Basin Water Sells Rights to Southern California Water Conveyance Assets to Empire Water Corporation
Deal Structure Provides Shares in Acquirer and Treatment System
Sale While Providing Opportunity for Development of Assets
RANCHO CUCAMONGA, Calif.--(Business Wire)--Basin Water Inc. (NASDAQ:BWTR), announced that it has completed a
transaction with Empire Water Corporation (Nevada) to sell the rights
its wholly-owned subsidiary acquired to Southern California water
conveyance assets in May 2007 of this year. The right to purchase
these assets was owned by Basin Water Resources, Inc. -- a
wholly-owned subsidiary of Basin Water, Inc. These assets include an
18-mile water conveyance canal, rights to pump water from the San
Bernardino County Basin and other equipment, tangible and intangible
property that were held by the West Riverside Canal Company and the
West Riverside 350 Inch Company. As compensation, Basin Water
Resources received 6 million shares of Empire Water Corporation at the
first closing. It will receive an additional 6 million shares at a
second closing to occur before June 30, 2008. These shares will be
subject to a one-year lockup. As a second part of the transaction,
Empire Water purchased a 1000 gallon per minute (gpm) nitrate removal
system from Basin Water that will be held in inventory until it is
deployed at a later date.
Peter L. Jensen, Chairman and CEO of Basin Water, commented "We
are very pleased to complete this transaction. This will allow the
shareholders of Basin Water to own a major stake in an exciting water
resource company based in Southern California. Long-term drought
combined with a growing population will continue to increase the value
of sustainable water resources in the Western United States. Empire
will be able to capitalize on this demand with its ability to both
produce and convey water across a major portion of the Inland Empire
of Southern California," he said. "At the same time, with the sale of
this first nitrate removal system and the opportunity to deliver more
units as the business of Empire Water grows, we are developing a new
customer and strengthening our core business," he added.
Formerly known as Cascade Coaching Corp., Empire Water Corporation
was recently renamed in anticipation of this transaction with Basin
Water. Empire Water is currently listed on the OTC bulletin board. The
company has retained financial services and investment banking firm
Canaccord Adams to raise up to $20 million to fund the purchase and
development of the canal project. In order to fund the immediate
purchase of the canal before year-end, when the options were to
expire, the funds are being raised in two tranches. The first tranche
raised approximately $3.75 million at $1.25 per share (plus equivalent
warrant coverage) at the first closing, with another $250,000 expected
to be raised shortly after the first closing. The second stage is
expected to raise the balance and to close before June 30, 2008.
The assets that form the basis for this transaction come from two
of the oldest water companies in California. The West Riverside Canal
Company was formed in 1886 and owned an 18-mile-long canal that has
historically been used to transport water for agricultural and other
non-potable water applications. The canal crosses several of the
largest groundwater basins in Southern California. The West Riverside
350 Inch Water Company was formed in 1891 and had historic water
rights in the Riverside Basin of approximately 960 million gallons per
year. It operated two wells and a pipeline distribution system
producing approximately 150 million gallons per year of non-potable
water. Future development of the canal assets offers Basin Water a
platform to compete for service opportunities to treat impaired
groundwater to increase the volume of water available for conveyance
and sale by Empire Water.
About Basin Water
Basin Water, Inc. is a provider of reliable, long-term process
solutions for a range of clients, which includes designing, building
and implementing systems for the treatment of contaminated groundwater
for drinking or other uses, the treatment of wastewater, waste
reduction and resource recovery. Basin Water employs treatment
technologies including its own proprietary, scalable ion-exchange
wellhead treatment system, along with a host of other treatment
technologies designed to meet customer needs in an efficient, flexible
and cost effective manner. Additional information may be found on the
company's web site: www.basinwater.com.
Forward Looking Statements
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
These statements, including expectations relating to future revenues
and income, the company's ability to gain new business and control
costs, involve risks and uncertainties, as well as assumptions that,
if they prove incorrect or never materialize, could cause the results
of the company to differ materially from those expressed or implied by
such forward-looking statements. Actual results may differ materially
from these expectations due to various risks and uncertainties,
including: the company's limited operating history, significant
operating losses associated with certain of the company's contracts,
the company's ability to identify and consummate other acquisition
opportunities that improve the company's revenues and profitability,
significant fluctuations in its revenues from period to period, its
ability to effectively manage its growth, the success of the company's
strategic partners, its long sales cycles, market acceptance of its
technology, the geographic concentration of its operations and
customers, its ability to meet customer demands and compete
technologically, the company's ability to protect its intellectual
property, regulatory approvals of the company's systems, changes in
governmental regulation that may affect the water industry,
particularly with respect to environmental laws, the company's ability
to attract and retain qualified personnel and management members and
the company's ability to manage its capital to meet future liquidity
needs and the timing of the company's stock repurchases, if any. More
detailed information about these risks and uncertainties are contained
in the company's filings with the Securities and Exchange Commission,
including the company's Annual Report on Form 10-K for the year ended
December 31, 2006 and subsequent Quarterly Reports on Form 10Q. The
company assumes no obligation to update these forward-looking
statements to reflect any change in future events.
Basin Water, Inc.
Michael M. Stark, President & COO, 909-481-6800
www.basinwater.com
Copyright Business Wire 2007
