October 1, 2019 - 10:39 AM EDT
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Shareholder Update

Fort Worth, TX - (NewMediaWire) - October 1, 2019 - Water Now, Inc. (WTNW):

 

To Our Shareholders:

 

In 2016 our company began working towards the development of a purification technology that could turn the toxic water into uncontaminated, sterilized water, clean enough for human consumption. We strove to accomplish this goal in the most cost effective manner possible, and we are proud to announce that we have surpassed our expectations. 

 

Partnerships

 

In September 2018 we announced our five-year partnership with South Africa-based African Horizon Technologies (AHT). For the next five years, AHT will serve as our exclusive distribution partner in South Africa for Water Now's family of water purification products. AHT is an industry-leading supplier of advanced technology-based products that offer water purification and filtration products to the mining sector, energy, manufacturing, and food services industries.

 

HydraSpin

 

In the past, fracking institutions would dispose of contaminated waste byproducts by pumping into the fully depleted oil reservoir, beneath the earth’s surface, once the oil was fully extracted. In more recent years, however, the United States Environment Protection Agency (EPA) has leveed severe fines to companies who engage in this practice due to the catastrophic implications for those in surrounding areas. In many cases, the toxic fluids have made their way into public drinking water supplies as well as nearby bodies of water, and have decimated the surrounding environment and wildlife. Our product, Hydraspin, allows these companies to turn their toxic waste into disposable water, rather than risking fines, legal action, or having to pay the extra costs of going through a hazardous waster disposal company. Furthermore, our technology enhances the overall yield that oil manufactures receive per drill site, as our purification system is able to extract microscopic droplets of oil from the toxic waste. We have substantially reduced maintenance costs while simultaneously maintaining ease of use.

 

In April of 2019, we announced that we had secured a two-year agreement for crude oil recovery from re-injection wastewater at a disposal well site in Oklahoma. Installed in late April 2019, the first HydraSpin Mobile HS3000 unit has performed exceptionally well. In September of this year, we announced our two-year contract for two HydraSpin Mobile HS5500 Units with an independent oil and gas producer with substantial production activities, We expect to generate gross revenues of approximately $4 million during the two-year term of the contract from our portion of the sale of oil reclaimed by the two units. Monthly revenue from the sale of oil is expected to begin in October. While we currently have two operational units, our ongoing agreement with AHT includes an additional five units, which have already arrived in the US, as more continue to be shipped in through November 2019. In September 2019, we announced an agreement to install our HydraSpin Mobile HS5500 unit at a location in Fort Worth, Texas. Total revenues for the two-year period following installation are expected to be approximately $2.8 million. The Company will share in the proceeds from the oil that is recovered and sold to the market. The customer is a Fort Worth-based independent oil and gas producer. Monthly revenues from the contract are expected to be recognized within 60 days after the site is prepared and the unit installed, which is expected to be on or before September 2019.

 

In order to keep up with rapid growth, we signed a lease for a new 70,000 square foot facility, as we were bottlenecked by our previous facility. With this new facility, our team will be much more efficient and better equipped to capitalize on the market demand for Hydraspin USA’s oil recovery solution. We expect to begin receiving revenue by October 2019. 

 

The Global Water Crisis

 

Once we recognized the full potential of our patented filtration system, we began looking at how our technology could impact broader issues facing the world. We began to explore the possibilities of making an efficient and portable water filtration system that requires minimal maintenance on an easy-to-use platform. According to the World Health Organization (WHO),globally over 785 million people lack basic drinking water, including 144 million people who are dependent on surface water[1]. Even more devastating is the fact that at least two billion people use drinking water sources contaminated with feces. This contaminated water can transmit diseases such diarrhea, cholera, dysentery, typhoid, and polio. Worryingly the situation will only continue to get even more dire as they predict that by 2025, half of the world’s population will be living in water-stressed areas[2]. There is a global need for a product that can decontaminate water sources, and provide the basic human right of water to all those in need. We plan to fulfill that need. 

 

We believe that we have created solutions that make clean, affordable water available to those in need anywhere on the planet, helping to end the vigorous spread of disease and death through ingestion of contaminated water sources. Our fully patented technology eliminates pathogens, chlorides, microorganisms, disinfectants, disinfectant byproducts, and any inorganic chemicals. The Aqua 1000 can produce drinking water from almost any source with quality that always meets the World Health Organization’s drinking water standards. What’s more is that The Aqua 1000 exceeds the removal of EPA regulated primary and secondary contaminates. In fact, our units have been used in a humanitarian effort in Haiti after a severe hurricane left hundreds of thousands without potable drinking water. Because this is a mobile unit, it can be moved into locations quickly when a disaster strikes and is able to produce a staggering 800 gallons of pure drinking water per day, or approximately 6,000 bottles of 500mL potable drinking water. Once taken to a river, stream, pond, or any other contaminated fresh water source, our product can produce sterilized water in mere minutes. The machine has proven results, removing more than 60 known pollutants and will eradicate 99% of all water borne viruses. The Aqua 125, a much smaller an easier to transport water purifier, is essentially the baby brother to The Aqua 1000. This unit is capable of delivering approximately 80 gallons per day of sterilized water, using our same patented filtering technology. This equates to approximately 600 bottles of 500mL water per day. Both of these products are produced and assembled in the US. 

