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					                                                                                                                                      Siddharth Rajeev, B.Tech, MBA
                                                                                                                                                             Analyst

                                                                                                                                                Kevin Liu, BBA, BSc
                                                                                                                                                  Research Associate

Investment Analysis for Intelligent Investors
                                                                                                                                                      March 25, 2008
Sonic Technology Solutions Inc. (TSXV: SNV) –Initiating Coverage; Advancing new applications in the
energy and materials sectors

Sector/Industry: Energy/Sonic                                                                                                                     www.sonictsi.com
Market Data (as of March 25, 2008)                                                          Investment Highlights
 Current Price                C$0.25
 Fair Value                   C$1.37                                                         S n ’ pt t e nl y a t aait f ee t g n si-
                                                                                             oi s a n dt ho g hsh cpb i o gnr i i uta
                                                                                                   c      ee c o                    e        ly           an d r l
 Rating*                       BUY                                                            scale sonic energy. SonoprocessTM t ho g s r t w r ’fsad
                                                                                                                                      c oe e e
                                                                                                                                    e nl i a h ol sitn        d r
 Risk*                   4 (Speculative)                                                      only use of large-scale sonic energy in industrial applications.
 52 Week Range           C$0.23 –  C$0.65                                                   Sonic commercialized its technology in the environmental sector in
 Shares O/S                 41,324,068                                                        2006, by developing a process for the remediation of soil and waste.
 Market Cap                C$10.33 mm                                                       2007 was a turn around year for the company, as it moved from a
 Current Yield                 N/A                                                            company purely focusing on the environmental sector, to a company
 P/E (forward)                 N/A                                                            that has the potential to enter several other markets at the same time.
 P/B                           1.13                                                         Sonic is now actively focusing on using sonic energy to enhance
 YoY Return                   -45.7%                                                          recovery of oil sands, upgrade heavy oil, and process fly ash for use as a
 YoY TSXV                     -21.3%                                                          substitute to cement. In addition to cost-savings, the application of the
*see back of report for rating and risk definitions                                           SonoprocessTM technology will also lead to lower greenhouse gas
    2,800,000                                                             1.20
                                                                                              emissions.
                                                                                             In
                                                                                             order to get a perspective on the potential market size, if Sonic breaks
    2,100,000                                                             0.90
                                                                                              into the energy and materials sectors, we estimate that a 1% market
                                                                                              share of the global market for heavy oil upgrading and fly ash sectors
                                                                                              would translate into annual revenues of $65.70 million and $111.72
    1,400,000                                                             0.60
                                                                                              million, respectively, for Sonic and its partners.
                                                                                            
                                                                                             Sonic has a partnership with Shell Canada to implement their
      700,000                                                             0.30
                                                                                              technology in the oil sands industry. The next 12 months promises to be
                                                                                              an exciting period for the company and their partners as they confirm
             0                                                            0.00                the viability of the SonoprocessTM technology in the energy and
          26-Mar-07         25-Jul-07        23-Nov-07          23-Mar-08                     materials sectors, and progress their projects to commercialization.
 F in a n c ia l S u m m a r y (Y E D e c 3 1 )
 (C $ )                                     2005                     2006                  2007E                   2008E
 R evenue                         1 ,1 1 4 ,4 3 9          1 ,6 6 5 ,7 0 6         1 ,4 8 6 ,9 6 0         1 ,6 3 5 ,6 5 6
 G ro s s M a rg in                   - 7 2 .7 0 %           - 1 1 0 .0 7 %            - 4 7 .7 2 %            - 2 5 .0 0 %
 N et In co m e                 ( 6 ,2 0 6 ,4 4 5 )      ( 7 ,2 9 9 ,3 2 8 )     ( 4 ,6 9 2 ,4 9 1 )     ( 4 ,1 8 1 ,6 3 6 )
 E P S (b a s ic )                        ( 0 .4 1 )               ( 0 .3 2 )               ( 0 .1 1 )              ( 0 .1 0 )
 C ash                            1 ,9 4 7 ,8 0 2          1 ,7 5 1 ,9 0 8            9 7 0 ,4 1 3               8 9 ,0 3 3
 A s s e ts                    1 1 ,0 0 2 ,4 9 1        1 0 ,7 7 4 ,6 0 5          9 ,3 3 3 ,0 2 1         8 ,2 9 4 ,5 2 1
 D e b t to C a p ita l*                1 1 .1 3 %                0 .0 0 %                3 .5 5 %                3 .7 6 %
 ROE                                        -9 1 %                  -5 7 %                  -5 2 %                  -5 8 %
 R O IC                                     -8 1 %                  -5 7 %                  -5 1 %                  -5 6 %

 * In c lu d e s o n ly le a s e o b lig a tio n s ; th e c o m p a n y d o e s n o t h a v e a n y in te re s t p a y in g d e b t


Sonic Technology Solutions Inc., based in Vancouver, Canada, has a patented technology to generate industrial-scale sonic energy.
Sn ’ pt t SonoprocessTM technology i t w r ’ fs ad ol i utal-scale sonic generator technology. After
    c
 oi s a n d ee                                     e      d r
                                               s h ol s i t n n n s i       y d r
successfully commercializing its technology in the environmental sector, the company is now actively trying to commercialize the
 e nl y pla o i t nryhay i n o ad) n t a r lsectors.
  c o s i i                  e                 l
t ho g’ap ct n n h eeg (ev o ad isns ad h m t i s     l             e ea

2008 Fundamental Research Corp.                                                                   www.researchfrc.com                       Siddharth Rajeev, B.Tech, MBA


                              PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Siddharth Rajeev, B.Tech, MBA          Sonic Technology Solutions Inc. –Initiating Coverage                        Page 2


Company            Sonic Technology Solutions Inc., based in Vancouver, Canada, owns the intellectual
Overview                  t gs          e      d r
                    rpr i t o h ol s it n n e nl y o ee t n si-scale sonic
                   poe yr h t t w r ’ fs adol t ho g t gnr ei utay c o              a d rl
                   energy. Although sonic energy has been used in the past to enhance several physical,
                   chemical and biological processes, applications on large-scale process were limited, as
                                                              f cv o e iet h o pn’ ui e n
                                                               f i            fi .
                   existing technologies were neither cost-e et enr fc n T ecm ays n u ad           q
                   innovative SonoprocessTM technology, we believe, has significantly increased the potential
                   of applying sonic energy in large-scale industrial processes.

                   The company has already proved the viability of their SonoprocessTM technology in the
                   environmental sector by developing a process for the remediation of soil and waste. The
                   Sonic Treatment System (the system used for environmental applications) is now considered
                   one of the most sustainable solutions for polychlorinated biphenyl (PCB) contaminated site
                   remediation, and the technology is licensed in Canada, Japan, Australia and Mexico (PCB is
                   considered one of the 12 most persistent organic pollutants by the UN Stockholm
                   convention).

                   After their success in the environmental sector, the company is now actively focusing on
                   commercializing its technology in the following three sectors - a) use of sonic energy to
                   enhance recovery of oil sands, b) upgrading heavy oil, and c) processing fly ash (one of the
                   residues generated in the combustion of coal) for use as a substitute to cement. The chart
                    e w hw a u m r fh o pn’cr n fcs r s
                      o                   y     e
                   bl so s sm a o t cm ays ur tou a a.          e           e



                                                        (Develops and holds all
                                                          SonoprocessTM IP)


                       Sonic Environmental
                          Solutions Inc.                                                               Fly Ash
                                                     
                                                    100% owned
                                                     
                                                    Partnership with Shell –                  
                                                                                              100% owned
                     
                     100% owned                     entered into a three phase                 of focp t e
                                                                                              ‘ro o cnets g
                                                                                                P                 ’a
                                                     development program                       
                                                                                              Application –
                     
                     Considered one of the                                                                   condition
                      most sustainable solutions    
                                                     Application – enhance oil                 fly ash to substitute
                      for PCB contaminated           sands recovery                            cement in concrete;
                      site remediation                                                         lower cement
                     
                     Commercialized                      PetroSonic Energy                    production results in
                      application                            Systems Inc.                      lower CO2 emissions
                      
                     Licensed technology in         
                                                    40% owned                                
                                                                                               Seeking a JV Partner
                      Canada, Japan, Australia       
                                                    Application –  upgrading
                      and Mexico                     heavy oil
                                                    
                                                     Plans to install a pilot plant
                                                     in 2008
                   Sonic protects its intellectual property through international patents for its sonic generator
                   technology. 2007 was a turn around year for the company, as it moved from a company
                   purely focusing on the environmental sector, to a company that has the potential to enter
2008 Fundamental Research Corp.                       www.researchfrc.com                      Siddharth Rajeev, B.Tech, MBA

                 PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Siddharth Rajeev, B.Tech, MBA          Sonic Technology Solutions Inc. –Initiating Coverage                      Page 3


                   purely focusing on the environmental sector, to a company that has the potential to enter
                   several other markets at the same time. In 2007, Sonic announced their partnership with
                   Shell Canada to implement their technology in the oil sands industry, and joint ventured with
                   PetroSonic Energy Systems to pursue their technology in improving the existing processes of
                   upgrading heavy oil. The next 12 months promises to be an exciting period for the company
                   and their partners as they confirm the viability of the SonoprocessTM technology in the
                   energy and materials sectors, and progress their projects to commercialization.

