# Originclear, Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Originclear, Inc.](/companies/ocln.md) (CIK 1419793)
- Form: 10-Q
- Filed: 2025-05-19
- Accepted by EDGAR: May 19, 2025, 08:00 ET
- Period: 2025-03-31
- Accession: 0001213900-25-045089
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1419793/000121390025045089/ea0242545-10q_origin.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1419793/000121390025045089/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $2.1m | us-gaap:Revenues |
| Gross profit | 3 months, 2025-01-01 to 2025-03-31 | $692.6k | us-gaap:GrossProfit |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$843.9k | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $761.3k | us-gaap:InterestExpenseNonoperating |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.00 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.00 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 1,706,942,790 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$221.3k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-03-31 | $1.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $3.5m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $4.1m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $47.9m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $50.4m | us-gaap:Liabilities |
| Long-term debt | at 2025-03-31 | $2.0m | us-gaap:LongTermDebt |
| Shareholders' equity | at 2025-03-31 | −$53.9m | us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest |

## Management's discussion and analysis

As filed, 22,884 characters.

This Quarterly Report on Form 10-Q contains forward-looking statements that involve a number of risks and uncertainties, many of which are beyond our control. These statements may relate to our business and financial strategies, intellectual property, production capabilities, future operating results, and our overall plans, objectives, expectations, and intentions, to the extent they are not historical facts.

All statements in this report, other than those based on historical fact, including those regarding our operations, financial position, estimated revenues and losses, projected costs, and strategic outlook, are considered forward-looking. Words such as “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” and “project,” among others, are often used to identify these statements, although their absence does not mean a statement is not forward-looking.

These statements speak only as of the date of this report and should not be relied upon as guarantees of future performance. While we believe the expectations reflected in these forward-looking statements are reasonable, we cannot assure they will be realized. Forward-looking statements appear throughout this report, including in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Actual results may differ materially due to various risks and uncertainties, and no assurance can be given that the plans, intentions, or expectations expressed in these statements will occur.

### Organizational History

OriginClear, Inc., (the “Company”, “OCLN” or “OriginClear”) was incorporated in Nevada on June 1, 2007. Initially focused on research, development, and licensing, the Company transitioned to commercialization in 2015. Our principal offices are located at 13575 58th Street North, Suite 200, Clearwater, FL 33760. Our main telephone number is (727) 440-4603. More information is available on our website, www.OriginClear.com, however, the website content is not incorporated in this report.

WODI comprises three distinct operating units, Modular Water Systems (“MWS”), Progressive Water Treatment (“PWT”), and Water on Demand (“WOD”), the last being a development-stage business.

### Overview of Business

OriginClear, Inc., originally founded in 2007 as OriginOil®, rebranded in 2015 to reflect its strategic shift toward industrial water innovation. Now operating as the Clean Water Innovation Hub™ (“CWIB”), the Company focuses on incubating and launching water-related businesses with scalable potential in the global water industry. OriginClear’s primary focus is to support its wholly owned subsidiary, Water On Demand, Inc. (“WODI”), which consists of three operating units: Progressive Water Treatment (“PWT”), Modular Water Systems (“MWS”), and Water on Demand (“WOD”).

PWT is the Company’s primary revenue driver, providing custom-engineered water treatment systems. MWS, which holds an exclusive master license for three active patents and related intellectual property, benefits from a valuation conducted in April 2023 that estimated the IP’s nominal value between $26.6 million and $53.2 million. Its product differentiation is further supported by proprietary know-how and operational excellence. WOD, currently in development, is designed to deliver outsourced water treatment services under a Design-Build-Own-Operate (“DBOO”) model. This unit aims to enable businesses to achieve water self-sufficiency by paying for treatment services on a per-gallon basis, with an initial showcase of this model currently in progress.

### Recent Developments

In 2023, OriginClear consolidated three operating divisions into WODI.

On May 8, 2025, the Company signed a settlement and transition agreement with the President of the MWS unit, to wind down MWS within 60 days, terminate the related intellectual-property license, forgive approximately $0.18 million of accrued royalties, and retain him as an outside technical advisor; thereafter the Company will focus solely on water-infrastructure financing. Because this event occurred after the March 31, 2025, balance-sheet date, no adjustments have been recorded in these financial statements, and management will evaluate discontinued-operations presentation once the wind-down is complete.

