CEO

Insider Briefing of 25 March, 2021

Can our technologies help us enter consumer water markets in developing countries? My show guest, Mr. Sadiq Qureshi, laid out how! How can Water on Demand™ provide end-users a higher quality and healthier life?  We covered that, and announced the date of the Trusted Investor Conference I've been talking about...It's all here in the briefing replay!

FEATURED OR COVERED IN THIS BRIEFING — QUICK LINKS

• Water on Demand:Consumer, the second leg of Water on Demand™. 
• The products OriginClear already has in the consumer water space.
• One of the instructional videos from the Waterpreneur Academy.
• A case study of AquaVenture Holdings as the model for Water as a Service®.
• The components of the Consumer Water on Demand market. 
• Nestlé in Pakistan and a look at their website.
• Introduction of Sadiq Qureshi and his formidable accomplishments.
• The opportunity in water that Sadiq and his associates want to work with OriginClear to pursue.
• Why they find OriginClear technologies perfect for accomplishing  their purpose.
• The Business to Consumer model they want to implement using OriginClear tech.
• How the synergy of  working with OriginClear drew Sadiq and his colleagues to seek a partnership.
• The importance of access to pure water in the United States and the opportunity the circumstances present.
• How people feel about having resources in-hand and how that relates to the plan.
• What OriginClear's trusted investor conference is all about and when it will be held.
• How to participate in OriginClear's activities and offerings.

Transcript from recording

Introduction

Riggs Eckelberry

All right. Well, thank you very much for showing up and  this is Water is the New Gold. And it is of course this great new asset class that we call Water. All right. And it's the last briefing of March. We've got the annual audit coming up. The annual report will be due anytime after the first. And then we have up to 15 days to get it done without penalty. So I'm sure that's what we'll accomplish. Anyway, we'll be commenting on that further as time goes by.

Forward Looking Statements

Let's move on. As always, we have the Safe Harbor statement, which says, it's kind of like our get out of jail free pass. Where if I say something that turns out not to be true, well, I thunk, I thunk it correctly at the time. No, but seriously, we do try very hard to make accurate forward-looking statements, and we always try to correct it when we don't.

The Second Leg

Now, we're talking now about the second leg of Water On Demand™. We've been talking a lot about industrial. We had Dan Early on the show a couple of weeks ago, talking about all the deal flow that is more than eight figure pipeline of potential deals. And he said up to a third of it could be expedited by funding up front. These outsourced water treatment systems, with no money up front kind of thing.

Consumer is Huge

Well, consumer is actually huge. And here's the funny thing, we're already in it, actually, because the Pool Preserver™ system services consumers. But in fact, now there's a new expansion into commercial pools where you wouldn't have a trailer. You would simply install a skid at maybe the city pool or hotel pool or whatever. We have our finger in it.

We built a whole teaching system, Waterpreneur Academy. The pilot is working well, Ryan Kooistra in fact, went ahead and bought out his system. He went from rental to buying out, which is great. And he's going into more units, et cetera. We'll be reporting further on that because there's also some additional customers coming along.

And I don't want to forget is I want to talk to you guys next week about the Pondster™. We sold our first unit for the trailer park. I've been talking about it for a long time and we'll get into that. Actually probably be the week after, because next week I'll be reporting on this Trusted Investor conference that you'll hear about more in a minute. Let's play a video, and then let's get on with it.

Start of video presentation

Somebody gives me a call. They want to know about the process.

Dwight:  I explain the advantages, you know, here's the advantages of doing it. I don't know the cost difference because I don't know what that person is going to have to incur cost wise to drain the pool themselves, hire somebody to drain it, I don't know what their water costs are from the city or wherever, the municipality, the water company, whatever it is. So I don't know what their costs are but I do know what I'm going to charge them once I do a site visit with the client.

When I go there I measure their pool, get the size of their pool. I test their water to make sure it meets the parameters that I want to work with. At that point I can give them an exact quote.

And if they want to proceed I'll go over the logistical side of it, where we're going to park, here's where the hoses are going to go, here's what you can expect, here's about how long I'll be there. Don't get in the pool. Some companies advertise you can swim when we're doing that. No, I do  not want you to swim, I want the water as calm as possible because that's how the process works.

