Pulse Seismic Inc.

Pulse Seismic Inc.

June 25, 2007 23:59 ET

Pulse Data Inc. Rejects Quantum Yield Offer

CALGARY, ALBERTA--(Marketwire - June 25, 2007) - The Board of Directors of Pulse Data Inc. (TSX:PSD) ("Pulse" or the "Company") has reviewed and considered the offer of Quantum
Yield Inc. ("Quantum") dated June 19, 2007 to acquire all of the common shares
of Pulse in exchange for one debenture of Quantum with a principal amount of
$3.05 and a nominal 10 percent interest rate per common share of Pulse.
The Board of Directors of Pulse unanimously recommends that shareholders
reject the offer and not tender their shares of Pulse to the offer. In the
opinion of the Board, the value of the offer is significantly below the value
of Pulse's shares.
In addition, Pulse announces that it is making an application to the
Alberta Securities Commission (ASC) for an order to cease-trade the offer due
to incomplete and misleading disclosure to Pulse shareholders. In the opinion
of the Pulse Board of Directors, Pulse shareholders should, at a minimum,
delay making a decision in respect of the offer until after the hearing.

REASONS FOR REJECTING THE OFFER:

Important reasons for rejecting the offer are as follows:

- The offer is a 100 percent leveraged buy-out, by an issuer and
management with no material assets, no discernible positive credit
history and no track record in the seismic business, using Pulse's own
assets as security and with Pulse shareholders providing "100 percent
vendor take-back financing." Pulse shareholders would continue to have
all of the risks of the ongoing business with no influence over
Company operations, while Quantum would gain exposure to all of the
upside.

- Quantum's statements that the offer represents a premium to the
trading price of the Pulse shares has no foundation. No calculable
premium is being offered, because there is no market for the
debentures in order to assess their price. Quantum's statements that
the debentures represent a premium to Pulse's book value are
irrelevant and misleading.

- Pulse currently has approximately $36 million outstanding in a secured
term loan. Under the term loan agreement, a change of control of Pulse
without the lender's prior consent is an event of default which
entitles the lender to accelerate the debt, demand repayment and
realize upon their security. It is unknown what the position of
Pulse's lender would be to a highly leveraged acquisition of Pulse.
Should the lender demand repayment, Quantum has no funds or disclosed
plan on how to repay this debt.

- To use the free cash flow of Pulse in order to pay interest on the
debentures, Quantum indicates that it intends to amalgamate with
Pulse. Pulse's loan agreements restrict amalgamations without the
lenders' prior written consent. It is unknown what the position of
Pulse's lenders would be to an amalgamation, and Quantum has no
disclosed plan to replace or repay the loan.

- The description of the debentures is highly misleading:

- The debentures are described as 10 percent debentures. In fact, the
interest payable under the debentures is not fixed at 10 percent
but is variable based upon the free cash flow of Pulse, with a cap
of 10 percent and with a right to defer any unpaid portion below
the cap;

- The debentures are described as having security over all of the
assets of Pulse. In fact, the debentures cannot be secured with
those assets, since Pulse has already granted security over all of
its assets to its existing lenders; and

- The debentures are described as retractable. In fact, the
debentures may not be retracted by the shareholders, but the
debentures may be redeemed by Quantum at any time without bonus or
penalty.

- Quantum is highly leveraged. It is a 100 percent debt-financed
start-up company, with no shareholders' equity, no revenues and no
assets.

- Pulse shareholders would exchange a liquid, listed, dividend-paying
common share for an illiquid unrated debt security. Pulse has paid
16 consecutive quarterly dividends including two increases to the
quarterly dividend rate per share and currently pays an annual
dividend of $0.15 per common share.

- There is no tax-free rollover. Pulse shareholders may have to try to
sell an illiquid debt security in order to pay taxes on the exchange
of their shares.

Shareholders are encouraged to read the more detailed explanation of
reasons for the Board of Directors of Pulse rejecting the offer attached
to this news release.