### Water Businesses

Through its subsidiary WODI, the Company is developing an outsourced water treatment business known as WOD, operated through its subsidiary, WODI. The WOD model aims to offer customers water self-sustainability as a service – allowing them to pay on a per-gallon basis for managed wastewater treatment services rather than incurring significant upfront capital equipment acquisition costs. This approach, generally known as DBOO, provides an alternative to conventional on-site wastewater treatment solutions requiring substantial initial investments.

The Company is currently evaluating opportunities for outsourced water treatment as a managed service, featuring pay-by-the-gallon pricing. It announced agreements with Enviromaintenance ®, a water services company, and Klir®, a utility network software provider, to support a WOD pilot program in the mobile home park sector. Under this model, WODI may initially build, maintain, and service the water treatment system it finances. As the program expands, WODI intends to rely on regional water service providers to perform these functions.

WODI intends to delegate the building and operation of WOD-Financed systems to regional water companies under performance contracts, thus creating a network of partners that can enable rapid scaling and establish a competitive barrier to entry. At the time of this filing, WODI made its first acquisition of personnel resources, hiring veteran C-Level Executive, James Woloszyn as its Chief Operating Officer. The Company intends to scale as it expands by acquiring further staff or independent resources. WODI’s other divisions, PWT and MWS together employ 20 people. Otherwise, WODI’s Board of Directors and executive officers are currently the same as those of OriginClear, and WODI obtains administrative support from OriginClear under a management services arrangement.

On February 15, 2024, the Company and Fortune Rise Acquisition Corporation (“FRLA”) filed a registration statement on Form S-4 with the Securities and Exchange Commission (“SEC”) for a proposed business combination involving WODI. However, on December 12, 2024, WODI and FRLA mutually agreed to terminate the Business Combination Agreement, as described elsewhere in this filing. For the year ending December 31, 2023 WODI and FRLA had an Business Combination Agreement.

On March 26, 2024, the Company announced a Memorandum of Understanding between MWS and Enviromaintenance to collaborate on the planned WOD pilot program in the Greater Central Texas Region. On April 9, 2024, the Company announced that Klir, Inc. had been selected to support the WOD pilot, further bolstering the Company’s efforts to provide decentralized water management solutions on a pay-per-gallon basis. Additional information regarding these developments is available in the Company’s publicly filed materials.

### Progressive Water Treatment Inc.

PWT, based in Sherman, Texas, designs, builds, and services a broad range of industrial water treatment solutions. It seeks to provide a comprehensive, end-to-end offer that addresses the increasing corporate demand for outsourced water treatment.

PWT designs and manufactures turnkey water treatment systems for municipal, industrial and pure water applications. Its competitive advantages lie in 25-years of experience that enables depth of understanding of each customer’s needs and employing multiple technologies – such as chemical injection, media filtration, membranes, ion exchange, and supervisory control and data acquisition (“SCADA”) systems – to deliver complete, customized solutions.

In addition to system design and manufacturing, PWT offers ongoing services that include maintenance contracts, retrofits, and replacement support. The Company also rents equipment under contracts of varying terms.

### Modular Water Systems

MWS provides a distinctive line of prefabricated water transport and treatment solutions designed for decentralized applications. The division is led by a senior engineering executive with extensive expertise in modular infrastructure. On June 25, 2018, the Company obtained a worldwide, exclusive, non-transferable license to the proprietary technology underlying MWS solutions. This license was renewed in May 2020 for a ten-year term and included rights to sublicense the technology and form manufacturing joint ventures.

On June 9, 2023, an identical license agreement was executed with WODI, and on June 12, 2023, the prior agreement with OriginClear was mutually canceled.

MWS, supported by Progressive Water Treatment and other fabrication partners, designs and delivers modular equipment marketed under the EveraMOD™, EveraSKID™, and EveraTREAT™ brands. These systems are intended for a range of end users—such as institutional campuses, real estate developments, and industrial sites—that require localized wastewater treatment.

On January 10, 2024, the Company announced a MOU between WODI and Plastic Welding and Fabrication, Ltd. (“PWF”) of Buda, Texas. PWF currently manufactures critical enclosures used in MWS solutions. The MOU is intended to streamline manufacturing operations and includes a LOI to evaluate a potential acquisition of PWF by WODI. If completed, the acquisition would establish WODI’s first in-house MWS production facility. Discussions are in early stages and no assurances can be made regarding the outcome.