The heavy, contaminated water sinks to the bottom of the pool. The purified water stays on top, it stratifies. So, we're constantly pulling the worst water in the pool so the water is not sanitary.

End of video presentation

Riggs: That was a cool little report on one of our videos for the [Waterpreneur Academy].

Case Study

I wanted to get into a case study here about AquaVenture Holdings. So AquaVenture Holdings, they started with these desalination facilities in island economies. They acquired the Quench network, which serves consumers at home and in businesses. And of course got sold exactly, almost exactly a year ago. I think the last day the stock ticker traded was the 27th of March, and it was 1 billion cash. They got taken private. This is the successful Water As a Service® formula. That registered trademark is theirs.

 So let's take a look at what this company built over time. It really had two parts.

Desalination

One was, and is now under Culligan, a business that provides primarily desalination. Again, these islands did not have to pay up front. They just signed contracts and they got their water. That was the model that they used.

Quench

And then there was a consumer side called Quench. And you may know this company under the Pure Water, Wellsys and Blue Line brands, but basically it's a great business, because you install the water cooler there, it uses the tap water and filters it. And nobody has to bring in those big bottles and so forth. So it's really done well.

Water Tankers

So consumer water on demand, some other areas that we see are, for example, water tankers, even in America, there's a need for water tankers. And I don't just mean for construction. I mean for literally for getting water to people who need it.

Latin America, of course is big area, Asia, our guests will be talking about that further. And then these point of use water systems, like I just showed you, and here's what's interesting, bottled water crazily enough, remains a huge business.

Local Networks

Nestle dominates the market in developing countries. And here is a picture from the Pakistan Nestle site. And as you see, it's all bottled water and weirdly enough, you can't order online yet. It's available soon. I guess they have to do it through these local networks. It's very, very basic.

Introduction

Riggs: All right, with that, I'm going to ask my good friend Sadiq to join me.  Sadiq, thank you for joining us.

Sadiq: Thank you for having me. Hello everyone and good evening to everyone, pleasure to be here.

Background

Riggs: Fantastic. Well, in fact, I want to just show you on screen. I'm going to embarrass you by showing everyone some of your background. You've led consortiums in setting up investment banks, oil and gas company, and family office. Also, raising a ton of money for the Al Hanoo Group, and selling the UAE Towers, and arranging a project finance of $200 million dollars, which that's the kind of numbers we like, Sadiq! 

Poken and SWYCH

And you have founded Poken Middle East and grew it by 1400%. Well done. And you are now an investor in SWYCH, which is a really cool startup that enables people if they get a gift card. Let's say you're a guy, and you get Victoria Secret's gift card. You can switch it to The Gap, or to REI, through this SWYCH thing. It's kind of cool.

And, of course, you're very involved in education. You're building, I believe, a charter school here in the U.S. So with that, I'm going to cut to the full screen. And I wanted to ask you a few questions here. First of all, how did you find us?

Finding OriginClear

Sadiq: So I was looking at few opportunities where we can directly serve consumer and empower consumer, and it came through different social networks from two, three places. So I said, "Okay, I should connect to this company," and that's how we initially connected through the participation in Reg A and through different social medias. That's how first, I got to learn.

Riggs: Yes. And, of course, background is your passion for water opportunities with consumers, especially in developing countries. How do you see that opportunity?

Opportunity

Sadiq: We see this opportunity as a great opportunity in terms of... Especially in the developing countries, what happened, the population has swelled in last few decades and they have developed different infrastructure. They have got to be more organized and more living in apartments, building and everything. While the governments are unable to serve the water and water is not very easy to serve, so that is the reason if you see the Nestle sells more bottle of water per capita in these developing countries, very specifically India, Pakistan, than in US and Europe.

Riggs: Wow. That's amazing. But how do you see an opportunity to insert ourselves into a market that, for example, Nestle's a big player already?

Need a Concession

Sadiq: Right, so water is one asset which no one company can control. So Nestle, even in developing countries, what they do, they develop a big IPs, whatever the filtration system, whatever they have, and then they finance or partner with the local well owners who have the concession. Because water, like my experience in oil and gas, you need to have a concession in large scale production.

