Mr. Lynn Mueller reports

IWS CLOSES BROKERED FINANCING TRANCHE

International Wastewater Systems Inc., further to its news release dated Jan. 19, 2017, has closed the first tranche of the company's brokered private placement, led by Haywood Securities Inc. as agent.

Pursuant to the first tranche of the brokered placement, the company has issued 2,659,850 units at a price of 30 cents per unit for gross proceeds of $797,955. Each unit consists of one common share and one common share purchase warrant of the company. Each warrant entitles the holder to purchase one share for a period of two years from the date of issuance at an exercise price of 40 cents per share.

The company has paid cash commissions in the amount of $59,846.63, being 7.5 per cent of the aggregate gross proceeds from the sale of units under this tranche of the brokered placement. The company has also issued to the agent and its designee 199,488 non-transferable warrants, being 7.5 per cent of the number of shares sold under this tranche of the brokered placement. Each agent's warrant entitles the holder to purchase one share at a price of 30 cents for two years from the closing date.

All securities distributed pursuant to the brokered placement are subject to a statutory hold period of four months and one day from the date of issuance.