Ecosphere Technologies Announces Q3 2013, Reporting YTD Net Income of $22.0 Million and EPS of $0.13, an Increase of $19.9

Ecosphere Technologies Announces Q3 2013, Reporting YTD Net Income of $22.0
Million and EPS of $0.13, an Increase of $19.9 Million and $0.12 Over Q3 2012
YTD

STUART, Fla., Nov. 13, 2013 (GLOBE NEWSWIRE) -- Ecosphere Technologies, Inc.
(OTCBB:ESPH), a water engineering, technology licensing and innovative U.S.
manufacturing company, today announced results for the nine months and quarter
ended September 30, 2013 in its quarterly report on Form 10-Q, reflecting Net
Income for the nine months ended September 30, 2013 of $22.0 million, compared
to $2.1 million in the same period in 2012. The Company announced Basic and
Fully Diluted EPS of $0.13, an increase of $0.12 versus the same period in
2012. For the third quarter, the Company reported a net loss of $2.8 million,
or $0.02 per share.

David Brooks, CFO of Ecosphere Technologies stated, "The sale of an additional
percentage of FNES to Fidelity National Financial, Inc. ("FNF"), a Fortune 500
company, at the same valuation has further validated the value of one of our
seven core applications in which the Company's patented, revolutionary Ozonix®
technology can be applied. Unlike revenue generated from manufacturing Ozonix®
units and related service revenue, which have limited gross profit margins,
the sale of intellectual property has essentially 100% gross margins. The 2013
profit is an indicator of the success of the Company's long-held plan of
developing and monetizing its intellectual property. The net loss for the
quarter of $2.8 million results from our transition from being the full-time
managing majority partner of FNES into monetizing additional subsidiaries in
which our Ozonix® technology can be used including but not limited to
Agriculture, Food & Beverage, Industrial, Mining, Marine and Municipal
wastewater treatment."

Brooks continued, "The Company retains 100% of the global rights to monetize
its patented Ozonix® technology in all other non-energy related water
treatment industries and plans to realize similar value as recently realized
from the development and sale of its ownership interest in FNES. This process
does not allow us to recognize consistent revenues or profits but ultimately
provides much greater value for our shareholders."

The Company's total assets have increased by $13.1 million since December 31,
2012, from $8.9 million to $22.0 million, while total liabilities have
decreased by $1.5 million, from $3.9 million to $2.4 million. Working capital
has increased by $2.1 million since 2012, from $1.0 million to $3.1 million as
of September 30, 2013. Mr. Brooks added, "We are positioning the Company to
realize similar success with non-energy related subsidiaries by using proceeds
from the sale of our IP related to the energy sector to maintain a solid
balance sheet."

Dean Becker, Director and Intellectual Property Strategist for Ecosphere
Technologies, stated, "During the three months ended September 30, 2013,
Ecosphere retained Navigant Consulting, Inc., a leading company in the field
of intellectual property valuation, to perform an analysis to value our
patented Ozonix® technology portfolio.Navigant delivered the valuation in
November 2013, which includes all of the potential industries and applications
where Ozonix® can be used and licensed, including the global energy
field-of-use, of which the Company owns approximately 31% interest in FNES.
While this valuation is subject to a number of assumptions, the Company
believes it illustrates the hidden value that is not recognized on our Balance
Sheet or by the investment community."

Becker continued, "In the past five months, Ecosphere has received $10 million
from FNF for the sale of the Company's 20% interest in FNES. We believe that
this sale represents approximately 2% of the estimated value of the Company's
global Ozonix® intellectual property portfolio. Additionally, FNF has an
option to purchase another 12% interest for $6 million in Q4 2013,
representing approximately 1% of the Company's global Ozonix® intellectual
property portfolio."

Becker added, "The application of Ozonix® in the energy field-of-use is just
the start of a long-term intellectual property monetization strategy of
inventing, patenting, innovating, manufacturing and successfully deploying our
intellectual property assets across numerous industries around the world."

Financial Statement Highlights

  *Net Income for the nine months ended September 30, 2013 of $22.0 million,
    or $0.13 per share
  *Sale of 20% of the Company's interest in FNES resulting in proceeds of
    $10.0 million over the second and third quarters of 2013
  *At September 30, 2013 the Company had approximately a 31% interest in
    FNES, a fair value of approximately $15.3 million
  *Increase in total assets of $13.1 million since December 31, 2012
  *Increase in working capital of $2.1 million since December 31, 2012
  *Decrease in total liabilities by $1.5 million since December 31, 2012

Ecosphere's 2013 annual meeting of shareholders will be held on Friday,
December 13, 2013 at 10:00 AM EST the Hilton Orlando Bonnet Creek Hotel in
Orlando Florida.The meeting will feature presentations by members of
Ecosphere's executive leadership team, tours and demonstrations of Ozonix®
equipment, and a question and answer session with management.

