Sionix Corporation Updates Shareholders

SANTA MONICA, Calif., Aug. 26 /PRNewswire-FirstCall/ -- Sionix Corporation (OTC Bulletin Board: SINX) Chairman & CEO James R. Currier and President & CFO David R. Wells today issued the following letter to its shareholders and potential investors.  The full text follows:

Dear Shareholders:

Over the last several months David Wells and I have been very deliberate regarding disclosures that would raise shareholder expectations without the certainty of underlying performance.  This approach has caused some frustration among some of you, fearing that the lack of news was an implied lack of progress.  Nothing could be further from the truth.  No doubt, by now all of you are aware that we have received our first contract for the definitive sale of the Company's Mobile Water Treatment System ("MWTS") for $1,453,500 from an egg production facility in the Midwest.  This represents a seminal moment in the "new" Sionix - not as a "cause celebre," but as an important milestone in the journey of this turn-around called Sionix.

Success at this facility will, once and for all, verify not only the efficacy of our products and technology, but the capacity of management to execute an extremely complex sales transaction from start to finish. While many of you may celebrate this moment, David and I have our feet firmly planted on the ground - once this MWTS has completed fabrication and assembly and successfully passed our pre-shipment testing protocols, and has been transported to its destination, installed, accepted and operating, and we have successfully booked additional orders for our MWTS, only then will David and I pause from this difficult task to consider our accomplishments.

Let us as well acknowledge that the environment in which our MWTS is to be installed is a "cutting edge" application under severe conditions.  We are part of a process that converts noxious chicken litter to energy - enough, in fact to power the entire production operation and approximately 850 homes in the surrounding area.  Not only that, our mission critical participation treats dangerous contaminants that impair and inhibit the productivity of an anaerobic digester, but also defines our corporate mission - recycle water for multiple/continuous use.  

Industrial, commercial, and agricultural uses of water in the production of products and delivery of services stress the limited amount of global water available for human use and consumption.  This is a mission management takes seriously.  Of course, our principal objective is to create value for our shareholders.  But we are also making a critical contribution to our environment that will have served the interests of a common global community.  Our pride in pursuit of that goal will manifest itself in everything we do at Sionix.

Since our last shareholder letter other events have occurred:  

• Effective August 3, 2010 a continuation patent on our Self Contained Dissolved Air Flotation System was officially granted. The continuation application allows much broader claims with respect to containment and control system configurations, and providing Sionix with a substantial "barrier to entry" or "blocking position" relative to potential competition that was not provided under the original claims.  
• In June we hired Thomas C. Leggiere as our Chief Operating Officer.  Tom is a former Naval Nuclear Engineering Officer and has 25 years experience in the water/stormwater treatment industry.  His duties at Sionix include: supervision of sub-contract manufacturing, MWTS procurement, contract administration/project management, field services, and after sale service/warranty administration.  Already his knowledge and experience over the administration and management of our current MWTS project has brought a positive impact.
• In August we hired Michael A. Maccia as our Vice-President of Business Development.  Mike was formerly Chief Counsel of Brogan Capital, the investment arm of one of our senior shareholders, and was instrumental in the award of the current MWTS project at the Midwest egg production facility.  Already, he has initiated domestic and international contacts that David and I believe could result in a number of sales opportunities.
• Also, in June we added RADM William A. Retz (USN-Ret.) and Johan A. Perslow to our Board of Directors.  Both Admiral Retz, with over 30 years active duty in the U.S. Navy and several senior management and board level engagements since retirement, and Mr. Perslow, Chairman of Pacific Advanced Civil Engineering, Inc. and PERC Water Corporation, with over 40 years experience in the water treatment industry, are uniquely qualified to serve on our Board.  Already their steady demeanor and sound advice has provided invaluable guidance to David and I during stressful and distracting moments.
• We have implemented a one-time option for current note holders to convert approximately $3.9 million of current note liabilities and accrued interest to common stock.  As of June 30, 2010 (soon after the program began), $633,205 had been converted to common stock. We anticipate additional conversions before the program ends.
• Since David and I have joined the Company, $10.2 million of approximately $18.0 million total debt has been removed from our balance sheet, including recognition of $1.62 million in revenues that were recorded as deferred liabilities on our balance sheet for the Arkansas project.  This was the first revenue ever recognized by Sionix in the history of the Company.
• We have received a $500,000 equity infusion from the owners of the egg production facility.  This strategic investment is further testimony to our growing credibility and the efficacy of our product and technology.
• We have engaged NYPPEX LLC of Greenwich, CT for purposes of a capital raise.  To date the Company has received $410,000 through the sale of common stock.

We are happy to report to you that what you have here is a "real" company, with "real" opportunities, and with "real" resources to execute in a complex and diverse marketplace.  David and I and our entire management team are totally focused on our jobs.  We hope you will agree.

Thank you for your time and attention.  We sincerely appreciate your continued patience and the opportunity to earn your trust and respect.

PS - I am also happy to report that the Navy has everything covered at Sionix.  In addition to Admiral Retz and Tom Leggiere, Jim Anderson and I are also naval veterans as well!  Anchors Aweigh!

Safe Harbor Statement

This press release contains statements that may constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of the Company, and members of their management as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-statements include fluctuation of operating results, the ability to compete successfully and the ability to complete before-mentioned transactions. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results. Sionix' recent financial results, risks and uncertainties are discussed in its Annual Report on Form 10-K for the fiscal year ended September 30, 2009 and in current reports filed since that date with the Securities and Exchange Commission, all of which are available for review at www.sec.gov.

SOURCE Sionix Corporation