History              h cm ay a fudd n ee br 02 s S n ni n et S l i sn. f rc
                   T e o pn w sone i D cm e 20 a “oiE v om n l o t n Ic a e     r        a uo           ” t
                   it acquired the intellectual property rights to its sonic generator technology. In order to
                   further develop the technology for use in environmental applications, the company acquired
                   three companies, namely SESI System Inc., Contech PCB Containment Technology Inc.,
                   and Terra-Kleen Response Group Inc.

                   In June 2007, the company changed its name to Sonic Technology Solutions Inc. to reflect
                   the fact that their technology has several other industrial applications, in addition to its
                   application in the environmental sector.

                   Sonic currently has 11 employees. Insiders own approximately 5.4%, and institutions (RAB
                   Capital Plc and Mavrix Fund Management Inc. are the top two holders) own approximately
                                                                      c sa s r ur t r i n h
                                                                       ’      e e el an
                   32% of the total number of outstanding shares. Soni s hr a cr n yt d go t              e
                   TSX Venture Exchange (TSXV: SNV) and the Frankfurt Stock Exchange (FDZ.GR).

                   Before taking a look at the various applications of the technology, we believe, it is essential
                                                                       h o pn’ n vt e n n u
                                                                        e
                   that investors get a clear understanding of t cm ay i oav ad ui es n i                     q
                   SonoprocessTM technology.

 ois
S nc ’             Although Sonic energy has been proven to be beneficial in the past for many chemical,
SonoprocessTM      physical or biological processes, the use of sonic energy in large-scale process applications
Technology         were limited until now. High-frequency ultrasound has been used in the past for various
                   applications, but they did not provide the robustness, economics and industrial capabilities
                    h oi s e nl y a rv e n h et et n e a
                     a       c c o                      d
                   t tS n ’ t ho g cn poi .I t nx sco,w t eal k a hw t
                                                                 e           i          k       o
                                                                                               o to h          e
                                           TM
                     m ay oorcs
                             s
                   co pn’S npoes technology generates intense sound energy.

                   Principle: The SonoprocessTM technology is based on the very simple phenomenon that
                   when objects are driven into their natural resonance frequency, they have the potential to
                   generate significant amounts of energy that can even be destructive. When objects are driven
                   into their natural frequency (the frequency at which a system naturally vibrates once it has
                   been set into motion), they fall into resonance - a tendency to oscillate at maximum
                   amplitude. When objects oscillate at high amplitude, they cause the air around them to move
                   and thereby, generate sound energy. At resonance, even small periodic forces can produce
                   large amplitude vibrations.

                   An example will help readers attain a better understanding. Tap a fork and hold it over the
                   opening of a can as shown below. One can notice that the sound gets louder when the fork is
                   held closer to the can opening.
2008 Fundamental Research Corp.                       www.researchfrc.com                    Siddharth Rajeev, B.Tech, MBA

                 PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Siddharth Rajeev, B.Tech, MBA           Sonic Technology Solutions Inc. –Initiating Coverage                      Page 4




                   This phenomenon is called resonance. In this case, the can acts like a resonating chamber.
                   The vibrating tuning fork held near the opening causes the can and the air in the can to
                   vibrate, and the sound becomes intensified and amplified.

                                        oi se nl y s ae o t u n ok xm l l sa d bv.
                                          c c o                          e ng
                   Sonic Generator: S n ’t ho g ibsd n h t i fr ea p iut t aoe           e l re
                   Instead of using a tuning fork, Sonic generator technology drives a 14-foot long bar,
                   weighing 2.8 tonnes, into resonance (shown below). Sonic energy from the bar, when
                   transmitted to a closed chamber (like the can in the above example), is significantly
                   amplified. When materials are pumped into this closed chamber, they are subject to intense
                   agitation and vibration. This agitation action can be used to break up materials, grind
                   particles, enhance chemical reactions, emulsification, etc.




                                                Source: Sonic Technology Solutions

                   The steel bar is driven into resonance by electromagnetism. The unit is activated by a series
                   of low-frequency pulses, which is taken through large magnets (at the two ends of the unit)
                   and into the steel bar (14 inches in diameter). As varying current flows through the magnets,
                   it forces the bar to vibrate at its natural resonance. It is estimated that the intensity of the
                   sonic energy produced by the bar when transferred to a reaction chamber is at least 10
2008 Fundamental Research Corp.                        www.researchfrc.com                    Siddharth Rajeev, B.Tech, MBA

                 PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Siddharth Rajeev, B.Tech, MBA           Sonic Technology Solutions Inc. –Initiating Coverage                      Page 5


                   sonic energy produced by the bar when transferred to a reaction chamber is at least 10
                   times more powerful than conventional industrial mixing systems.

                                     ai l , oi s e nl y a e sd o n rcs h i l s
                                        cl          c c o
                   Applications: B s ay S n ’ t ho g cnb ue fraypoest t no e                        a vv
                   energy-intensive separation, grinding or mixing, and therefore, the technology has very wide
                   industrial applications. The major applications of industrial scale sonic energy that have
                   currently been identified are as follows.

                   Energy –
                               High intensity sound energy can be used to improve existing technologies used
                     to upgrade heavy oil, and to enhance oil recovery by displacing bitumen from oil sands
                   Material –
                                Process waste to valuable products. This application has two advantages –   1)
                     it helps cut greenhouse gas emissions and waste in the environment; 2) by converting
                     waste to valuable products, the technology increases the marketability and value of
                     waste. Sonic is currently focusing on conditioning fly ash (one of the residues generated
                     in the combustion of coal) to substitute cement in concrete.
                   Environmental treatment –Sonic energy can be used to remove persistent organic
                   
                     pollutants (POPs) that persist, and are hazardous to the environment; Sonic has already
                     proven the benefits of sonic energy in this space, and because of the advantages over
                     alternative technologies, their technology is considered one of the most sustainable
                     solutions for PCB contaminated site remediation.
                   Bio-waste and Bio-Energy treatment –This is another market, we believe, which
                   
                     offers good upside potential. Sonic energy can be used in de-watering and cell disruption,
                     and therefore, applications in pre-conditioning materials for chemical and biological
                     digesting, processing bio-product and enhance bio-oil recovery.
                   Chemical Processing –
                                             Sonic energy can be used to enhance chemical reactions.
                   Others – Processes for food emulsions, mixing, grinding, pulverization, de-
                   
                     agglomeration.

                   The fact that the company has already commercialized the SonoprocessTM technology in the
                   environmental space, we believe, indicates that the technology is feasible. Sonic is currently
                   focusing on commercializing its technology in other applications. The important thing to
                   note here is that the company does not intend to develop an alternate process for any of
                   the applications listed above, but plans to use industrial power sonic energy to improve
                   efficiencies of existing processes that will potentially lead to cost-benefits.
Low Risk        nt d f ee p g n a t g t rdc o d f et plaosS n ’ sa
                   e            on
               Is a o dvl i adm ren i poutfr ie n ap ct n, oi s t t
                                               ki s              s      fr          i i          c r egy
Business Model is to partner with suitable industry players, who in turn will work towards the development,
               marketing and commercialization of the technology for different applications. Sonic, in turn,
               will benefit by receiving licensing fees upfront, royalties from the application of the
               technology and/or through equity investments in their partners.

                   The advantage of this model is that it allows the company to focus on several
                   applications at the same time, and simultaneously reduce financial and business risks
                   for the company. For example, Sonic has licensed its Sonic Treatment Solution (for
                   environmental applications) to various partners in Canada, Japan, Australia and Mexico. The
                   partners will be responsible for further penetration in their respective markets. The advantage
2008 Fundamental Research Corp.                        www.researchfrc.com                    Siddharth Rajeev, B.Tech, MBA

                 PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Siddharth Rajeev, B.Tech, MBA            Sonic Technology Solutions Inc. –Initiating Coverage                      Page 6


                   to Sonic is that, Sonic will continue to receive royalties, typically 50% of net earnings, from
                   their partners.

                   Among the applications listed earlier, the company is currently focusing on commercializing
                   its technology in the following three sectors:

                   1. Upgrading heavy oil
                   2. Enhance oil recovery by extracting bitumen from oil sands
                   3. Condition fly ash to cut greenhouse gas emissions, and to increase the value of the fly ash
                      by making it a substitute to cement

                   The company has already progressed to the proof of concept stage and independent
                   validations for these three applications. Considering the demand for such a technology in
                   these markets, we believe that the company has significant upside potential, if and when it
                   commercializes the technology in at least one of these applications. In this report, we have
                   mainly discussed the potential of the Sonic generator technology in these applications, in
                   addition to its potential for further penetration in the environmental sector worldwide.
                   However, note that it does not in anyway suggest that the applications of the SonoprocessTM
                   technology are restricted to just these sectors.

                   Our outlook on the potential market for the SonoprocessTM technology in the energy sector
                   (heavy oil and oil sands industries) follows.

Heavy Oil and      Total heavy oil and bitumen reserves exceed conventional crude oil reserves: According
Oil Sands          to the Energy Information Association (EIA), the sum of recoverable heavy oil resources
                   (434 billion bbl) and recoverable natural bitumen (651 billion bbl) exceeds conventional
                   (light) oil reserves (952 billion bbl). The following chart presents the distribution of the
                   world's known recoverable oil resources and reserve type.
                                Distribution of the world's known recoverable oil resources
                                             and reserves by type (in billion bbl)




                                   32%                                                     Conventional (light) oil
                                                                                           reserves
                                                                       47%                 Recoverable Heavy Oil
                                                                                           Resources
                                                                                           Recoverable Natural
                                                                                           Bitumen

                                          21%
                         Source: EIA

                   According to Schlumberger (NYSE: SLB), total heavy oil and bitumen reserves account for
                   70% of the total global oil reserves. The chart below shows the regional distribution of
                   estimated technically recoverable heavy oil and natural bitumen in billions of barrel.
                   According to the EIA, South America has the largest amount of technically recoverable
2008 Fundamental Research Corp.                         www.researchfrc.com                    Siddharth Rajeev, B.Tech, MBA

                 PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Siddharth Rajeev, B.Tech, MBA                        Sonic Technology Solutions Inc. –Initiating Coverage                                                   Page 7


                   According to the EIA, South America has the largest amount of technically recoverable
                   heavy oil (265.7 billion bbl), representing about 61.2% of the world total, while North
                   America has the largest amount of technically recoverable natural bitumen (530.9 billion
                   bbl), representing about 81.6% of the world total.

