Aqua Power Systems Inc. Signs Agreement to Purchase Magnesium Air Fuel Cell Company Aqua Power System Japan

Tokyo, Japan--(Newsfile Corp. - April 16, 2015) - Aqua Power Systems Inc. (OTCQB: APSI) (the "Company") signed a Share Purchase Agreement dated April 9, 2015 (the "Agreement") with Aqua Power System Japan Kabushiki Kaisha ("Aqua Power") and Tadashi Ishikawa (the "Shareholder"), who is also President and a director of the Company, to purchase all issued and outstanding shares of Aqua Power. The Agreement confirms the mutual intention of the Company, Aqua Power and the Shareholder to enter into a business combination (the "Transaction") to be effected by the purchase by the Company of all of the issued and outstanding shares of Aqua Power from the Shareholder.

Closing conditions to the Transaction include delivery of audited financial statements of Aqua Power and the due diligence review of the financial statements. The Agreement contains provisions that are customary for a transaction of this nature, and closing is dependent on the Company's status as a reporting issuer with the U.S. Securities and Exchange Commission Exchange. Upon completion of the Transaction, Aqua Power will be a wholly-owned subsidiary of the Company. The transaction is expected to close in May 2015. For further details please refer to the Company's Form 8-K filing regarding the Agreement at www.sec.gov.

ABOUT AQUA POWER

1. OVERVIEW

Aqua Power is a technology company specializing in magnesium air fuel cell technology. Founded in Japan in 2004, Aqua Power develops, manufactures and has successfully commercialized magnesium air fuel cells for generating safe, green, reliable and inexpensive off-grid electricity. Non-toxic and recyclable, Aqua Power fuel cells can be stored for up to 20 years before activation. Aqua Power's patented (and patents-pending) Realistic Magnesium Air Fuel System ("RMAF") technology causes electricity to be generated from the chemical reaction of the combination of magnesium, oxygen (air) and a saltwater electrolyte.

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2. MARKET NEED & MARKET SIZE

There are approximately 1.3 billion people, 18% of the world's population, who have no electricity. Millions of households and businesses go without power every year due to natural disasters and power outages. Oil and gas, mining and forestry companies, and the military, often operate in remote locations and require off-grid power sources. Expanding outdoor recreation market segments – marine, backcountry, camping – are seeking zero-emission and ever more lightweight portable power and lighting sources for areas where no grid power is available. These requirements are driving rapid growth in the global fuel cell industry with a potential market projected to reach $2.5 billion in revenue by 2018 according to the Freedonia Group. This expansion comes as the traditional solutions for meeting these needs are in decline due to limitations in portability, reliability, sustainability and financial viability. The global combined fuel cell and battery markets are worth over $100 billion annually.

Current off-grid electricity generation and recharging solutions fall short for a several reasons as they are often not renewable, expensive, heavy, and not environmentally friendly. Other solutions are also unreliable in emergency situations due to their short shelf life. Aqua Power has developed and is developing a range of products that address these issues.

Aqua Power's technology can be applied to the following markets:

• Emergency Preparedness and Disaster Relief - indefinite shelf life meets the standard to be default back-up system.

• Outdoor Recreation - environmentally safe portable products for back country adventures, mountaineering, and eco-exploring

• Industry - mining, oil and gas and forestry that require off-grid power supply.

• Military - lightweight increases mobility and mission range.

• Marine - its saltwater electrolyte makes Aqua Power a better choice in saltwater environments.

• Automotive - opportunities for power delivery that include automotive main drive, electrical subsystems, and backup systems.

3. THE SOLUTION – AQUA POWER'S PATENTED RMAF TECHNOLOGY

Aqua Power's patented technology, RMAF, can be refueled virtually without limit using its proprietary lightweight magnesium rods, which fuel the electrical reaction that produces electricity. Aqua Power's magnesium air fuel cell uses metal magnesium for the anode and oxygen from the air for the cathode. Salt water (including sea water) is used for the electrolytic solution. The air filter cathode is a unique component that shields water transfer, allowing only oxygen to pass as it generates electricity. The benefits of RMAF fuel cells are that they have a very long shelf, are lightweight, transportable, environmentally friendly, safe and easily scalable for greater power generation.

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4. PRODUCTS

Aqua Power has successfully commercialized magnesium air fuel cells. It has aggressively patented (16 patents and patents-pending to date) and actively protects its intellectual property in Japan and internationally. This early-to-market position and technology leadership help to create strong barriers to entry in Aqua Power's markets.