Scaling Technologies 

That's where we see that lot of IPs of OriginClear, which is currently they are developing or has developed, we can implement and convert further in a smaller scale businesses. And that's how Nestle have done. It is no way that Nestle is bringing water from outside. Water is very expensive to be transported. There is no way.

Riggs: So they do a lot of localized business. I remember what my father once said to me is that Coca-Cola it's not a soda company, it's a trucking business. So that's really interesting. What I'm thinking here is that, let's say, okay, well, you talked about our IP, our intellectual property, and we've got this great technologies, these various technologies to put things in a modular basis, et cetera. Is that kind of what you're talking about?

Sadiq: That's right. That's correct. Because the way I saw after having few conversations between me, you and even Ken, you have remodeled the business model of water, it's very small scale operations. That is very interesting to me and that's why we got into more detail conversation.

30% Water Loss

I was personally involved in a desalination plant in Saudi Arabia and middle East, but the operation was like 25,000 cubic meter. It's a huge operation. And one of the biggest problem, what we used to face until it will reach to consumer, we were almost losing 30% in transportation. Because it just evaporates with the heat, with all the leakages. It can't be controlling it.

Business to Consumer Model

So the way you are operating like few of the solutions you have, let's say for agriculture, you know how you are using your modular system for agriculture, if a small farmer can be served in a way that they, they can reuse the water, because water is the most expensive commodity for these farmers, just imagine how it will all assist them in improving their margins.

Riggs: It's fascinating. I mean, we're almost going back up into industrial, but at the scale, you're talking about, it really is B to C. These are individual farmers. They're not companies, et cetera. Right. So it's really, I think what we're saying here is that it's really a matter of scale, not so much, wait a minute, is it a business, or is it a person? But rather, is it small-scale delivery? And the question I have is you were looking at doing this before you met us by yourself. What convinced you to start talking to us instead of doing your own pure play?

Great Synergy

Sadiq: So, as we shared, we have developed lot of viewpoint and knowledge how we want to assist to the consumer and empower them. The synergy we see here with you, when we had different calls with my other colleagues and you are doing business to business, the large scale, that's what it is. We want to commercialize those technologies on a smaller scale which will be very democratized in a smaller scale B to C. And that is why we feel it can be a great synergy because there is no competition in the two departments or two ventures of the holding company.

They will be almost giving each other lot of complementary services on the B2B size site. You will be our supplier at times as well, the existing IP and existing technologies. We will be doing lot of those services directly for let's say, bottled water and getting the feedback from the end users. So when you will develop that real own hand research, it will make more meaningful pitch to get better contracts from the big municipality contracts.

Riggs: Ah, that's interesting. So you're saying that there's a way that this feeds back into our business?

Sadiq: That's right.

Critical Timing

Riggs: Fascinating. No, I mean, for myself, there's just no way from a focus point of view that we would start a consumer business ourselves. And so I think that what you're saying is this is a good complementary relationship where we have resources for you. We're up and running. We have a lot of capabilities, a lot of technology and in turn, you can extend us out into the space that otherwise, I don't think we could step into for another 24 months. And at that amount of time, I think it's critical.

Sadiq: That's right.

Consumer Water in the USA

Riggs: Fascinating. So now you are living in Quincy, Mass., these days, right? 

Sadiq: That's right, from last year locked down.

Riggs: Locked down in Quincy. Well, what is your view of the consumer water space in the United States?

Sadiq: I looked at different states plus within different cities, different counties. There are different variants because again, each water is being supplied by different sources. So they have different nutrients and different minerals, which are coming or not.

Water Purity

The other impact happened we just saw last month in Texas. So many residents were announced to be boiling the water for several days. So here again we see the consumer play that if we can somehow develop some of those technologies — filters, just before or after when the municipality pipes enter their home, and do one step better, it will help lot of families from rather than spending big money in infrastructure or wait until the municipality will fix it. It basically affects their property value even.

