CEO

Insider Briefing of 4 March 2021

We got a rare treat — an industry professional's testimonial on Progressive Water’s systems and capabilities… Investor Alfredo Guatto told us, “You want to live? Take care of the water.” See what he's doing about it! How does Water on Demand™ unite all our efforts and why is it becoming the entire focus of OriginClear? It's all here in the replay!

FEATURED OR COVERED IN THIS BRIEFING — QUICK LINKS

• Why water rates are soaring and its effect on people.
• A rare testimonial from a water industry professional working with our Texas fabrication and manufacturing  division, Progressive  Water Treatment [PWT]. 
• PWTs booster pump systems and how well they perform.
• PWTs containerized systems and the market they serve.
• Meet the incredible Alfredo Guatto and his passion for the future of water and the people of Earth!
• Meet Omar Paoloni...what is his relationship to Ivan and Alfredo?
• A clip from Riggs appearance at the Emerging Growth conference which reveals the vital focus every action at OriginClear is coordinated around.
• Layering capabilities and how it connects with our DBOO strategy.
• The vital connection between broken infrastructure and outsourcing managed water treatment services.
• The most workable model in the water industry and why we are patterned after it.
• Why water is a risk to be managed and how outsourcing that risk is becoming increasingly appealing to managers.
• Managed services and OriginClear's quiet plan.
• The outside team OriginClear is bringing in and delivering Water on Demand™.
• What propels OriginClear and how it is coming together.

Transcript from recording

Introduction

Riggs Eckelberry: 

Hello everyone, another great show in fact,  you'll be happy to know that this is the 100th show!

Water Rates Soaring

Water is the new Gold. This is the 100th multimedia show.  We had many, many before that were on the phone, me driving back and forth, back when we were driving around in LA.  "The worlds ONLY vital, scarce and recession-proof market." And that's proving to be true with water rates skyrocketing.

I see that oil is going up, not because oil is being used more, it's because the U.S. dollar is going down. This is affecting water rates tremendously and this is a problem of course for people.  If you're spending more than 4% of your take-home pay every month on water, you can't afford it. A lot of people are in trouble with that.

Forward Looking Statements

Briefing number 100. Of course safe harbor statement, and we want you to know that we try our very best to tell it like it is, but they are forward looking statements. Okay, this is a cool interview that I'm going to play here. 

Start of video presentation

Transcript from recording

Tom: I'm Tom Marchesello at OriginClear. I'm the chief operating officer and we have the pleasure of talking with Jim Davis at Consolidated.

Jim: I'm Jim Davis with Consolidated Water Solutions. I'm an account manager and I focus on project work. We did several projects with PWT [Progressive Water Treatment] but most recently we did a project where a customer, a mining company, wanted to dewater their tailing storage facility and we used the pump booster systems that PWT utilizes to feed both ultrafiltration of the first stage reverse osmosis and the second stage reverse osmosis. 

Progressive Water BroncBoost™ booster pump skids

We needed a system that would maintain an even pressure flow going in even though the day tanks behind them might fluctuate and we needed something reliable that wouldn't trip out and it's worked very well. They've had no problems with these pump boost systems.

Mike: We're really pushing the  booster pump market out there. 

Tom: Why is it that you feel this kind of a product really has a great niche in the market not just for this product but also other areas? Like, what does it really do for you guys and for your customers?

Jim:  Well it gives us a way to reliably feed a certain pressure and pressure is very important.

Reverse osmosis filtration requires pressure to push the water through the filter.

These systems, like an RO, like to have at least 30 psi and the ultrafiltration requires a certain amount of pressure to push through and this just smoothes out the operation.

Booster Pump System

Everything balances out when you have this even pressure. You don't have tanks going dry and you don't have things tripping out. If you try to put these systems all together without a brake tank, without a pump boost system like Progressive Water Treatment makes, you run the risk of tripping out at the slightest pressure variance and this could be quite irritating if guys have to go out at two o'clock in the morning and reset their system. 

So, we've avoided this by making it a simple, safe system with a good pump boost system and this is what the customer has ordered again, which means they're very happy with it.

