CEO

We interviewed key Toyota Exec, Cristian Danielli, for the show… Why does he say that Toyota predicts they will no longer be selling cars in 10 years?! And why is there such HUGE demand for pay-as-you-go, service-based commodities? Find out in this presentation!

Transcript from recording

Opening

News Show Host: OriginClear is a company that focuses on wastewater treatment.

CEO OriginClear — Riggs:  And hello everyone. Welcome to the Water is the New Gold CEO briefing.

Riggs: Our mission is to transform the water industry.

OriginClear Chief Engineer: Decentralization offers us this opportunity.

CEO Manhattan Street Capital: The plan that you've built here is super impressive.

Investor: The world is experiencing a crisis in regards to water. It's a great opportunity that you're giving us investors.

Riggs: Decentralization of water treatment means that we no longer need to establish giant water treatment plants.

OriginClear VP Development: Let them fight over the 20%. Let's work with the 80% that's untreated.

Investment Advisor: Over 21 thousand unique alternative investments.

Riggs: Three million jobs in the US alone.

Investor: Making it easy for the regular investor.

Riggs: All the old trends just accelerated.

Investor: It's lucrative and fulfilling.

OriginClear Chief Engineer: The vision I've got is to standardize these products. Design, Build, Own and Operate.

Riggs: We have 65 people in the room.

CEO AGM Agency: We've got an important message to give to the world.

CEO PhilanthroInvestors: We can put a guy on the moon but our water is horrible.

Pool Cleaning Technician: Recycling all that water, it's a huge impact for the environment.

COO OriginClear: Bringing new infrastructure in drives the growth in America.

Riggs: That's a critical part of the picture.

Progressive Water Engineer: It's a twin 125 gallon per minute RO (reverse osmosis) system.

Riggs: I don't think we're talking about a 10 Million dollar fund, we're talking about a series of 10 million dollar funds.

Overseas Partner: The opportunity itself is very big.

International Investor: You want to live? Take care of the water.

Investor: Not too many CEOs do a weekly briefing and are willing to talk to individual investors.

Introduction

Riggs Eckelberry:

And welcome everyone, thank you for joining on this very first presentation of the year, and it's. I'm so excited about 2022. There's so much to talk about, but I'm going to be... This is a great way to start because as I mentioned in today's CEO update, we're very close with Water on Demand™ to other things like transportation on demand, you know what is happening in the car industry, for example.

And so with that in mind, I thought I would go ahead and play just a fantastic interview that I had in late December. And I'm also going to be discussing some interesting updates. So let's bring it on, shall we? So I'm just going to go ahead and share a screen here.

We're, it's Thursday, January 66. Well, it is January 06 briefing number one forty one helping you thrive in the world's only vital, scarce and... fortunately I did not put six six six right. That would have been terrible. In any case, the we've been saying for a long time that water is vital, scarce and recession proof. But now we really have this, this model, this business model that is so exciting, so not to waste any further time on that.

I'm going to just move on and let you know, of course, that you can hear this in Spanish and you just click on the globe that's that's there on your system and there we go.

Usual Safe Harbor statement that we always do our very best to tell you what's happening and we are, you know, we're extremely transparent company and when we get it wrong, of course we corrected immediately. But the Securities Exchange Commission does not sign off on these things. Excuse me. And I'm also going to tell you, I've taken your working week and ends tomorrow and I've been skiing. It's been wonderful. So I'm actually literally in an Airbnb condo, which is why it's kind of like weird, weird backgrounds.

Chats

So let's take a look here, I've got some chats already. Yes, it's also, Stephen, thank you. It's also twenty twenty two. We'll fix that slide in post. Oh gosh, you know, fortunately, I got out of the 19th century that, that's a good thing. And Bob Roos? Yes, Bob was also, I'm not going to live this one down, am I? But anyway, J.R.W. was... All right, guys. Thank you very much. All right.

