Basin Water Sells Rights To Southern California Water Conveyance Assets To Empire Water Corporation

Rancho Cucamonga, CA — Basin Water Inc. has 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.

SOURCE: Basin Water