Mr. Frederic Dugre reports

H2O INNOVATION ANNOUNCES THE ACQUISITION OF A UNIQUE CONTROL TECHNOLOGY, CLEARLOGX

H2O Innovation Inc. has signed an agreement with Clearlogx Inc. to purchase all of the assets of Clearlogx pertaining to its unique Clearlogx control technology and its specialty coagulants.

The Clearlogx technology is a proprietary technology developed by Gregg McLeod, director and shareholder of Clearlogx, which precisely and continuously controls the feed of specialty coagulants used in water treatment to maintain a proper pH level and an optimum particle charge, while simultaneously improving overall treatment process efficiency. This technology is especially critical for ultrafiltration (UF) water treatment plants to minimize membrane fouling and thus highly complementary to H2O Innovation's project business.

In addition to the Clearlogx technology, H2O Innovation will purchase Clearlogx's business related to the sale of coagulants for conventional and membrane filtration systems. This line of specialty coagulants is complementary to the corporation's specialty chemicals marketed under the name PWTTM and will significantly increase the level of recurrent sales.

The Clearlogx control technology will be added to the corporation's systems group offering while the specialty coagulants business will join PWTTM speciality chemicals group, making both of them stronger and more profitable.

"This acquisition fits perfectly with H2O Innovation's vision to complement its offering to its customers and to create synergies between its different business lines. Moreover, this transaction will be accretive from day one to our earning with current sales of approximately $1.2-million (U.S.) per year, and an earnings before interest, taxes, depreciation and amortization level reaching 15 per cent to 25 per cent of Clearlogx's revenues. This new business unit will undoubtedly contribute to the growth and profitability of H2O Innovation by complementing its offering, generating more recurrent sales and bringing differentiation," explained Frederic Dugre, president and chief executive officer of H2O Innovation.

Entirely financed by a secured long-term debt of $2-million (U.S.) with a Canadian chartered bank, the transaction will not require equity financing, thus avoiding dilution of H2O Innovation's shareholders ownership. The disbursement of the loan is subject to the execution of proper documentation related to collateral.

Subject to the execution of the documents pertaining to financing and collateral, H2O Innovation expects to execute a definitive asset purchase agreement and to complete this acquisition at the beginning of October, 2015.

We seek Safe Harbor.