3Q09 Investor’s Report

PLAYA PUERTO NUEVO, Quebexico, 10/01/2009 – Sludge Soda, Inc., a leading provider of utterly random titty bits, announced today that for the three months ended September 30, 2009 it reported revenues of free wax, a net loss attributable to underlying market attitudes and an average session to day ratio of 88%. The results for the third quarter of 2009 included an unexpected drop in river level, combined with warm weather, which in turn prompted a severe wave count deficit in latter weeks. This compares to 2008, when ideal water levels materialized in the back third of the quarter and wave conditions ranged from three stars to Aunt Jemima pancake and crepe. The results for the third quarter of 2009 included a non-cash allowance for board impairment and other restructuring and nonrecurring board repair charges. Research and development budget was fully exhausted on a SUP touring weekend on the riviére Rouge. 

Sludge Soda is organized into three operating divisions: Local Goons, Respectful Voyageurs and Expat Amigo. During the third quarter of 2009, both the Local Goons and Respectful Voyageurs divisions faced innumerable challenges and violent confrontations from York to China. The recent lack of daylight hours at this ungodly latitude dictates session counts will drop for all except the unemployed, until someone arbitrarily turns the clock forward on November 1. Local Goons enjoyed two virtually unobstructed months in the People’s Republic and paddled into unfamiliar waters when they lifted the internet publication ban. Fellow comrades, JL and Stoner Dave arrived mid-quarter to join the movement. Never content with their own progress, Sludge Soda upper management successfully coupled mild hallucinogenics, grandpa’s old cough medicine and both left and right-handed Marlboros with their own surfing; results were mind-blowing and often hazy. Proceeds of disposition generated from the sale of a fully amortized jet ski, were thoughtfully re-invested, bon choix Monkey and the new machine represents all long term fixed assets. Respectful Voyageurs were extremely limited in weekend options, but two early season tropical lows and consistent weekday bumps were nonetheless available. Expat Amigo maintained productivity through the harsh winter months and continued to update his grey matter via post secondary education. Early in the quarter, Big Wave Dave migrated North and eventually shut down the og banter board. BWD’s cursing, yelling and violent groans will be missed. Honorary Goon, Elijah Mack passed a memorable week ripping waves from the 514 to the 613. By far the most important operations observation is that surf school wave exploitation is experiencing a harrowing downturn and not one day included a lineup of 30 pupils and 6 instructors, a la 2005-2007. 

Commenting on the quarter Junior, Chairman and Chief Executive Officer, stated, “Although Sludge Soda met its overall total session target, the late third quarter presented many challenges as we began to experience volume increases from certain demographics as a result of fair weather surfer habits combined with plunging wetsuit prices and skyrocketing fun board retail sales. Earlier in the quarter, this was offset by unfavorable river levels, cold July water and ambient air temperatures and possibly the fact that surfing has lost its “cool” factor. As we move into the last quarter of the year, we will continue to focus on positioning Sludge Soda to be prepared to capitalize on potential opportunities from future long period swells and harmonic river levels.” 

For further information contact:
Sludge Soda Investor Relations
Certain statements in this press release, including, without limitation, statements as to fluctuations in quarterly operating results, statements as to the impact from economic conditions, statements as to acquisition integrations and operating efficiencies, statements about expected opportunities in our markets, statements as to trends, statements as to Sludge Soda’s or management’s beliefs, expectations or opinions, and all other statements in this press release, other than historical facts, are forward-looking statements, as such term is defined in the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created thereby. Forward-looking statements are subject to risks and uncertainties, are subject to change at any time and may be affected by various factors that may cause actual results to differ materially from the expected or planned results. In addition to the factors discussed above, certain other factors, including without limitation, risks related to the economy, the risk that Sludge Soda will not be able to implement its business strategy as and when planned, the risk that Sludge Soda will not be able to realize operating efficiencies in the integration of its acquisitions, risks related to Sludge Soda’s significant level of debt, risks of future impairment charges to our goodwill, intangible assets and purchased accounts receivable, risks related to union organizing efforts at the Company’s facilities, risks related to past and possible future terrorists attacks, the risk that Sludge Soda will not be able to improve margins, risks relating to growth and acquisitions, risks related to fluctuations in quarterly operating results, risks related to the timing of contracts, risks related to international operations and other risks detailed from time to time in Sludge Soda’s filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2008, can cause actual results and developments to be materially different from those expressed or implied by such forward-looking statements. The Company disclaims any intent or obligation to publicly update or revise any forward-looking statements, regardless of whether new information becomes available, future developments occur or otherwise.


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