                       Regional Distribution of estimated technically recoverable heavy oil and natural
                                                    bitumen in billions bbl

                                                    Heavy Oil                                                             Natural Bitumen




                               N.America     S. America   Africa     Europe                                 N.America     S. America     Africa    Europe
                               Middle East   Asia         Russia                                            Middle East   Asia           Russia




                                                                                      Source: EIA

                   Heavy oil production growth to exceed light oil production growth: According to the
                   EIA, global heavy oil production (heavy sour & high TAN) is expected to increase at a
                   compounded annual growth rate (CAGR) of 2.31% from 2005 to 2020, while world
                   production of light oil (light sweet & light sour) is expected to grow at a CAGR of only
                   1.18% during the same period. The following chart shows world oil production forecast by
                   crude oil quality.
                                             F o r e c a s t f o r W o r l d O i l P r o d u c t i o n b y C r u d e O il Q u a l i t y
                                                                     1 9 9 0 - 2 0 2 0 ( i n m i ll i o n b p d )
                      80

                      70

                      60

                      50

                      40

                      30

                      20

                      10

                       0
                                  19 90               19 95          2 00 0              2 00 5             2 01 0               20 15            20 20

                                                                      L ig h t O il        H e a vy O i l
                       S o u r c e : EIA




2008 Fundamental Research Corp.                                          www.researchfrc.com                                       Siddharth Rajeev, B.Tech, MBA

                 PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Siddharth Rajeev, B.Tech, MBA           Sonic Technology Solutions Inc. –Initiating Coverage                      Page 8


                   Alberta oil sands production is expected to increase with capital spending: The
                   Canadian Energy Research Institute estimates capital spending of $77.4 billion on oil sands
                   projects in the period 2004 to 2020 (as shown in the chart below). The chart on the right
                   shows the expected growth in oil sands production in Alberta through 2015.




Upgrading          Producing heavy oils and oil sands bitumen has been a concern for producers primarily
Heavy Oil –        because of the low recovery rates and the high costs associated with the extraction and
Expecting to       refining process. Sonic has partnered with PetroSonic Energy Systems Inc. to apply
construct a        SonoprocessTM technology in improving the efficiencies of the existing processes used to
prototype in       upgrade heavy oil, and thereby offer significant cost-benefits to producers. PetroSonic is a
2008               private company founded by CEO Dr. David Kahn who specializes in heavy oil production
                   and processing, and has worked with heavy oil companies that were acquired by companies
                   such as Ivanhoe Energy (TSX: IE), Pearl Exploration and Production Ltd. (TSXV: PXX) and
                   MegaWest Energy Corp. (OTC: MGWSF). Sonic and PetroSonic Energy entered into an
                   agreement in May 2007.

                   Heavy oil, like bitumen, is heavier and more viscous than conventional crude oil. Therefore,
                   like bitumen from oil sands, heavy oil has to be upgraded to reduce viscosity (vis-breaking)
                   to allow shipment by pipeline, and to improve quality by reducing sulphur content (de-
                   asphalting). By upgrading heavy oil, producers can receive more value for the produced oil
                   and reduce transportation costs.

                   According to the agreement, PetroSonic intends to develop a proof of concept in the first
                   phase. Preliminary results indicated that de-asphalting and vis-breaking may be possible
                   using sonic energy. Sonic announced they would advance to include third party evaluation of
                   the test results and the process economics. Following the successful completion of the first
                   stage, Sonic will have a 40% interest in PetroSonic. In the second phase, both companies
                   will work together on a prototype installation in the field. If successful, PetroSonic will have
                   the right to obtain a global license from Sonic to use the SonoprocessTM. Sonic, in addition
                   to having a 40% equity interest in the company, will also receive royalties from the
                   application of SonoprocessTM. A provisional patent application has been made.

                        S n ’oj t eso s h h
                           c   ei        g
                   Petro oi s b cv it ue i -intensity sonic energy to improve the conventional de-

2008 Fundamental Research Corp.                        www.researchfrc.com                    Siddharth Rajeev, B.Tech, MBA

                 PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Siddharth Rajeev, B.Tech, MBA          Sonic Technology Solutions Inc. –Initiating Coverage                      Page 9


                   asphalting and vis-breaking processes, and thereby reduce costs and improve the quality of
                                                                                           TM
                    i S n ’ m ngm n blvs h ,fm l et ,h oorcs
                     l      c                   i      a         e e e
                   o . oi s aae et eee t tii p m n d t S npoes technology can
                   help producers improve their netback by about $6/bbl. At crude oil prices of $80/bbl, these
                   cost cuttings reflect an improvement of 7.5% in netback. Assuming that Sonic receives
                   tolling fees of at least $3/bbl from producers in exchange for processing heavy oil, we
                   estimate, the company can generate annual revenues of about $2.19 million from a single
                   junior oil company producing at 2,000 bpd.

                   In order to get a perspective on the size of the potential market; our estimate of global
                   heavy oil production that Sonic can target is estimated at about 2.2 billion barrels per
                   year. Therefore, even a 1% market share in this space for PetroSonic would imply
                   annual revenues of $65.70 million.

Enhanced Oil   The company established their subsidiary, SonoOil, in 2006, with the objective to develop,
Sands Recovery use and market the SonoprocessTM technology in the oil sands industry.
–Partnership
with Shell     Oil sands, when mined commercially, contain an average of 10-12% bitumen, 83-85%
               mineral matter, and 4-6% water. Oil sands are typically extracted either by open-pit mining
               or in-situ recovery methods (which includes steam, chemical and solvent injection). In the
               open-pit mining method, the sands are dug up by large hydraulic and electrically powered
               shovels. The mined oil sands then undergo a hot-water process separation (water is added to
               sand and then agitated) in a separation cell to separate bitumen from sand, water and
               minerals. As a result of the high temperature and agitation, bitumen separates from the oil
               sands, and floats to the top of the separation vessel, where the bitumen can be skimmed off.
               Chemical addition, flotation and light solvent dilation are other techniques used to separate
               bitumen.

                   Recovered bitumen does not flow freely, as it is heavier and more viscous than crude oil.
                   Compared to crude oil, bitumen contains too much carbon and less hydrogen. Thus, coking
                   processes (which involves thermally cracking of the fractions) and hydrocracking processes
                   (adding hydrogen) are normally used to remove carbon from the heavy fractions of bitumen.
                                                            TM
                    oi s b cv s o s oorcs
                       c      ei
                   S n ’ oj t ei t ueS npoes to facilitate the extraction processes mentioned
                   above to improve the overall flow rates and recovery of bitumen. Sonic, with the help of the
                   Alberta Research Council (ARC), has identified the following specific applications of its
                   SonoprocessTM technology in this sector.

                   1. Extraction process of naptha and bitumen from surface mining plants
                   2. Influence viscosity by modifying the primary separation operations of surface mining
                      plants
                   3. Basic separation technologies
                   4. Diluent reduction through pipeline sonication

                   As mentioned earlier, SonoprocessTM will not replace any existing technology, but will be
                   retrofitted to existing systems to improve their efficiency. The company has completed proof
                   of principle work on an oil sands related application with the help of some financial aid from
2008 Fundamental Research Corp.                       www.researchfrc.com                    Siddharth Rajeev, B.Tech, MBA

                 PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Siddharth Rajeev, B.Tech, MBA           Sonic Technology Solutions Inc. –Initiating Coverage                      Page 10


                   the Industrial Research Assistance Program (IRAP).

                   Partnership with Shell Canada: On August 15, 2007, Sonic announced that they signed an
                   agreement with Shell Canada Energy to apply SonoprocessTM in the oil sands industry.

                   Shell Canada, one of the largest integrated petroleum companies in Canada, is one of the
                   major players in the oil sands industry. Shell, along with Chevron (NYSE: CVX) and
                   Marathon (NYSE: MRO), currently produces about 160,000 barrels per day (bpd) from the
                   Athabasca Oil Sands, and have approval to produce 470,000 bpd.

                   Both Shell and Sonic will work together in developing a process to increase efficiencies of
                   certain aspects of the Athabasca Oil Sands Prospects (AOSP) project, which is a joint
                   venture between Shell, Chevron and Western Oil Sands. We believe, the fact that Shell has
                   chosen Sonic in their efforts to increase the recovery rates of oil sands, indicates the potential
                   of industrial power sonic energy in the oil sands industry.

