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December 27, 2014

Global Water Technologies releases annual shareholder letter

Dear Shareholders of Global Water Technologies,

Our annual shareholder letter reviews both progress and some unexpected challenges for the company over the past year, plus additional opportunities as we move into 2015.

Global Water Technologies has been working to position itself as a technology provider of “smart water” tools that combine innovative software and hardware solutions to diagnose, monitor and improve the efficiency of drinking water and wastewater distribution systems. These buried assets are a vital part of the infrastructure that are often ignored until critical sections fail and cause extensive damage.

Global trends including urbanization and a movement to smart cities, combined with new technologies and the emerging “Internet of Things” that utilizes sensors and software to create new linkages are ready to change procedures for condition assessment and asset management in the water industry. This is an area where the company sees significant opportunities and has been developing a portfolio of tools and solutions to improve efficiency and create value for utilities and their customers.

After completing the acquisitions of GreenSuite and Water and Sewer Innovative Resources (WASIR) in 2013, the company prepared for significant growth in 2014. During the first quarter, the company engaged a larger accounting firm, submitted proposals for federal research projects and saw an increase in sales for its legacy water treatment product. New team members and business partnerships were also established.

In April, the company was notified of legal matters related to a former director, who had resigned in 2010. The company was not named in the filed complaints, but separate entities that hold restricted shares in the company were relief defendants. A final SEC judgment on October 30, 2014 precludes the sale of those shares by the named entities.

Attention to these matters hampered efforts by the company to fund and execute the anticipated growth in its new areas of business. The company's Electric H2O subsidiary has continued to improve its performance with increased revenues in 2014. GreenSuite and WASIR have not contributed revenues in 2014, but have made progress toward such efforts in the coming year.

Two changes regarding the company's university relationships also took place in the past year. Over the summer, Dr. Tom Iseley, who leads the company's new WASIR business, left Indiana University Purdue University Indianapolis (IUPUI) to head the national Trenchless Technology Center at Louisiana Tech. Separately, the Indiana University Innovation Center announced it will phase out its affiliate and tenant services at its Indianapolis location. As a result, the company is reviewing options for strategic university partnerships within the emerging water sector.

At the same time, the company has continued to make progress on developing a portfolio of technologies to improve water efficiency and is currently working on several opportunities with both U.S. and international partners. Additional details on these efforts are expected to be announced during the first quarter of 2015.

Continued growth in the network of emerging water technology clusters in the United States have presented additional opportunities for 2015, with several major industry events scheduled to be held in the two multi-state clusters overlapping Indiana. A recent article on the company's web site addresses some of those opportunities.

Although the company has been restrained by available working capital, it continues to avoid any short-term financing that could be considered toxic and has taken steps to preserve the share structure. At the end of 2014, the company has 17,131,605 shares of its common stock issued and outstanding.

Additional funding to build the company and its subsidiaries in the coming year will be sought from strategic partners and investors who share the commitment to create value for both new and existing shareholders.

We are thankful for the continued support of those who have been shareholders in the company for many years and welcome those who are looking for new opportunities in the future.

Sincerely,


Erik Hromadka
Chairman and CEO


FORWARD-LOOKING STATEMENT:
Statements in this press release 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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