TaaS

So the the gentlemen that you're going to be hearing from this brief interview, he speaks Spanish, but it will be subtitled. And he is, this is all about what's called Toyota Mobility, and this is this new thing called transportation as a service to TaaS, which you know, in 10 years, shall we say? Maybe longer or maybe shorter, who knows, you will have a car for sentimental reasons only, and you'll just basically order up a car to do whatever. Shoot, I need a pickup truck. Boom. Call up a pickup truck, whatever. And it's had a good rollout in Argentina, a program called Kinto One, for example. And these are basically you just you have a car and everything else is taken care of.

Now we're connected to Argentina through our very own Ivan Anz who brought us PhilanthroInvesting and many, many great investors. In fact, his Argentina Argentinean Toyota dealerships are number one in the country that was recently awarded. The great, great, Steve St. Angelo was also responsible for it for Toyota in Toyota Mobility when he was running the entirety of Toyota in Latin America. So we have a lot of connections to that. But without further ado, I'm going to go ahead and play this little interview. And then we will get to the next thing. Oh gosh, Jan. sixty-six. Twenty one. I don't think I'm going to live that one down. Truly. Oh, Lord. Ok, here we go.

Start of video presentation

Introduction

Cristian: My name is Cristian Danielli and I have been working at an Official Toyota dealership in the city of San Luis for just over 11 years. I hold the position of Executive Director. The company, in addition to being the official Toyota dealer, is an official Toyota dealer in industrial equipment and I'm a Director in that business unit as well. So, today we're living a process of transformation that began just over four years ago where

Mobility Solutions

Toyota's philosophy is beginning to change and is starting to offer mobility solutions, instead of offering to sell cars. They build the cars with a purpose, but the macro target that Toyota is looking for worldwide is more related to being a mobility solution. So they are working very hard, not only in the sale of cars, but in the value chain that involves or is related to the sale of cars.

Riggs: So, Mobility is a global initiative for Toyota, of course?

Cristian: The concept was made up of a combination of factors that Toyota started to develop with a large team at Toyota Motor Corporation headquarters in Tokyo, Japan. Considering the combination of research and factors and calculations a few selected this product, closely linked to the value chain and after a very thorough analysis, indicators and a lot of research and study they realized that you have to offer what the customer is looking for, what the customer needs.

Car Ownership No Longer Valued

So, we started to lose this concept of car ownership. People no longer value car ownership, and we realized, what a car actually represents to people which is a mobility service. A person's basic need for a car is for commuting to work or to go on vacation or to do "x" activity, that's a focus of specialized activity and therefore, the car ends up just being a means to an end.They are specialists in their activity and therefore hire a specific service to solve their mobility problem.

Mobility Station

It's a bit of a challenge for the concept at a general level. Consider Kinto a station — that's the Toyota Mobility Service. We changed the name from Toyota Mobility Service to Kinto. Kinto is Japanese for cloud.

Riggs: Ah. okay.

Cristian: The ingrained concept of the cloud is this thing about being able to move, and that it's anywhere, because it can also move. That's the concept of the cloud, that's why it's called Kinto. And the customer today...

Riggs: Traveling in the cloud!

Cristian: Traveling in the cloud, yes. The concept today in Argentina, in a country that is complex in the sense that it is complex because of its routes, complex because of its distances. I was just telling you that I live 700 kilometers (435 miles) from the capital city or from the Federal Capital and my situation is very similar for many people. So the concept of, I go to a business meeting to Buenos Aires, and not have to think abut when I'm leaving but to offer me a momentary solution, service solution, is vital.

More Than a Rental

Kinto is not a car rental service here, it's much more. It is much more than that, it's a product that gives a solution to the person who needs to move from point A to point B. That's the basic concept of Kinto and how it works. Make use of the car as needed and I don't pay a penny more for 10 minutes that I've had it parked outside the door.

That's kind of the concept. Rent a car at a Kinto station in San Luis and return the car at a Kinto station in Mendoza. I'm getting on a plane and I'm leaving. I leave it there and that's it. there is no problem, and it's a lot cheaper to do that than to be thinking about how I return it, how do I pay if it gets stolen, insurance, taxes etc.