Aqua Power has been generating revenue since its initial products were launched in 2009 in Japan. These products included a water-activated AA battery (more than 8 million sold to date), mini-LED flashlights, and portable radios. Aqua Power gained national attention in Japan following the earthquake and tsunami that devastated many parts of the country in 2011. Aqua Power has continued its growth by improving and advancing its magnesium based technology for new applications focusing on advancing its fuel cell technology and power supply equipment.

The Evolution of Aqua Power Products

Batteries -> Lighting Products -> Power Supply Equipment

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Aqua Power's products can be broken into three categories: (1) batteries, (2) fuel cell powered lighting products and (3) power supply equipment. Aqua Power currently has five products in the market and hopes to have a number of additional lighting and power supply products launched in the market over the next year.

4.1 Batteries

The NoPoPo battery was Aqua Power's first product, launched in 2009. The water activated 1.5 V AA batteries can power LED flashlights, mini lanterns and portable radios and have a shelf life of 20 years (dry cell battery is less than three years). They brought the Company national recognition during power outages after the devastating Japanese earthquake and tsunamis in 2011. They are made up of manganese dioxide (+) and magnesium alloy (-). More than eight million batteries have been sold to date. They are distributed throughout Japan by Aqua Power's distribution network, which includes Tokyo Hands, a nationwide big-box retailer.

4.2 Lighting Products

Aqua Power has developed cutting edge lighting products using their RMAF system technology. The products can be broken into four categories: Flashlights, Speciality Lighting Products, Lanterns and magnesium Power Bars for these products.

Diagram showing the basic functioning of the technology behind the lighting products

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4.2.1 Flashlights

The Company has developed three flashlights and flashlight-lantern hybrids that are expected to go into production over the next year.

4.2.2 Specialty Lighting Products

Aqua Power is developing several speciality lighting products to suit the needs of particular customers and industries. The Mining Industry Flashlight is to be used by workers in underground mining operations where safety is a top priority. The Car and Boat Light/Battery is being designed to be a light source as well as electricity source to be used in cars and boats. The Mountain Climbing & Outdoor Recreation light is to be used as a light source in both climbing and outdoor markets.

4.2.3 Lighting Products - Magnesium Power Bars

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The Aqupa Power Bars are magnesium rods that provide the power source for the Lanterns and Flashlights. The magnesium rod is easily replaced and ranges in size from 130 x 25 mm to 102 x 30 mm. The Power Bars are expected to generate significant recurring revenue streams for the Company as consumers replace them.

4.2.4 Lanterns

Aqua Power's lanterns are ideal for off-grid lighting for disaster response, camping, remote worksites, and marine use. An on-off switch starts - and stops - the chemical reaction that generates electricity to power the lantern. The magnesium bolt is easily replaced - a see-though bottom indicates when a replacement is needed.

The table below provides the estimated product specifications for the Aqua Power lanterns, marketed under the ‘Aqupa' brand in Japan.

The Aqupa Lamps 210 and 250 are stand up light sources (lanterns). The Lantern using Aqua Power AA Battery is a modified version of the Aqupa Lamp 250 so as to have a lower price. The Home Use Lantern is an upgraded Aqupa Lamp 250 with higher current, which provides up to 2A power.

Aqua Power's "Coleman-style" Aquupa Lamp 250 model lanterns have been selling in Japan for about US$30 each since their launch in July 2014

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4.3 Power Supply Equipment

Power supply equipment is the third category of Aqua Power products and is expected to evolve to become a very significant portion of the Company's business.

4.3.1 First Generation Portable Power Supply

Aqua Power's first generation portable power plant was commercialized and designed specifically for the City of Sonora in Mexico as a back-up power plant for disaster situations. In September 2011, 510 units were sold to the City of Sonora. This product would last approximately 240 hours and generate 15-19V DC / 100-220 AC with an estimated price of US$1,120 per unit.