                   According to the agreement, the main objectives of the proposed three phase development
                   program are:

                   1. Confirm the effectiveness of SonoprocessTM on viscosity
                   2. Construct prototype equipment, and
                   3. Evaluate the pilot plant unit

                   Shell is currently conducting phase one. If results are positive, the project will move to the
                    eod hs, hn oi i o S e n ei i ad osut g p o p n S n ’
                                             c li            l        gn
                   scn paew e S n wlj n hli ds n g n cnt cn a i t l t oi s             r i       l a. c
                   capital investment in the project will depend on the results of each phase. Both companies
                   will own the project and any intellectual property created. Under the agreement, both
                   companies will equally benefit from the subsequent licensing and commercialization of the
                   process. Sonic will also benefit from sale of its sonic generators.

                    n re t rt t h o pn s cm et e oio , oi a o d c sd uh
                                    e e              e            iv
                   I odr opo c t cm ai ’ o pti psi s S n hsnt i l e m c     tn         c            so
                   information on the project. Therefore, we are not in a position to precisely quantify the
                   potential cost savings for oil sands producers from adopting SonoprocessTM. However, if
                   successful, we believe, this project will be a significant breakthrough for the entire oil sands
                   industry.

                   The third major application that the company is currently focusing on is to apply the
Conditioning       SonoprocessTM technology to condition fly ash produced from coal power plants. By
Fly Ash –          conditioning fly ash, the technology serves two purposes:
Substitute to
Cement             
                    Condition fly ash for use as a substitute to cement for concrete
                   
                    Achieve carbon credits by reducing cement production

                   It is estimated that 7% –60% of the total cement content in concrete can be replaced with fly
                   ash. However, because of its size and carbon content, fly ash is normally not used to
                   substitute cement. Currently, 65% of the fly ash in North America ends up in landfills. Sonic
                                               TM
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                   believes that SonoprocessTM can condition fly ash to achieve preferred particle size (by
                   grinding) and cut down carbon content by facilitating the separation of freed carbon from
                   ashes. By converting waste to a valuable product, we believe, SonoprocessTM has the
                   potential to generate significant interest in this sector.

                   In addition, there are benefits in using sonicated ash to cement:

                   
                    Reduce greenhouse gas emissions - Cement producers today are facing difficulties in
                     meeting market demand due to environmental concerns. Production of cement emits CO2.
                     It is estimated that 1 ton of cement generates 1.25 ton of CO2. CO2 emissions from
                     cement production are estimated to account for 7 – of total greenhouse gas emissions
                                                                         8%
                                                                            n wt l s, oi se nl y
                                                                                 h y
                     in the world from human activities. By replacing cemet i f ah S n ’t ho g  c c o
                     will help cut greenhouse gas emissions, and achieve carbon credits.
                   
                    Adding fly ash reduces permeability of concrete, thereby increasing durability and
                     strength.
                   
                    Cheaper than cement: It is estimated that the value of fly ash as a substitute for cement
                     ranges between $70 and $100 per tonne, which is relatively lower than the price of
                     cement.

                   Partnership with Natural Resources Canada - Sonic has previously worked with Canmet
                   (a research and development arm of Natural Resources Canada) on the conditioning of fly
                   ash from fluidized bed coal fired power stations to achieve carbon credits. Preliminary work
                   on the study gave positive results, and indicated the feasibility of this project.

                   Sonic has filed a preliminary patent application for this process, and as a result, they received
                   financial aid from IRAP. Just like the energy sector, Sonic is seeking potential partners to
                   commercialize their technology in this sector.

                   Strong Global Cement Consumption Forecasts: According to a report by Ocean Shipping
                   Consultants Ltd. (OSC), world production and consumption of cement increased 633 million
                   tonnes during the period between 2001 and 2005, with almost 70% of this overall growth
                   (440 million tonnes) coming from East Asia alone, and 76 million tonnes from other Asian
                   countries. Based on the OSC report, world consumption of cement is forecast to continue to
                   increase, from 2.28 billion tonnes in 2005, to around 3.13 billion tonnes by 2015, and 3.56
                   billion tonnes by 2020. The following graph shows the increasing trend of cement
                   consumption (in million tonnes).




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                                                                           Source: Ocean Shipping Consultants Ltd.


                   The OSC report expects global cement consumption to grow approximately 19.75% in 2005-
                   2010, slowing to 14.5% in the next half-decade and 13.75% in 2015-2020. According to the
                   report, of the total 1.28 billion tonnes forecasted increase in world cement consumption in
                   2005-2020, over 72% is expected to come from Asia. China is expected to remain the largest
                   national consumer of cement in the world, accounting for close to half of global cement
                   consumption in 2010 (World Cement Industry).

                   Cement prices: According to the U.S. Geological Survey (USGS), global production and
                   prices of cement have increased significantly between 1970 and 2004 (572 million metric
                   tons at $19.70/t in 1970 versus 2,130 million metric tons at $79.50/t in 2004). The following
                   chart shows historical cement prices and world production.

                                                      World Cement Porduction and Prices, 1970 - 2004

                                            2,500                                                                                       90.00
                                                                                                                                        80.00
                         World Production




                                            2,000                                                                                       70.00
                                                                                                                                        60.00
                                            1,500
                                                                                                                                        50.00   Price
                                                                                                                                        40.00
                                            1,000
                                                                                                                                        30.00
                                             500                                                                                        20.00
                                                                                                                                        10.00
                                               0                                                                                        0.00
                                                    1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003

                                                          World production, in million metric tons (t)               Unit value ($/t)
                       Source: U.S. Geological Survey (USGS)

                   We believe supply and demand plays a critical role in determining cement prices. Based on
                   strong global cement demand forecasts, we expect cement price will continue to stay high in
                   the forecast period.
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                   Positive outlook for Fly Ash Usage: According to the American Coal Ash Association
                   (ACAA), fly ash production in 2006 amounted to 72.4 million tons, compared to 71.1
                   million tons in 2005, and 70.8 million tons in 2004. According to the ACAA, the utilization
                   rate (usage of fly ash over production) increased to about 44.8% in 2006 (32.4 million tons
                   used out of 72.4 million tons of production), compared to about 39.7% in 2004 (28.1 million
                   tons used out of 70.8 million tons of production). In addition, the usage of fly ash in the
                   production of concrete and cement has also increased, to about 19.2 million tons in 2006
                   (15.04 million tons consumed in concrete, concrete products and grout, and about 4.15
                   million tons consumed in cement production), compared to 16.5 million tons in 2004 (used
                   as a replacement for Portland cement in concrete manufacturing and as a component of the
                   kiln feed to produce clinker).

                   A wide range of government agencies, including the Environmental Protection Agency, the
                   Federal Highway Administration, the U.S. Army Corps of Engineers and the U.S. Bureau of
                   Reclamation, supports the use of coal fly ash in concrete. According to the ACCA,
                   producing one ton of cement generates more than one ton of CO2, and this emission can be
                   eliminated by replacing a ton of cement production with a ton of fly ash, resulting in about a
                   10 million ton reduction in CO2 emissions annually. In light of the global movement to
                   reduce greenhouse gases and high cement prices, we believe the production and
                   utilization rate for fly ash will continue to increase in the future.

                   Trading Carbon Credits: By conditioning fly ash, the SonoprocessTM technology helps in
                   achieving carbon credits.

                   The Kyoto Protocol, an international agreement between more than 170 countries with the
                   objective of reducing greenhouse gases, has developed frameworks to trade carbon and other
                   greenhouse gas credits. Particularly, the protocol stipulates quotas on the maximum amount
                   of greenhouse gases for each country, and these countries then set emission quotas for local
                   businesses and organizations. A business is granted an allowance of credits, with each unit
                   usually representing the right to emit one metric ton of carbon dioxide or other equivalent
                   greenhouse gases. If a business has not used up its quota, it can sell the unused allowances as
                   carbon credits. Businesses that exceed their quotas can buy additional allowances privately
                   or via open markets. The carbon credits can be traded in the international market, subject to
                   validation by the UNFCCC (United Nations Framework Convention on Climate Change).

                   Various exchanges have been set up for the trading of carbon credits including the European
                   Climate Exchange and Chicago Climate Exchange. The following chart illustrates the
                    io c r e f h h ao l t xhne F 08 ot c o h e o
                     s ra c              e c            m e
                   h t i lpi so t C i g Ci a E cag’ C I20 cn atfrt pr d  s                  r          e i
                                                                                   hne F cn at r
                                                                                          s
                   between April 2006 and March 2008. The Chicago Climate Excag’ C I ot c a a        r s e
                   cash product with a contract size of 100 metric tons. As shown from the chart below, the
                   prices of the CFI 2008 contract has increased significantly recently, closing at $5.05 as of
                   March 19, 2008.




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                                                Source: Chicago Climate Exchange

                   In December 2007, the New York Mercantile Exchange (NYMEX) launched The Green
                   Exchange for trading carbon emissions and other environmental products. Green Exchange
                   partners include Evolution Markets Inc., Morgan Stanley Capital Group Inc., Credit Suisse,
                   JPMorgan, Merrill Lynch, Tudor Investment Corp., ICAP and Constellation Energy.

                   The recent increase in prices of CFI contracts and the launch of the Green Exchange
                   clearly indicate the increase in demand for carbon credits, which we believe, will
                   further increase the value proposition of the SonoprocessTM technology.

                   Potential market size for Sonic: The global market for cement was 2.28 billion tonnes per
                   year in 2005 (according to OSC). The potential market for fly ash is 159.60 million tonnes
                   per year (based on a conservative assumption that fly ash can replace 7% of cement). If we
                   assume a 1% market share for Sonic, it would translate into annual revenues of $111.72
                   million (assuming the value of fly ash is $70/tonne). Note that this estimate does not reflect
                   the additional benefits from carbon credits.
Environmental -    Sonic commercialized its SonoprocessTM technology in the environmental sector before they
Commercialized                                                           n ni oi nr ,h o pn’
                                                                           t t         c
                   decided to focus on other applications. Using high-i esysn ee y t cm ays g e
application        Sonic Treatment Solution is used for the treatment of soils and sediments contaminated with
                   persistent organic pollutants (POPs), like polychlorinated biphenyls (PCB), dioxins and
                   furans (PCDD and PCDF), and toxic volatile and semi-volatile organics (VOCs).

