Mr. Frederic Dugre reports

H2O INNOVATION WINS $12 MILLION IN NEW CONTRACTS AND REACHES HISTORICAL HIGH SALES BACKLOG OF $40.5 MILLION

H2O Innovation Inc. was recently awarded $12-million in new contracts, mainly in mining and municipal sectors. These new contracts bring the company's order backlog for water treatment projects to $40.5-million as of July 1, 2014, excluding backlog from its specialty products and services division (PWT, Piedmont and H2O Innovation Maple). The entire order backlog will be executed over the next 24 months.

Amongst these contracts, one of them consists in the design, fabrication and commissioning of a complete water treatment plant on a mining site located in British Columbia, Canada. This water treatment plant dedicated to the treatment of mine tailings water comprises ultrafiltration (UF) and reverse osmosis (RO) systems. This water treatment plant will have a total capacity of permeate flow of 2.16 million gallons per day (8,165 cubic metres per day). As part of the UF pretreatment system, H2O Innovation will supply its Fiberflex skid, which provides membranes interchangeability and accommodates several types of modules.

As part of another mining project, which is located in the province of Quebec, Canada, H2O Innovation will supply a containerized potable water treatment system for a workers camp. This unit will produce 0.12 million gallon per day (480 cubic metres per day) of drinking water.

A third contract with a Vancouver-based mining company consists in the design, fabrication and commissioning of an RO system to treat water from a tailings pond in order to remove arsenic and antimony, and produce water meeting the environmental discharge criteria. Prior to final design and fabrication of the full-scale system, bench scale and pilot testing will be performed to validate the recovery rate of the system. It is expected that the full scale RO system capacity will be 3.456 million gallons per day (13,082 cubic metres per day). This RO system will be installed on a mining site located in the United States.

H2O Innovation has also secured contracts with different municipalities throughout the United States, such as Dunes Community Development District (Palm Coast, Fla.) and Clifton Water District (Clifton, Colo.). The most significant contract in the municipal sector is a 12-million-gallon-per-day (45,425-cubic-metre-per-day) UF system, using company's Fiberflex skid, to treat clarified raw water supplied from the Colorado River or Grand Valley Canal Water for the Clifton water district in Colorado. For this project, H2O Innovation will be responsible for the design, fabrication and commissioning of the 12-million-gallon-per-day UF system.

Furthermore, H2O Innovation will design, manufacture and commission an RO water treatment system, having a total capacity of 0.72 million gallon per day (2,725 cubic metres per day) to treat brackish water for the Dunes Community Development District in Palm Coast, Fla. The company will also supply, to a municipality located in California, a containerized advanced water treatment system with operator control room and laboratory, chemical dosing and UF, primary RO and concentrate recovery RO systems.

Lastly, H2O Innovation has been selected to provide a 1.0-million-gallon-per-day (3,785-cubic-metre-per-day) UF system to treat industrial and municipal effluent at the San Francisco Airport's Mel Leong tertiary treatment plant.

"We are delighted to have secured these new contracts at the beginning of our new fiscal year. In the company's history, we have never reached this level of order backlog. This strong order backlog gives H2O Innovation an excellent visibility on the coming fiscal year in terms of predictability of revenues and thus, allows us to anticipate a decrease of volatility of these revenues," said Frederic Dugre, president and chief executive officer of H2O Innovation.

We seek Safe Harbor.