SIGNIFICANT SHAREHOLDERS NOT TENDERING TO THE OFFER:
----------------------------------------------------

To date, significant institutional shareholders and the directors and
officers of Pulse, representing in total more than 50 percent of the
outstanding shares of Pulse (calculated on a diluted basis), have indicated to
Pulse that they will not be tendering their shares to the offer. The offer is
conditional upon at least 66-2/3 percent of the outstanding shares (calculated
on a diluted basis) being deposited to the offer. Pulse expects that this
condition will not be met.

APPLICATION TO THE ALBERTA SECURITIES COMMISSION:
-------------------------------------------------

The Board of Directors of Pulse has been advised by external legal
counsel that the offer contains serious deficiencies under applicable
securities laws, resulting in incomplete and misleading disclosure to Pulse
shareholders. Pulse is making an application to the ASC for an order to
cease-trade the offer. The date for the hearing of this application has not
been set. Pulse recommends that, at a minimum, shareholders delay making any
decision in respect of the offer until after the hearing.

BUSINESS PLAN AND CORPORATE UPDATE:
-----------------------------------

The Board of Directors and management of Pulse are committed to a
business plan focussed solely on the seismic data library business. The
Company is well-positioned in this business with an experienced management
team, a top-performing sales force and an excellent reputation within the oil
and gas industry. Our long-life seismic data assets, which are very difficult
and expensive to replicate, generate attractive cash margins and free cash
flow. Furthermore, management sees strong opportunities for growing the
seismic data library through both strategic, high-quality seismic data
acquisitions and participation surveys to acquire new data. In that regard,
Pulse is continually pursuing and reviewing data acquisition opportunities. In
addition, Pulse will commence a significant 3D seismic participation survey in
July in the Deep Basin area of west-central Alberta comprising approximately
150 square kilometres of 3D data. Pulse expects to obtain at least 65 percent
pre-funding for this survey with delivery of the data to the participants by
the end of Q3 2007.

As previously announced on March 5, 2007 the process for the disposition
of Pulse's Terrapoint business unit is continuing on schedule. There has been
significant industry interest in Terrapoint. Confidentiality agreements have
been executed with 14 interested potential purchasers who are reviewing
Terrapoint's information and conducting due diligence. Under the schedule,
initial expressions of interest will be solicited early in Q3 2007, and the
disposition of Terrapoint is targeted for completion by the end of Q3 2007.

Upon completion of the Terrapoint disposition, Pulse will have a total of
approximately 25 employees and expects to achieve a significant reduction in
general and administrative expenses. Pulse can continue to grow the seismic
business without any significant increase in the number of employees or
general and administrative expenses for the foreseeable future.

GEORGESON:
----------

Pulse has engaged Georgeson Shareholder Communications Canada Inc. to act
as information agent on behalf of Pulse, to assist Pulse in informing
shareholders as to the views of the Board regarding the Quantum offer.
Shareholders of Pulse should contact Georgeson if they have any questions
regarding the offer at:

Georgeson Shareholder Communications Canada Inc.
100 University Avenue
11th Floor, South Tower
Toronto, Ontario
M5J 2Y1

North American Toll Free Number 1-888-605-7616

DIRECTORS' CIRCULAR:
--------------------

Pulse believes that as a result of the material disclosure deficiencies
in the Quantum offer, it is unable to fully address all of the inadequacies
and risks associated with the offer. Accordingly, Pulse is applying to
cease-trade the offer, as noted above. Subject to the ruling of the ASC, Pulse
will in due course mail to the shareholders its Directors' Circular in
response to the offer, in accordance with applicable securities laws. Pulse
recommends that shareholders not make a decision in respect of the offer until
such time as the Directors' Circular has been received and considered by them.

Disclaimer: Certain information contained herein may constitute
forward-looking statements under applicable securities laws. Such statements
are subject to known or unknown risks and uncertainties that may cause actual
results to differ materially from those anticipated or implied in the
forward-looking statements. Investors are encouraged to review the "Risk
Factors" section of the Management's Discussion and Analysis in the Company's
most recent Annual Report and interim reports for a discussion of risks that
could affect the Company's operations and financial results. Forward-looking
statements are based upon management's assumptions, expectations and estimates
at the time that such statements are made. Pulse does not update
forward-looking statements should circumstances change or management's
assumptions, expectations or estimates change, unless required by law.

