The sales revenue for the year 2008 increased from CAD13,118,000 in the previous year to CAD19,688,000, and monitoring and technical support revenue increased from CAD1,629,000 to CAD2,479,000.

The 2007 earnings incorporated a one-time gain of over CAD1 million from the discontinued operations.

The net income for the fourth quarter of 2008 was CAD778,000 compared with CAD3,390,000 in the last quarter of 2007 when the first phase of a major international project was completed. Earnings per share on both a basic and diluted basis were CAD0.02 compared to CAD0.11 in 2007. Total revenue for the quarter was CAD6,017,000 compared with CAD8,452,000 in 2007.

Based on our current levels of activity, we hope to maintain a high level of growth in 2009. The company has evolved over the past few years from a technology provider to a solutions provider in the area of infrastructure asset management. We see considerable synergistic growth opportunities from our four distinct but overlapping business streams:

Sale of new monitoring technologies for pipelines, bridges and structures;

Recurring revenue from data analysis and site maintenance for these technologies, and from licensing of our SmartBall leak detection system;

Technical services including inspection, leak detection and condition assessment;

Specialized engineering services in areas related to asset management, primarily in the area of pipeline condition assessment for water and wastewater infrastructure.

In the past, we have focused our direct marketing efforts primarily in North America. With our expanded range of products and services, we will be increasing our international business development activities in 2009 and will be establishing a direct presence in high-growth markets. We are in the process of setting up a branch office in Abu Dhabi, which will be a service centre for anticipated work in the region, and will be a hub for business development in the Middle East, South East Asia and India. These measures will give us more direct control over business opportunities in international markets.

Financial Overview:

Revenue for the year increased by CAD7.4 million or 50% compared to 2007. CAD4.1 million of the revenue growth was attributable to the acquisition of Price Brothers (UK) Ltd. (PBUK). The second and third shipments for the Great Man-Made River Authority (GMRA) contract were delivered in the first half of the year. The first wastewater acoustic fibre optic (AFO) installation was also completed in the second quarter. In addition to these projects, there were five other AFO installations during the year. Two major bridge projects were completed along with three building structure projects.

As a percentage of sales, gross margin for 2008 was 63% versus 65% in 2007 (57% in 2006 and 59% in 2005). With the growth experienced in the year, use of subcontractors increased as internal resources were allocated to high value tasks.

While consulting services tend to have lower margins, the other revenue sources continue to generate strong margins. It is expected that overall gross margins will continue to be in excess of 60%.

Marketing and promotion expenses have increased 51% in 2008 compared to an increase of 53% in the prior year. Substantial revenue opportunities were recognized in the international market in 2007, and these opportunities were explored in 2008 with several projects resulting. The increased marketing expenses for the year were mainly attributable to the increased international presence along with additional resources added in the North American locations.

General and administrative expenses increased 95% over 2007 compared to a 6% decrease from 2006 to 2007. Staffing was increased in 2007 and 2008 as revenue was correctly anticipated to grow at a substantial rate. 18 additional staff members were added in 2008.

37% of the 2008 increase in General and administrative expenses is attributable to the PBUK acquisition. Increases in insurance and legal expenses account for a further 13%.

Research and development expenditures for the year increased by 62%, with a consistent expenditure between 2006 and 2007. These expenses can fluctuate from year to year depending upon whether projects underway meet our capitalization policy. In 2007, SmartBall(R) and SoundPrint(R) AFO development costs were capitalized. In 2008, SmartBall Oil and Gas expenditures and AFO development costs for wastewater met the capitalization criteria. Staffing levels remained the same.

Depreciation and amortization increased 51% from 2007. The expense was consistent between 2006 and 2007. In 2008, the purchase price allocation relating to the acquisition of PBUK included amounts attributable to customer contracts, customer relationships, and goodwill. Amounts relating to customer contracts and relationships are amortized over 5 years. In addition, with full year amortization for both AFO and SmartBall, the expense has increased proportionately.

A large portion of the company’s activities are generated through its wholly-owned U.S. subsidiaries. Upon consolidation, the company is subject to foreign exchange gains or losses due to the use of the temporal method to translate the accounts of the subsidiaries. These gains or losses are recognized in current year earnings or losses. The company also holds cash and intercompany loans in various currencies. These are subject to revaluation on a monthly basis. In addition, international contracts are or were denominated in U.S. dollars, Euros, and British Pounds. Accordingly, the company is susceptible to foreign exchange fluctuations due to the monthly revaluations. 90% of the foreign exchange gain for 2008 can be attributed to the revaluation of currencies. The company does not currently engage in currency hedging activities.

Pure’s working capital is strong and at December 31, 2008 was CAD27,605,000 including CAD20,204,000 in cash and cash equivalents. The company currently has no debt.

The company currently has a confirmed order backlog in excess of CAD19 million plus annualized recurring revenues under contract of about CAD3.5 million. In addition, Pure has received verbal confirmation of awards in excess of CAD2.8 million subject to the completion of the normal contract review process and final documentation.