                   Sonic Treatment Solutions specializes in treating PCB contaminated soil. PCB, which is
                   considered one of the 12 most persistent organic pollutants by the UN Stockholm
                   convention, is a synthetic chemical compound consisting of chlorine, carbon and hydrogen.
                   Because PCBs are fire-resistant, nonconductive, have low volatility and are chemically
                   stable, they have several applications, including use in insulating fluids, coolants, paints,
                   plastic, and pesticides. However, since it is chemically very stable, they do not decompose,
                   and therefore, they are very persistent in the environment. PCB is toxic, and therefore PCB-
                   contaminated soils pose an enormous environmental problem. PCBs can cause cancer and
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                   affect the immune, reproductive, nervous and endocrine systems. Although PCB usage was
                   banned in North America in 1977, they continue to enter the environment through the
                   improper disposal of PCB– containing materials and accidental incidents.

                   Technology: After acquiring the intellectual property rights to its sonic generator
                   technology, Sonic acquired three companies operating in the soil remediation space, namely
                   SESI System Inc., Contech PCB Containment Technology Inc. and Terra-Kleen Response
                   Group. An independent report from URS Canada Inc. indicated that the Sonic process can
                    ucs u y e c C ot i i o e h . 5 t h so o sei
                           fl d                    a ao             s a 0
                   sces l r ueP B cn m nt nt l st n0 0% ( et ehl fr“pc l                 h r d                  a
                     at s e nd y ..ad vn s o s . 0%,r
                        e         i                             w
                   w s ”a df e b BC) n ee a l a 0 02 f m at i l ocn ao o0          o      pa
                                                                                          y c cnet t n f ri
                   0.1%. The entire unit is mobile, and therefore, it allows the process to be done on-site. The
                   benefit to this is that companies do not have to transport hazardous material to far off places
                   for treatment, and thereby eliminate public concerns and liabilities.

                   Basically, Sonic performs soil remediation in two steps:

                   a) Extract and separate contaminants using the Terra-Kleen extraction technology
                   b) Permanently destruct contaminants using Sonic energy

                   The diagram below shows a typical Sonic Treatment Solution.




                                                  Source: Sonic Technology Solutions

                   a) Extraction and separation using the Terra-Kleen technology - This process
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                     concentrates all the PCB in soil, and reduces the volume of contaminated waste material
                     to as low as 2% of the original. By keeping the volume of the contaminated soil to a
                     minimum, transportation and processing costs involved in the disposal (or destruction) of
                     waste are significantly lowered. Sonic acquired this technology in December 2005. This
                     technology has been in effective use for the past 15 years, and is established in the U.S. as
                     an EPA approved mobile treatment system for onsite remediation. The technology has
                     been implemented in several sites, including the U.S. EPA Superfund, the U.S Dept of
                     Defense, the U.S. Dept of Energy and other commercial clients.

                     This process reduces the volume of contaminated waste material in four steps:

                     1)    Contaminated soil is initially placed into extraction bins (blue tank)
                     2)    The contaminants are dissolved in a proprietary biodegradable and non-toxic extract
                           solvent, which is transferred from a solvent storage tank (orange tank)
                     3)    The extract solution is then drained from the soil and transferred to the extract
                           solution storage tank (brown tank).
                     4)    Organic contaminants are separated from the solvent through chemical regeneration
                           in a proprietary solvent purification station (red tank)

                     The contaminant concentrate is then destructed in the next stage by the proprietary sonic
                     generators. A picture of a demonstration plant is shown below.




                                               Source: Sonic Technology Solutions
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                   b) SonoprocessTM destruction: The low-volume concentrate is first mixed with a solvent,
                      and pumped inside a closed chamber, where it is subject to high-intensity sonic energy.
                      High-intensity sonic creates fine sodium dispersion and regenerates it throughout the
                      process. The solvent is then chemically treated by conventional de-chlorination resulting
                      in a non-toxic industrial waste. The advantage of using sonic energy in de-chlorination is
                      that the sonic generators finely disperse sodium, which under the influence of intense
                      sound energy, facilitates complete reaction with chlorides, and effective de-chlorination of
                      the chlorinated molecules, such as PCB.

                     The by-products of the process are sodium chloride (salt) and biphenyl, which is a
                          rd fe l u h h cmp n ’fcs th mo n io C e vl h
                                   . h
                     low-ga e ulAto g te o a ysou a te mets nP Brmoa te                           ,
                     system can be easily modified to remove other persistent soil contaminants.

                   Alternative Technology: The most commonly used technology for destroying PCBs is
                   incineration, which is essentially passing contaminated soil through a high temperature
                   combustion chamber to destroy the PCBs. The table below shows how the Sonic Treatment
                   Solution is a better alternative.

                                                       Incineration                                  Sonic Treatment Solutio n
                                        Causes air emissions when combustion is
                   Pollution                                                                                No emissions
                                                      incomplete.
                                      There are fewer than 20 incinerators in North
                                          America. Contaminated soil has to be
                   Transportation                                                                     Treatment is done on-site
                                      transported to a facility, which can be costly
                                               and cause p ublic concerns.

                   Re-usage of       Incinerators destroy the soil, therefo re, new soil     Treated soil retains its physical properties;
                   treated soil         has to be imported to the remediated site.                 treated soil can be backfilled


                                     Due to air emissions, incineration is prohibited
                   Prohibited                                                                              Not Prohibited
                                            in many areas, including Japan.

                                                                                           Consumes very little energy; Also, one of the
                   Energy
                                           Conducted at high-energy (1200C)                by-products is bip henyl, which is a low-grade
                   Co nsumption
                                                                                                                fuel.
                                     A ccording to Sonic, transpo rtation and thermal
                                                                                           Sonic estimates costs to be around $500 - $70 0
                   Co sts               treatment typically range between $700 -
                                                                                                             per tonne.
                                                    $ 1,100 per tonne


                   Sonic Treatment Solutions (including SonoprocessTM destruction) have been installed in
                   three projects to date. The first commercial contract was for a project in Delta, BC, to
                   process 3,000 tons soil at $500/tonne for $1.5 million in revenues. The other two projects
                   were for a site in Sault Ste. Marie, Ontario (625 tonnes of soil) and Greater Toronto (1,700
                   tonnes of soil).

                   Sonic has received regulatory approvals in BC (Canada), Ontario (Canada), the U.S, Victoria
                    A saa ad aa o t oi r t n ss m
                        ri                      e
                   ( ut l) n Jpnfr h S n t a et yt . T esn P B S npoes i
                                                      c em           e              c
                                                                            h oi C oorcs s              ™
                   patented in the USA and Japan and patents are pending in over 20 other countries. The
                   system also has ISO 14001:2004 and OHSAS 18001: 1999 registrations.
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                       o a yse n l ys urnl i ne n o r o nr s
                               c o         yc            i
                   The cmp n ’t h o g icret lesdi fu cu t e.

                   1. Canada –   Quantum Murray L.P.; an operating partnership of Newport Partners Income
                      Fund TSX:NPF.UN-T) –signed agreement in late 2007 - net proceeds will be shared on
                      an equal basis. Sonic will also receive $0.50 million from Quantum, payable upon
                      Quantum securing its first PCB remediation contract.
                   2. Japan (only the Terra Kleen extraction technology is licensed) –Mitsubishi Heavy
                      Industries, Ltd. –Sonic will receive a royalty of 2.25% of revenues, after MHI has had
                      sales of approximately US$22 million. As of September 30, 2007, approximately US$9.90
                      million has been completed by MHI.
                   3. Australia – (only the Terra Kleen extraction technology is licensed) – Veolia
                      Environmental Services –    Sonic will receive royalties of 50% of profits.
                   4. Mexico –Phoenix Group Mexico - signed an option agreement in late 2007 - net
                      proceeds will be shared on an equal basis.

                   Sonic will focus on expanding to other regions, especially Asia.

                   PCB Market Potential

                   
                    The primary factors driving this sector are the real estate market, which is creating
                     demand for sites to be cleaned up for redevelopment, and government regulations
                     requiring remediation and setting standards.
                   
                    According to the World Health Organization (WHO), PCB production started in the late
                     1920s, and since 1929, about 2 billion kg of PCBs have been produced commercially,
                     with about 0.2 billion kg of the amount still remaining in mobile environmental reservoirs.
                   
                    In addition to thousands of brownfields (abandoned/under-used fields) that need to be
                     remediated for re-development, the U.S. Environmental Protection Agency estimated
                     there are at least 55 million tonnes of PCB contaminated earth in more than 500 sites
                     designated as priority sites for cleanup.
                   
                    In Canada, the market for the remediation of PCB contaminated soil is expected to grow,
                     driven by pending federal regulations requiring the clean up and treatment of all PCB
                     contaminated sites by December 31, 2009. According to the B.C. Environmental Industry
                     Association, the waste removal market (from soil, air and water) is worth about $2 billion
                     annually. According to a Globe Foundation report to the Environmental Technologies
                     Forum, as of October 2003, there were 7,000 contaminated sites in B.C. alone, with 44
                     sites being added every month.

