Innovation Inc.
Subject: H2O Innovation annonce ses résultats pour l ’exercice 2014

PLAIN TEXT:

H2O Innovation reports fiscal year 2014 year-end results

Key highlights of 2014 fiscal year

$41.8 M of new bookings of water treatment projects secured over the year, pushing order backlog to a record high of $
--->38.3 M. Expansion of specialty products and services offering through the acquisition of Piedmont Pacific Corporation 
--->in December 2013. Revenues down by 3.6% to $34.8 million, compared to previous fiscal year. Revenues from specialty pr
--->oducts and services, which are recurring in nature, increased by 30% to $17.2 M, compared to previous fiscal year. Gro
--->ss profit before depreciation and amortization up at 26.6%, compared to 25.6% in fiscal year 2013. Adjusted EBITDA at 
--->$77,155, compared to $1,584,252 in fiscal year 2013, positive for a third consecutive year.  Net loss of ($1,456,131) 
--->compared to a net earnings of $312,992 in fiscal year 2013. Secured $10.1 M in equity financing to complete the acquis
--->ition of Piedmont and to reduce long-term debt.

All amounts in Canadian dollars unless otherwise stated.

Quebec City, September 23, 2014 – (TSXV: HEO) – H2O Innovation Inc. ("H2O Innovation" or the "Company") announces its 
--->results for the fourth quarter and 2014 fiscal year ended June 30, 2014. H2O Innovation's fiscal year 2014 results sho
--->wed revenues of $34.8 M down from $36.1 M for fiscal year 2013, a 3.6% reduction year over year. Despite the small dec
--->line in revenues, the Company has shown a significant increase of 134% of its new bookings of water treatment projects
--->, pushing the order backlog to a record-high of $38.3 M as at June 30, 2014. The Company also solidified its business 
--->model through the acquisition of  Piedmont Pacific Corporation [http://www.piedmontpacific.com/] ("Piedmont"), a world
--->-known manufacturer of specialty couplings, adding to the portfolio of specialty products and services. The Company's 
--->gross profit before depreciation and amortization improved over the year from 25.6% in fiscal year 2013 to 26.6% in fi
--->scal year 2014, due to business mix and improved project execution.

The Company's new bookings for water treatment projects secured increased by 134% from $17.9 M during fiscal year 2013
---> to $41.8 M during current fiscal year. As at June 30, 2014, Company's sales backlog stands at $38.3 M compared to $14
--->.1 M as at June 30, 2013. The bookings over revenues ratio of the Company's stood at 2.4 for fiscal year 2014, compare
--->d to 0.78 for fiscal year 2013. "This is a good indicator that we will assist to an increase of revenues derived from 
--->water treatment projects in the coming fiscal year. Such solid order backlog at the beginning of this new 2015 fiscal 
--->year gives us the ability to better plan the allocation of our resources and growth", stated Frédéric Dugré, President
---> and Chief Executive Officer of H2O Innovation Inc.

The decline of 3.6% in revenues in fiscal year 2014 is mainly attributable to the lower level of revenues from water t
--->reatment projects deliveries and projects progress, caused by delays beyond our control. However, these projects will 
--->be delivered during the next fiscal year. The decline was partly offset by the higher level of revenues from sales of 
--->specialty products and services, further pushed by the acquisition of Piedmont in the course of the year.

In fiscal year 2014, revenues from water treatment projects stood at $17.6 M compared with $22.9 M in fiscal year 2013
--->, while revenues from specialty products and services reached $17.2M in fiscal year 2014 compared with $13.2 M in fisc
--->al year 2013. The decline of revenues from water treatment projects was partly offset by the higher level of revenues 
--->from sales of specialty products and services. For the year ended June 30, 2014 sales from specialty products and serv
--->ices, which are of recurring nature, accounted for 49% of total revenues, while this proportion was 37% in the previou
--->s fiscal year. "The increase of 30% of revenues from sales of specialty products and services is the result of a strat
--->egic decision to acquire Piedmont, and strengthening our relationship with our customers, providing a steady stream of
---> revenues and creating a direct value to our shareholders", stated Frédéric Dugré.

The acquisition of Piedmont completed on December 5, 2013, is part of this strategy to generate greater revenues from 
--->specialty products. Additional efforts aimed at increasing the organic growth associated with our maple syrup producti
--->on equipment and products and our specialty chemical products have also paid off. Indeed, our distribution network for
---> maple syrup production equipment now has a total of 30 distributors covering the province of Quebec and the Northeast
---> of the United States, an addition of 3 distributors over the current fiscal year. Furthermore, the additions made to 
--->the  Professional Water Technology [http://www.pwtchemicals.com/] ("PWT") sales force of specialty chemical products a
--->lso supported the growth of recurring revenues from specialty products and services.

This strategy for organic growth of revenues from sales of specialty products and services is proven to be winning sin
--->ce it minimizes the impact of revenue volatility associated with revenues derived from water treatment projects, reinf
--->orces long-term relationships with its customers and maintain a higher gross profit.