The Company requests that all parties planning to attend please RSVP to
representatives of its investor relations firm ICR, LLC.Contact information
for ICR is listed below.

About Ecosphere Technologies

Ecosphere Technologies, Inc. (OTCBB:ESPH) is a water engineering, technology
licensing and innovative U.S. manufacturing company that develops
environmental water treatment solutions for industrial markets throughout the
world.The Company is a leader in emerging advanced oxidation processes and
has an extensive portfolio of intellectual property that includes five United
States patents for the Ecosphere Ozonix® process. The patented Ecosphere
Ozonix® process is a revolutionary advanced oxidation process that is
currently being used by customers to reduce costs, increase treatment
efficiencies and eliminate harmful chemicals from wastewater treatment
operations around the United States. Ozonix® can be used to replace chemicals
in a wide variety of industries and applications, including but not limited to
agriculture, energy, food and beverage, industrial, mining, marine, and
municipal wastewater treatment.

In 2013, Ecosphere was named Water Management Company of the Year in the
Midcontinent by the Oil and Gas Awards, chosen by Bloomberg as a New Energy
Pioneer and selected by IHS CERAWeek as a 2013 Energy Innovation Pioneer.
Ecosphere is also a recipient of the 2013 American Technology Award - "Clean
Tech/Green Tech" category and the 2012 Frost & Sullivan North American Product
Leadership Award in Disinfection Equipment for Shale Oil and Gas Wastewater
Treatment. In addition, Ecosphere has been chosen for the Artemis "Top 50
Water Tech" Listing for the last three years.

Since 2008, Fidelity National Environmental Solutions, a company in which ESPH
holds a 31% interest, has enabled oil and gas customers to treat, recycle and
reuse over 3 billion gallons of water on more than 800 oil and natural gas
wells.

For more information, please visitwww.EcosphereTech.com.

To receive timely information on Ecosphere Technologies, sign up for
Ecosphere's email news alert system at http://www.ESPH-IR.com.

Cautionary Note Regarding Forward-Looking Statements.

This press release contains forward-looking statements including plans for and
future success from non-energy related industries.Forward-looking statements
are based on our current expectations and assumptions regarding our business,
the economy and other future conditions. Because forward-looking statements
relate to the future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict. Our actual results may
differ materially from those contemplated by the forward-looking statements.
We caution you therefore against relying on any of these forward-looking
statements. They are neither statements of historical fact nor guarantees or
assurances of future performance. Important factors that could cause actual
results to differ materially from those in the forward-looking statements
include the ability to find a purchaser for our Ozonix® unit, the ability to
locate partners to finance the use of our technology in other markets and
general reluctance of businesses to utilize new technology.

Further information on our risk factors is contained in our filings with the
SEC, including our Form 10-K for the year ended December 31, 2012. Any
forward-looking statement made by us in this press release speaks only as of
the date on which it is made. Factors or events that could cause our actual
results to differ may emerge from time to time, and it is not possible for us
to predict all of them. We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information, future
developments or otherwise, except as may be required by law.

Ecosphere Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
                                                              
                                                 September 30, December 31,
                                                 2013          2012
                                                 (Unaudited)   
Assets                                                         
Current assets                                                 
Cash                                              $1,435,763  $2,464,911
Restricted cash                                   25,000        60,168
Accounts receivable                               —             1,150,152
Current portion of accounts receivable-related    713,794       —
party
Inventory                                         2,238,542     757,682
Prepaid expenses and other current assets         297,914       107,067
Total current assets                              4,711,013     4,539,980
Investment in unconsolidated investee             14,813,002    —
Accounts receivable-related party, net of current 1,106,770     —
portion
Property and equipment, net                       1,185,601     4,264,125
Debt issuance costs, net                          45,100        —
Patents, net                                      77,235        81,691
Deposits                                          14,840        22,441
Total assets                                      $21,953,561 $8,908,237
                                                              