Very Profitable

Riggs: But is it profitable for Toyota?

Cristian: Yes, yes. absolutely. In fact, it is a business that is part of the value chain and one of our most profitable sectors. The sale of the car itself is becoming more and more competitive in the world, not particularly in San Luis, but more competitively in the world and the more supply there is the more you lower the price and the car ends up becoming a commodity. So, either the dealers or the customer, they're not going to be able to price the car.

So, we have to look for these peripheral issues that have to do with the value chain and these are very profitable. We are talking about returns that are on the order of 40% to 45%, very important returns. Of course, the income stream is small. You have to volumize to do business, to pass the break even of the business, but these are businesses that are very profitable, for Toyota and for the dealer.

Like Water on Demand

Riggs: The initiative we have in water, that we discussed before the interview, is called Water on Demand™ and Kinto is "car on demand." You want it, you send it, boom, instantly. And the question people have for transportation, just like water, is adoption. How old do you need to be adopted? What is the basis for adoption now? What are the cases in which we have adoption? We need special cases, for example: the handicapped, or sick or other special cases to start the movement. What do we have as this trend?

Just A Click Away

Cristian: Basically, getting into a Toyota Mobility System is very easy. You download an application to your phone. In this business there are three parts: the Toyota brand, part two is the dealer, and then the customer. The first thing to know is that the customer comes first, and when the customer comes first, you have to give him the best and quickest and the fastest route.

Today, with a mobile application, in 30 seconds I rent a car and I can find out if it is available or not without talking to anyone. That is, I open the app, I see all the Kinto stations in the country, that there are more than 1200 units for rent. And if I'm going to head from point A to point B, I can see what availability there is, the car that's available and so on, and I rent it myself without telling anyone. I don't have to talk to anyone, because you're just a click away. That's kind of the concept too.

What About Market Share?

Riggs: In the concept of "market share" when do you think you will have a significant market share?

Cristian: Well, Toyota is making a prediction that in 10 years we'll probably stop selling cars to the pubic. Existing as a corporate sales dealer with dedicated mobility functions.

Riggs: Then in 10 years it will be normal to say, "I need a car, okay. (typing on phone - makes sound) Bop bop beep, Of course, I'm leaving." But, you need the automated self driven delivery, because if you need a person who comes to deliver, that's an expense for society. The preferred one would be, as Elon Musk says is "A robot driven taxi that comes automatically." Well, in 10 years that's a possibility, right?

Cristian: Well, it's similar. You know that I can tell by your examples this is happening, that's why Toyota makes the prediction that 10 years from now it's going to start to end. Today, the generation of kids who are 30 years old do not have a sense of car ownership as a status level. That exists for people who are 45 or 50.

For the 30-year-olds, it's not a question of status. They are not interested in owning property. Not interested in owning it, they don't want to own cars, they don't want to have a house; they don't have that concept of owning. So, they use the product for what it was conceived for, transportation. So, they don't want all the red tape of having to pay for insurance, to pay the annual memberships, taxes, fuel.

And I can tell you an experience: Last month we rented a Toyota SW4, which is a seven-seater SUV. Seven friends got together, they paid a little each and they went on vacation for 15 days with a truck they can't afford and wouldn't want to anyway. All combined together, renting for 15 days they paid for it and left in the SUV. Something they couldn't afford to own.

Adoption

Riggs: This is an important point which is the adoption by companies, by businesses, adopting a "block" society that all our transportation would be in this concept of mobility, right?

Cristian: Kinto One is that business. Kinto is divided into two branches, one is Kinto Share, which is C2C or "customer to customer". And then there is Kinto One, which is for corporations. Argentinian corporations such as YPF, Arcor. Large corporations no longer have cars on their property. Costs and resources involving a fleet, for the maintenance, for the resources that have to be put into it. Arcor, for example, used to have 250 units in its fleet, so they had to have a chief maintenance engineer, a maintenance workshop that would take care of the entire fleet management. And Arcor is in the business of making candy, not maintaining a fleet of cars.