CONSOLIDATED RESULTS

Selected financial data

Three-month periods

ended on June 30,

(Unaudited)

Twelve-month periods

ended on June 30,

(Audited)

2014

2013

2014

2013

$

$

$

$

Revenues

7,896,401

6,768,455

34,831,514

36,136,901

Gross profit before depreciation and amortization

2,117,494

1,812,428

9,250,488

9,251,537

Gross profit before depreciation and amortization

26.8%

26.8%

26.6%

25.6%

Operating expenses

204,718

202,544

859,483

696,079

Selling expenses

1,071,346

907,553

4,042,511

3,509,081

Administrative expenses

1,100,644

890,226

4,100,167

3,533,042

Research and development expenses – net

21,497

-

220,145

-

Net earnings (loss)

(269,242)

(532,392)

(1,456,131)

312,992

Basic and diluted earnings (loss) per share

(0.002)

(0.008)

(0.017)

0.005

Adjusted EBITDA

(201,458)

(234,355)

77,155

1,584,252

Adjusted EBIDTA

(2.6%)

(3.5%)

0.2%

4.4%

The Company's ratio of selling, operating and administrative expenses ("SG&A") as a whole over revenues amounted to 25
--->.8% for fiscal year 2014, up from 21.4% for the previous fiscal year. This increase is attributable to a higher level 
--->of SG&A expenses, especially selling expenses to support our business plan aimed at increasing our water treatment sys
--->tems' sales in North America, combined to a lower level of revenues derived from water treatment projects sales. With 
--->the acquisition of Piedmont, management aims to reduce the SG&A ratio to a level similar to last year through an incre
--->ase of revenues and tighter management of SG&A expenses

Adjusted EBITDA for fiscal year 2014 was $77,155 compared to $1,584,252, for fiscal year 2013. The adjusted EBITDA has
---> significantly varied in fiscal year 2014 due to the severe decline of revenues derived from water treatment projects 
--->and the increase of SG&A expenses.

Net cash used by operating activities amounted to ($2,486,316) in fiscal year 2014 compared to $1,053,500 of net cash 
--->generated by operating activities during the previous fiscal year. This deterioration is attributable to the significa
--->nt net loss in fiscal year 2014 compared to a net earnings fiscal year 2013. This significant deterioration is also at
--->tributable to a negative change in working capital items, such as:

Higher volume of activities toward year-end reflected in an increase of the level of accounts receivable as of June 30
--->, 2014 compared to June 30, 2013; This higher volume of activities has also increased the level of accounts payable an
--->d accrued liabilities in fiscal year 2014 compared to fiscal year 2014; A timing difference within the projects produc
--->tion phases affecting the invoicing milestones reached and therefore affecting costs incurred in excess of billings an
--->d billings in excess of costs incurred.

Financial results for the fourth quarter of fiscal year 2014

Revenues for the fourth quarter were up by 17 % to $7.9 M from $6.8 M for the same quarter of the previous fiscal year
--->. The increase is explained by the increase of $1.7 M in revenues from specialty products and services, coming in part
---> from the acquisition of Piedmont in December 2013 and, to lesser extent, to higher level of sales of maple syrup prod
--->uction equipment. It was toned down by a decrease of $0.6 M of revenues from water treatment projects which suffer fro
--->m lower volume of projects execution.

For the quarter ended June 30, 2014, the gross profit before depreciation and amortization remained stable at 26.8%.

The fourth quarter SG&A expenses were somewhat stable and similar to the first three quarters of fiscal year 2014. The
--->y stand at $2.4 M in this current quarter compared to $2.0 M in the fourth quarter of fiscal year 2013. The increase i
--->s mainly due to the integration completion of Piedmont to our Vista's office and hiring to support its operations and 
--->the increase of selling expenses related to bookings secured during the quarter.

Strategic outlook for fiscal year 2015

We begin this fiscal year 2015 with confidence. We have a record high order backlog of water treatment projects standi
--->ng at $38.3 M as at June 30, 2014 and our revenues from specialty products and services, which are recurring in nature
--->, reached $17.2 M during fiscal year2014. It means that the strategic investments we have made in fiscal year 2014 are
---> paying off and we intend to continue towards this direction." stated Frédéric Dugré.

During fiscal year 2014 the Company has made significant steps in its water treatment projects sales' business develop
--->ment:

Secured, for a second mandate, the supply of a modular plant to produce drinking water and wastewater sanitation for a
---> major oil & gas company worker's camp in Alberta; Granted a $10 M contract to design, manufacture and deliver of reve
--->rse osmosis units for the municipality of Monterey, the second largest desalination plant unit in California; Selected
---> by the City of Montevina, California for providing an ultrafiltration system with a capacity of 30 million gallons of
---> water, ultrafiltration largest ultrafiltration project ever undertaken to date by the Company;  Successfully marketed
---> to several Northwestern United States municipalities, its new design frame Fiberflex for membranes MF/UF made to acco
--->mmodate several types of microfiltration membranes and different ultrafiltration.

All these important milestones accomplished during fiscal year 2014 will certainly contribute to the revenues of the n
--->ext fiscal year but will also position favorably the Company for future wins. Indeed, the current pipeline of water tr
--->eatment projects sales remains rich in opportunities which should allow the Company to renew its order backlog and sup
--->port its revenue growth. With an enlarged sales team compared to 2013 fiscal year, we maintain high bidding activities
---> and business development mainly in Canada and United Sates while supporting our network of international distributors
---> and agents to ensure organic growth for our specialty products.

The increase of revenues from specialty products and services is mainly due by the revenues coming from the acquisitio
--->n and the successful integration of Piedmont. In fiscal year 2015, we intend to continue to maximize cross-selling act
--->ivities between the distinct networks of PWT and Piedmont. We will also continue the expansion of our distribution net
--->works for specialty chemical products PWT as well as for our Piedmont flexible couplings.

