Sofame Launches New NOx Reduction Technology

Sofame Launches New NOx Reduction Technology

Montreal, November 25, 2009 (TSX-V: SDW) -- As CEO of Sofame, my mandate is to lead change in our sales process and close business. After 200 days, I have a clear picture of where Sofame needs to be in 2010 and every reason to believe that we will get there. The potential of the new direct sales force in helping us achieve our revenue targets is clear already. The combination of in-house sales and engineering teams is turning heads at our corporate customers. The knowledge and experience of our people is a tremendous resource for companies who wish to reduce green house gas emissions like NOx, and reduce fuel costs by up to 25% at the same time. Most environmental technologies today do not offer investment grade paybacks on capital equipment investments of 3-years or less like Sofame does.

We still require a network of manufacturers representatives to keep a continuous presence in the markets we serve. Turn-key projects including installation and after sale service require local representation, and our Reps are responding to the new leadership posture we are assuming. Budgets for sales activities are a must, and I will get to that momentarily.

In addition to its standard product line, Sofame has invested resources in the development of a new product called the "Sofame Steam Pump". By modelling and improving the technology,the Company has invested over $750,000 and 2 years of hard engineering efforts to reach today's milestones.The company has currently a funnel of $20M of quoted Steam Pump projects including some of the largest co-generation plants in the USA. Potential clients have demanded that actual proven engineering data be tested and validated with evidence to be provided to them. We have built in-house a Steam Pump prototype to provide such proof so clients can move forward in their decisions to purchase the Steam Pump. Our prototype has to date improved the efficiency of a traditional boiler while significantly reducing NOx emissions. In-house test data is scheduled to be reviewed and validated by a third party expert within the next 90 days.

Despite our best efforts, the restraint on capital spending in the U.S., followed by a sharp decline in the price of natural gas, did both work to slow down Sofame's revenue generation and conclusion of new contracts in 2009. Since September 2009, the price of natural gas has begun to strengthen, and this is having a favourable impact on energy efficiency project economics. ROI is improving for customers who must make purchasing decisions. Although capital spending remains tight everywhere, Sofame is responding with an aggressive sales and marketing effort. Sofame has solid potential to close key projects using its standard heat recovery technology, as well as key new business using its Steam Pump technology, within the next 12 months, but this requires working capital to move forward.

The engineering department, production planning and quality management processes are now fully operational and will allow Sofame to sustain the expected growth in sales. Daniel Lefebvre, Director of Engineering, possesses expertise in NOx reduction, burner efficiency and heat recovery that is unique in the industry and an asset to the Company. The Sales Plan under the leadeership of Robert Demers, our Vice President of Sales and Marketing, requires the deployment of additional professionals in sales to directly cover the 94 active projects, and financing of the dynamic growth strategy across North America.

The funding required to finance working capital for orders on hand and on-going sales and marketing campaigns into 2010 is $2 million. We have approached the Quebec government for assistance, and the reception is encouraging. Negotiations with lenders and investors are under way to close the funding gap. A private placement of up to $2 Million was announced on November 19, 2009. As always, we are grateful to our shareholders who continue to believe in the company and our products.