Outsourcing Non-Core Services and Risks

Riggs: It's what we see with water, with companies that now have to treat their own water, that didn't need to treat it before. It used to be the work of water treatment plants. But, water treatment plants in America and other parts of the world are degrading and now businesses have to do their own treatment. But their focus is not water. Say your job is like, brewing beer, maybe. Then the same as transportation, your job is not transportation. Their job is to do their core activity, their focus in society.

So more and more we need to outsource certain services of a business, so that they can focus on their core work, which allows for more impact and more profits because they can be left to do their own work.

Cristian: And they can do their work more efficiently because they have more dedication. For me, using the Kinto analogy towards a gallon of water purchase system, I pay for only the gallons I need.

For example, we in Argentina, we have an excellent agricultural system. We produce water that sustains one of the breadbaskets of the world and we use water softening systems or water treatment systems to be able to irrigate the fields. These are highly complex systems, difficult to manage. Water is corrosive, chemical considerations, treatment and quality, and measuring the quality of water being delivered. And besides, if I grow soybeans, I grow soybeans for three months and then I stop growing.

Riggs: It's also a health problem, a health problem for the people. because they don't want public health problems. Transportation is a risk too, delegate it and the risk is reduced.

CapEx Becomes OpEx

Cristian: I imagine, as customers in this "Kinto Water Business," if you will; I put it that way to be understood, I imagine that for companies that are launching a new product on the market or who are beginning, their investment in a water treatment plant, thinking that they have to invest in a product that they will then have to manufacture...,

Riggs: Of course.

Cristian: I would say, "If it goes bad for me later I'll keep the water treatment plant, and what do I do with that?" Better if I contract the amount of water or I rent the water treatment plant for a while and then if I do well, well, I'll see. But ultimately, in this process of waiting to see if it's doing well or not, it's much better to invest in a little of that and instead invest more of my money into the heart of my business. And not in a water treatment plant that is necessary for my business but it is not my finished product.

Riggs: Of course, of course. And also lower the capital expenditures of the monthly operating expenses. That is better for society, rather than raising capital, instead it becomes a normal operating expense, like the rent of the buildings, etc. It is the logical thing to do.

Global Trend

The world is becoming service-based, that's the global trend and it's a good trend, because it allows companies to specialize and stay away from things that are not their specialty. And I think we are united in this initiative to allow focus. So, you can be optimistic that it's going to fit in the business that's coming. This will become more adopted as time goes on. More and more and more speeding up, right?

Demand Continually Increases

Cristian: Every month we have more occupancy than the previous month. I mean, never have we sold less than the month before, never.

Riggs: Unbelievable, unbelievable.

Cristian: A product very much in demand, there is a limited supply, and if in one month we have and occupancy capacity of 70%, the next month 71, 72 and then 73%. We have always been climbing, always. Because we specialize in this and because we offer mobility products in general, you could buy a car from us, or you could rent one, but you could also end up repairing it. We're becoming specialists at this and we're getting better and better and we will continue to grow. So for us it's a very profitable business. And also, we're kind of delivering a customer satisfaction and that makes us happy too.

Better User Experience

Riggs: I think the quality of the experience for the customer is better because the cars are always new, more or less new, they are well maintained and there are no problems, you drive and that's it. And that's the quality of the experience, I think that's better. I have a car that I love very much, which is a 2016 Mercedes, because it was the lat year of diesel, I love diesel, but it needs constant maintenance.

And though I love it, love it very much, it's not logical. It would be better to just have a car as a service, nothing more, and move on. And I think in the future, 10 years from now, that will be the preference. I want my Mustang, I want my Corvette, to go out on Sunday. That's something else. That would be something else — a collection for pleasure, but for transportation I'll do everything via subscription of course.

Improving Efficiency of Use

Cristian: Yes, 70% of the people, use a car for commuting from home to work and some peripheral activity, such as taking a child to school and not much more than that.