All of these growth initiatives established during fiscal year 2014 allow us to begin the 2015 fiscal year with confid
--->ence.

The annual financial report is available on  www.h2oinnovation.com [http://www.h2oinnovation.com/] and on NYSE Euronex
--->t Alternext's site. Additional information on the Company is also available on SEDAR ( www.sedar.com [http://www.sedar
--->.com/]).

Prospective disclosures

Certain statements set forth in this press release regarding the operations and the activities of H2O Innovation as we
--->ll as other communications by the Company to the public that describe more generally management objectives, projection
--->s, estimates, expectations or forecasts may constitute forward-looking statements within the meaning of securities leg
--->islation. Forward-looking statements concern analysis and other information based on forecast future results, performa
--->nce and achievements and the estimate of amounts that cannot yet be determined. Forward-looking statements include the
---> use of words such as "anticipate", "if", "believe", "continue", "could", "estimate", "expect", "intend", "may", "plan
--->", "potential", "predict", "project", "should" or "will", and other similar expressions, as well as those usually used
---> in the future and the conditional, notably regarding certain assumptions as to the success of a venture. Those forwar
--->d-looking statements, based on the current expectations of management, involve a number of risks and uncertainties, kn
--->own and unknown, which may result in actual and future results, performance and achievements of the Company to be mate
--->rially different than those indicated. Information about the risk factors to which the Company is exposed is provided 
--->in the Annual Information Form dated September 22, 2014 available on SEDAR ( www.sedar.com [http://www.sedar.com/]). U
--->nless required to do so pursuant to applicable securities legislation, H2O Innovation assumes no obligation to update 
--->or revise forward-looking statements contained in this press release or in other communications as a result of new inf
--->ormation, future events and other changes.

About H2O Innovation

H2O Innovation designs and provides state-of-the-art, custom-built, and integrated water treatment solutions based on 
--->membrane filtration technology to municipal, energy & natural resources end-users. Also, directly and through its affi
--->liates, H2O Innovation provides services and products complementary to its membrane filtration and reverse osmosis sys
--->tems. These products consist of a complete line of specialty chemicals and consumables and a complete line of coupling
--->s. For more, visit  www.h2oinnovation.com [http://www.h2oinnovation.com/].

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX 
--->Venture Exchange) nor the Alternext Exchange accepts responsibility for the adequacy or accuracy of this release.

– 30 –

Source:

H2O Innovation Inc.

www.h2oinnovation.com [http://www.h2oinnovation.com/]

Contact:

Marc Blanchet

+1 418-688-0170

[marc.blanchet@h2oinnovation.com]

Download this press release in PDF > [http://www.h2oinnovation.com/AxisDocument.aspx?id=1307&langue=en&download=true]

Read all of H2O Innovation's news > [http://www.h2oinnovation.com/Afficher.aspx?section=97&langue=en#.VCBsQhbOVqA]

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You are receiving this email because you have subscribed to H2O Innovation's news mailing list through our website at 
---> www.h2oinnovation.com [http://www.h2oinnovation.com/].

This email was sent by H2O Innovation Inc. located at 330 rue St-Vallier Est, Suite 340, Quebec City, QC, G1K 9C5, Can
--->ada. Phone: 418-688-0170 / Fax: 418-688-9259