Liabilities, Redeemable Convertible Cumulative                 
Preferred Stock and Equity
Current liabilities                                            
Accounts payable                                  $398,173    $845,241
Accrued liabilities                               628,402       1,122,119
Customer deposits                                 187,500       23,196
Convertible notes payable, net of discounts       240,305       1,203,126
Current portion of note payable                   85,125        68,100
Warrant derivatives fair value                    4,308         197,009
Current portion of financing obligations          64,144        96,548
Current portion of capital lease obligation       15,155        14,593
Total current liabilities                         1,623,112     3,569,932
Convertible note payable, net of discounts and    477,296       —
current portion
Note payable, net of current portion              85,124        136,199
Financing obligations, net of current portion     119,050       106,612
Restructuring reserve                             —             5,909
Capital lease obligation, net of current portion  45,839        57,276
Total liabilities                                 2,350,421     3,875,928
                                                              
Redeemable convertible cumulative preferred stock              
Series A - 11 shares authorized; 6 shares issued
and outstanding at September 30, 2013 and         1,197,869     1,180,994
December31, 2012; $25,000 per share redemption
amount plus dividends in arrears
Series B - 484 shares authorized; 241 shares
issued and outstanding at September 30, 2013 and  2,501,970     2,456,781
December 31, 2012; $2,500 per share redemption
amount plus dividends in arrears
Total redeemable convertible cumulative preferred 3,699,839     3,637,775
stock
Commitments and contingencies (Note 15)                        
Equity                                                         
Ecosphere Technologies, Inc. stockholders' equity              
(deficit)
Common stock, $0.01 par value; 300,000,000 shares
authorized; 163,588,214 and 160,060,088 shares    1,635,881     1,600,601
issued and outstanding at September 30, 2013, and
December 31, 2012, respectively
Common stock issuable, $0.01 par value; 0 and
1,138,724 issuable at September 30, 2013, and     —             11,387
December 31, 2012, respectively
Additional paid-in capital                        109,420,155   107,697,369
Accumulated deficit                               (95,152,735) (117,337,883)
Total Ecosphere Technologies, Inc. stockholders'  15,903,301    (8,028,526)
equity (deficit)
Noncontrolling interest in consolidated           —             9,423,060
subsidiary
Total equity                                      15,903,301    1,394,534
Total liabilities, redeemable convertible         $21,953,561 $8,908,237
cumulative preferred stock and equity


Ecosphere Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
                                                             
                      For the Three Months Ended  For the Nine Months Ended
                      September 30,               September 30,
                      2013           2012         2013          2012
Revenues                                                      
Equipment sales and    $ —          $ 5,664,637 $ —         $ 17,091,344
licensing
Equipment sales and
licensing, related     2,268,295      —            2,268,295     —
party
Field services         —              1,133,021    1,547,786     6,692,213
Aftermarket part sales —              528,725      287,724       528,725
Aftermarket part       120,294        —            122,521       —
sales, related party
Total revenues         2,388,589      7,326,383    4,226,326     24,312,282
                                                             
Costs and expenses                                            
Equipment sales and
licensing costs
(exclusive of          1,923,064      4,272,243    1,923,064    12,942,666
depreciation shown
below)
Field services costs
(exclusive of          —              576,670      721,214      2,092,252
depreciation shown
below)
Aftermarket part costs
(exclusive of          95,950         —            322,423      —
depreciation shown
below)
Selling, general and   2,055,462      1,694,775    6,563,147    5,470,075
administrative
Restructuring charge   —              (62,000)    (3,170)      (62,000)
Gain on sale/disposal  —              (142,457)   —             (142,457)
of fixed assets, net
Depreciation and       55,253         556,154      931,504       1,657,324
amortization
Total costs and        4,129,729      6,895,385    10,458,182    21,957,860
expenses
                                                             
Income (loss) from     (1,741,140)   430,998      (6,231,856)  2,354,422
operations
                                                             
Loss on investment in
unconsolidated         (437,594)     —            (483,598)    —
investee
                                                             
Other income (expense)                                        
Gain on                —              —            29,474,609   —
deconsolidation
Interest expense       (113,478)     (111,261)   (351,707)    (286,602)
Gain on change in fair
value of derivative    1,215         87,724       89,894       1,729
instruments
Loss on sale of
interest in            (500,000)     —            (500,000)    —
unconsolidated
investee
Other, net             —              —            —             4,627
Total other income     (612,263)     (23,537)    28,712,796    (280,246)
(expense), net
                                                             
Net (loss) income     (2,790,997)   407,461      21,997,342    2,074,176
                                                             
Preferred stock        (20,688)      (25,687)    (62,064)     (77,125)
dividends
                                                             
                                                             
Net (loss) income
applicable to common
stock before           (2,811,685)   381,774      21,935,278    1,997,051
allocation to non
controlling interest
                                                             
