Infowave Resolves Funding Issue with Industry Canada

Business Wire, August 25, 2004

VANCOUVER, British Columbia -- Infowave Software, Inc. (the "Company") (TSX:IW) has reached an agreement with Industry Canada to settle outstanding issues over whether Infowave was in compliance with certain provisions of its funding agreement with Technology Partnerships Canada ("TPC"), an agency of Industry Canada.

As previously disclosed, in April 2004, Industry Canada commenced an audit of the TPC contract award process at a number of different companies, including Infowave. Based on the results of this audit, Industry Canada has taken the position that Infowave breached the terms of its funding agreement by structuring its compensation to a third party consultant as a commission whom was not properly registered under the Lobbyists Registration Act.

Infowave believes it acted properly and in good faith at all times. Infowave co-operated fully with Industry Canada's auditors and has sought to resolve this issue expeditiously so that it could move forward with the continued successful implementation of its business strategy.

Under the terms of the agreement, TPC will reduce its funding to Infowave by 15 per cent, or $1,093,425. This is the same amount Infowave was to pay the third party consultant for its assistance in developing Infowave's technology road map and with its application for TPC funding. As previously disclosed in Infowave's 2003 annual report, Infowave cancelled its agreement with this third party consultant in February 2004 with no obligation for any payment to the consultant by Infowave. This will reduce Infowave's total TPC funding from $7,289,500 to $6,196,075.

"Infowave is very pleased to have resolved this matter in a manner that addresses Industry Canada's concerns and preserves our valuable relationship with TPC," said Jerry Meerkatz, president and chief executive officer. "In partnership with TPC, we continue to invest in building industry leading enterprise mobility solutions. During the past year, Infowave has made three acquisitions of US based companies whose technology development has been migrated to Canada. During this period, we also raised over US$4 million in foreign capital complementing the significant additional private Canadian capital raised to support our continued development efforts and leverage the funding to be provided by TPC to build a Canadian based Hi-Tech company."

About Infowave

Infowave (TSX:IW) provides enterprises with scalable and robust mobile solutions for improving operational efficiency and increasing the productivity of mobile workers. Infowave's configurable enterprise mobile application (EMA) suite, Telispark Mobile Enterprise, is designed to streamline and integrate business operations required by mobile workers. Infowave mobile solutions are sold directly and indirectly through telecommunications carriers, independent software vendors and systems integrator partners. Some of the world's most innovative organizations, including Hydro One, Shell Oil, Unilever and the U.S. Navy use Infowave solutions to increase the efficiency of their large mobile workforces. For more information, please email info@infowave.com or visit www.infowave.com.

(C)2004 Infowave Software, Inc. All rights reserved. Infowave, Telispark Mobile Enterprise, mOffice, mCustomer and the Infowave logo are trademarks or registered trademarks of Infowave Software, Inc. All other product or service names mentioned herein are the trademarks of their respective owners.