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  <tr>
    <td valign="top" style="font-family:Arial, Helvetica, sans-serif;" ><table width="100%" border="0" cellspacing="1"
---> cellpadding="1">
        <tr>
          <td width="50%" style="font-family:Arial, Helvetica, sans-serif;" ><a href="http://application.jeffjobin.com
--->/t/y-l-itjlykd-iiljlihul-r/" target="_blank"><img src="http://i1..cmail2.com/ei/y/C6/16B/B4E/044605/csimport/499_0.jpg
--->" width="194" height="123" border="0" /></a></td>
          <td width="50%" style="font-family:Arial, Helvetica, sans-serif;" ><div align="right"></div>
          <div align="right"></div></td>
        </tr>
      </table>
      <p style="text-align:center;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;font-size:16px;" ><st
--->rong><span style="font-size:18px;" >H<sub>2</sub>O Innovation reports fiscal year 2014 year-end  results</span></stron
--->g></span></p>
      <p style="text-align:center;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;font-size:16px;" ><st
--->rong><span style="font-size:12px;" >&nbsp;</span></strong></span></p>
      <p style="margin-top:0;" ><span style="font-family:arial;font-size:16px;" ><strong><u><span style="font-size:13p
--->x;" >Key  highlights of 2014 fiscal year</span></u></strong></span></p>
      <ul class="style15" style="font-size:13px;" >
        <li>$41.8&nbsp;M  of new bookings of water treatment projects secured over the year, pushing  order backlog to
---> a record high of $38.3&nbsp;M.</li>
        <li>Expansion  of specialty products and services offering through the acquisition of Piedmont  Pacific Corpor
--->ation in December 2013.</li>
        <li>Revenues down  by 3.6% to $34.8 million, compared to previous fiscal year.</li>
        <li>Revenues  from specialty products and services, which are recurring in nature, increased  by 30% to $17.2&
--->nbsp;M, compared to previous fiscal year.</li>
        <li>Gross  profit before depreciation and amortization up at 26.6%, compared to 25.6% in  fiscal year 2013.</l
--->i>
        <li>Adjusted  EBITDA at $77,155, compared to $1,584,252 in fiscal year 2013, positive for a  third consecutive
---> year. </li>
        <li>Net loss  of ($1,456,131) compared to a net earnings of $312,992 in fiscal year 2013.</li>
        <li>Secured  $10.1&nbsp;M in equity financing to complete the acquisition of Piedmont and to  reduce long-term
---> debt.</li>
      </ul>
      <p class="style15" style="text-align:justify;margin-bottom:0;font-size:13px;" ><span style="font-family:arial;" 
--->>&nbsp;</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span class="style17
--->" style="font-family:arial;font-size:11px;font-style:italic;" >All amounts in Canadian dollars unless otherwise stated
--->.</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" ><strong>Quebec  City, September 23, 2014</strong>&nbsp;&ndash;  (TSXV: HEO) &ndash; H<sub>2</sub>O&nbsp;
--->Innovation Inc. (&ldquo;H<sub>2</sub>O&nbsp;Innovation&rdquo;  or the &ldquo;Company&rdquo;) announces its  results fo
--->r the fourth quarter and 2014 fiscal year ended June 30, 2014. H<sub>2</sub>O  Innovation&rsquo;s fiscal year 2014 res
--->ults showed revenues of $34.8 M down from $36.1  M for fiscal year 2013, a 3.6% reduction year over year. Despite the 
--->small  decline in revenues, the Company has shown a significant increase of 134% of  its new bookings of water treatme
--->nt projects, pushing the order backlog to a  record-high of $38.3&nbsp;M as at June 30, 2014. The Company also solidif
--->ied  its business model through the acquisition of 
<a href="http://application.jeffjobin.com/t/y-l-itjlykd-iiljlihul-y/" target="_blank">Piedmont Pacific Corporation</a>
---> (&ldquo;Piedmont&rdquo;), a world-known manufacturer of specialty couplings, adding to the  portfolio of specialty pr
--->oducts and services. The Company&rsquo;s gross profit before  depreciation and amortization improved over the year fro
--->m 25.6% in fiscal year  2013 to 26.6% in fiscal year 2014, due to business mix and improved project  execution. </span
--->></p>
      <p class="style15" style="margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-family:times new roma
--->n;" ><span style="font-family:arial;" >&nbsp;</span></span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >The Company&rsquo;s new bookings for water treatment  projects secured increased by 134% from $17.9 M du
--->ring fiscal year 2013 to  $41.8 M during current fiscal year. As at June 30, 2014, Company&rsquo;s sales  backlog stan
--->ds at $38.3 M compared to $14.1 M as at June 30, 2013. The bookings  over revenues ratio of the Company&rsquo;s stood 
--->at 2.4 for fiscal year 2014,  compared to 0.78 for fiscal year 2013. &ldquo;This is a good indicator that we will  ass
--->ist to an increase of revenues derived from water treatment projects in the  coming fiscal year. Such solid order back
--->log at the beginning of this new 2015  fiscal year gives us the ability to better plan the allocation of our resources
--->  and growth&rdquo;, 
<strong>stated Fr&eacute;d&eacute;ric Dugr&eacute;, President  and Chief Executive Officer of H<sub>2</sub>O&nbsp;Inno
--->vation Inc</strong>.</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >&nbsp;</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >The decline of 3.6% in revenues in fiscal year 2014 is  mainly attributable to the lower level of revenu
--->es from water treatment  projects deliveries and projects progress, caused by delays beyond our control.  However, the
--->se projects will be delivered during the next fiscal year. The  decline was partly offset by the higher level of reven
--->ues from sales of  specialty products and services, further pushed by the acquisition of Piedmont  in the course of th
--->e year.</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >&nbsp;</span></p>
      