Riggs: Well, so really you're talking about two things. One is emergency use. So being on standby to provide trucked in water, literally you're using tankers. And then also you're talking about being an additional level of quality, and of course it could be challenging to go up against some of the existing players like Pelican in the space. How do you see that we can go up against those guys?

Big Opportunity

Sadiq: It's not going up against VC, the opportunity itself is very big, the pie is so big. If they were able to satisfy, why were the municipalities and the governments and states, everyone was requesting that boil the water?

Riggs: That's fascinating

Sadiq: Unfortunately, if that would have been satisfied then nobody would be ever asking.

Riggs: But what I've learned is you have to be in place already before the emergency in order to... They're not going to do deals during the emergency, it's not going to happen. So we have to preposition ourselves, is what I'm saying.

Resources in Hand

Sadiq: That's right. Under the team I'll be leading, that's what we will be preparing and now after living through weather  so strong in last 10 years, even Texas, a lot of homes, which is the second biggest population, is feeling that no, they need to have some resources in their hand itself.

Riggs: Everybody's a prepper these days, that's for sure.

Sadiq: Like people have start installing solar or having a generator backups, so this will be additional filter backup... Why not? Why risk the life or the quality of the life of the kids

Thank You Sadiq!

Riggs: No, I feel the same way.  Okay, well, with that, I'm going to thank you Sadiq for having showed up here on short notice. And of course we're busy putting together a potential relationship, and I hope that our discussions bear fruit and that you become a member of the terrible joke team of OriginClear because apparently that's what we do.

Sadiq: Thank you for having me Riggs, and thank you all for listening and please reach out and give your points and comments. The bigger ideas, how we can assist the community for better and healthier life. It's not only developing an asset or money, we want to develop a sustainable business, that's for sure, while any good viewpoints and everything, we want to empower more people, especially water, a very precious thing.

Riggs: Well, that is a wonderful sentiment, which I agree 100% with. So thank you very much. I'm going to go ahead and take you offline and we'll talk some more later. Thank you Sadiq. Bye-bye.

Trusted Investors

All right, there we go, perfect. All right, now, Bob Roos and others want to know what's up with this trusted investor conference. In fact, it is on Wednesday at 2:00 PM Eastern, 11:00 AM Pacific. And generally for people, a trusted investor by definition is someone who has invested more than once in a private placement. We have made a few exceptions, and if you really are interested please reach out to invest@originclear.com.

What's cool about this is that it's basically a chance to just get 25 or 30 investors in a Zoom room and just freestyle, get some real good viewpoints, share them and it will be recorded so that we can bring highlights to you. This is not confidential in any way, but it is going to be very freestyle and open.

Participating

All right, and then we got Ken Berenger who is available to speak. Now, Ken, I noticed that your schedule became completely locked up this week, there was no scheduling of meetings.

Ken: Right, I thought my calendar broke today when I had an opening. I went, "Wait a minute, there's something wrong." I told Devin, "Can you book a calendar meeting because something's broken."  It's been fun, look it's been great. I've had a chance to speak with a lot of folks that have kind of been supporting us all along and it's been a lot of fun. Kind of like,  "remember when" moments you know, and we're kind of enjoying the fact that we're now talking about all of this growth that we're looking at as opposed to kind of just battening down the hatches. We've had a really rough couple of years, ten years ago, and the last three of four years have been phenomenal. And they've seen the difference.  

Riggs: It's nice when you're a prophet. So well done. And I recommend that anyone who's interested in participating just put in oc.gold/ken on your browser and book a call. Hopefully it'll be sometime in the next week, he's a very popular man. And thank you, Ken, for what you do.

Thank You

And with that, I'm going to go to... Next week there'll be a report on this famous trusted investor conference. We hope to do more of these. So with that, I'm going to wrap it up. Thank you all, it's been great, a good little show. I'm really excited about a new consumer direction. And as you notice, it's not going to de-focus us on our main business, because that is...

Did you know that the average workday now is 11 hours? Because we're all working at home. So I'm feeling it and I wouldn't want to make it 20 hours a day. So it's very important that Sadiq is coming along here with his team. You'll be hearing more. Thank you all and have a great weekend.

Register for next week’s Insider Briefing: HERE

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