Riggs: And it's parked all day!

Cristian: 24 hours in a day, the car is parked for at least 6 hours at the house, because you're sleeping. Then, you use it for maybe an hour to get to work and then it's parked for 8 hours, absolutely no movement. Then you use it for an hour and then you get home. Consequently, how much better would it be to have a service and use the car exactly when you need to use it? Because, when you don't you have to pay for parking too.

Riggs: But you have a responsibility to deliver good service, 100% service, because if that doesn't happen, it's going to stop the adoption if it's not well done. That's the challenge, isn't it?

Availability is Key

Cristian: Yes. Our worst enemy or, if you will, our competitor is the availability of the car. If we offer the mobility of a mobility service, and if the customer needs a car, the car has to be available. That's what we're up against, the core of the business, is it has to be like, what it's like to own a car. And must be available when a guy wants it, just as if it were his.

Riggs: That's the priority. That's why it's important to have instant availability. And if it isn't available, that's going to stop the program

Cristian: Yes of course there has to be quality. So that's why, that's why it's important that with just two or three clicks you have a car at your doorstep and that it doesn't end up being a traumatic experience and that the client ends up saying, "This is a failure, I'm buying a car." Because there, the value chain is over.

Riggs: Of course. Cristian, it was a very interesting discussion and best wishes for an incredible ear ahead.

Cristian: Well, thank you very much and thank you for your participation and count on me for whatever you need.

Riggs: Thank you very much and now I'm going to finish the interview. Thank you once again.

End of video presentation

Service Businesses

Riggs: This is a really interesting this this interview brought up many interesting points that that, you know, I can't help but really think about, for example, the fact that Toyota is, you know, is recognizing that margins in the auto business are low. And this is a solution that he's talking about, you know, 40 percent, 30, 35, 40 percent margins on these services. And yet their people appreciate them more.

I often say that in the old days, you used to be able to have a Microsoft Office for $130 one time and now you're paying, I don't know, $19 or whatever it is a month. You're paying more over time. But your experience is better. So Microsoft makes more money and you have better experience. It's a win win.

And this is, I think, happening in the automobile industry because we know the margins are terrible. I've shown you the the graph of GM finance versus GM itself, and we want to be in the finance business. But even more so in the services business. So that, I think is is the big lesson.

Meeting the Demand

The other thing that was very interesting. Notice how they can barely keep up with demand. And this is what we're finding also is that people are excited. Our potential clients, these people that we've been accumulating a big backlog of systems that they don't quite have the capital for, et cetera. They're eager to get going. And so, you know, we're very, very quickly going to get into the need to deliver in order to make this thing work.

And that's why we are raising the capital for this. And that's why investors like it very much because it's got this tremendous demand. And I believe that it really is the way that private water treatment and private water management will be done. One hundred percent in a matter of years, how many years? It's hard to say because it's just beginning now, but for sure, it's something that is really, really, you know, it makes me wonder why the heck nobody came up with this before. And you know, it just took us a long time for us to to really refine it. And here we are.

So I'm going to quickly wrap up, and what I have is some some OK, and let me just see some chats here. Ok, thank you. I'm glad you guys. There's some interesting representation. Send me a copy of possible, et cetera. They when you will get the replay and also a person, it doesn't show it fully macro. Something says I still needed to know what as an investor, what level I could come in at all will be answered. Let me continue because this is important and. I'm going to go ahead and come back to the presentation.

Personnel News

Personnel news. We've got people major developments and now this is I'm giving you a bit of a scoop because this has not been officially announced. And once again, something popped in here. I've got a bad date in the bottom left, so you're supposed to disregard that completely.

Chief Strategic Officer

All right. Andrea Agostini is somebody I've known for a long, long time, and he has an amazing background. I'm actually going to show you his his resume. But he is really a specialist in digital media marketing strategy, and I might also say crypto. And he is, you know, there's been a big problem we've had, which is that that we have a very, very good management team, but we lack or we really lack the the marketing and public relations and crypto.