<p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-family:a
--->rial;" >In fiscal year 2014, revenues from water treatment  projects stood at $17.6 M compared with $22.9 M in fiscal 
--->year 2013, while  revenues from specialty products and services reached $17.2M in fiscal year  2014 compared with $13.
--->2 M in fiscal year 2013. The decline of revenues from water  treatment projects was partly offset by the higher level 
--->of revenues from sales  of specialty products and services. For the year ended June 30, 2014 sales from  specialty pro
--->ducts and services, which are of recurring nature, accounted for  49% of total revenues, while this proportion was 37%
---> in the previous fiscal  year. &ldquo;The increase of 30% of revenues from sales of specialty products and  services i
--->s the result of a strategic decision to acquire Piedmont, and  
strengthening our relationship with our customers, providing a steady stream of  revenues and creating a direct value 
--->to our shareholders&rdquo;, <strong>stated Fr&eacute;d&eacute;ric Dugr&eacute;.</strong></span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >&nbsp;</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >The acquisition of Piedmont completed on December 5,  2013, is part of this strategy to generate greater
---> revenues from specialty  products. Additional efforts aimed at increasing the organic growth associated  with our map
--->le syrup production equipment and products and our specialty  chemical products have also paid off. Indeed, our distri
--->bution network for  maple syrup production equipment now has a total of 30 distributors covering  the province of Queb
--->ec and the Northeast of the United States, an addition of 3  distributors over the current fiscal year. Furthermore, t
--->he additions made to  the <a href="http://application.jeffjobin.com/t/y-l-itjlykd-iiljlihul-j/" target="_blank">Profes
--->sional Water Technology</a> 
(&ldquo;PWT&rdquo;) sales force of specialty chemical  products also supported the growth of recurring revenues from s
--->pecialty  products and services.</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >&nbsp;</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >This strategy for organic growth of revenues from  sales of specialty products and services is proven to
---> be winning since it  minimizes the impact of revenue volatility associated with revenues derived  from water treatmen
--->t projects, reinforces long-term relationships with its  customers and maintain a higher gross profit.</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >&nbsp;</span></p>
      <table cellspacing="0" cellpadding="0">
        <tr>
          <td width="231" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;" ><span styl
--->e="font-family:arial;" ><br />
            <br />
              </span>
            <p style="margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>CONSOLIDATED RESULTS</
--->strong></span></p>
            <p style="margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>Selected financial dat
--->a</strong></span></p></td>
          <td colspan="2" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;
--->" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>Three-month   
---> periods <br />
            ended on June 30,</strong></span></p>
            <p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >(Unaudited)</
--->span></p></td>
          <td colspan="2" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;
--->" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>Twelve-month  
--->  periods <br />
            ended on June 30,</strong></span></p>
            <p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >(Audited)</sp
--->an></p></td>
        </tr>
        <tr>
          <td width="231" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;
--->" ><p style="text-align:justify;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>&nbsp;</stro
--->ng></span></p></td>
          <td width="82" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;"
---> ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>2014</strong></
--->span></p></td>
          <td width="70" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;"
---> ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >2013</span></p></td>
          <td width="78" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;"
---> ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>2014</strong></
--->span></p></td>
          <td width="75" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;"
---> ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >2013</span></p></td>
        </tr>
        <tr>
          <td width="231" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;
--->" ><p style="text-align:justify;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>&nbsp;</stro
--->ng></span></p></td>
          <td width="82" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;"
---> ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>$</strong></spa
--->n></p></td>
          <td width="70" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;"
---> ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >$</span></p></td>
          <td width="78" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;"
---> ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>$</strong></spa
--->n></p></td>
          <td width="75" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;"
---> ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >$</span></p></td>
        </tr>
        <tr>
          <td width="231" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;
--->" ><p style="text-align:justify;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >Revenues</span></p><
--->/td>
          <td width="82" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>7,896,401</s
--->trong></span></p></td>
          <td width="70" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >6,768,455</span></p>
---></td>
          <td width="78" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>34,831,514</
--->strong></span></p></td>
          <td width="75" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >36,136,901</span></p
--->></td>
        </tr>
        <tr>
          <td width="231" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;
--->" ><p style="text-align:justify;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >Gross    profit befo
--->re depreciation and amortization</span></p></td>
          <td width="82" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>2,117,494</s
--->trong></span></p></td>
          <td width="70" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >1,812,428</span></p>
---></td>
          <td width="78" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>9,250,488</s
--->trong></span></p></td>
          <td width="75" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >9,251,537</span></p>
---></td>
        </tr>
        <tr>
          <td width="231" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;
--->" ><p style="text-align:justify;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >Gross    profit befo
--->re depreciation and amortization</span></p></td>
          <td width="82" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>26.8%</stron
--->g></span></p></td>
          <td width="70" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >26.8%</span></p></td
--->>
