Mr. Brian Anderson reports

FORMATION FLUID MANAGEMENT INC. ENTERS INTO NON-BINDING LETTER OF INTENT AND ADVANCES CAD $250,000 SECURED LOAN TO A SUBSIDIARY OF THE PROPOSED TRANSACTION PARTY

Formation Fluid Management Inc. (doing business as Formation Fluid Technology Inc.) has entered into a non-binding letter of intent with an arm's-length industry participant, whereby FFM will acquire all of the issued and outstanding securities in the proposed transaction party. It is anticipated that the proposed transaction will be completed early 2016, and FFM will issue a further press release detailing the proposed transaction upon the signing of a definitive agreement or as otherwise required by applicable law. The entering into of the definitive agreement is subject to standard conditions, including, but not limited to, director approval, successful due diligence and final determination of the valuation of the parties.

In addition to the LOI, the corporation has advanced a secured non-convertible loan in the amount of $250,000 to a wholly owned subsidiary of the proposed transaction party. The loan is evidenced by a promissory note issued by the loan party to FFM and secured by a general security agreement on certain water right assets of the loan party. Amounts outstanding under the promissory note shall accrue interest at a rate of 10 per cent per annum, payable in arrears at maturity, and will be due on May 19, 2016.

The proposed transaction party is a fully integrated service company headquartered in Houston, Tex., that is dedicated to the safe and cost-effective collection, handling, transport, treatment and reuse of contaminated water produced by conventional oil and gas production, and hydraulic fracturing flowback water.

We seek Safe Harbor.