Clearford Announces Private Placement for up to $2,500,000

OTTAWA, May 13 /CNW/ - Clearford Industries Inc. ("Clearford" or the "Company", TSX-V:CLI) today announced its intention to proceed with a common share issuance up to an amount of $2.5 million by way of a private placement of equity units ("Units") at a price of $0.10 per Unit. Each Unit will consist of one (1) common share and one (1) warrant to acquire an additional common share with an exercise price of $0.15 per common share and a two year term. The common shares issued will be subject to a restriction from trading on the TSX Venture Exchange ("TSX-V") for four months from the closing date in accordance with TSX-V rules and regulations for private placements. Proceeds will be applied to fund the Company's internal operations and working capital requirements. Participation in the share issuance will include third parties, as well as current shareholders and directors of the Company. The Company currently has 25,706,165 shares outstanding and 27,906,227 shares on a fully-diluted basis. Investment in this issue of $1.135 million has been committed, of which $635,000 will be purchased by SC Stormont Holdings Inc. ("Stormont"), subject to required shareholder consent, and $500,000 by a fund manager based in Europe.

In August 2009, the Company's strategy became focused specifically on those areas in the international marketplace where the Clearford SBS solution is well positioned to meet the needs of the local communities; where water scarcity and modest cost are key drivers in decisions for wastewater solutions. This international initiative, built upon the foundation of Clearford's existing Canadian reference sites, intellectual property, system integration partnership and wastewater outputs being clean water and fuel to generate green electricity, have resulted in a very positive response and strong interest from these markets.

As a result of trips in late 2009 and early 2010 with senior government officials, Clearford's international focus has included numerous political, academic and business meetings in countries including China, India and the Maldives. Through these ongoing face-to-face efforts, Clearford has established what we believe to be a credible business development network. Clearford is now in discussions with sponsors of projects in Delhi and Jaipur, India. Further numerous suitable sites have been identified throughout China and the Maldives. No contracts yet exist and it is not certain that any will result, however, currently the response from these potential clients has been both very positive and progressing toward what management anticipates could result in contracts in the next several months.

This share issue will be used to fund the Company's internal operations as it pursues these opportunities. Financing requirements for specific projects will be funded by the customer. A broker fee from 3% up to 6% will be paid on investments made by arms-length investors. The investment brokers involved in selling to arms-length shareholders include Lytton Industries Inc. and another brokerage firm. Stormont currently owns 4,875,000 common shares of the Company or 19% of the issued and outstanding shares and 17.5% on a fully diluted basis. Following this private placement, Stormont will own 11,225,000 common shares or 30.3% of outstanding shares assuming a subscription of only $1.135 million, and on a fully diluted basis 15,458,333 common shares or 22.2% assuming a full subscription of $2.5 million. The Stormont portion of this private placement is subject to disinterested shareholder approval to be obtained by written consent and approval by the TSX-V. Pursuant to Clearford's Insider Trading Policy, any insiders, including Stormont, are subject to a blackout period until release of the first quarter financial results (the "Blackout Period"). It is anticipated that the private placement contemplated herein may close prior to the end of the Blackout Period. Clearford will seek Board approval for the waiver of the Blackout Period for the private placement described herein with any insiders, including Stormont. Stormont is a company controlled by Rod Bryden, a director and officer of the Company.

Since early November 2009, the Company has been provided with short term financing from Stormont and a company controlled by a director of the Company. The terms of the short term debt have been extended and increased to allow for further funding of the Company's operations. It is intended that a portion of these short term loans, when repaid, will subsequently be invested in common shares of the Company.

While Clearford believes that significant and near term opportunities exist for the Company's solution, there can be no assurance that customer agreements will be reached or that such agreements will be profitable should they be implemented.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

About Clearford Industries Inc.

Clearford Industries Inc. (TSX-V: CLI) is the developer of the patented Small Bore Sewer (TM) (SBS(TM)), a watertight small diameter wastewater collection system that provides servicing with superior operational and environmental performance at a significantly lower cost when compared to historic gravity sewers. Clearford's SBS(TM) technology and industry expertise provide the enabling platform to deliver, on a global basis, turnkey, fixed-price wastewater collection, treatment and energy generation solutions that are ideally suited for water-scarce regions, those with unreliable water distribution networks, and new developments seeking a greener approach to water and wastewater management. For more information on Clearford, please visit www.clearford.com.

Forward Looking Statements

This news release contains certain statements that constitute forward-looking statements as they relate to the Company and its management. Forward-looking statements are not historical facts but represent management's current expectation of future events, and can be identified by words such as "believe", "expects", "will", "intends", "plans", "projects", "anticipates", "estimates", "continues" and similar expressions. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that they will prove to be correct. By their nature, forward-looking statements include assumptions and are subject to inherent risks and uncertainties that could cause actual future results, conditions, actions or events to differ materially from those in the forward-looking statements. If and when forward-looking statements are set out in this news release, Clearford will also set out the material risk factors or assumptions used to develop the forward-looking statements. Except as expressly required by applicable securities law, the Company assumes no obligation to update or revise any forward looking statements. The future outcomes that relate to forward-looking statements may be influenced by many factors, including, but not limited to: industry cyclicality; the ability to secure third party agreements; successful integration of Clearford's system with third party technology; competition; reduction in demand for products; collection from customers; relationships with suppliers; product liability; intellectual property; reliance on key personnel; environmental; interest rates; uninsured and underinsured losses; operating hazards; risks of future legal proceedings; income tax matters; credit facilities; availability and terms of financing; distribution of securities; restrictions on potential growth; effect of market interest rates on price of securities; and potential dilution.

SOURCE Clearford Industries Inc.

For further information: For further information: Bruce Linton, President and CEO, Clearford Industries Inc., Phone: (613) 599-6474 ext. 301, www.clearford.com

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