That's stuff that I've been doing personally. And there's a limit to how much I can do and still run the rest of the company. So this is really, really needed, and I think it's going to be loosening up a tremendous amount of scale for us. And also, he is connecting us with international investors. Let's review his profile real fast, if we might do that right now.

Key Player

So here it is. So, Andrea, you know, he's done a lot of amazing things. He was a key player in a very large company called American Power and Gas. That's how I've known most of his performance over the years. And today he is involved with a company called Sales Jet. And then you see, he's involved with coin share. Let me let me just make this bigger for you.

Here we go. Here we go. Coin share, which is a blockchain technology and he's done a tremendous number of projects. Here's American power and gas. They got to three hundred million dollars and growing, continuing to grow, amazing operation. And he has a background in radio and TV, and there's his educational background. This will all be announced, but I wanted you to kind of get a feel for this person who's joining us. He is. He's already on fire. So he's very welcome. You'll be hearing more.

Marketing and PR

And if you want to see what he looks like, there he is a couple of pictures of the man himself. So this is, I can tell you, because right now we have we have a chief operating officer, Tom Marchesello. We have, you know, we have a CFO chief finance officer. We also have Ken Berenger who I'm going to talk more about in a moment. And we really needed somebody in marketing and that's really where the rubber meets the road. Of course, we have all our people in the operating divisions, but the marketing and PR was really a problem.

So I'll be interviewing him in depth on next week's CEO briefing and that there will be a major announcement of his coming on board.

Executive VP

Now. Another big, big announcement I want to make today is that we are promoting Ken Berenger to executive vice president of the company, which makes him an officer and he really is the co-founder of Water on Demand. He and I created this together, and he has been pivotal to developing this initiative all along. He's also been involved with our crypto, which is a big deal. And so, you know, we really want to recognize that he is really. Perhaps more than me now, I think we're both equally vital to the company, and I really, really welcome him to this new position, this well, well deserved.

All right, now, speaking of which, there is you have the ability to join this Water on Demand. But remember that because it's early days, you can be a founder of Water on Demand. So it's not just the profit share that we give that we plan to give to everybody, but a tremendous amount of stock value. And what we've done is we've we've treated you. We're treating you right now as if you were investing a $5 million block. And you can really invest anything as long as you're qualified.

And so I'm not going to get into all this stuff, but it's a powerful, powerful package that you really should review with Ken directly.

So and that's the sweet spot is five million, and that's how one can get in for a whole lot less.

Call Ken

All right. You could talk to Ken. He just simply go to, oc.gold/Ken, schedule a call and talk to him. He is on the phone nonstop. So this is the best way to schedule with him. You can also email invest@originclear.com.

Thank You

Well, it's it's been really interesting. The more I think about this analogy to the the whole automobile game is something that is really, really interesting to me. So I think it's I think it really works as an analogy. Well, there we are, and I want to thank you all. Somebody is calling me a handsome devil. Cute. Well, the handsome devil who keeps putting the wrong date on the slides. So, you know, don't hate me because I'm beautiful. Ok.

But anyway, it's been wonderful having you. I will be back in Florida tomorrow, and it's going to be a great pleasure to be able to. Well, I'm sorry. It was a great pleasure skiing. I'm just going to say that right now. And but it will. I'm really looking forward to making Water on Demand happen in 2022. And ultimately, we all know where it's going is to a place on a national exchange. So that is the big goal. Can't say it's going to happen in 2022, but certainly by making Water on Demand a success, it will give us the assets needed to do exactly that. So everyone, thank you so much. It's been great having this first meeting.

And Kelly Perazza. Hello, Kelly, "Congrats to Mr. Ken Berenger. Happy New Year to all." Well, Kelly, we love you. Thank you very, very much. All right. Thank you, guys. Have a great great weekend and I'll see you next week. We'll have Andrea on the show, and I think you'll find it fascinating. Thank you and good night.