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| PRESS RELEASE |
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WAVEFRONT TECHNOLOGY SOLUTIONS INC. |
For Immediate Release: |
Wavefront Announces Second Quarter Results Cautionary
Disclaimer – Forward Looking Statements THE TSX VENTURE EXCHANGE NEITHER
APPROVES NOR DISAPPROVES THE CONTENTS OF THIS RELEASE WHICH WAS PREPARED
SOLELY AT THE DISCRETION OF MANAGEMENT
EDMONTON, Alta., April 29, 2010/ Wavefront Technology Solutions Inc.
(“Wavefront” or the “Corporation”, TSX-V: WEE), 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, 2010.
Revenues for the six months ended February 28, 2010 were $1,076,965, an
increase of $378,206 over the comparative period in 2009 that recognized
revenues of $698,759. The increase in revenues is primarily a result of the
continued increase in the commercialization of Powerwave and Primawave, and
increase in activity in the service, tubing pump, and bailer product lines
in Alberta.
The current strategy of providing discounts and other inducements to new
Powerwave and Primawave customers and market leaders yielded increases in
revenue of $376,152 to the Corporation’s core technologies in the first six
months of the current fiscal year. The Corporation will continue to offer
rapid installation incentives and other inducements to have the current back
log of 110 Powerwave license/rental contracts installed. The timing of the
installations of the back log remains beyond the Corporation’s control. Once
Powerwave installations occur the Corporation can recognize associated
revenue and begin invoicing its clients.
The Corporation’s expenses through the six month period were $4,173,784
compared to $4,938,439 for the comparative period in 2009.
The basic and diluted net loss for the six months ended February 28, 2010
was $3,096,819 ($0.04 per share), compared to $4,239,680 ($0.06 per share)
for the comparative period of February 29, 2009.
Total assets decreased by $2,256,777 to $22,220,823. The decrease was
primarily due to a decrease of $2,774,785 in cash that was used to fund
operations and the manufacturing of Powerwave and Primawave systems.
As at February 28, 2010, the Corporation had a working capital of
$12,378,190. The Corporation believes that its working capital position will
decline despite having a significant increase in the number of Powerwave
contracts in-hand as Wavefront cannot control or dictate the installation
schedules.
During the second quarter of fiscal 2010, Wavefront continued to make
strides with its Powerwave and Primawave product lines with its sales and
marketing efforts in Canada, the United States, Mexico, and internationally.
Operational highlights of the second quarter of 2010 also included:
* Expansion of the Powerwave program that has been running approximately 2.5
years in eastern Alberta. The expansion provides that Wavefront will
initially provide a minimum of 35 to 50 additional Powerwave systems.
Approximately two-thirds of those systems are slated for the existing
eastern Alberta operations, with the balance in two new oil fields operated
by the same client.
* The continued growth of Powerwave single well stimulations in Alberta,
California and Alaska by Wavefront and it licensed agents.
The continued adaptation of Powerwave and Primawave as well as the
resurgence of the Alberta market for the tubing pump and bailer product
lines bode well for the Corporation’s financial outlook” said Wavefront
President and CEO Brett Davidson. “In the Eastern Alberta project the
Corporation has thirty-four tools installed. The primary importance for the
Corporation is to expedite the installation of the back log of Powerwave
tools slated for installation at other clients’ locations. We anticipate
many of those tools to be installed shortly.”
Subsequent to the quarter ended February 28, 2010 and an update to the
Corporation’s news release of April 26, 2010, Wavefront closed a brokered
private placement consisting of 10,438,170 units at a price of $2.10 per
unit for gross proceeds of $21,920,157. The Offering was led by Casimir
Capital LP, and included Haywood Securities Inc (the “Agents”). Each unit
consists of one common share (“Share”) and one-half of one non-transferable
share purchase warrant. Each whole warrant (the “Warrant”) entitles the
holder to purchase an additional common share at a price of $2.75 per share
for 12 months expiring on April 27, 2011, subject to an accelerated expiry
date; commencing on August 27, 2010, if the volume weighted average trading
price of a Share on the TSX Venture Exchange, or any other stock exchange on
which the Shares are then listed, is at a price equal to or greater than CAN
$3.15 for a period of more than 20 consecutive trading days, Wavefront will
have the right to accelerate the expiry date of the Warrants by giving
written notice to the holders of the Warrants that the Warrants will expire
on the date that is not less than 30 days from the date notice is provided
by Wavefront to the holder of the Warrant. In connection with the private
placement, a cash agent’s fee of 8%, totalling $1,736,813 was paid. In
accordance with securities legislation currently in effect, the securities
issued will be subject to a “hold period” of four months plus one day from
the date of closing, expiring August 27, 2010.
The offered securities, noted above, will not be registered under the United
States Security Act of 1933, as amended, and may not be offered or sold in
the United States absent registration or an applicable exemption from such
registration requirements. This news release shall not constitute an offer
to sell of an offer to buy the offered securities in any jurisdiction.
Mr. Davidson further commented, “We continue to follow an aggressive
expansion plan and a strong balance sheet will aid that growth. The
Corporation has reached agreements with Agent representatives in the United
Arab Emirates and Qatar. We anticipate establishing offices and personnel in
the Middle East, South America and the North Sea region to more effectively
market and deploy Powerwave. Positive traction has been established with
representatives of the OPEC nations and confirmation of Powerwave
stimulation and/or waterflood programs in areas such as Colombia, Argentina,
Oman, United Arab Emirates, Ecuador, Indonesia, as well as the North Sea
Region is expected in the near term.”
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, 2010, which was filed on SEDAR on April 29, 2010.
For further information please contact:
D.
Brad Paterson, CFO
780-486-2222 ext. 224 Tel
investor.info@onthewavefront.com
On behalf of the Board Of Directors, Wavefront Energy & Environmental
Services Inc.
“D. Brad Paterson” (signed)
D. Brad Paterson, CFO and Director
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.