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December 31, 2012

Global Water Technologies issues shareholder letter with 2013 plans

Dear Shareholders of Global Water Technologies,

As we end the year and prepare for 2013, it is time for our annual shareholder letter with a review of the company's progress and future opportunities.

During the past year, we focused our efforts on the opportunities to create a pilot “smart water grid” that utilizes information technology to better manage the distribution of drinking water in the United States. We identified this as a significant and growing market, as aging systems of underground pipes continue to develop leaks and cause hundreds of water main breaks each day. This not only wastes approximately 20 percent of the clean water that has been treated to high drinking water standards, but it is an expensive problem that also damages infrastructure, disrupts business and causes public health and safety problems.

With the massive amount of funding needed to restore the nation's drinking water infrastructure in the coming decade, a fragmented market with thousands of water utilities and increasing demands for greater accountability and efficiency, we believe there are significant opportunities for new technologies that can reduce water loss and create a “smarter” delivery system.

We also believe that the benefits of such technologies must be demonstrated on a local basis in a way that shows their impact on people, pipes and policy. Earlier this month, we announced our plans to launch a pilot smart water grid that shows how our comprehensive “people + pipes + policy” approach can be a model for sustainable water infrastructure.

Global Water Technologies has been working with several partners to launch such a pilot project with new technologies that engage the people who are consumers of water, the pipes and infrastructure that make up the delivery system and the policies that encourage water efficiency at the local, state and national levels.

The company announced initial partnerships during the past year, including our effort to introduce a patented sensor + software system that has been deployed across Europe to provide better measurement and early warning of underground water leaks. We also announced a partnership with the Buried Asset Management Institute - International (BAMI-I) that works with owners of underground water infrastructure to improve their asset management. We expect to announce additional partnerships as we develop our pilot project in the coming year.

While we believe there are great opportunities ahead, the company also recognizes the challenges of introducing new technology solutions to water utilities that are generally conservative and slow to adopt change. That is one reason that we are pursuing a comprehensive approach with a pilot project that demonstrates benefits to the wider community. The successful launch of a pilot project can then serve as an example from which additional deployments of the technologies can be expanded and scaled into larger systems.

While focusing on these new opportunities, Global Water Technologies has continued to provide shareholders with quarterly filings of financial statements through the OTC Markets. In 2012, GWTR stock maintained its “Current Information” status, which is the highest tier for pink sheet companies.

Financial results demonstrated the challenges of transitioning to a new area of focus, especially since the smart water grid efforts to date have been pre-revenue business development and the company's legacy product line continues to have minimal sales through its Electric H2O subsidiary. Business efforts have been hampered by a lack of working capital and securing additional funding is a top priority for 2013.

The company continues to operate with a very lean cost structure and has been careful in issuing new shares of its common stock to secure new technologies and services, settle accounts payable and raise working capital. At the end of 2012, the company had 11,698,605 shares of its common stock issued and outstanding.

Development work has also continued on the patent issued to the company in 2011 for on-site production of sulfuric acid. Global Water Technologies recently met with its partner on that effort and was informed that initial design work has been completed on a one-ton per day system and a prototype is expected in the first half of 2013.

In the past month, the company has also met with its securities attorney and accountant to discuss the possibility of making future SEC filings, which would require auditing of financial statements and may provide better access to capital markets. The company is reviewing such options and will provide updates as appropriate.

Thank you to all our shareholders, customers, partners, vendors and staff for continuing to support the company as we build Global Water Technologies and look forward to a successful new year.

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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