Texas AM and CDT Systems, Inc. Partnering for Advancing Desalination and Water Technology

Jan. 6, 2005

Texas A&M University, the Texas Agricultural Experiment Station (TAES), and the Texas Water Resources Institute (TWRI), a component of TAES, have executed a Memorandum of Understanding (MOU) with CDT Systems, Inc. (OTC Bulletin Board: CDTN), a Dallas, Texas based water technology company. The MOU creates a five-year partnership to provide basic concepts and procedures to provide programs of research, technology development and outreach between CDT Systems, Inc. and TWRI.

This MOU is based upon a working relationship established in October 2003 between CDT Systems, Inc., TAES, TWRI and Texas A&M's Global Petroleum Institute, which resulted in continuing desalination testing programs with the Texas Water Development Board.

CDT Systems, Inc., TAES and TWRI will cooperate to develop comprehensive programs to achieve maximum efficiency in desalination and water treatment technologies. The parties will cooperate in the execution of the programs by providing the resources needed for the testing, evaluation and field usage of desalination technologies; where possible, the parties will consolidate and disseminate research results to cooperating industries and to the scientific community.

The parties also agree that the implementation of this MOU can be best achieved by locating the planned CDT Systems, Inc. manufacturing facility in the Bryan-College Station, Texas area; therefore, either party may provide equipment, financial and other resources as may be mutually agreed upon and needed within the legal restriction placed by the policies of each institution.

The Texas A&M Board of Regents has also approved the creation of a graduate program that will allow Texas A&M students to obtain Master and Doctoral Degrees in Water Management and has submitted the program to the Texas Higher Education Coordinating Board for review and approval.

The Water Resources Institute and CDT Systems, Inc. participated in a study for an alternative cost-effective technology for the desalination of brackish water in 2004. Capacitive Deionization Technology (CDT) was tested with funding provided by the Texas Water Development Board. This test project is continuing under the direction of the Global Petroleum Research Institute. CDT Systems, Inc. has furnished additional CDT Aqua Cells and funding to the Global Petroleum Research Institute for the project. Plans are to continue the testing on an expanded application basis.

Source: CDT Systems, Inc.

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