Canadian company purchases Terra-Kleen

Vancouver, Canada— Adam Sumel, president and CEO of Sonic Environmental Solutions Inc. announced that the Company has entered into an agreement to acquire 100% of the shares of Terra-Kleen Response Group, Inc. based in San Diego, California. Terra-Kleen operates proprietary and patented technologies for the remediation of contaminated soil through a solvent extraction process which removes and concentrates contaminants. The Company has an established operating history with the Environmental Protection Agency in the United States and has licenses in both Japan and Australia. Terra-Kleen is privately held by founder Alan Cash who will join the Sonic management team as president of United States operations. The transaction will be effected through a merger between Terra-Kleen and a newly incorporated subsidiary of Sonic in the United States.

The total consideration for the Terra-Kleen acquisition is a maximum of approximately US$8 million. On closing of the acquisition, the shareholders of Terra-Kleen will receive an initial re-payment of shareholder loans of US$488,000 and be issued Sonic common shares with a value of US$500,000 at a minimum price of CDN$2.50 per share. A further US$500,000 in Sonic common shares will be issued at market value six months following the closing. The remaining consideration is based directly on the performance of the Terra-Kleen business over the next three years. Most of the performance payments will follow a formula that closely approximates net income from the business, with payments comprised of a minimum of 30% cash and the balance payable by either cash or Sonic common shares, at Sonic’s discretion.

The acquisition is subject to various conditions, including regulatory approval, satisfactory completion of due diligence, and to Sonic completing an additional financing within 120 days of signing of the Agreement.