ARMADA WATER ASSETS INC IPO

The Company intends to utilize the proceeds of the offering for working capital,
purchase of equipment and general corporate purposes. The amounts and timing of
expenditures for each purpose may vary significantly depending on numerous
factors, including, without limitation, the progress of the building of our
customer base. We anticipate, based on currently proposed plans and assumptions
relating to our operations, that our available cash of approximately $200,000
(which Barstow had in its bank account when the Company purchased it in February
2013), the funds we raised in January and February 2013 ($487,500), the proceeds
of a $500,000 loan from a third party and the net proceeds of this offering (up
to $2,945,000), if successful, and cash flow from operations, if any, will be
adequate to satisfy our capital needs for the remainder of fiscal year 2013. In
the event that our offering is successful, the first $1,000,000 in proceeds
received after the first $1,000,000 in proceeds from this offering triggers the
early prepayment clauses within the promissory notes we issued as part of the
purchase price for the membership interests acquired from the members of Barstow
Production Water Solutions, LLC.

There are several competitors and potential competitors that currently offer
certain of the technologies involved in the water remediation process (for
example, electro-coagulation, reverse osmosis, or membrane filtration).
Similarly, there are competitors which have facilities offering injection wells
and/or transportation of contaminated or clean water or offer fresh water for
sale. It is the Company’s intention to combine all of the services, technologies
and commodity components required by its customer base in order to offer the oil
and gas industry in its targeted markets a simple and convenient, yet essential
“one-stop” solution.

The Company’s management and its advisors have well over 20 years of experience
performing field services in and around the oil and gas industry. Additionally,
the Company has or intends to retain the services of senior oil and gas field
engineers that have significant hands-on experience in designing, constructing
and operating water treatment facilities in and around the oil and gas industry.
Following its research and due diligence, the Company’s management believes that
there are no strategically-located facilities in the oil and gas fields in its
target markets offering an all-inclusive, collection, remediation,
recycling/reuse water treatment technology to the oil and gas industry. While
Company management believes that there are other groups providing similar
services, Company management believes it can provide a water treatment and
related support services that are superior to competitive offerings based on 1)
Company management’s existing relationships with Oil and Gas field service
providers with proven safety and performance histories and 2) the Company’s
access through its existing engineering and technology partners to patented
and/or proprietary water treatment technologies that have been proven in terms
of throughput, performance and reliability. Further, Company management believes
that its strategically located facilities which are either currently owned or
targeted will result in a competitive advantage in terms of convenience and
reduction of transportation costs for its customers.

The Company intends to negotiate both long and short-term contracts with its
customers. Once contracts are secured, they will provide an advantage for the
company in terms of minimizing market variables by determining its revenues and
costs in order to maintain predictably profitable operations.

The Company then intends to offer additional ancillary services such as
proprietary drilling mud treatment services, vapor and emission control
capabilities, as well as freshwater sales at several of its facilities.