                   Potential market for Sonic: The cost for Sonic to build the entire unit is just over $2
                   million. Considering that an average project will have throughput of 15,000 tonnes in 220
                   days, we believe the payback period is less than a year. The company can achieve net
                   revenues of $3.75 million (assuming revenues of $500/tonne and gross margins of 50%) in
                   220 days.




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Management         Brief biographies of management and board of directors as provided by the company follow.
and Directors
                   David Coe –Chairman: Mr. Coe was CEO of Dairyland for sixteen years from 1986 to
                   2001. From 1981 until he became CEO, Mr. Coe was Operations Manager and then COO.
                   Mr. Coe helped grow the business from a regional organization of two plants into a national
                   company with plants from coast to coast selling its own national brands. During Mr. Coe's
                   tenure, sales at Dairyland grew from $180 Million to $1.7 Billion with the organization
                   growing to employ over 3,400 people. Mr. Coe started his business and management career
                   at Warner Lambert, a manufacturer and marketer of pharmaceuticals, cosmetics and
                   confectionary. Working in all three divisions, it was here that he earned his reputation as a
                   trouble-shooter. As production manager in Canada, he worked on numerous assignments in
                   the USA, Central America, and the Caribbean. Throughout his career, Mr. Coe has served on
                   a number of industry, company & cultural boards and clubs, as well as being a board
                   member and President of the Terminal City Club in Vancouver. He has served an
                   unprecedented two terms as the Chairman of Canada's National Dairy Council. In 1998 he
                   was listed by the Financial Post as one of the top 200 CEO's in Canada and one of the top 20
                   executives in BC.

                   Richard Ilich - Director, Secretary & Co-founder: Mr. Ilich is the President of the
                   Townline Group of Companies in Richmond, B.C. which, since 1983, has been actively
                   involved in all facets of land development through construction, financing and marketing in
                   the residential and commercial real estate markets of Greater Vancouver. Over the years,
                   Townline and Mr. Ilich have been recognized for many achievements, including several
                   prestigious awards. Mr. Ilich is a highly experienced and respected member of the
                   construction and land development community in North America. He is a member of the
                   City of Richmond's Technical Building Committee for the 2010 Olympics. In the past, he
                   has also been involved with the City of Richmond Design Panel as well as numerous other
                   development and home builder's associations.

                   Roderick O. McElroy, B.Sc., M.Sc., Ph.D. –Director: Dr. McElroy is a process
                   technology specialist with over 30 years of experience ranging from laboratory and pilot-
                   scale test work (BC Research, 1970 - 1988) through to industrial scale feasibility assessment,
                   design and plant operations (Fluor Daniel Wright Ltd., 1988 - 2002). Dr. McElroy's key
                   technology areas at Sonic include: test work, design for successful commercialization,
                   project execution, critical evaluation of technology opportunities and the sourcing of cost-
                   effective engineering and other technical services. Dr. McElroy received his B.Sc.
                   (Chemistry, Honours) from the University of Alberta (1965), M.Sc. (Materials Science) from
                   McMaster University (1967), and his PhD (Hydrometallurgy) from the University of British
                   Columbia (1972).

                   Adam R. Sumel - Chief Executive Officer, President, Director & Co-founder: Mr.
                   Sumel has been the driving force behind the creation and development of Sonic. He was
                   formerly a partner in Canwest Leasing Inc., an independent sales and leasing company. He
                   has 21 years experience in all aspects of business: sales, service, financing and management.
                   Over the years, he has consistently demonstrated highly effective communication, team
                   building and organizational skills. Mr. Sumel serves on the Board of Directors to the British
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                   Columbia Environmental Industry Association (BCEIA) and on the Executive Committee of
                   the National Brownfield Association's BC chapter, which he helped found.

                   Lisa Sharp, C.G.A. - Chief Financial Officer: Ms. Sharp is a Certified General Accountant
                   and has over 15 years experience in senior management roles in a variety of industries. She
                   has held the position of Controller at Sonic for the past two years, prior to being promoted to
                   CFO. Before her tenure at Sonic, Ms. Sharp was the Controller of a large environmental
                   remediation company in British Columbia with operations in Western Canada.

                   James Hill, B.Sc., M.B.A., Ph.D., P. Eng. - Executive Vice President: Dr. Hill has over 20
                   years experience in technology commercialization. He was formerly President and Chief
                   Operating Officer of BC Research Inc., at the University of British Columbia. Following the
                   privatization of BC Research in 1993, Dr. Hill helped transform it into a vibrant contract
                   research and technology incubator. Dr. Hill was previously Vice President of Engineering
                   and Product Development for Innovac, including all manufacturing and applications support
                   for international customers in the environment, fisheries and food industries. Dr. Hill is a
                   P.Eng. and received a B.Sc. Mechanical Engineering (First Class Honours) from the
                   University of Durham, England, and a PhD in the Aerodynamics of Turbomachinery from
                   the University of Newcastle Upon Tyne, England in 1971. In 1989, Dr. Hill received a MBA
                   from Simon Fraser University where he specialized in strategic management and public
                   policy.

                   The company currently generates all its revenues from the first three commercial contracts
Financials         for the environmental applications. Sonic started generating revenues in FY2004. The chart
                    e w hw t o pn’r ne s c t .
                      o           e
                   bl so sh cm ayseeus i ehn     v        n e
                                                      Revenues and Gross Margins

                                $2,000,000                                                                   40%


                                $1,600,000
                                                                                                             0%

                                $1,200,000
                                                                                                             -40%
                                 $800,000

                                                                                                             -80%
                                 $400,000


                                       $0                                                                    -120%
                                                   2004            2005           2006          2007E


                                                                 Revenues        Gross Margins


                    oi s e ne n rs a n r e t t iz s h r r si n r
                       c v                        gs e           a le
                   S n ’ r eusadgosm ri a ytos b i a t ya t nioi f m a       e e a tn g o
                   development company to commercialization. Revenues have grown from $1.09 million in
                   FY2004 to $1.67 million in FY2006, reflecting a CAGR of 23.4%. However, revenues
                   dropped YOY in the first nine months of FY2007, from $1.18 million to $1.05 million, a
                   decrease of 10.7%.
2008 Fundamental Research Corp.                             www.researchfrc.com                    Siddharth Rajeev, B.Tech, MBA

                 PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Siddharth Rajeev, B.Tech, MBA          Sonic Technology Solutions Inc. –Initiating Coverage                      Page 21




                   Gross margins have been highly volatile in the past, as they ranged between -110% and 29%
                   during FY2004 –  2006. Gross margins in the first nine months of FY2007 were -48% versus
                   -66% in the comparable period in the previous year. We estimate that the company can
                   achieve long-term gross margins of 50% going forward.

                   Our revenue forecasts for FY2007 and FY2008 are $1.49 million and $1.64 million,
                   respectively.

                   All margins were negative in FY2006. The table below shows margins since FY2004.

                    Mar gins                   2004             2005             2006             2007E
                   Gr oss                      29%             -73%           - 110%            -47.72%
                   EBI TDA                   -215%            -401%           - 339%           -269.31%
                   EBI T                     -241%            -444%           - 408%           -338.43%
                   EBT                       -228%            -557%           - 438%           -330.81%
                   Net Margin                -228%            -557%           - 438%           -330.81%

                   General &Administrative expenses in FY2006 were $3.34 million versus $2.74 million in
                   FY2005, an increase of 20.8%. One positive aspect in the first nine months of FY2007, was
                   that the company was able to cut down its G&A expenses by 17.1% YOY, from $2.39
                   million to $1.98 million.

                   EBITDA in FY2006, and the first nine months of FY2007, were ($5.64 million) and ($2.83
                   million), respectively. Sonic posted a net loss of $7.30 million in FY2006, and $3.49 million
                   in the first nine months of FY2007, versus $6.21 million and $4.80 million in the comparable
                   periods in the previous year.

                   Our forecasts for net losses in FY2007, and FY2008, are $4.69 million (EPS: -$0.11) and
                   $4.18 million (EPS: -$0.10), respectively.

                   The company spent $4.75 million on operations in FY2006 ($3.37 million in FY2005) and
Cash Flows         $3.54 million in the first nine months of FY2007 ($3.54 million in the comparable period in
                   the previous year). As for investing activities, the company spent $0.77 million in FY2006
                   ($3.12 million in FY2005) and $0.53 million in the first nine months of FY2007 ($0.27
                   million in the comparable period in the previous year) on property, plant and equipment and
                   patent maintenance costs.

                   Operating and investing activities were primarily funded by equity financings. The company
                   raised $5.38 million, and $3.99 million, in FY2006, and the first nine months of FY2007,
                   respectively. We believe, Sonic will have to raise $3.20 million to fund its operating and
                   investing activities in FY2008.

                   At the end of Q3-2007, the company had cash and working capital of $1.66 million and
Cash and           $2.26 million, respectively, versus $1.75 million and $0.81 million at the end of FY2006.
Liquidity
Position
2008 Fundamental Research Corp.                       www.researchfrc.com                    Siddharth Rajeev, B.Tech, MBA

                 PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Siddharth Rajeev, B.Tech, MBA                      Sonic Technology Solutions Inc. –Initiating Coverage                                     Page 22


                   Liquidity Analysis                                                    2005               2006                 Q3-2007
                   Working Capital                                                 $1,234,442           $808,208               $2,255,518
                   Current Ratio                                                        1.64               1.32                     2.93
                   Debt /Equity                                                        12.5%               0.0%                     0.5%
                   Debt/Capital                                                        11.1%               0.0%                     0.5%

                   Profitability Analysis                                               2005                 2006
                   Return on Avg Assets                                               -66.3%               -43.6%
                   Return on Avg Equity                                               -90.8%               -57.3%
                   Return on Average Invested Capital                                 -80.7%               -57.3%

                   Activity Analysis                                                    2005                   2006
                   Days Inventory Outstanding                                             26                    43
                   Days Accounts Receivable                                               28                   175
                   Days Accounts Payable                                                133                    372
                   Cash Conversion Cycle                                                 (79)                 (154)

                   Sonic is yet to achieve profitability; therefore all profitability ratios were negative in the past.
                   Debt to Capital was 0.5% at the end of Q3-2007, versus 11.1% at the end of FY2005. The
                   company does not have any interest paying debt at this time.

