FOX-TEK announces first quarter results

TSX Venture Exchange symbol: FOX

TORONTO, May 31 /CNW/ - Fiber Optic Systems Technology, Inc. ("FOX-TEK"), (TSX-V: FOX), a developer of patented non-intrusive sensing systems, today announced financial and operating results for the period ended March 31, 2010. The quarterly statements have been filed on SEDAR (www.sedar.com). All amounts are expressed in Canadian dollars unless otherwise noted.

    
    Q1 2010 Developments:

    -  Revenue totaled $121,000.
    -  Fiber Optic System Technology (Canada) Inc, ("FOX-TEK Canada"), a
       wholly owned subsidiary of FOX-TEK, filed for bankruptcy on March 29,
       2010.
    -  Operating expenses decreased by $106,000, comparing Q1-2010 to
       Q1-2009.
    -  Cash on hand was $29,000 at March 31, 2010.

    Among the financial results for the period ended March 31, 2009, FOX-TEK
reported revenue of $121,000 compared to $277,000 in 2009. The net loss for
the first quarter of 2010 was $580,000 or $.01 per share, compared to a net
loss of $606,000, or $.01 per share in the first quarter of 2009.
    As part of the bankruptcy proceedings, FOX-TEK Canada, held a meeting for
all of its suppliers on April 19, 2010 and tendered its assets on May 11,
2010. No tender bids were received by FOX-TEK, so the assets of FOX-TEK Canada
will divert to FOX-TEK in satisfaction of its secured intercompany loan
agreement. The trustee of FOX-TEK Canada expects these proceeding will be
finalized by the end of June 2010.

    Subsequent events:

    -  FOX-TEK signed a non-binding letter of intent with Marcon
       International Inc. on April 6, 2010.
    -  On May 7, 2010 FOX-TEK announced the successful closing of its non-
       brokered private placement.
    -  Material orders received, totaling $520,000 for 9 PinPoint systems.
    

For greater details of these events please referred to the most recent Financial Statements and the Management Discussion and Analysis now available on SEDAR (www.sedar.com).

About FOX-TEK:

FOX-TEK develops non-intrusive asset health monitoring sensor systems for the oil and gas market to help operators track the thinning of pipelines and refinery vessels due to corrosion/erosion, strain due to bending/buckling, and process pressure and temperature. FOX- TEK's FT fiber optic sensor and PinPoint systems allow cost-effective, 24/7 remote monitoring capabilities to improve scheduled maintenance operations, avoid unnecessary shutdowns, and prevent accidents and leaks.

FOX-TEK has its headquarters in Toronto, ON, and is traded on the TSX Venture Exchange under the symbol "FOX". For more information, visit www.fox-tek.com.

This press release contains forward-looking statements based on assumptions, uncertainties and management's best estimates of future events. Actual results may differ materially from those currently anticipated. Investors are cautioned that such forward-looking statements involve risks and uncertainties. Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements are detailed from time to time in FOX-TEK's periodic reports filed with the Ontario Securities Commission and other regulatory authorities. FOX-TEK has no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.

%SEDAR: 00020673E

For further information: FOX-TEK Company contact: Sean Carr, President & CFO, Fiber Optic Systems Technology, Inc., [phone], [email protected]