Toronto, ON-8/11/2009- Sirit Inc. (“Sirit”) (TSX: SI), a leading provider of radio frequency identification (“RFID”) technology, reports its financial results for the second quarter ended June 30, 2009. All amounts are stated in Canadian Dollars unless otherwise noted.

Q2 2009 Financial Results

Sirit continues to withstand the current weak economic environment achieving consistent revenue levels for the third consecutive quarter in comparison to prior year quarterly results. For the second quarter of 2009, the Company achieved revenue of $5.2 million (US$4.5 million) representing a 9% increase compared to $4.8 million (US$4.7 million) reported for Q2 2008.

Year-to-date, revenue has reached $10.8 million compared to $9.1 million in the first half of 2008, an improvement of almost 19%. Revenue growth has been distributed across all application areas when compared to the prior year. In particular, Sirit has experienced strong initial demand from the new Golden Ears Bridge in Vancouver, Canada which opened during 2009 as well as continued sales into Brazil.

Ongoing efforts to manage cash spend are a top priority at Sirit. To date, these efforts have been effective as the Company has utilized just over $0.2 million of cash to fund operations during Q2 2009. For the first half of 2009, Sirit has managed its cash spending to approximately $0.4 million compared to $4.1 million in the first half of 2008 which included the acquisition of RSI ID Technologies, Inc.

Automatic Vehicle identification (“AVI”) related applications contributed $3.8 million or 73% of Q2 2009 revenue with the remaining $1.4 million attributable to Radio Frequency Solutions (“RFS”) related applications. This is compared to revenue of $3.3 million and $1.5 million for AVI and RFS respectively in Q2 2008, with AVI representing 70% of total quarterly revenue. While RFS applications revenue has remained consistent with prior year, the growth in AVI during the second quarter relates to the new customers noted above. Timing of future revenue growth in either RFS or AVI will depend on new and large customer orders which have been delayed due to continued weak global economic conditions.

“As a technology company, it remains important for Sirit to ensure its future success through current development activities. This investment in the future continues to be possible as Sirit has effectively managed its cash resources,” commented Anastasia Chodarcewicz, Chief Financial Officer, Sirit. “While net losses have been reported, these losses are primarily attributable to non-cash items such as amortization and stock compensation expenses. Even in this tough economic environment, Sirit is operating at a sustainable level and will continue to do so as we pursue growth from new opportunities,” added Ms. Chodarcewicz.

Gross profit for the second quarter of 2009 is reported at 33.5% compared to 30.0% reported in the second quarter of 2008. For the first half of 2009, gross profit is 34.2% up from the 32.9% in the first half of 2008. The improvement in margin experienced to date results from efficiencies achieved in operations as well as efforts to improve the manufacturing costs of key products.

Cash operating expenses, consisting of selling, general and administrative as well as development costs amounted to $2.1 million in Q2 2009 compared to $2.9 million in Q2 2008. The reduction in expenses has enabled almost cash neutral levels on a quarterly basis. The remaining expenses including stock compensation, amortization and foreign exchange are all non-cash items, amounting to $0.5 million during Q2 2009 and $0.7 million in Q2 2008. The Company intends to maintain lower operating expense levels until operations are cash flow positive.

Net loss reported in the second quarter of 2009 was $0.9 million compared to $2.2 million in the second quarter of 2008 and consistent with the first quarter of 2009. Net loss for the first half of 2009 is reported at $1.9 million compared to $3.5 million in the first half of 2008.

The Company’s cash balance at June 30, 2009 was $2.9 million compared to $3.3 million at the beginning of 2009.

Q2 2009 Corporate Highlights

The following highlights some of Sirit’s activities during the second quarter of 2009:

• As a result of ongoing development activities, Sirit announced the expansion of its RFID reader and tag offerings. The new IDentity 4100 fixed position reader and the IDentity 3100 desktop reader expand form factors and introduce price differentiation to the Sirit reader line. In addition, new HF and UHF inlays enhance the Company’s portfolio of specialized tag designs.

• Sirit announced its partnership with eriginate Corporation, a subsidiary of HerdStar™, LLC and a global integrator of track, trace and monitoring solutions to the livestock food industry. eriginate will utilize Sirit’s UHF RFID tag and reader technology to support comprehensive solutions for the livestock food market which traditionally has utilized low frequency technology.

• In early June, Sirit replaced and increased its existing borrowing facilities by moving its line of credit facility to Silicon Valley Bank, a specialist technology bank in the US. The Company now has a maximum borrowing facility of US$2.5 million, up from $1.5 million, supported by accounts receivable and inventory balances.

• Also in June, Sirit along with its partner, Axiompass, a leading integrator and supplier of tolling equipment and RFID systems across Mexico, and Caminos y Puentes Federales de Ingresos y Servicios Conexos (“CAPUFE”), Mexico’s Federal Tolling Authority, announced they had successfully tested Sirit’s IDentity 5100 for interoperability between legacy and new tolling systems. This success was immediately followed by the implementation of the first electronic vehicle registration (“EVR”) monitoring system in Mexico utilizing Sirit’s stationary automatic vehicle identification (“AVI”) monitoring technology. The new EVR system tracks vehicles as they pass through the Alpuyeca toll plaza with mobile AVI monitoring technology utilized in Cuernavaca, both in the State of Morelos. The system was inaugurated by Mexican President Felipe Calderón.

“As the global economy stabilizes, Sirit has maintained its position enabling the Company to capitalize on future market momentum,” said Norbert Dawalibi, President and CEO, Sirit. “We are able to fund our development and regular operations at a sustainable level, despite some of the economic weaknesses we have been experiencing in our traditional markets. At the same time, we have worked diligently and seen growth with new customers. Progress has been achieved in places such as Brazil and Mexico and we are working at converting these opportunities into new revenue channels,” added Mr. Dawalibi.

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Anastasia Chodarcewicz
Sirit Inc.
416.367.1897 x227
achodarcewicz@sirit.com