Stock Options      We estimate the company has about 5.62 million stock options outstanding (all of them are
and Warrants        ur t ‘u
                      el
                   cr n y ot                      h
                                 -of-the-m ny) i a e h d vr e xr s pi o $. prhr ad
                                                         ge        a       ce c
                                          oe’wt w i t ae g ee i r e f 1 5 e sa ,n         0            e
                   maturity dates between September 2008 and December 2012.

                     h cm ay l a 1. ii a at u t i ( l fh r ur t ‘u
                                  s        6     ln r s s n n l
                   T e o pn a ohs 4 0m lo w r n otad g a o t m a cr n y ot        e e el              -of-
                   the-money) with a weighted average exercise price of $0.76 per share and maturity dates
                   between March 2008 and April 2009.

Valuation          We have valued Sonic based on a Discounted Cash Flow (DCF) analysis. Our fair value
                   estimate on the company is based on a scenario analysis shown in the table below.

                     Scenario Analysis ($/share)

                     1 application          (1)       Environmental applications                                                             $0.50

                     2 applications         (2)       Environmental and Heavy Oil Upgrade (1% market share)                                  $0.83
                                            (3)       Environmental and Fly Ash (1% market share)                                            $1.09

                                            (4)       Environmental and Heavy Oil Upgrade (2% market share)                                  $1.27
                                            (5)       Environmental and Fly Ash (2% market share)                                            $1.64

                     3 applications         (6)       Environmental, Heavy Oil Upgrade(1% market share) and Fly Ash (1% market share)        $1.53
                                            (7)       Environmental, Heavy Oil Upgrade(2% market share) and Fly Ash (2% market share)        $2.75

                     Probability weighted average                                                                                            $1.37


                   Although we believe the company will focus on entering other sectors going forward, our
                        r nl i s n ae n h o pn’ o n a i h e a t nm l h
                         i     ys         y
                   scena oaa s i ol bsdo t cm ayspt tlnt e m re , a e t
                                                        e                 ei          r        ks           y e
                   environmental, heavy oil upgrade and materials (fly ash) sectors. Since it is too early to get
                   an estimate on the potential cost savings for oil sands producers from adopting
                                      TM
2008 Fundamental Research Corp.                                       www.researchfrc.com                             Siddharth Rajeev, B.Tech, MBA

                 PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Siddharth Rajeev, B.Tech, MBA              Sonic Technology Solutions Inc. –Initiating Coverage                        Page 23


                   SonoprocessTM, e ae oacut frh cm ays o n ait o sns et .
                                           e     e       ei    e l     o
                                 w hv ntcon d o t o pn’pt tln h i ad sc r

                   Scenario 1 assumes that the company will continue to penetrate the environmental sector, but
                   will not be able to break into the energy and materials sectors.

                   Scenarios 2, 3, 4 and 5 assume that the company will be able to break into one sector (heavy
                   oil upgrade or fly ash), in addition to the environmental sector. While Scenarios 2 and 3
                   assume that the company will be able to achieve a global market share of 1%, scenarios 4
                   and 5 assume that the company will be able to attain a 2% market share.

                   Scenarios 6 and 7 assume that the company will be able to break into both the heavy oil
                   upgrade and fly ash markets, in addition to the environmental sector.

                   Investors should note that our target market share assumptions are conservative estimates, as
                   we believe that the company will be able to attain higher market shares if the company and
                   their partners are able to commercialize their SonoprocessTM technologies in these sectors.

                   By assigning an equal probability of occurrence to each of the seven scenarios, we have
                   determined the fair value of the company as $1.37 per share. It is worth noting that the
                   company is undervalued at current price levels even based only on Scenario 1 (where we
                   assume that the company will not be able to break into the energy and materials sector).

                   A summary of our DCF valuation based on Scenario 6 (where we assume the company will
                   be able to break into both heavy oil upgrade and fly ash markets, and attain a global market
                   share of 1% in both markets) is shown below.

                    DCF Valuation Model (in C$)
                                                         2008E           2009E          2010E           2011E          2012E
                    FFO                            ($2,770,838)    ($3,104,199)   ($2,706,066)      ($965,011)    $3,069,790
                    Investment in WC                 ($166,128)       $380,350      ($242,089)      ($696,230)   ($1,201,766)
                    CFO                            ($2,936,966)    ($2,723,849)   ($2,948,155)    ($1,661,241)    $1,868,024
                    CAPEX                          ($1,000,000)    ($3,050,000)   ($3,050,000)    ($5,050,000)   ($5,050,000)
                    FCF                            ($3,936,966)    ($5,773,849)   ($5,998,155)    ($6,711,241)   ($3,181,976)
                    PV                             ($3,443,812)    ($4,417,952)   ($4,014,681)    ($3,929,289)   ($1,629,618)


                                                         2013E           2014E          2015E        Terminal
                    FFO                            $10,519,828     $17,942,782    $31,684,278     $36,914,288
                    Investment in WC               ($1,651,149)    ($2,543,093)   ($4,660,617)    ($4,434,636)
                    CFO                             $8,868,679     $15,399,690    $27,023,661     $32,479,652
                    CAPEX                          ($5,050,000)    ($5,050,000)   ($5,050,000)    ($5,050,000)
                    FCF                             $3,818,679     $10,349,690    $21,973,661     $27,429,652
                    PV                              $1,710,724      $4,055,756     $7,532,249     $83,060,807

                    Discount Rate                      14.32%
                    Terminal Growth Rate                   3%
                    Total PV                       $78,924,184
                    Cash - Debt                     $3,878,068
                    Equity Value (C$)              $82,802,252
                    Shares O/S (dil)                54,124,068
                    Value per share                      $1.53




2008 Fundamental Research Corp.                            www.researchfrc.com                   Siddharth Rajeev, B.Tech, MBA

                 PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Siddharth Rajeev, B.Tech, MBA              Sonic Technology Solutions Inc. –Initiating Coverage                      Page 24


                   The weighted average cost of capital of 14.3% was calculated as shown below.

                                                    Calculation of Weighted Average Cost
                                                               of Capital (WACC)
                                              Cost of Equity*                            16.6%
                                              Cost of Debt                                8.0%
                                              Debt / Capital (long-term avg)             20.0%
                                              Equity / Capital (long-term avg)           80.0%
                                              Tax                                        35.0%

                                              WACC                                       14.32%

                                * Average cost of equity of industrial equipment and components (Yahoo Finance)

                   We did not conduct a comparables analysis at this time as we do not believe the company
                   has a direct comparable.

Rating             Therefore, based on our valuation models and analysis of the potential of the
                    o a ys o i eeao e n l y e nt t oeae n o i eh o g
                                                   c o
                   cmp n ’ sncgnrtr t h o g,w iiae cvrg o S ncT cn l yi                                o
                   Solutions Inc. with a BUY rating, and a fair value estimate of $1.37 per share. Our fair
                   value estimate reflects upside potential of 448% from current price levels.

                    net s hu o h or a ao n con o t o pn’ pi pt tln
                         o        d e a              ui
                   Ivs rsol ntt t u vl t nol acutfrh cm ay us e o n ai
                                                               y          s     e           s d        ei
                   the heavy oil upgrade, fly ash, and environmental sectors (assuming a market share of 1% -
                    %)Iii pr n t nt h or a ao s ev y eedn o t o pn’ait
                                   a          e a          ui
                   2 .tsm ot to o t t u vl t nihai dpnet n h cm ays b i    l                 e             ly
                   to commercialize their SonoprocessTM technology in the heavy oil upgrade and fly ash
                   markets. Our valuation will change significantly if the company is unable to do so.

Risks              The following risks, though not exhaustive, will cause our estimates to differ from actual
                   results:

                    h cm ay rwh i eed ev y n t b i o o m r az h plao
                    T e o pn’go t wldpn hai o i ait t cm e ii t ap ct n
                                  s         l               l       s ly c le e i i
                                   TM
                     of Sonoprocess technology in different sectors.

                   
                    Further penetration in the environmental sector will depend on its ability to license its
                     technology.

                   
                    Failure to prove the viability of the SonoprocessTM technology in the energy sector will
                     put downward pressure on our valuation.

                   
                    We   believe, the company has to raise approximately $3.20 million in FY2008. Our
                     valuation models assume that the equity financing will take place at current share prices.
                     If share prices drop from current prices, it would negatively impact our valuation due to
                     share dilution.

                   We rate the shares Risk 4 (Speculative).