          <td width="78" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>26.6%</stron
--->g></span></p></td>
          <td width="75" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >25.6%</span></p></td
--->>
        </tr>
        <tr>
          <td width="231" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;
--->" ><p style="text-align:justify;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >Operating    expense
--->s</span></p></td>
          <td width="82" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>204,718</str
--->ong></span></p></td>
          <td width="70" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >202,544</span></p></
--->td>
          <td width="78" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>859,483</str
--->ong></span></p></td>
          <td width="75" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >696,079</span></p></
--->td>
        </tr>
        <tr>
          <td width="231" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;
--->" ><p style="text-align:justify;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >Selling    expenses<
--->/span></p></td>
          <td width="82" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>1,071,346</s
--->trong></span></p></td>
          <td width="70" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >907,553</span></p></
--->td>
          <td width="78" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>4,042,511</s
--->trong></span></p></td>
          <td width="75" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >3,509,081</span></p>
---></td>
        </tr>
        <tr>
          <td width="231" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;
--->" ><p style="text-align:justify;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >Administrative    ex
--->penses</span></p></td>
          <td width="82" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>1,100,644</s
--->trong></span></p></td>
          <td width="70" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >890,226</span></p></
--->td>
          <td width="78" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>4,100,167</s
--->trong></span></p></td>
          <td width="75" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >3,533,042</span></p>
---></td>
        </tr>
        <tr>
          <td width="231" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;
--->" ><p style="text-align:justify;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >Research    and deve
--->lopment expenses &ndash; net</span></p></td>
          <td width="82" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>21,497</stro
--->ng></span></p></td>
          <td width="70" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >-</span></p></td>
          <td width="78" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>220,145</str
--->ong></span></p></td>
          <td width="75" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >-</span></p></td>
        </tr>
        <tr>
          <td width="231" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;
--->" ><p style="text-align:justify;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >Net    earnings (los
--->s)</span></p></td>
          <td width="82" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>(269,242)</s
--->trong></span></p></td>
          <td width="70" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >(532,392)</span></p>
---></td>
          <td width="78" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>(1,456,131)<
--->/strong></span></p></td>
          <td width="75" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >312,992</span></p></
--->td>
        </tr>
        <tr>
          <td width="231" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;
--->" ><p style="text-align:justify;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >Basic    and diluted
---> earnings (loss) per share</span></p></td>
          <td width="82" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>(0.002)</str
--->ong></span></p></td>
          <td width="70" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >(0.008)</span></p></
--->td>
          <td width="78" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>(0.017)</str
--->ong></span></p></td>
          <td width="75" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >0.005</span></p></td
--->>
        </tr>
        <tr>
          <td width="231" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;
--->" ><p style="text-align:justify;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >Adjusted    EBITDA</
--->span></p></td>
          <td width="82" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>(201,458)</s
--->trong></span></p></td>
          <td width="70" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >(234,355)</span></p>
---></td>
          <td width="78" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>77,155</stro
--->ng></span></p></td>
          <td width="75" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >1,584,252</span></p>
---></td>
        </tr>
        <tr>
          <td width="231" valign="top" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13px;
--->" ><p style="text-align:justify;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >Adjusted    EBIDTA</
--->span></p></td>
          <td width="82" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>(2.6%)</stro
--->ng></span></p></td>
          <td width="70" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >(3.5%)</span></p></t
--->d>
          <td width="78" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><strong>0.2%</strong
--->></span></p></td>
          <td width="75" valign="bottom" class="style15" style="font-family:Arial, Helvetica, sans-serif;font-size:13p
--->x;" ><p style="text-align:right;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" >4.4%</span></p></td>
        </tr>
      </table>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >&nbsp;</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >The Company&rsquo;s ratio of selling, operating and  administrative expenses (&ldquo;SG&amp;A&rdquo;) as
---> a whole over revenues amounted to 25.8%  for fiscal year 2014, up from 21.4% for the previous fiscal year. This incre
--->ase  is attributable to a higher level of SG&amp;A expenses, especially selling  expenses to support our business plan
---> aimed at increasing our water treatment  systems&rsquo; sales in North America, combined to a lower level of revenues
---> derived  from water treatment projects sales. With the acquisition of Piedmont,  management aims to reduce the SG&amp
--->;A ratio to a level similar to last year  through an increase of revenues and tighter management of SG&amp;A expenses 
---></span></p>
      <p class="style15" style="margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-family:times new roma
--->n;" ><span style="font-family:arial;" >&nbsp;</span></span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >Adjusted EBITDA for fiscal year 2014  was $77,155 compared to $1,584,252, for fiscal year 2013. The adju
--->sted EBITDA has significantly varied in fiscal  year 2014 due to the severe decline of revenues derived from water tre
--->atment  projects and the increase of SG&amp;A expenses.</span></p>
      <p class="style15" style="margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-family:times new roma
--->n;" ><span style="font-family:arial;" >&nbsp;</span></span></p>
