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Clearford Announces Amendment to Convertible Debentures, Issues Option to acquire portion of UV Pure Technologies Inc., receives additional USD$1.99 million in funding

Ottawa, Ontario – (December 13, 2019) – Clearford Water Systems Inc. (“Clearford” or the “Company”), (TSXV: CLI), today announced that it has entered into amending agreements on its convertible debentures and provided an option to an existing debtholder to acquire 25% of its subsidiary, UV Pure Technologies Inc. (UVP) for $1 million. Additionally, it announced that it has entered into a new US$1.99 million with Sustainable Water Recycling Inc..

The Company announced that it has entered into an agreement with its convertible debenture holders to amend the terms of four of its convertible debentures. The amendments remove the conversion feature which would have allowed the debtholder to convert the debt into shares of the Company at a conversion price of $0.20 per share effectively changing the convertible to a standard secured debt. Additionally, the maturity date for the debentures have been amended to December 1, 2023 from various maturity dates between August 5, 2020 to November 5th, 2023. The total amount of the convertible debentures affected by these amendments is C$8,625,000. All other terms remain the same.

As part of the transaction, the Company’s principal lender has also agreed to waive and assign all security rights over UVP to the debenture holder.

Additionally, the company has provided a 5 year option to the debtholder to acquire 25% of UVP through the issuance of new shares from treasury for $1 million at any time during the option period. The option provides the company with potential additional funding for UVP to fund future growth opportunities.

UVP recently released its third generation product. The new products include a 100 gallon per minute unit and replaces the existing sales offering with new robust systems with both NSF and EPA ratings. The products are currently being certified for international markets and the Company expects to be in a position to deliver products into this market in the first half of 2020.

The Company currently has 102,027,729 issued and outstanding shares, and 159,382,729 on a fully diluted basis. Following the transaction, the Company will have 102,027,729 issued and outstanding shares and 116,257,729 on a fully diluted basis. The fully diluted shareholdings include convertible debentures, employee stock options and these newly issued warrants.

In addition to the above, the Company through its subsidiary Clearford Koester Canada Inc, (CKC) entered into a new 10-year loan agreement with Sustainable Water Recycling Inc. (SWR). The loan bears an interest rate of 9.75% with interest payable semi-annually with a 2029 maturity date. The proceeds of the loan will be used for working capital purposes including interest payments. The loan agreement will include a general security agreement between CKC and SWR.

“These amendments allow us additional flexibility to manage our debt as we continue to progress on delivering our business plan, launched in 2017, as previously announced, to become a full service water solutions company”, says Kevin Loiselle, President and CEO of the Company. “We recently released our Q3 results on SEDAR on November 21st, 2019 which has showed continued improvement in our operations” he concluded.

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 is a provider of unified water management solutions for the design, deployment, finance and operation of water infrastructure systems. The Company’s technology-based water solutions include Clearford One® wastewater infrastructure systems, Clearford M‑brane™ packaged treatment solutions, and a full range of UV Pure® water disinfection products. Clearford is the winner of the Frost & Sullivan 2017 Enabling Technology Leadership Award for Global Decentralized Water & Wastewater Treatment. For more information, visit www.clearford.com.

About Clearford Koester Canada Inc. (a Clearford subsidiary)

Clearford Koester Canada Inc. is a manufacturer of packaged water and wastewater treatment systems for municipal, commercial and industrial applications. The company designs and builds custom modular and containerized treatment systems that integrate advanced technologies like membrane filters, ultraviolet disinfection, and smart instrumentation and control systems for highly efficient treatment solutions that address any site constraints and water quality challenges. The company’s M-brane™ membrane bioreactor (MBR) treatment plant has been installed at sites in Ontario and New York State.

About Clearford Waterworks Inc. and Clearford ASI Inc. (Clearford subsidiaries)

Clearford Waterworks Inc. and Clearford ASI Inc. are full-service providers of water and wastewater systems management including in-field operations and maintenance, emergency operations, regulatory compliance support, engineering services and technical assistance and troubleshooting, and asset management services. The company operates over 170 treatment plants, water distribution and wastewater collection systems in Ontario for small municipalities, private developments, golf courses, camps and campgrounds.

About UV Pure Technologies Inc. (a Clearford subsidiary)

UV Pure Technologies is a manufacturer of advanced ultraviolet water disinfection systems for residential, commercial, industrial, public, and municipal applications. The company’s patented Crossfire Technology® is an innovative water disinfection solution with over 18,000 installations worldwide. UV Pure has earned an Artemis Top 50 Clean Tech Company award, Going Green Global Top 200 award, two Frost & Sullivan Best Practices Awards, and a Canadian Drinking Water Association award for innovation. For more information, 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

About Clearford Water Systems Inc.
Clearford Water Systems Inc. (TSX-V: CLI) is a provider of unified water management solutions for the design, build, finance, operation and maintenance of water and wastewater infrastructure systems. The Company’s technology-based water solutions include Clearford One® wastewater infrastructure systems, Clearford M-brane™ packaged treatment solutions, and a full range of UV Pure® water disinfection products. Clearford is the winner of the Frost & Sullivan 2017 Enabling Technology Leadership Award for Global Decentralized Water & Wastewater Treatment. For more information on Clearford Water Systems, please visit www.clearford.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

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