ATTACHMENT TO PULSE DATA INC. PRESS RELEASE OF
JUNE 25, 2007

DETAILED EXPLANATION OF REASONS FOR PULSE REJECTION
OF
QUANTUM YIELD OFFER
-------------------

The Board of Directors of Pulse Data Inc. ("Pulse" or the "Company") has
reviewed and considered the offer of Quantum Yield Inc. ("Quantum") dated
June 19, 2007 to acquire all of the common shares of Pulse in exchange for one
debenture of Quantum with a principal amount of $3.05 and a nominal 10 percent
of interest rate per common share of Pulse. The Board of Directors of Pulse
unanimously recommends that shareholders reject the offer and not tender their
shares of Pulse to the offer.

Important reasons for the Board's recommendation are as follows:

1) In the opinion of the Board, the $3.05 nominal amount of the offer is
significantly below the value of the Pulse shares in a change of
control transaction. In particular, the $3.05 nominal amount does not
adequately take into account the significant free cash flow per share
generated by the seismic data operations of Pulse, or the fact that
upon completion of the announced disposition process for the
Terrapoint business, free cash flow from the seismic data operations
will not continue to support those operations.

2) In the opinion of the Board, the paper consideration offered in the
form of the debenture is extremely risky and has an intrinsic value
considerably below $3.05 per share for reasons including the
following:

- The offer is a 100 percent leveraged buy-out, using Pulse's own
assets as security and with Pulse shareholders providing
"100 percent vendor take-back financing." Quantum is adding no
asset value. Pulse shareholders would continue to have all of the
risks of the ongoing business with no influence over operations,
while Quantum would have access to all of the upside;

- Quantum's statements that the offer represents a premium to the
trading price of the Pulse shares has no foundation. No calculable
premium is being offered, because there is no market for the
debentures in order to assess their price. Quantum's statements
that the debentures represent a premium to Pulse's book value are
irrelevant and misleading;

- Quantum and its management have no discernible positive credit
history or track record in the seismic business;

- The debentures have not been rated by any rating agency;

- Quantum is 100 percent debt-financed. It has no material
shareholders' equity ($90.00 on its balance sheet) and no equity
is added as a result of the offer. Quantum plans to issue further
debt of up to $155 million in connection with the offer;

- An acquisition of control of Pulse by Quantum without the consent
of Pulse's lenders is an event of default under Pulse's
outstanding term loan in the principal amount of approximately
$36 million. It is unknown whether Pulse's existing lender would
be prepared to continue the loan on the same terms in such a
highly leveraged structure. Quantum's Circular does not disclose
any plan to replace this indebtedness or to handle this repayment
which, if not made, could put Pulse into receivership or
bankruptcy and seriously impair the value of the shares of Pulse
then held by Quantum and the ability of Quantum to pay interest on
the debentures;

- To use the free cash flow of Pulse in order to pay interest on the
debentures, Quantum indicates that it intends to amalgamate with
Pulse. Pulse's loan agreements restrict amalgamations without the
lenders' prior written consent. Again, it is unknown what the
position of Pulse's lenders would be to an amalgamation, and
Quantum has no disclosed plan to repay or replace the loans;

- The pro forma income statement contained in Quantum's Circular has
not adjusted interest expense to provide for any interest on the
debentures, nor has it increased depreciation as a result of
Quantum writing-up the value of the assets of Pulse by
approximately $110 million in conjunction with the offer. The
pro forma income statement includes the one-time, non-recurring
writedown of some of Terrapoint's assets in 2006 of $5.6 million
after tax. Based on the information in respect of Quantum
contained in its offer circular, Pulse calculates that the correct
pro forma loss is approximately $27.7 million, which is
considerably greater than the $3.3 million pro forma loss
disclosed in the offer circular;

- The offer circular does not provide a calculation of earnings
coverage with respect to the debentures. Pulse calculates that the
pro forma earnings coverage for interest on borrowed indebtedness
including the debentures is negative, with a deficiency in
pro forma earnings coverage of approximately $27.7 million before
payment of the interest of $17.3 million on existing Pulse
indebtedness and on the debentures offered to shareholders and
before income taxes;