2008 Fundamental Research Corp.                            www.researchfrc.com                   Siddharth Rajeev, B.Tech, MBA

                 PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Siddharth Rajeev, B.Tech, MBA                   Sonic Technology Solutions Inc. –Initiating Coverage                           Page 25



                                                               Appendix
STATEMENTS OF OPERATIONS
(in C$)                                                2004           2005          2006           2007E             2008E

 Revenues                                         1,093,387      1,114,439     1,665,706       1,486,960          1,635,656

 COGS                                               780,996      1,924,634     3,499,119       2,196,603          2,044,570

 Gross Profit                                       312,391      (810,195)    (1,833,413)       (709,643)         (408,914)

 Expenses
 General & Administration                         1,904,736      2,744,434     3,314,283       2,584,413          2,433,940
 Stock-based compensation                           760,524        915,838       493,871         484,061            163,566

 EBITDA                                          (2,352,869)    (4,470,467)   (5,641,567)      (3,778,117)       (3,006,420)

 Amortization                                       284,019       479,226      1,160,334       1,027,740          1,247,232

 EBIT                                            (2,636,888)    (4,949,693)   (6,801,901)      (4,805,857)       (4,253,652)

 Interest Income                                    142,589        40,534       (229,158)         68,365            72,016
 Other Income                                                                                     45,000
 Loss on write down of Investments and others                   (1,297,278)     (272,237)

 EBT                                             (2,494,299)    (6,206,437)   (7,303,296)      (4,692,491)       (4,181,636)

 Taxes/(Income Tax Recovery)                           127              8         (3,968)              -                -

 Net Earnings for the period                     (2,494,426)    (6,206,445)   (7,299,328)      (4,692,491)       (4,181,636)

 Basic and diluted loss per share                     (0.18)         (0.41)        (0.32)           (0.11)            (0.10)




2008 Fundamental Research Corp.                                 www.researchfrc.com                       Siddharth Rajeev, B.Tech, MBA

                       PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Siddharth Rajeev, B.Tech, MBA              Sonic Technology Solutions Inc. –Initiating Coverage                        Page 26


BALANCE SHEETS
(in C$)                                           2005           2006          2007E              2008E

Assets

Cash and cash equivalents                   1,947,802      1,751,908         970,413          89,033
Accounts receivable                           127,599        711,825         892,176         981,394
Prepaid expenses and deposits                 153,902        242,827         223,044         245,348
Other Receivables                             318,406        195,946           6,207             -
Work in progress                              375,438        181,040
Inventory                                     252,835        260,855         219,660         204,457

Current Assets                              3,175,982      3,344,401       2,311,500       1,520,232

Property, plant and equipment               3,367,936      3,470,938       3,873,746       4,561,938
Deferred development and financing costs    1,070,652        883,633         805,451         805,451
Patents and intangible assets               3,387,921      3,075,633       2,342,324       1,406,900

Total Assets                               11,002,491     10,774,605       9,333,021       8,294,521

Liabilities & Shareholders' Equity

Accounts Payables & Accrued Liabilities     1,279,003      2,241,725       1,098,301       1,022,285
Due to related parties                         19,637        259,468           2,302           2,302
Acquisition payment                           584,750         35,000             -               -
Short-term loans                               58,150
Obligation under capital lease                                    -          147,931         144,414

Current Liabilities                         1,941,540      2,536,193       1,248,534       1,169,001

Deferred rent inducement                       70,037         52,528             -
Convertible debentures                        949,185
Obligation under capital lease                                    -          144,414         129,062

Shareholder's Equity
Share Capital                               16,400,927     22,953,387     26,941,839      30,141,839
Contributed surplus                          2,158,614      3,419,708      3,877,936       3,915,957
Deficit                                    (10,517,812)   (18,187,211)   (22,879,702)    (27,061,338)
Shareholder's Equity                         8,041,729      8,185,884      7,940,073       6,996,458

Total Liabilities & Shareholders' Equity   11,002,491     10,774,605       9,333,021       8,294,521




2008 Fundamental Research Corp.                           www.researchfrc.com                      Siddharth Rajeev, B.Tech, MBA

                      PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Siddharth Rajeev, B.Tech, MBA                    Sonic Technology Solutions Inc. –Initiating Coverage                         Page 27


STATEMENTS OF CASH FLOWS
(in C$)                                                  2004           2005          2006        2007E            2008E


 Operating Activities
 Net earnings for the period                       (2,494,426)    (6,206,445)   (7,299,328)   (4,692,491)      (4,181,636)

 Items not involving cash
 Depreciation                                         284,019       479,226      1,160,334     1,027,740        1,247,232
 Deferred financing fees                                                           120,394                            -
 Write down and leasehold inducements                              1,306,772       247,189
 Stock based compensation                             861,015        957,028       571,110       484,061          163,566
                                                   (1,349,392)    (3,463,418)   (5,200,301)   (3,180,690)      (2,770,838)

 Changes in non-cash operating working capital       (283,198)       90,049       451,439      (892,018)         (166,128)

 Cash from from (used in) operations               (1,632,463)    (3,373,497)   (4,748,862)   (4,072,708)      (2,936,966)

Investing activities
PP & E                                             (1,508,583)    (2,830,674)    (745,437)     (659,743)       (1,000,000)
Patents                                               (67,443)       (51,835)     (28,322)      (37,496)              -
Deferred development costs and others                (450,661)      (233,263)
                                                   (2,026,687)    (3,115,772)    (773,759)     (697,239)       (1,000,000)

 Financing activities
 Equity                                             2,341,271     2,540,561     5,384,877      3,988,452        3,200,000
 Debt                                                                34,737       (58,150)                       (144,414)
                                                    2,341,271     2,575,298     5,326,727      3,988,452        3,055,586

 Increase (decrease) in cash                       (1,317,879)    (3,913,971)    (195,894)     (781,495)         (881,380)

 Cash beginning of period                           7,170,652     5,861,773     1,947,802      1,751,908         970,413

 Cash end of period                                 5,852,773     1,947,802     1,751,908       970,413           89,033




2008 Fundamental Research Corp.                                 www.researchfrc.com                       Siddharth Rajeev, B.Tech, MBA

                        PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Siddharth Rajeev, B.Tech, MBA                             Sonic Technology Solutions Inc. –Initiating Coverage                                               Page 28



Buy – Annual expected rate of return exceeds 12% or the expected return is commensurate with risk
Hold – Annual expected rate of return is between 5% and 12%
Sell –Annual expected rate of return is below 5% or the expected return is not commensurate with risk
Suspended or Rating N/A— Coverage and ratings suspended until more information can be obtained from the company regarding recent events.

Fundamental Research Corp. Risk Rating Scale:
1 (Low Risk) - The company operates in an industry where it has a strong position (for example a monopoly, high market share etc.) or operates in a regulated
industry. The future outlook is stable or positive for the industry. The company generates positive free cash flow and has a history of profitability. The capital
structure is conservative with little or no debt.

2 (Below Average Risk) - The company operates in an industry where the fundamentals and outlook are positive. The industry and company are relatively less
sensitive to systematic risk than companies with a Risk Rating of 3. The company has a history of profitability and has demonstrated its ability to generate positive free
       o ( og cr n f e ah l a b ngt e u t cp ai s n . h cm ays ailt c ricne t e i il o oet s o db
        w h              e e           o
cash fl st uh ur tr cs f wm y e eav deo ailnet et T e o pn’cp asut es osrav wt lt tm dsue f et
                                                        i             t v m )                              t r u                vi         h te                           .

3 (Average Risk) - The company operates in an industry that has average sensitivity to systematic risk. The industry may be cyclical. Profits and cash flow are
sensitive to economic factors although the company has demonstrated its ability to generate positive earnings and cash flow. Debt use is in line with industry averages,
and coverage ratios are sufficient.

4 (Speculative) - The company has little or no history of generating earnings or cash flow. Debt use is higher. These companies may be in start-up mode or in a
turnaround situation. These companies should be considered speculative.

5 (Highly Speculative) - The company has no history of generating earnings or cash flow. They may operate in a new industry with new, and unproven products.
Products may be at the development stage, testing, or seeking regulatory approval. These companies may run into liquidity issues, and may rely on external funding.
These stocks are considered highly speculative.

Disclaimers and Disclosure
                                                                                                                n “ w r o i s t n ” r u bset a s
                                                                                                                     o d o n am s e
The opinions expressed in this report are the true opinions of the analyst about this company and industry. A y fr a l k g te et a or etsm t                     i e
and opinions based upon information that is publicly available and that we believe to be correct, but we have not independently verified with respect to truth or
                                       h oroe s i a r le c ar l wl i l a
                                        a         c s l e az                  u s t l k y y h aa sad udm n l eer C r. F C de nt
                                                                                                                 y
correctness. There is no guarantee t t u fr atwlm t ii . A t leu s i l e vr. T e nl tn F na et R sa h op “R ” os o                  a        c
own any shares of the subject company, does not make a market or offer shares for sale of the subject company, and does not have any investment banking business
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 h d tbt n f R ’r i a so o s B Y 7%)H L 9 , E L 4 , U P N 8 .
      si i                   tg e           l
T e ir u o o F Csans ra fl w : U (9 , O D(%)S L (%)S S E D(%)
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                                                                                                  h o pn n/ s c’ pr r ac n r t n l i s n
                                                                                                    e               o o          f
This report contains "forward looking" statements. Forward-looking statements regarding t C m ayad r t ks e om nei e n yi o erk ad            hel vv s
uncertainties that could cause actual results to differ from such forward-looking statements. Factors that would cause or contribute to such differences include, but are
not limited to, continued acceptance of the Company's products/services in the marketplace; acceptance in the marketplace of the Company's new product
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2008 Fundamental Research Corp.                                                www.researchfrc.com                               Siddharth Rajeev, B.Tech, MBA

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