Mike:  Jim is the engineer on projects, he's the process guy. So, Jim and I started working together because we're both process folks and we started bidding and doing some projects together. 

We've got a really good history, working, history of working together.

Consolidated Water Solutions website. www.consolidatedh20.com 

Integrators

Jim:  We are integrators and we do put pieces of equipment together to get a smooth system and we found that PWT is great if we need custom work and they've  been a great partner to help us with various ancillary systems associated with these total systems. We've really appreciated the support. We've had real god success, real good quality. Their ability to help us integrate things is greatly appreciated. 

PWT staff assembling one of their custom systems.

Containerized Systems

Mike:  A kind of a niche that we've also developed that we've worked with you on Jim is a number of containerized systems.

Jim: Containerized systems are very important, both to these, what you call mine remediation companies that go in and take care of something for them and also for the mining companies themselves to move things around when their needs change. So yes, containerized systems are coming on as something that the customer is looking for.

Tom: That's fantastic. Thanks a bunch Jim, thanks Mike.

Mike: Thanks Jim.

End of video presentation

PWT Capabilities

Riggs: Okay, the reason that I'm playing that is because we don't talk a lot about the capabilities of our guys in Texas. It's very rare that we can get an organization like Consolidated to speak up publicly about the work that's done. It's actually a huge thing and so it's very, very meaningful. We're honored by it.

Meet Alfredo Guatto

We have the gentleman who is investing, we believe, two million dollars in this fund, first investment. He's at the airport, he's about to board, we're trying to get him onboard, he doesn't have the link...it's all this exciting stuff.

Translation from Spanish to English where spoken

[Riggs is joined in conference on this call by Ivan and Bella Anz, Omar Paoloni and Alfredo Guatto]

Riggs: Hey Alfredo! You are in the airport! 

Alfredo: Good night, good night [good evening] I tested ten times for COVID...in one hour. The flight is open right now. 

Riggs: No problem.  I'm very happy for this interview, thank you! Ivan is joining us with the wonderful Bella. Fun stuff, go back a little bit, come closer [laughter].

About Alfredo

Alfredo: Hello! I'll explain for the others because I don't have much time.  My name is Alfredo Guatto, I am 66 years old. I am an accountant from Buenos Aires University. I have an MBA from the Catholic University of Argentina (UCA) and a Master's degree in Political Sociology from the University of Buenos Aires. You want to live? Take care of the water! You love your life? Conserve the water. 

Now, OriginClear is my principal partner. It is my partner because I love life. The main thing to me is my life, not my money. Money is of no consequence. Water is the real energy for situations [things]. This is my opinion [true feelings]. Because of these consequences [of water] I put my money in OriginClear for the future. 

Riggs: We are honored. And very grateful. I want to say that Alfredo and his partners have decided to make the first multi-million dollar investment into OriginClear Financial to fund water projects. I will be talking about that. I want to introduce also Omar Paoloni here. What is your relation to Ivan and Bella?

Omar: The emotion overwhelms Alfredo and he is very passionate about all this!

About Omar

Riggs: He has a lot of passion, that's for sure. So Ivan, tell us who Omar is in relation to your and Alfredo. 

Ivan: Omar is an Ambassador in Philanthroinvestors® actually, and he has been Ambassadoring for many years, since 2017 or so very successfully for Equity and Help, which is my real estate philanthroinvesting firm. He was one day going through Linked In and contacted, actually reached Alfredo, I would say one year ago or so,  and that's how they met. And Omar got excited very much with all the water philanthroinvesting projects. 

Riggs: And what is his personal relationship?

Ivan: Oh, Omar is Bella's dad!

[everyone laughing]

Riggs: Exactly

Opening a Headquarters

Alfredo: OK. I'm going to, Riggs, I'm going to Buenos Aires right now for open the new business for crowdfunding for Equity and Help and OriginClear, right? The headquarters for all America. 

Riggs: For all America, thank you very much. 

Alfredo: I'm sorry, I don't have more time, Goodnight. 

Riggs: Ciao [Goodbye] Thank you. We're going to continue the show. I'm going to share screen again, and this is from yesterday's show that I gave on Emerging Growth and I jjust take a small part of it. I think it's worth playing, watch this. 

