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March 6, 2010

Global Water Technologies answers investor questions

The past week has been an interesting time for Global Water Technologies. Following the announcement of a settlement in its legal matters, there has been considerable interest in the company's stock, resulting in a record 97 million shares being traded on March 4, 2010. That volume has generated additional interest in the company and numerous requests for more information.

Longtime shareholders know it is the company's policy to be responsive to such individual requests, as appropriate. However, given the large number of inquiries from new and potential shareholders, the following answers are provided to frequently asked questions.

This information is neither legal nor investment advice and no financial amounts have been audited. You should consult with your own professional advisors before making any decisions.

Global Water Technologies - Frequently Asked Questions

Does your company have ongoing operations?
Yes, since emerging from bankruptcy in 2004, Global Water Technologies has maintained small ongoing operations that have focused on treating water for commercial and industrial customers, with an emphasis on non-chemical solutions.

What are your revenues?
The company deregistered with the SEC in August 2002 and has been in a non-reporting status since then. That means the company does not file quarterly or annual reports listing revenues and other financial information.

In May 2003, the company filed petition under Chapter 11 of the Federal Bankruptcy Code and then emerged from bankruptcy in July 2004 with its securities intact. Filings made prior to that event should not be used to project estimated revenues.

Following a change in management in February 2009, the company has worked to establish the internal and external reporting systems required for relisting. However, the lack of such systems and resulting data from previous years has made this process difficult and such efforts continue in 2010.

Does the company have outstanding convertible debentures or other debt?
The company issued convertible debentures of approximately $1 million in 2005. The redemption of all outstanding amounts and non-converted debentures was announced in October 2007.

Following the change in management in 2009, members of the board loaned the company money to pay vendors, suppliers and other outstanding bills. At the end of 2009, the amount of those loans totaled approximately $350,000. The company has no other outside debt at this time.

What is the company's share structure?
The company has one class of common shares and provides its share structure and corporate information to the pink sheets under "Company Info" at pinksheets.com.

The company emerged from bankruptcy in 2004 with 25 million shares. By the end of 2008, that number had increased to 1 billion shares authorized and outstanding. Users of charts tracking the stock price during that period should note the increase in shares.

Following the change of management in 2009, the company reached a comprehensive settlement on a number of issues, including a repurchase of some shares held by former management. That settlement was amended in February 2010, so that a total of 195,838,346 shares of Global Water common stock will be returned to the company treasury. According to the company's bylaws, the returned shares will initially have the status of authorized and unissued. Those shares may be issued in the future.

The company also has a class of preferred stock, with no shares issued at this time.

Is your stock price too high or too low?
The company will make no comment on its share price.

However, a general word of caution is in order for novice investors considering the purchase or sale of any stock, especially those priced below a penny and experiencing large swings in price. Given the auction nature of stock markets, the current price at any given moment is a reflection of the opinions of the buyer and the seller and may or may not reflect an accurate valuation of a company's current value or its future value. Beware of statements based solely on how a stock is "priced" and remember it is more difficult to create value than to destroy value.

In addition, while some items have commonly accepted prices, others have highly subjective prices that can lead to a wide range of bids in an auction setting. For example, consider a gallon of milk and an oil painting. Although it is fairly easy to price the milk, it can be very difficult to price a painting… especially if there are many people trying to predict what that painting might be worth in the future. Some paintings create fortunes; many end up being worth less than a gallon of milk. Such speculative purchases, with a wide range of bids now and unknown future demand, carry a very high level of risk.

While the company welcomes new shareholders, potential investors should be wary of any comments made by others who predict large swings in stock price in either direction. The company has not engaged any promoters for its stock nor has it authorized any third party to make statements its behalf.

Please read the information on our investors page at: http://www.gwtr.com/investors.php

Does the company have any subsidiaries?
Yes, the company has one subsidiary. Global Water Technologies owns 90 percent of Electric H2O, Inc., which provides non-chemical water treatment in commercial and industrial applications. The remaining 10 percent is owned by a key supplier and strategic partner of the company.

The company also had a subsidiary called “Watergy Produced Water Solutions” that was sold in 2008. While the company is not actively engaged in the produced water business, it may seek to develop opportunities that arise from its previous efforts.

Prior to its bankruptcy, the company was in the business of constructing cooling towers worldwide. While it is no longer in that business, the company does get some residual inquiries from that operation and attempts to be responsive to such requests.

Does the company have any patents?
Yes, the company holds several patents related to its non-chemical water treatment products. The company has also filed two other patent applications; one for the onsite production of sulfuric acid and one related to the use of forward osmosis in produced water.

Will the company need to raise capital in 2010?
The past year has been an exceeding difficult time for all companies seeking to raise capital and many businesses that needed funding did not survive 2009. Given that environment, management aggressively cut costs so that the company would make it through the year and be positioned for profitable growth in 2010.

The company is currently exploring a number of financing options to move forward in the coming years. Management believes the best source of such funding is through strategic partners who take a long-term interest in the company's success.

What is the company's vision for the future?
The company believes that there is a growing need for water technologies to make better use of limited sources of clean water and reduce the amount of chemicals added to such water. As an early innovator in this area, management believes the company is well positioned to utilize its technologies and increase sales of its products and services.

In addition, management believes that a technology company should not only sell its existing products and services, but also continue to innovate and seek new opportunities. The company continues to move in that direction and welcomes opportunities to develop new water technologies with strategic partners.


FORWARD LOOKING STATEMENT
Statements on this web site relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments, and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, risk factors inherent in doing business. Forward-looking statements may be identified by terms such as "may," "will," "should," "could," "expects," "plans," "intends," "anticipates," "believes," "estimates," "predicts," "forecasts," "potential," or "continue," or similar terms or the negative of these terms. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The company has no obligation to update these forward-looking statements.

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