Clearford Announces Results for the Second Quarter of Fiscal 2017 and Additional Information on Strategic Business Plan

Ottawa, Ontario – (July 28, 2017) – Clearford Water Systems Inc. (“Clearford” or the “Company”), (TSX-V:CLI), a TSX Venture 50 Company, today released results for its three months ended June 30, 2017. The unaudited consolidated financial statements are presented in accordance with IFRS (all figures in Canadian dollars).

As previously disclosed on June 22, 2017, the Company announced a new strategic business plan which includes pursuing strategic acquisitions to support the company’s growth. The business model provides a path for the Company to become an operating utility with equipment supply capability and an effective technology capable of delivering water and wastewater infrastructure at a lower life-cycle cost.  These additional capabilities will be added through a series of acquisitions.  The execution of the business plan will require the Company to put in place new equity and debt financing. The Company has had discussions with lenders and equity interests to fund the new strategic business plan but has not entered into any agreements at this time. Additional updates will be provided as required under the continuous disclosure requirements. The first acquisition is expected to be completed before the end of the fiscal year.

Revenue for the quarter was $972,731 compared with $1,041,011 for the prior year’s quarter. Operating loss before net financing costs were $520,580 for the quarter compared with $816,879 for the prior year’s quarter. Net financing costs for the quarter were $823,975 compared with $629,347 for the prior year’s quarter, with net loss for the year of $1,344,555 or $0.01 per share compared with $1,446,226 or $0.02 per share for the prior year’s quarter.

For the six months ended June 30, 2017 revenue was $1,809,499 compared with $1,961,790 in the prior year and our operating loss was $1,162,682 compared to $1,756,910 in the prior year. Net financing costs were $1,565,680 compared to $1,282,676 in the prior year. The net loss for the six month period was $2,728,362 or $0.03 per share compared to $3,039,586 or $0.03 per share in the prior year period.

UV Pure segmented sales for the three and six months ended June 30th were $938,357 and $1,730,011compared to $900,020 and $1,636,410 in the prior year representing a 4% and 6% increase in sales respectively.

Costs of sales decreased to $498,148 during the quarter from $614,784 in the prior year’s quarter due to completion of Clearford One® project implementations in Ontario and India and the start of Phase 2 of the Clearford OneTM project implementation in Colombia. Additionally, cost of sales were flat at UV Pure on sales increases and a better  product and channel sales mix which increased its its overall gross margin for the six month period to 52% from 46% in the prior year comparable period.

Sales and marketing costs decreased to $339,355 and $674,977 from $401,321 and $814,830 in the prior year’s three and six month periods respectively reflecting less travel for both segments.

Costs of engineering and research and development decreased to $207,195 and $411,444 from $221,902 and $427,885 in the prior year’s three and six months periods respectively reflecting a decrease in spending on the Clearford OneTM System and capitalized development costs for new product development in the UV Pure segment.

General and administration costs increased to $659,155 from $621,977 in the prior year’s quarter primarily reflecting additional costs for legal and corporate overheads and accounting and legal costs. General and administrative costs decreased in the six month period ended June 30th to $1,149,759 from $1,256,259 primarily related to the reduced spending on external consultants.

Kevin Loiselle, President and CEO of Clearford, expressed enthusiasm for the future of Clearford: “The new business model will position Clearford as a provider of water purification and complete wastewater solutions: collection; treatment; and systems operations.  This will solidify Clearford’s market position, increase the revenue from each project, and capture the full value created by the Clearford One system” he said. “This will be achieved by acquiring the capacity for treatment plant fabrication and a systems operations capability, these competencies are complementary to Clearford’s current capabilities and will allow us to control every step of the water infrastructure services chain, including potable water purification and delivery, wastewater collection, treatment, and operations” he continued.  “Integration of systems operations will also secure the long-term operating contracts that will generate steady monthly cash flow for Clearford.” He concluded.

Mr. Loiselle also added that, “UV Pure continues to grow on the competitive strength of the Crossfire technology. The next generation of products based on Crossfire, currently in development, and expected to be released to market in the latter half of fiscal 2017 will allow UV Pure to continue to grow and increase its market share in this $1 billion dollar market.”

Clearford ended the June 30, 2017 quarter with unrestricted cash of $324,950 compared with $411,444 on December 31, 2016. The Company’s quarterly unaudited consolidated financial statements and MD&A are available at www.SEDAR.com.

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

About Clearford Water Systems Inc.

Clearford Water Systems Inc. (TSX-V: CLI) is a provider of unified water management and sanitation systems based on Clearford One®. Clearford One® is a proprietary system comprised of ClearDigest® smart digester, ClearConvey® small bore sewer, and ClearRecover® final treatment facility. For more information on Clearford Water Systems, please visit www.clearford.com.

About UV Pure Technologies Inc.

UV Pure Technologies manufactures technically advanced UV water purification systems. The Company has won an Artemis Top 50 Clean Tech Company award, two Frost and Sullivan Best Practices awards, a Canadian Drinking Water Association award for innovation, and is a Going Green Global Top 200 company.

There are currently over 15,000 UV Pure systems in residential, commercial, industrial, public and municipal applications, with flow rates up to 1 million gallons per day. An aerospace version of UV Pure’s system is being used by Boeing to purify water on its new 787 Dreamliner.

UV Pure’s patented Crossfire Technology® is dramatically advantaged compared to conventional UV systems. Lamps are mounted in air surrounded by elliptical reflectors providing more effective deactivation of pathogens, facilitating easy lamp changes and visual quartz inspection. They are self-cleaning, smart – with multiple sensors and on-board diagnostics guiding maintenance, engineered to be fail-safe, virtually maintenance free, and are plug-in ready for remote monitoring. For more information on UV Pure Technologies, please visit www.uvpure.com.

Forward Looking Statements

This news release contains certain statements that constitute forward-looking statements as they relate to the Company and its management.  Forward-looking statements are not historical facts but represent management’s current expectation of future events, and can be identified by words such as “believe”, “expects”, “will”, “intends”, “plans”, “projects”, “anticipates”, “estimates”, “continues” and similar expressions.  Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that they will prove to be correct.

By their nature, forward-looking statements include assumptions and are subject to inherent risks and uncertainties that could cause actual future results, conditions, actions or events to differ materially from those in the forward-looking statements.  If and when forward-looking statements are set out in this news release, Clearford will also set out the material risk factors or assumptions used to develop the forward-looking statements. Except as expressly required by applicable securities law, the Company assumes no obligation to update or revise any forward looking statements. The future outcomes that relate to forward-looking statements may be influenced by many factors, including, but not limited to: industry cyclicality; the ability to secure third party agreements; successful integration of Clearford’s system with third party technology; competition; reduction in demand for products; collection from customers; relationships with suppliers; product liability; intellectual property; reliance on key personnel; environmental; interest rates; uninsured and underinsured losses; operating hazards; risks of future legal proceedings; income tax matters; credit facilities; availability and terms of financing; distribution of securities; restrictions on potential growth; effect of market interest rates on price of securities; and potential dilution.

For more information contact:

Kevin Loiselle, President & CEO
Clearford Water Systems Inc.
Phone: (613) 599-6474 ext. 303
www.clearford.com