Wavefront Technology Solutions Inc.

Wavefront Technology Solutions Inc.

April 29, 2009 23:59 ET

Wavefront Technology Solutions Inc. Second Quarter Results

EDMONTON, ALBERTA--(Marketwire - April 29, 2009) - Wavefront Technology Solutions Inc. ("Wavefront" or the "Corporation") (TSX VENTURE:WEE) (PINK SHEETS:WEESF), a leader in technology development and implementation for improved oil recovery and optimized groundwater remediation announces its financial and operating results for the second quarter ended February 28, 2009.

During the second quarter of fiscal 2009, the Corporation revenues related to the tubing pump and bailer product lines decreased due to economic and commodity price conditions. However, with certain oil producers' desire to replace or increase production, this decline was offset by increases in Powerwave revenues as well as increases in Primawave revenue in the environmental sector. The Corporation anticipates securing additional contracts for Powerwave and Primawave as positive outcomes are disseminated to the user community.

Revenues for the six months ended February 28, 2009 were $698,759, an increase of $71,655 over the comparative period in 2008 that recognized revenues of $627,104. The increase in revenues relate primarily to the interest generated from the investments of cash from prior periods private placements, and growth in the commercialization Powerwave and Primawave technologies.

The basic and dilute net loss for the six months ended February 28, 2009 was $4,239,680 ($0.06 per share), compared to $2,145,810 ($0.04 per share) for the comparative period of February 29, 2008. During the first quarter ended November 30, 2008, there was a material decline in commodity prices. The Corporation recorded a write-down of its Rogers County oilfield property, plant and equipment and intangible assets by $1,689,148 (representing a basic and diluted loss per share of $0.024 per share). No write-down was provided for in the second quarter ended February 28, 2009.

The basic and diluted net loss, before the extraordinary non-cash write-downs of property, plant and equipment and intangible assets, for the period ended February 28, 2009 was $2,550,532 ($0.036 per share), compared to $2,145,810 ($0.041 per share) in 2008. The increase in losses, before the extraordinary non-cash write-downs of property, plant and equipment and intangible assets, of $404,722 was primarily from:

- General and administrative expenses increased due principally to increased wage, office, and consultant expenses. The increases reflect increased sales personnel and personnel required for Powerwave and Primawave training and installations. Although the Corporations business model is not to be a services company, as the Powerwave and Primawave systems are designed for end-customer "plug and play", it is believed that ensuring proper initial installation and operation of Powerwave and Primawave systems will warrant greater customer acceptance of the technologies and provide long-term strategic value.

Increases in consulting expense relate to using external resources to develop a new wireline deployable Powerwave tool. This new Powerwave tool is deployed in a well by simply lowering it through the injection tubing and securing it to the end of the tubing using readily available oilfield equipment thereby reducing installation cost, which should reduce barriers to the adaptation of Powerwave. Additionally, during the quarter the Corporation completed the development of a new Primawave tool. The new Primawave tool is a rotary, surface-mounted tool that permits the Corporation to market across the entire remedial injection spectrum. Manufacturing costs of the new Powerwave and Primawave tools are expected to be lower than the current proven and established versions. Both new tools have been successfully field-deployed.

- Increases in stock based compensation due to increased volatility in the financial markets that affect the valuation of such stock options, and the prior period's stock options being predominately expensed.

- Increases in selling and marketing expense as the Corporation expanded its sales network focusing on the United States southeast and west coast locations, and as it continues to provide strategic Powerwave customers inducements to enter into long-term contracts and for rapid installation. In order to control cost, any additional expansion of sales efforts will be through agents in key international and domestic territories.

Offsetting the above noted increases were gains in foreign currency translation of US dollar denominated expenses, assets and liabilities related to the devaluation of the Canadian dollar against the United States dollar.

Total assets decreased by $3,989,021 to $27,939,706. The decrease was primarily due to a decrease of $3,820,993 in cash that was used to fund working capital and for the purchase of property, plant and equipment. Assets were also affected by the Corporation's Acquisition of Predator Pumps Ltd. that was completed on January 31, 2009 (which increased its property, plant and equipment by $213,490), its decision to write-down its oilfield related property, plant and equipment and Royalty Rights in the prior quarter.

As at February 28, 2009, the Corporation had working capital of $18,298,819. The Corporation believes that its working capital position will continue to decline despite having a significant increase in the number of Powerwave contracts in-hand, as the Corporation continues to assemble an inventory of Powerwave and Primawave systems (that are categorized as non-current assets) in advance of installing and the commencement of billing of Powerwave clients that have executed contracts in-hand. The Corporation cannot control the installation rate of such Powerwave systems, which is dictated by the oil producers, who often want such installations to occur when other work is being performed on the well targeted for the Powerwave installation.

The Corporation continues believe that lower commodity prices may also force certain producers to look at alternatives to replacing produced reserves, which may be favorable to the adaptation rate Corporation's Powerwave technology. However, the Corporation is not immune to the global economic conditions that continue to deteriorate, inclusive of increases in United States and Canadian unemployment rate, or the volatility in the commodity markets and foreign exchange rates. As a result, the Corporation undertook certain cost cutting measures to ensure that its labour force was in line with the current economic environment.

The above financial highlights should be read in conjunction with the unaudited consolidated financial statements and management discussion and analysis of results for Wavefront's most recently completed quarter, ended February 28, 2009, which was filed on SEDAR on April 28, 2009.

The Corporation would like to update the market on Primawave results reported in an earlier release dated April 20, 2009. As reported the two acre former industrial site in New Jersey was being redeveloped for residential use and had high concentration levels of chlorinated and non-chlorinated organic compounds which required treatment. The schedule called for rapid remediation of the contamination with minimal impact to adjacent property owners. New information provided to the Corporation indicates that Primawave resulted in an overall project cost saving $US176,100 or 44% in remedial costs ($US401,500 to $US225,400). The client is now employing Primawave at another high profile site in New Jersey.

About Wavefront Technology Solutions Inc.

Wavefront specializes in designing and developing leading-edge techniques for oil well stimulation, improved oil recovery, and environmental groundwater remediation.



D. Brad Paterson, CFO & Director

Cautionary Disclaimer - Forward Looking Statements

Certain statements contained herein regarding Wavefront and its operations constitute "forward-looking statements" within the meaning of Canadian securities laws and the United States Private Securities Litigation Reform Act of 1995. All statements that are not historical facts, including without limitation statements regarding future estimates, plans, objectives, assumptions or expectations or future performance, are "forward-looking statements". In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue" or the negative of these terms or other comparable terminology. We caution that such "forward-looking statements" involve known and unknown risks and uncertainties that could cause actual results and future events to differ materially from those anticipated in such statements. Such factors include fluctuations in the acceptance rates of Wavefront's Powerwave and Primawave Processes, demand for products and services, fluctuations in the market for oil and gas related products and services, the ability of Wavefront to attract and maintain key personnel, technology changes, global political and economic conditions, and other factors that were described in further detail in Wavefront's continuous disclosure filings, available on SEDAR at www.sedar.com. Wavefront expressly disclaims any obligation to up-date any "forward-looking statements", other than as required by law.

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