Kelso Technologies Inc.: August 31, 2012 Fiscal Year End Results

VANCOUVER, BRITISH COLUMBIA and LISLE, ILLINOIS--(Marketwire - Dec. 17, 2012) - Kelso Technologies Inc. (the "Company" or "Kelso") (TSX VENTURE:KLS)(OTCQX:KEOSF) -

The Company reports that it has released its financial reports for the year ended August 31, 2012.

HIGHLIGHTS OF FOURTH QUARTER ENDED AUGUST 31, 2012

• Quarterly revenue reaches $1,292,871 (2011 -$459,083).
• Weekly shipments average $99,452 (2011 - $35,314).
• Loss of $231,991 (2011 - $677,731) includes year end audit adjustments and accruals.
• Loss is in line with management's budgets and expectations.
• Loss includes non-cash amortization of $21,220 and share based compensation of $14,664.
• Product development finishes new #27 external pressure relief valve designed for crude oil transport.
• The #27 valve successfully passes independent engineering tests.
• The #27 valve fuels new sales for remainder of calendar 2012 at approximately $3,000,000.

HIGHLIGHTS OF YEAR ENDED AUGUST 31, 2012

• Annual revenue reaches record $2,233,807 (2011- $1,326,024).
• Gross profit maintained at 25% (2011 - 24%) on low volume production and rising commodity prices.
• Loss of $1,276,827 (2011 - loss of $1,463,869) is in line with management budgets and expectations.
• Loss includes amortization of $45,031, stock based payments of $71,132 and foreign exchange fluctuation costs of $75,587.
• Working capital at August 31, 2012 was $1,422,376.
• Earnings improve to a loss of $0.04 per share in 2012 compared to $0.05 per share in 2011.
• Exercise of warrants and options generate $841,040 in new equity capital during fiscal year.
• Company remains debt free.

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL RISKS

At August 31, 2012 the Company had cash on deposit in the amount of $2,582; accounts receivable of $877,526; HST receivable of $26,577; prepaid expenses of $82,999 and inventory of $1,196,465 compared to cash on deposit of $1,457,934; accounts receivable of $337,562; HST receivable of $92,551, prepaid expenses of $45,755 and inventory of $251,171 at August 31, 2011.

The working capital position of the Company at August 31, 2012 was $1,422,376 which includes $16,362 due to related parties compared to a working capital position of $1,916,036 which includes $17,000 due to related parties at August 31, 2011. At August 31, 2012, the Company has no long-term liabilities.

Subsequent to the year ended August 31, 2012 Kelso successfully closed a non-brokered private placement in the amount of US$1,197,000 on September 28, 2012 to adequately finance rapid sales growth.

OUTLOOK

Over the past two years we have accessed development capital; improved our business reputation; developed our modern production infrastructure; gained required regulatory approvals; executed our marketing initiatives; and commenced distribution of our products in growing numbers to key North American rail tank car manufacturers, shippers of hazardous materials and many retrofit/repair businesses.

We continue to build the quality of our brand in the railroad industry. Success relies on our ability to develop, engineer, reliably supply and service our "best technology" product solutions that address the demanding technology criteria of our railroad customers. We are very confident that we have gained their confidence, approval and their willingness to adopt our products.

Although we have many challenges ahead of us we are extremely bullish about the market outlook for our products. We look forward to the growth of our sales volume in both the railroad industry and new markets over the upcoming years. Delivery schedules for our products from September to December 31, 2012 (new fiscal year-end) have reached approximately $3,000,000.

Sales orders are currently being negotiated with key customers for delivery in 2013. Management remains confident that the steady growth in product adoption rates demonstrated by key customers in 2012 will continue in 2013.

About Kelso Technologies

Kelso is a railroad equipment supplier that produces and sells proprietary tank car components used in the safe loading, unloading and containment of hazardous materials during transport. Products are specifically designed to provide economic and operational advantages while reducing the potential effects of human error and environmental harm during the transport of hazardous materials.

For a more complete business and financial profile of the Company, the financial statements and management discussion and analysis can be viewed in their entirety on the Company's website at www.kelsotech.com or www.sedar.com.

On behalf of the Board of Directors,

James R. Bond, CEO and President

Legal Notice Regarding Forward-Looking Statements: This news release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Forward-looking statements are indicated expectations or intentions. Forward-looking statements in this news release include that we are very confident that we have gained the confidence, approval and willingness of our customers to adopt our products; that sales orders are being negotiated with key customers for delivery in 2013; and this sales growth trend will continue in 2013. The Company's products involve detailed proprietary and engineering knowledge and specific customer adoption criteria, hence factors that could cause actual results to be materially different include that we may be unsuccessful in raising any additional capital needs that may arise; we may not have sufficient capital to develop, produce and deliver new orders; product development may face unexpected delays; orders that are placed may be cancelled; delivery of orders may be rescheduled; product may not perform as well as expected; markets may not develop as quickly as anticipated or at all; and operations may run into permit, labor or other problems. Further, we are reliant on certain key employees who may leave the Company and we may be unable to protect or defend our intellectual property. Investors are cautioned against placing undue reliance on forward-looking statements. We assume no responsibility to update these forward looking statements except to the extent required by law.