Start of video clip

Transcript from recording

Sole Focus

Riggs: Well, since I don't have any questions, I'm going to tell you guys a little bit more about emerging things that are happening in the company beyond this presentation. And that is, that the whole concept of Water on Demand is now becoming the sole focus of OriginClear.

And in the weeks to come, you will see the OriginClear site really specialized on making it possible for end users to get water systems without having to come up with capital. And that's extremely exciting. It's the direction that the entire water industry is moving in. We believe we are a pioneer. And I think we're going to have a lot of fun with that. So Ana, how did you like it?

Ana: Loved it. Sorry, I lost my internet. I just got back on. But we do have some questions for you, Riggs.

Riggs: Oh, good, because I was going to start the entire presentation again for you. [laughing]

Ana: No, no, we're all good. So some of these might be redundant, but these are the questions from our attendees. Currently, how many systems do you have out there now?

Riggs: Oh, well, Progressive Water, as I say, has been in business for 25 years. So it's into the thousands by now. I just had to guess, we install maybe... We do systems between $50,000 and $2 million. The biggest we did was a system for Xcel Energy up North. But in that range, we do maybe 20 or 30 of these every month, so that gives you a scale of what we do.

A White Knight

Now these are conventional engineered solutions. "Hi, I need a system for blah, blah, blah." And then we talk to them for months and months and months and months and months and months, and then they pay, and they install it. It's called design and build.

Now the last part of it is own and operate. Design, build, own, and operate. So what I've been talking to you about is really where we also own and operate. So when somebody comes to us, "I need a so and so and so." "Fine, no problem." Instead of talking for months and trying to get the capital deal done or bidding with others, "We've taken care of it. So just sign here and you'll pay it by the gallon." And that turns us from a salesperson into a white knight. And that's the exciting new thing.

End of video clip

Riggs: Okay. So I'm going to stop it right there because it's exciting and different and fun and all that good stuff, but we have a show and we want to keep things going for you. Let's talk a little bit about what I was just talking about, building from engineered solutions and on up from there.

Engineered Solutions

So coming back to my PowerPoint, here we go. So we start with our engineered solutions. That's our Progressive Water Treatment team in Texas. And to that we add Modular Water Systems™, which is the roll-in, roll-out portable prefab systems that make it possible for us to do this Water on Demand.

We add decentralized finance, OriginClear Finance, you just heard from Mr. Guatto, who he and his partners are contributing multiple millions of dollars to the fund as we speak. I'll be talking a bit more about that. We will fund Progressive Water Treatment systems. We will fund Modular Water Systems. We will also later do it with outside water companies, right? And this is something called managed services. In the water industry, it's called DBOO.

Design, Build, Own and Operate

Let me tell you what that's about. Design and Build, that's what we do already. You want a system, we charge you, we deliver it, we walk away. But the rich model in the business, it's Own and Operate. And to do all four is the ultimate. Now not a lot of companies are able to do it. Why? Because own means money. A lot of people do DBOO where somebody like the government owns it or whatever, but a true DBO is where you own it.

All right. Now I was talking last week about water coin. First, we've decided to strategically let's focus on building this finance group. It needs to be done properly. It needs to be profitable, needs to grow fast, and we don't want to do too much at once. So water coin is very much in our roadmap, but later on.

Broken Infrastructure

Okay. Now quickly, again, broken infrastructure, you've seen this slide before. One in three people globally don't have access to safe water. There is technology. It's not happening. Water rates are growing.

And in fact, this is what the water rates are looking like. It's horrendous, much faster than food and inflation itself. So that is a big problem.

Model that Works

And there's this case history by a sister company in the industry called Cambrian Innovations, which installed the system. By the way, they financed it, so the Russian River Brewery did not have to pay up front. This is the model that works. But it paid because sewage rates are so high. And so he's makes it right clear is that you've got a problem with a high fees for wastewater, lots of regulations, and water supply restrictions. I'm emphasizing that point. You may not get all the water you want, so you better maybe do some recycling. That's what it's all about. So this is the model that's growing.

