February 08, 2010 16:15 ET

H2O Innovation Announces Definitive Cancellation of a Previously Postponed Contract

QUEBEC CITY, QUEBEC--(Marketwire - Feb. 8, 2010) - H2O Innovation Inc. (TSX VENTURE:HEO)(ALTERNEXT:MNEMO:ALHEO)("H2O Innovation" or the "Company"), a complete water treatment solutions company providing custom designed systems along with specialty chemicals for membrane filtration systems, announces the definitive cancellation of a contract it has received in October 2008 from Petro-Canada Oil Sands Inc. on behalf of Fort Hills Energy L.P. The execution of this contract had previously been deferred on November 21, 2008, over 14 months ago. H2O Innovation is currently negotiating the terms of the cancellation and the compensation payable to the Company as a result of that cancellation. The negotiation process underway will determine the terms of the negotiated resolution.

The remaining contract value will be removed from the Company's backlog as of today. The Company's sales backlog is uniquely comprised of systems and equipment sales and does not include sales of services or consumable products, which represented approximately a quarter of its total sales for the previous quarter (first quarter of the current 2010 fiscal year).

Prospective disclosures

This press release may contain prospective disclosures representing current expectations of H2O Innovation which are subject to certain risks and uncertainties. For details of these risks and uncertainties, please refer to the Company's Annual Information Form dated September 28, 2009 available on SEDAR (www.sedar.com). H2O Innovation rejects any obligation to revise or update the prospective disclosures contained in this press release.

About H2O Innovation

With 10 years of experience developing water treatment solutions, H2O Innovation is establishing itself as a key player in sustainable development and clean technologies in North America and abroad. H2O Innovation designs, develops, produces, and integrates state-of-the-art custom-built water treatment systems for the production of drinking water, the reclamation of water, the treatment of wastewater and industrial process water in the municipal, commercial, industrial, oil & gas, mining, and energy markets. Additionally, the Company offers complete operating and maintenance solutions for membrane filtration and reverse osmosis systems. H2O Innovation has approximately 100 employees and eight offices including three manufacturing plants in Canada and the United States and is a founding partner of H2O Innovation India, a joint venture with Chembond Chemicals of Mumbai, India. Shares of H2O Innovation are listed on the TSX Venture Exchange (HEO) as well as on the NYSE Euronext Alternext Exchange (MNEMO: ALHEO). For more information about H2O Innovation, visit the Company's website at www.h2oinnovation.com.

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

Contact Information