      <p class="style15" style="text-align:justify;margin-top:0;font-size:13px;" ><span style="font-family:arial;" >Ne
--->t cash used by operating activities  amounted to ($2,486,316) in fiscal year 2014 compared to $1,053,500 of net cash  
--->generated by operating activities during the previous fiscal year. This  deterioration is attributable to the signific
--->ant net loss in fiscal year 2014  compared to a net earnings fiscal year 2013. This significant deterioration is also 
---> attributable to a negative change in working capital items, such as:</span></p>
      <ul class="style15" style="margin-bottom:0;font-size:13px;" >
        <li>Higher volume of activities  toward year-end reflected in an increase of the level of accounts receivable 
--->as  of June 30, 2014 compared to June 30, 2013;</li>
        <li>This higher volume of  activities has also increased the level of accounts payable and accrued  liabilitie
--->s in fiscal year 2014 compared to fiscal year 2014;</li>
        <li>A timing difference within  the projects production phases affecting the invoicing milestones reached and 
---> therefore affecting costs incurred in excess of billings and billings in excess  of costs incurred.</li>
      </ul>
      <p class="style15" style="margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-family:times new roma
--->n;" >&nbsp;</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" ><strong>Financial  results for the fourth quarter of fiscal year 2014</strong></span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >Revenues  for the fourth quarter were up by 17 % to $7.9 M from $6.8 M for the same  quarter of the prev
--->ious fiscal year. The increase is explained by the increase of $1.7 M in  revenues from specialty products and service
--->s, coming in part from the  acquisition of Piedmont in December 2013 and, to lesser extent, to higher level  of sales 
--->of maple syrup production equipment. It was toned down by a decrease  of $0.6 M of revenues from water treatment proje
--->cts which suffer from lower  volume of projects execution.</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >&nbsp;</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >For the quarter ended June 30, 2014,  the gross profit before depreciation and amortization remained sta
--->ble at 26.8%.</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >&nbsp;</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >The fourth quarter SG&amp;A expenses  were somewhat stable and similar to the first three quarters of fi
--->scal year  2014. They stand at $2.4 M in this current quarter compared to $2.0 M in the  fourth quarter of fiscal year
---> 2013.. The increase is mainly due to the integration  completion of Piedmont to our Vista&rsquo;s office and hiring t
--->o support its  operations and the increase of selling expenses related to bookings secured  during the quarter.</span>
---></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >&nbsp;</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" ><strong>Strategic  outlook for fiscal year 2015</strong></span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >We begin this fiscal year 2015 with  confidence. We have a record high order backlog of water treatment 
--->projects  standing at $38.3&nbsp;M as at June 30, 2014 and our revenues from specialty  products and services, which a
--->re recurring in nature, reached $17.2&nbsp;M  during fiscal year2014. It means that the strategic investments we have 
--->made in  fiscal year 2014 are paying off and we intend to continue towards this  direction.&rdquo; <strong>stated Fr&e
--->acute;d&eacute;ric Dugr&eacute;</strong>.</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >&nbsp;</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;font-size:13px;" ><span style="font-family:arial;" >Du
--->ring fiscal year 2014 the Company  has made significant steps in its water treatment projects sales&rsquo; business de
--->velopment:</span></p>
      <ul class="style15" style="font-size:13px;" >
        <li>Secured, for a second  mandate, the supply of a modular plant to produce drinking water and wastewater  sa
--->nitation for a major oil &amp; gas company worker&rsquo;s camp in Alberta;</li>
        <li>Granted a $10&nbsp;M  contract to design, manufacture and deliver of reverse osmosis units for the  munici
--->pality of Monterey, the second largest desalination plant unit in  California;</li>
        <li>Selected by the City of  Montevina, California for providing an ultrafiltration system with a capacity  of
---> 30&nbsp;million gallons of water, ultrafiltration largest ultrafiltration  project ever undertaken to date by the Com
--->pany; </li>
        <li>Successfully marketed to  several Northwestern United States municipalities, its new design frame  Fiberfl
--->ex for membranes MF/UF made to accommodate several types of  microfiltration membranes and different ultrafiltration.<
--->/li>
      </ul>
      <p class="style15" style="text-align:justify;margin-bottom:0;font-size:13px;" ><span style="font-family:arial;" 
--->>All these important milestones  accomplished during fiscal year 2014 will certainly contribute to the revenues  of th
--->e next fiscal year but will also position favorably the Company for future  wins. Indeed, the current pipeline of wate
--->r treatment projects sales remains  rich in opportunities which should allow the Company to renew its order backlog  a
--->nd support its revenue growth. With an enlarged sales team compared to 2013  fiscal year, we maintain high bidding act
--->ivities and business development  mainly in Canada and United Sates while supporting our network of international  dis
--->tributors and agents to ensure organic growth for our specialty products. </span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >&nbsp;</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >The increase of revenues from  specialty products and services is mainly due by the revenues coming from
---> the  acquisition and the successful integration of Piedmont. In fiscal year 2015, we  intend to continue to maximize 
--->cross-selling activities between the distinct  networks of PWT and Piedmont. We will also continue the expansion of ou
--->r  distribution networks for specialty chemical products PWT as well as for our  Piedmont flexible couplings. </span><
--->/p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >&nbsp;</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >All of these growth initiatives  established during fiscal year 2014 allow us to begin the 2015 fiscal y
--->ear with  confidence.</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >&nbsp;</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" ><strong>The annual financial report is available on  <a href="http://application.jeffjobin.com/t/y-l-itj
--->lykd-iiljlihul-t/" target="_blank">www.h2oinnovation.com</a> and on NYSE Euronext Alternext&rsquo;s site. Additional  
--->information on the Company is also available on SEDAR (<a href="http://application.jeffjobin.com/t/y-l-itjlykd-iiljlih
--->ul-i/" target="_blank">www.sedar.com</a>). </strong></span></p>
      <p class="style15" style="margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-family:times new roma
--->n;" ><strong><span style="font-family:arial;" >&nbsp;</span></strong></span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" ><strong>Prospective disclosures</strong></span></p>
      