Outsourcing the Risk

Water is a risk that smart managers will outsource, and inflation is going to get far worse as we enter these inflationary times. Look at oil, just hit $69 a barrel. That should not be, given that so little oil's being used. It should be down in the twenties still. It's the dollar. Okay. It means that you need to make money on money. And this is where you need to be with an asset that it, too, is inflating. Now outsourcing through what we call Water on Demand means that these companies do not have to worry about the problem, financing it or managing it.

Managed Services

Now municipalities are in trouble. Federal government is paying almost nothing of their cost and they're falling apart. 85% of all government water treatment plants are small and they are the ones who fail. It's like Michigan, Compton, California, many others.

All right. In short, Water on Demand. Water outsourcing through managed services is very, very needed. Just like you have your internet service provider does your website. You don't have a server in your back room doing your website. It's managed by professionals using what's called a service level agreement.

Our Plan

Okay. Here's our plan then. It is to build a new asset class of water. It's a commodity with always increasing demand. And our new fund enables us to fund outsourced, managed services and water-on-demand, and water is an essential commodity, we believe.

Operation

Okay, I'm going to show you what,  we're bringing in a team, in fact. We're launching resources to do this, to set up, fund and operate OriginClear Finance, and to furnish water equipment on a rental or pay-as-you-go basis.

Water on Demand

And I'm going to quickly show you the scope of work. This is what this resource is there to do. Basically to do the heavy lifting on these investments. You saw, Alfredo Guatto and his group have made a commitment. Well, that commitment hasn't happened. It needs to be made to happen. And I want to make that very, very clear that it is not a done deal.

So, that needs to go in. A lot of due diligence, administration, legal work, et cetera. The contracts with the managed services develop the playbook for Water on Demand. Approve or reject the ... Basically, companies know how to do it, or they don't. It separates the men from the boys, as they say. Although that's rather a sexist way to put it. But nonetheless, you want to be competent.

Managed services means that you're maintaining a level of water quality in that distant water treatment situation at that brewery or whatever. And you have to control it remotely. And if you don't, you don't get paid. And that is a very important service level agreement to maintain. All right. And so of course, this is the playbook for this resource.

Call Ken

All right, so moving on here, I wanted to mention how we have the incredibly brilliant Ken Berenger, who is working closely with me on this. He has been for three years now, and a year ago during the beginning of COVID, we went into high speed growth on this. And it has been very rewarding. We are starting to really take off and we're seeing excellent funding, major capital coming in. We are really starting to become a player, and who'd a thunk. Who'd a thunk.

Next week, I'll be discussing more about the fund building, more details, and we're going to get very, very specific. So that is what it's all about.

What Propels Us

So, to come back to what propels us in all this. At yesterday's conference ... And if you're tuned in to my CEO updates you'll get a link to it. At the very end, Anna asked me to just give my thoughts. And this is what it's all about. I came out of high-tech, Tom Marchesello came out of high-tech and high-end finance. We have a lot of high-end finance people Ivan Anz et cetera. We all are accustomed to fast moving execution.

The water industry, it's time for it to accelerate. And we are not going to wait another 10 years to do this. This, 2021 is our year. You're going to see some amazing things happen. And as we build the assets in the fund, that's important. Without that, we can't get on the NASDAQ. So that's a critical part of the picture is building the asset base. You'll be seeing all that, stay tuned. It's going to be a fun road ahead. I'm having more and more fun as I go.

Acknowledgements

Thank you all for joining, for listening in and for listening to Alfredo Guato on his way to the airport. Look, he and his partners have a wonderful plot of land in development in Port St. Lucie. Apparently the evaluation's $2 million. We have to verify everything. But for him to dedicate that to OriginClear finance is an amazing statement of his loyalty and support.

And frankly, Ivan Anz, who is the Inc. 500 leader of Equity and Help, that he is actually doing the recommending and has himself and Bella, his wife, have also brought real estate into this company to turn into assets. These are amazing votes of confidence.

I am so thankful for what you're doing because my dream, Ken's dream, Tom's dream, Dan Early's dream, Marc Stevens, all of us. It's coming together with your help and we are so grateful. So again, thank you very, very much. It's been wonderful. Have a great evening. Join me next week. I promise you more fantastic information. Things are moving very quickly. Have a great weekend, everyone.

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