 

In the last year, we have made significant strides as a company. In January of 2019, we announced our partnership in the Philippines, where more than 100 million people live on more than 2,000 islands. With annual exposure to such natural disasters as typhoons and volcanic discharges, the importance of being able to rapidly supply fresh drinking water is critical, and more often-than-not, contaminated water is the primary reason many die in the aftermath of such disasters. On July 9th2019, we also announced our initial international marketing and distribution agreement with DPIM-ID, LLC for the sale of both Aqua 125 as well as Aqua 1000 units in India. This three-year, $3 million agreement allows our company to have a meaningful immediate impact on India’s dire need for clean, drinkable water for its rapidly growing population. Over 100 million people across India are currently experiencing a nationwide water crisis. 21 major cities in India are on the verge of running out of ground water in the next year, which makes up roughly 40% of the country’s sterilized drinking water. Furthermore, almost two-thirds of India's reservoirs are running below normal and according to a UN human rights report, the world as a whole is swiftly approaching a “climate apartheid” where only wealthy individuals can gain access to basic human rights such as water[3]. Today in India, hundreds of thousands of residents wait each day in lines to fill up pots with water from government tankers, yet schools and hospitals still struggle to provide those in need with clean water. With India set to overtake China as the most populous country in the world, according to the UN, the demand for water will reach twice the available supply by 2030, placing hundreds of millions of lives in danger. We firmly believe that our technology will be on the front lines of this water crisis, hopefully bringing clean water to millions. 

 

HydraHeat – A Safe Alternative

Soon after the early success of our water sterilization products, we recognized that our patented flameless heater could be sold independently, as a portable and fast acting heating unit. With ‘modern’ space heaters accounting for over 1/3 of all household fires, causing an average of 300 deaths per year in the US alone, we saw an opportunity in the market. In response, we developed HydraHeat in June of 2019. HydraHeat is space heater with none of the traditional risks or costs of conventional heaters. Our heating unit contains no fuels, no heat coils, and no flame, which completely removes the risk of fire due to unit breakage or tip-over. HydraHeat, instead, uses external electricity and internal propylene glycol to produce its heat. This not only prevents house fires, but can help reduce the 15,000 injuries per year, predominately children, who are seriously injured in these incidents. The unit can heat an area up to 1,000 square feet up to 150°F. We currently have a number of units already in the field for testing, and have had nothing but positive feedback from users. 

In closing, our products can provide oil companies with the most cost efficient way of properly disposing their toxic waste once fracking has been completed. While some fear the decline in the price of oil, we are optimistic that the demand will soon outweigh the supply, providing us with many opportunities to secure more clients. Our patented heating technology is the safest of its kind on the market, and we plan to see more interest in HydraHeat as the winter approaches. Our purification system can provide those in need with clean drinking water who lack access, can be utilized to cut costs as well as limiting environmental damage from toxic waste disposal by those in oil, and can provide a large area with heat in the safest way currently available on the market. We are positioning ourselves to meet large-scale demands for access to clean drinking water. I would like to thank all of our wonderful employees who have accomplished unbelievable results in the past six months. 

Beginning in Q4, we expect to see revenues from HydraSpin as well as our other products, which should help us generate positive cash flow and possible earnings for our investors. We anticipate communicating quarterly with our investors to keep them updated on our current projects, new progress in our technology, purchase orders, as well as general expansion. 

David King, CEO

 

[1]“Drinking-Water.” World Health Organization, World Health Organization, 14 June 2019, www.who.int/news-room/fact-sheets/detail/drinking-water.

2“Water-Related Diseases.” World Health Organization, World Health Organization, 29 Aug. 2016, www.who.int/water_sanitation_health/diseases-risks/diseases/diarrhoea/en/.

3Yeung, Jessie. “India Has Just Five Years to Solve Its Water Crisis, Experts Fear.” CNN, Cable News Network, 4 July 2019, www.cnn.com/2019/06/27/india/india-water-crisis-intl-hnk/index.html.

Contact:

Water Now, Inc.

817-900-9184

 

 


Source: NewMediaWire (October 1, 2019 - 10:39 AM EDT)

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