<p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-family:a
--->rial;" >Certain  statements set forth in this press release regarding the operations and the  activities of H<sub>2</s
--->ub>O&nbsp;Innovation as well as other communications by  the Company to the public that describe more generally manage
--->ment objectives,  projections, estimates, expectations or forecasts may constitute  forward-looking statements within 
--->the meaning of securities legislation. Forward-looking statements  concern analysis and other information based on for
--->ecast future results,  performance and achievements and the estimate of amounts that cannot yet be  determined. Forwar
--->d-looking statements include the use of words such as  &ldquo;anticipate&rdquo;, &ldquo;if&rdquo;, &ldquo;believe&rdqu
--->o;, &ldquo;continue&rdquo;, &ldquo;could&rdquo;, &ldquo;estimate&rdquo;, 
&ldquo;expect&rdquo;,  &ldquo;intend&rdquo;, &ldquo;may&rdquo;, &ldquo;plan&rdquo;, &ldquo;potential&rdquo;, &ldquo;pr
--->edict&rdquo;, &ldquo;project&rdquo;, &ldquo;should&rdquo; or &ldquo;will&rdquo;,  and other similar expressions, as we
--->ll as those usually used in the future and  the conditional, notably regarding certain assumptions as to the success o
--->f a  venture. Those forward-looking statements, based on the current expectations of  management, involve a number of 
--->risks and uncertainties, known and unknown, which  may result in actual and future results, performance and achievemen
--->ts of the  Company to be materially different than those indicated. Information about the  risk factors to which the C
--->ompany is exposed is provided in the Annual  Information Form dated September 22, 2014 available on SEDAR (<a 
href="http://application.jeffjobin.com/t/y-l-itjlykd-iiljlihul-d/" target="_blank">www.sedar.com</a>).  Unless require
--->d to do so pursuant to applicable securities legislation, H<sub>2</sub>O&nbsp;Innovation  assumes no obligation to upd
--->ate or revise forward-looking statements contained  in this press release or in other communications as a result of ne
--->w  information, future events and other changes.</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >&nbsp;</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" ><strong>About H<sub>2</sub>O&nbsp;Innovation</strong>&nbsp;</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >H<sub>2</sub>O Innovation designs and  provides state-of-the-art, custom-built, and integrated water tre
--->atment  solutions based on membrane filtration technology to municipal, energy &amp;  natural resources end-users. Als
--->o, directly and through its affiliates, H<sub>2</sub>O  Innovation provides services and products complementary to its
---> membrane  filtration and reverse osmosis systems. These products consist of a complete  line of specialty chemicals a
--->nd consumables and a complete line of couplings. For  more, visit <a href="http://application.jeffjobin.com/t/y-l-itjl
--->ykd-iiljlihul-h/" target="_blank">www.h2oinnovation.com</a>.</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >&nbsp;</span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" ><em>Neither TSX Venture Exchange nor its Regulation Services  Provider (as that term is defined in the p
--->olicies of the TSX Venture Exchange)  nor the Alternext Exchange accepts responsibility for the adequacy or accuracy  
--->of this release.</em></span></p>
      <p class="style15" style="text-align:justify;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fa
--->mily:arial;" >&nbsp;</span></p>
      <p class="style15" style="text-align:center;margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-fam
--->ily:arial;" >&ndash;  30 &ndash;</span></p>
      <p class="style15" style="margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-family:arial;" ><stro
--->ng>Source: </strong></span></p>
      <p class="style15" style="margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-family:arial;" >H<sub
--->>2</sub>O Innovation Inc. &nbsp;</span></p>
      <p class="style15" style="margin-top:0;font-size:13px;" ><span style="font-family:arial;" ><a href="http://appli
--->cation.jeffjobin.com/t/y-l-itjlykd-iiljlihul-k/" target="_blank">www.h2oinnovation.com</a></span></p>
      <p class="style15" style="margin-bottom:0;font-size:13px;" ><span style="font-family:arial;" ><strong>Contact: <
--->/strong></span></p>
      <p class="style15" style="margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-family:arial;" >Marc 
--->Blanchet</span></p>
      <p class="style15" style="margin-top:0;margin-bottom:0;font-size:13px;" ><span style="font-family:arial;" >+1&nb
--->sp;418-688-0170 </span></p>
      <p class="style15" style="margin-top:0;font-size:13px;" ><span style="font-family:arial;" ><a href="mailto:marc.
--->blanchet@h2oinnovation.com">marc.blanchet@h2oinnovation.com</a></span></p>
<p class="style16" style="margin-bottom:0;font-family:Arial, Helvetica, sans-serif;font-size:13px;" ><a href="http://a
--->pplication.jeffjobin.com/t/y-l-itjlykd-iiljlihul-u/" target="_blank">Download this press release in PDF &gt;</a></p>
<p class="style16" style="margin-top:0;font-family:Arial, Helvetica, sans-serif;font-size:13px;" ><br />
  <a href="http://application.jeffjobin.com/t/y-l-itjlykd-iiljlihul-o/" target="_blank">Read all of <span style="text-
--->align:justify;margin-top:0;margin-bottom:0;" ><span style="font-family:arial;" ><span style="color:black;" >H<sub>2</s
--->ub>O</span></span></span> Innovation's news &gt;</a></p>
<p class="style14" style="margin-bottom:0;font-family:Arial, Helvetica, sans-serif;font-size:13px;font-weight:bold;" >
--->Follow us:</p>
<p class="style16" style="margin-top:0;margin-bottom:0;font-family:Arial, Helvetica, sans-serif;font-size:13px;" ><spa
--->n id="listEvent_ctl02_description"><strong><strong><a href="http://application.jeffjobin.com/t/y-l-itjlykd-iiljlihul-b
--->/" target="_blank"><img alt="" src="http://i2.cmail2.com/ei/y/C6/16B/B4E/044605/csimport/490_1.jpg" border="0" height=
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---></a></strong></strong></span></p>
<p class="style16" style="margin-top:0;margin-bottom:0;font-family:Arial, Helvetica, sans-serif;font-size:13px;" >&nbs
--->p;</p></td>
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--->, sans-serif"><span class="style4" style="color:#030303;font-weight:bold;font-size:12px;" >If you do not wish to recei
--->ve H2O Innovation news in the future, you may
      <a href="http://application.jeffjobin.com/t/y-u-itjlykd-iiljlihul-x/">unsubscribe here.</a>
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    <td valign="top" bgcolor="#FFFFFF" style="font-family:Arial, Helvetica, sans-serif;" ><p class="style18 style10" s
--->tyle="font-size:12px;" ><font face="Arial, Helvetica, sans-serif">You are receiving this email because you have subscr
--->ibed to H2O Innovation's news mailing list through our website at <a href="http://application.jeffjobin.com/t/y-l-itjl
--->ykd-iiljlihul-p/">www.h2oinnovation.com</a>..</font></p>
      <p class="style18 style10" style="font-size:12px;" ><font face="Arial, Helvetica, sans-serif">This email was sen
--->t by H2O Innovation Inc. located at 330 rue St-Vallier Est, Suite 340, Quebec City, QC, G1K 9C5, Canada. Phone: 418-68
--->8-0170 / Fax: 418-688-9259</font></p></td>
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