB: IFXY), a global provider of unified Smart Grid-related products and services for the Energy and Utility industries, announced today the filing of its Quarterly Report on Form 10-Q with the SEC for the quarter ending December 31, 2010 reporting an increase in revenues and invoiced orders compared to the second quarter in 2009.

"We continued to focus on our Smart Grid product development and field trials during the quarter and are pleased with our progress. The response of Utilities to our security focus continues to validate our direction," said Paul J Aiello, President and CEO of Infrax. "As the future nature and composition of the "Smart Grid" continues to evolve, it is clear that Security is a critical component that is often overlooked. The Infrax Secure Intelligent Energy Platform has been designed to secure not only data generated, but also the communications infrastructure and meter devices. We continue to believe that the Security of the Energy Grid is a matter of National Security."

Operationally, Infrax conducted interoperability testing with a variety of communications devices, began utility field trials and entered into a Technical Information Licensing Agreement with ITRON, a leading smart meter manufacturer. Additionally, Infrax launched the UMAX+, a wireless communications device which provides Ethernet and T-1 handoffs for substation applications enabling Utilities to meet mandated requirements.

Financial Information, Results of Operations
The loss reported in the six months ended December 31, 2010 in the amount of $1,244,253. This amount included non-cash charges to operations for depreciation and amortization in the amount of $673,985 and stock-based compensation of $58,000. Costs incurred during the six month period included costs associated with the Trimax acquisition, which includes legal, audit, as well as duplicated functional salaries and inherited consulting contracts. Due to the consolidation of corporate expenses, reduction in redundant personnel, and the one-time nature of acquisition costs (audit, legal, stock registrations, etc.), we anticipate a significant reduction of our future expense flow.

Additionally, in December 2010, the Company had received signed statements of work which potentially will generate $946,251 of revenue. Of these signed contracts no revenue has been recognized, as commencement on these projects had not begun until after our report date. We have received $93,431 in January 2011 on these contracts. Due to the uncertainty of the amount of the final contract, $852,820 was reserved until cash is received. The latter contract has not been recognized or treated as a deferred revenue due to the advanced planning that is required and industry knowledge that modifications are common and amounts, unless significant cash deposits occur, may differ significantly; therefore contract prices are not fixed or determinable. We anticipate finalization of these contracts and other high probability contracts to close in the coming quarters.

With pending contracts at our prevailing margins, we anticipate that our Company will reach a positive cash flow operating profit for the coming quarters. 

Subsequent Events
The Company is currently in merger or acquisition negotiations with entities which management believes to be key components of the Smart Grid solutions we envision. Management believes that acquisitions will be a catalyst for advancing the Company's existing technology to attain greater market share. We are currently in valuation negotiations with the targeted companies; acquisitions will be primarily share exchanges. Additionally, we are seeking capital financing for the purposes of furthering our plan of operations. These negotiations have not advanced, at this point, to an issuance of a letter of intent; however management believes this ongoing strategy will best serve existing shareholders.

The Company has been approached as a potential target for acquisition. Preliminary discussions were brought to the attention of the Board of Directors. Although negotiations have not advanced, we believe that those discussions were validation of our technology. Management and the Board of Directors are aware of our position and potential of our technology and will consider any offer that increases shareholder value.

"Going forward, Infrax will continue to focus on completing the previously announced acquisitions of Broadband Holdings and Lockwood Technology, both of which will provide Infrax with additional product offerings for our utility customers," added Aiello.

A more detailed description of Infrax's business, our results of operations and financial statements are contained in the Quarterly Report on Form 10-Q filed with the SEC on February 22, 2011.

About Infrax Systems
Infrax Systems offers a series of interrelated operational management, communications, and grid security related products and services known as Secure Intelligent Energy Platform (SIEP). Our products enable a comprehensive and unified solution for communications and applications management of the Smart Grid. SIEP™ incorporates a wide array of communications, security, device and data management tools for Smart Grid applications such as advanced metering solutions and grid optimization. SIEP platform creates a unified solution to securely manage Advanced Metering Infrastructure (AMI) and distribution automation. Infrax's secure smart grid platform, incorporates a communications transport and management system, (Grid Mesh™), device and data security management, and ultimately secures intelligent endpoint devices (SIED). The secure management of the "last mile" backhaul will be necessary for utilities to implement Smart Grid applications including AMI, real-time pricing, Demand Side Management (DSM), Distribution Monitoring and Automation. When combined, these applications can offer economic, operational and environmental benefits for utilities, and ultimately the utility's customers.

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Forward-Looking Statements
This press release may contain forward-looking statements covered within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among other things, plans and timing for the introduction or enhancement of our services and products, statements about future market conditions, supply and demand conditions, and other expectations, intentions and plans contained in this press release that are not historical fact and involve risks and uncertainties. Our expectations regarding future revenues depend upon our ability to develop and supply products and services that we may not produce today and that meet defined specifications. When used in this press release, the words "plan," "expect," "believe," and similar expressions generally identify forward-looking statements. These statements reflect our current expectations. They are subject to a number of risks and uncertainties, including, but not limited to, changes in technology and changes in pervasive markets.

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