4.3.2 New Generation Power Supply Equipment

Aqua Power's R & D team is currently developing a number of power supply equipment products of increasing power output, physical size and cost:

• Handheld USB charger for cel phones & laptops

• Handheld USB charger for laptops - is being designed to have an estimated output of 80 hours of electricity at up to 3.0V

• Small power plant (2-3A) - is being designed to have an estimated output of 8 hours of electricity per day for 14 days at up 2-3A with voltage of 15 to 19V DC

• Medium power plant (5A) - is being designed to have an estimated output of 8 hours per day of electricity for 14 days at up to 5A with voltage of 22.5V DC

• Large power plant (10A) - is being designed to have an estimated output of 8 hours per day of electricity for 14 days at up to 10A with voltage of 22.5V DC

• X-Large power plant (30A) - is being designed to up to 30A with voltage of 37.5V AC

The Handheld USB charger for cel phones & laptops is expected to be launched in 2015. The Company anticipates that this launch will be very well received in Japan especially given the recent past history of Furukawa Battery Co. Ltd.'s announcement in September 2014.

Furukawa Battery Co. Ltd., based in Japan, announced in September 2014 that it has developed a magnesium air power pack for emergency power generation with the ability to recharge a cel phone 30 times in its lifespan of 5 days from the time of activation (adding water). However, relative to Aqua Power's product Furukawa's technology has no on/off switch, is disposable that is thrown away after 5 days with no refuelling or recharging capability and its selling price was announced at US$93 which is very expensive relative to Aqua Power's charger which is anticipated to sell in the US$30 range. After announcing its magnesium air power pack in September, Furukawa Battery's share price more than doubled from about 600 yen to a high of 1,500 yen (from a market cap of about US$170 million to a high over US$400 million). The share price is currently about 900 yen giving it a current market cap of about US$250 million. Furukawa Battery has a broad and diversified battery business with annual sales in the US$400 million range however its significant increase in market cap in September 2014 occurred in the days immediately after its disposable magnesium based battery was announced. The Furukawa power pack was supposed to be released in December 2014 but it still has not been released.

5. CURRENT & NEAR-TERM PRODUCT DISTRIBUTION

Aqua Power's NoPoPo batteries are currently distributed throughout Japan and in select Asian markets through its network of wholesalers and retailers, which include big-box chain stores such as Tokyo Hands. The Aqua Power lighting products are distributed in Japan on a non-exclusive basis through Yamazen Corp, a product development and distribution partner, which gives Aqua Power access to more than 100,000 stores throughout Japan (see Bloomberg's Yamazen profile at http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=8051:JP).

Aqua Power is currently focused on building a solid foundation in its Japanese home market but is constantly evaluating and planning for international expansion. Aqua Power's home market provides a solid foundation to build its sales as the Japanese are technology-obsessed, only second to Americans who have more devices per person, and they have a strong demand for off-grid power alternatives due to the country's natural disasters.

According to Time Magazine, “Japan is arguably the world leader in disaster readiness” and in a Harvard Humanitarian Initiative report it states “Japan's earthquake and disaster preparedness capacity is the most sophisticated in the world”. The Japanese Government has made a coordinated effort to prepare their population for disaster and all citizens are encouraged to keep a survival kit in their homes – Aqua Power's flashlights and lanterns could be invaluable for navigating if the power goes out and portable phone chargers help people stay informed and communicate in emergency situations.

Aqua Power does intend to expand its global distribution as it expands its production capabilities and its product lines. The Company receives expressions of interest in its current products and those in development on an ongoing basis.

6. KEY SUCCESS FACTORS

Four primary factors make Aqua Power uniquely qualified to succeed:

7. SUMMARY

Aqua Power is a technology firm specializing in magnesium air fuel cell technology which develops, manufacturers and has successfully commercialized magnesium air fuel cells for generating safe, green, reliable & inexpensive off-grid electricity. Aqua Power's vision is to become the world's leading supplier of affordable, environmentally friendly off-grid power. Aqua Power's mission statement is to develop, manufacture, license and market its magnesium air fuel cell technology globally, and to collaborate with advanced R&D institutions worldwide to advance its technology.

For additional information regarding Aqua Power please visit www.aquapowersystems.com.

On behalf of the Board

Tadashi, Ishikawa, President

For further information please contact: info@aquapowersystems.com.

Notice Regarding Forward-Looking Statements

This news release contains "forward-looking statements," as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future, including but not limited to, statements regarding the Transaction.

Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with mineral exploration and difficulties associated with obtaining financing on acceptable terms. We are not in control of metals prices and these could vary to make development uneconomic. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that the beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our most recent annual report for our last fiscal year, our quarterly reports, and other periodic reports filed from time-to-time with the Securities and Exchange Commission.