Less: net (income)
loss applicable to non
controlling interest   —              (65,789)    187,806       (810,420)
in consolidated
subsidiary
                                                             
Net (loss) income
applicable to
Ecosphere              $(2,811,685) $315,985   $22,123,084 $1,186,631
Technologies, Inc.
common stock
                                                             
Net (loss) income per
common share                                                  
applicable to common
stock
Basic                  $(0.02)      $—         $0.13       $0.01
Diluted                $(0.02)      $—         $0.13       $0.01
                                                             
Weighted average
number of common                                              
shares outstanding
Basic                  163,588,214    156,948,937  163,237,401   156,012,479
Diluted                163,588,214    164,624,749  164,929,678   168,746,364


Ecosphere Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
                                                                
                                                   For the Nine Months Ended
                                                   September 30,
                                                   2013          2012
                                                                
Operating Activities:                                            
Net income applicable to Ecosphere Technologies,    $22,123,084 $1,186,631
Inc. common stock
Adjustments to reconcile net income applicable to
Ecosphere Technologies, Inc. common stock to net                 
cash provided by (used in) operating activities:
Gain on deconsolidation                             (29,474,609) —
Preferred stock dividends                           62,064       77,125
Depreciation and amortization                       931,504      1,657,323
Loss on sale/disposal of fixed assets, net          —             (142,457)
Non-controlling interest in income (loss) of        (187,806)    810,420
consolidated subsidiary
Amortization of debt issue costs                    19,644        —
Accretion of discount on notes payable              197,984       152,977
Stock-based compensation expense                    1,042,028     1,203,975
Restructuring charge reversal                       —             (62,000)
Income from change in fair value of warrant         (89,894)     (1,729)
derivative liability
Loss on investment in unconsolidated investee       483,598      —
Loss on sale of interest in unconsolidated investee 500,000      —
Write-down of inventory                             158,650      —
Changes in operating assets and liabilities:                     
Increase in accounts receivable                     (1,130,699)  (1,413,033)
Increase in prepaid expenses and other current      (184,715)    (136,641)
assets
Increase in inventory                               (2,392,824)  (115,844)
Decrease in deposits                                —             445
Increase in restricted cash                         —             (41,083)
Decrease in accounts payable                        (312,363)    (95,400)
Decrease in accrued liabilities                     (476,088)    (150,104)
Increase in billings in excess of costs and         —             (89,140)
estimated earnings on uncompleted contracts
Decrease in restructuring reserve                   (5,909)      (37,842)
Decrease in customer deposits                       165,465       218,968
Net cash (used in) provided by operating activities (8,570,886)  3,022,591
Investing Activities:                                            
Net proceeds from sale of interest in subsidiary    9,600,000     —
Repayment of amounts due to unconsolidated investee (1,385,139)  —
Cash held by deconsolidated subsidiary              (247,636)    —
Purchase of property and equipment                  (227,246)    (116,487)
Proceeds from sale of fixed asset                   —             206,000
Transfer from (to) restricted cash                  35,168        (25,000)
Net cash provided by investing activities           7,775,147     64,513
Financing Activities:                                            
Proceeds from issuance of convertible notes payable 706,467       —
and warrants, net of debt issue costs
Proceeds from warrant and option exercises          —             249,300
Proceeds from warrant modifications                 133,188       107,400
Distributions from subsidiary to noncontrolling     —             (1,619,654)
members
Repayments of notes payable and insurance financing (964,050)    (183,398)
Repayments of capital lease obligations             (10,875)     —
Repayments of vehicle and equipment financing       (98,139)     (67,938)
Net cash used in financing activities               (233,409)    (1,514,290)
Net decrease in cash                                (1,029,148)  1,572,814
Cash at beginning of period                         2,464,911     2,043,593
Cash at end of period                               $1,435,763  $3,616,407

CONTACT: Investor Relations:
         Gary Dvorchak, CFA
         Senior Vice President
         ICR, Inc.
         +1 (310) 954-1123
         gary.dvorchak@icrinc.com
        
         Press and Media Relations:
         Brian Ruby
         Vice President
         ICR, Inc.
         +1 (203) 682-8268
         brian.ruby@icrinc.com
        
         Company:
         Corey McGuire
         Director of Marketing
         Ecosphere Technologies, Inc.
         +1 (772) 287-4846
         cmcguire@ecospheretech.com

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