RE:Page 6 wow, impressive The USA activity could be very interesting in 2022! (as per management discussion)
Revenues for the fiscal year and three months ended August 31, 2021 were not as anticipated and negatively impacted as end users and / or E&P customer companies experienced COVID-19 related oilfield shut downs, had limited access to oilfields due to social distancing and travel restrictions, or have had supply chains (i.e., chemical and acid manufacturing and availability, coiled tubing and rigs parts availability, etc.), which has impacted projects and revenue recognition and business operations. Despite the COVID-19 related issues, the Company, late in the fourth quarter 2021, was able to secure a new Texas-based E&P customer and was issued a well stimulation package for multiple wells with an approximate aggregate value of US $85,000. This same E&P customer also issued two additional well stimulation packages, late in the fourth quarter and subsequent to year end, for multiple wells with an approximate aggregate value of US $210,000. Although these well packages have yet to be completed due to the customer’s supply chain and COVID-19 related issues, the back log of well stimulations represent a significant growing backlog of revenues which, when earned, may represent in excess of a threefold increase in fiscal 2021 USA Powerwave revenues. Subject to continued quality of Powerwave service to these existing and new clients, the Company anticipates further awards of Powerwave well stimulation packages throughout fiscal 2022.
Subsequent to fiscal 2021, the Company was also able to add three Texas-based E&P customers, who provided well stimulation packages for multiple wells with an approximate aggregate value of US $330,000.
Additionally, and subsequent to the year ended August 31, 2021, the Company was able to secure a new GSA with a minimum guaranteed contract value of US $10 Million, over a five-year term. Wavefront will invoice the GSA client US $500,000 (“Quarterly Guaranteed Minimum”), or any prorated portion thereof, during each of the Company’s fiscal quarters over the term of the Agreement. Any Services work more than the Quarterly Guaranteed Minimum would be invoiced above the Quarterly Guaranteed Minimum and recognized as revenue using the percentage of completion method, which is based on the term of the tool rental and Services. Given the inability to recognize revenues related to a prior GSA, the Company will account for revenues related to the new GSA agreement on a cash basis.
The totality of the recent US based business development activities, with an approximate aggregate value of US $2,625,000, if and when the projects are completed and revenues are able to be recognized, would represent a significant increase over the current fiscal years total reported revenues of $1,156,677