EcoSphere Technologies Inc. (fka ESPHQ)

[Recognizer]

We currently have limited working capital. Without working capital or an available credit facility, the Company cannot manufacture
new Ozonix® units and be in a position to seek new customers. We have signed a non-binding term sheet with a Proposed Licensee and have
been negotiating a definitive agreement for the past two months. Assuming we are able to close the transaction, the Proposed Licensee will have
exclusive rights to our Ozonix® technology onshore in the United States oil and gas business, although EES will continue to service our two
customers in the short-term . Additionally, we will retain manufacturing rights. We believe that the Proposed Licensee has the necessary
capital and operational experience to expand usage of the Ozonix® technology. We cannot assure you we will close the transaction. If we are
unable to enter into a definitive agreement with this Proposed Licensee, we will need additional financing or may not be able to remain
operational.