Global Water Technologies issues shareholder letter with 2013 plans

For immediate release: Global Water Technologies (OTC Pink: GWTR)

http://www.gwtr.com

December 31, 2012

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

www.gwtr.com

FORWARD-LOOKING STATEMENT:
Statements 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.