- Quantum is a start-up company, has no revenue to date, has just
recently acquired a 10-year licence for certain technology in
exchange for a $5 million fee with the first $500,000 due in
December 2007, has borrowed $200,000 which is repayable with
interest in December 2007 and appears to have borrowed further
funds to pay for the costs of the offer which it estimated to be
$650,000. The aforementioned technology appears to come from an
associated company which has owned it for six years. No
information is given as to how Quantum intends to develop its
business relating to the licensed technology, other than through
Pulse and there is no assurance that the licensed technology will
be of any incremental value to Pulse's seismic data business. It
is not clear how Quantum can pay the licence fee or its
indebtedness (except with Pulse's money); and

- As the terms of the debentures provide that "free cash flow" must
be first applied to pay current and accrued interest on the
debentures, if there is limited or insufficient free cash flow, it
is not clear how Quantum will be able to finance the growth of the
seismic data business.

3) The terms of the debentures are unattractive as stated and misleading
and unclear in many significant respects, including the following:

- The designation of the debentures as "10 percent secured,
retractable debentures" is highly misleading as the debentures do
not have a 10 percent fixed yield, are not retractable, and cannot
be secured with the assets of Pulse;

- The interest of 10 percent is not a fixed rate but is a cap on
interest paid. The debentures are a participating debt instrument
with variable interest paid depending on free cash flow subject to
a cap of 10 percent. The calculation of free cash flow and exactly
how this works is unclear;

- There is no compound interest payable on deferred or unpaid
interest on the debentures;

- Pulse shareholders will give up the potential upside in Pulse's
business, including the potential for increases in the dividend
and, as the only assets underlying the debentures are Pulse's
assets, remain exposed to the downside risk in Pulse's business;

- The debentures are not retractable at the option of the holder of
the debenture (as described above), but are redeemable at any time
at the option of Quantum. If Quantum's future financial
performance was strong, the debentures could be redeemed early.
The offer circular does not specify the redemption price;

- With the non-material shareholders' equity in Quantum, the Quantum
shareholders have all the upside and the debenture-holders have
virtually all of the risk;

- As mentioned above, all of the assets of Pulse are currently
subject to security in favour of Pulse's current lenders, and are
not available to provide security for the debentures;

- Pulse's shareholders have voting rights as shareholders in Pulse,
but as debenture-holders to Quantum they would not have any voting
rights in Quantum;

- The debentures are subordinate to senior indebtedness, but no
definition is given for senior indebtedness, and the terms of
subordination are not described;

- The events of default under the debentures are not described; and

- The covenants and negative covenants of Quantum under the
debentures are not described.

4) The debentures would be illiquid. There would be no market for the
resale of the debentures and the debentures are not freely tradeable
under Canadian securities laws. Sellers of the debentures would need
to use a prospectus or privately place the securities using an
exemption from the prospectus requirements. There is no assurance
that a listing could be obtained or that a market would develop.

5) There would be limited financial and other continuous disclosure
information available to debenture-holders regarding Quantum and
Pulse. Quantum is not a reporting issuer and Quantum plans to cause
Pulse to cease to be a reporting issuer.

6) There is no tax-free rollover for tax purposes under the offer. The
sale of Pulse shares for Quantum debentures is a taxable transaction
for Canadian and United States residents, but shareholders would not
receive any cash to pay their taxes and the debentures would be an
illiquid security. Canadian residents may be required to pay taxes on
accrued, deferred interest on the debentures even though the interest
had not been paid to them.

7) The offer provides that Quantum is entitled to all dividends paid
after the date of the offer, and this would include the dividend paid
on June 20 by Pulse to shareholders of record on June 6. It may be
the case that shareholders would have to pay the dividend to Quantum
and, accordingly, any assessment of the value of the offer should
reduce the value by $0.0375 per share.

Having carefully considered the Quantum offer circular, having sought
outside legal advice, and having developed the aforementioned analysis
concerning the deficiencies of the Quantum offer, the Board of Directors of
Pulse unanimously determined on June 22, 2007 to reject the offer and to urge
the shareholders of Pulse not to tender their shares to the offer.

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