On March 26, 2024, the Company announced an MOU between MWS and Enviromaintenance of Georgetown, Texas to jointly promote standardized wastewater systems in the Central Texas market, particularly targeting the Mobile Home Park (“MHP”) segment. The initiative aims to provide affordable and scalable wastewater solutions tailored to the MHP sector.

Subsequently, on May 08, 2025, Water On Demand Inc. announced its plan to focus entirely on developing and providing financing services for, instead of competing with, water equipment companies. As a first step in the new plan, Daniel M. Early, President and Chief Engineer of the Modular Water Systems (MWS) business unit of WODI, agreed to sunset the MWS unit over the next 60 days. As a result, PWT became the sole revenue contributor, while the Company focused on developing WOD for the financial services mission.

### Patents and Intellectual Property

On June 25, 2018, the Company obtained a worldwide, exclusive, non-transferable license to a portfolio of intellectual property related to modular water treatment systems. This portfolio includes five issued U.S. patents as well as supporting design software, CAD files, marketing materials, and technical specifications (collectively referred to as the “MWS IP”).

On May 20, 2020, the license was renewed for an additional ten years, with the possibility of three-year extensions. The renewal also granted the Company the rights to sublicense the Early IP, and, with approval, to establish ISO-compliant manufacturing joint ventures.

As part of the sale of MWS-related assets to WODI on April 14, 2023, the license to the MWS IP was transferred to WODI. A new ten-year license agreement reflecting this transfer was executed on June 9, 2023, and the prior license agreement with OriginClear was terminated on June 12, 2023.

Subsequently, on May 10, 2025, Daniel M. Early and WODI mutually agreed to terminate this license.

On May 10, 2021, the Company announced the filing of a patent application titled “System and Method for Water Treatment Incentive,” which incorporates blockchain and NFT technologies to facilitate automated payment distribution for outsourced water treatment services billed on a per-gallon basis.

The ORIGINCLEAR trademark application was registered as U.S. Trademark Registration 7,296,730, issued on February 6, 2024. Additionally, the ORIGINCLEAR logo trademark application was registered as U.S. Trademark Registration 7,296,731, issued on February 6, 2024.

Other trademarks in process of registration include:

| Patents | Entity | Serial Number | Status |
| --- | --- | ---: | --- |
| $H20 | OriginClear Inc. | 90714035 | Pending |
| WATERPRNEUR | OriginClear Inc. | 90471071 | Pending |
| CLEARAQUA | OriginClear Inc. | 90840903 | Pending |
| THE WATER COIN FOR THE WORLD | OriginClear Inc. | 90840920 | Pending |
| WATER - THE BLUE GOLD (Int. TM Class 036 - Crowdfunding) | OriginClear Inc. | 97734240 | Pending |
| THE CLEAN WATER INNOVATION HUB | OriginClear Inc. | 97616504 | Dead |
| ARMY OF US | OriginClear Inc. | 98450380 | Pending |
| The Blue Gold (Intl. TM Class 041 - Education, Entertainment and Cultural Services | OriginClear Inc. | 97734240 | Pending |
| FINTECH FOR CLEAN WATER | Water on Demand, Inc. | 98099593 | Pending |
| WATER ON DEMAND | Water on Demand, Inc. | 98099605 | Pending |
| WATER LIKE AN OIL WELL | Water on Demand, Inc. | 97616574 | Pending |

The Company relies on, and expects to continue relying on, a combination of confidentiality agreements with employees, consultants, and third parties, as well as trademark, copyright, patent, trade secret, and domain name protection laws, to protect its proprietary rights.

### New Role of the Company

The Company, in its role as the CWIH, seeks to create, incubate or accelerate businesses in the water industry and potentially other sectors.

The Company intends to achieve growth by partnering with or developing businesses where it may take equity positions in addition to earning management fees.

We believe our primary strength lies in helping such businesses secure capital through retail corporate development, achieve commercial proof of concept, scale operations, and pursue mergers and acquisitions.

Identifying suitable candidates for this strategy may prove challenging. Even if identified, there is no assurance these ventures will achieve commercial success. The Company’s primary focus for the foreseeable future remains the financing, development, and support of its Water On Demand, Inc. subsidiary.

### Critical Accounting Policies

The Securities and Exchange Commission (“SEC”) defines “critical accounting policies” as those that require application of management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Not all of the accounting policies require management to make difficult, subjective or complex judgments or estimates. However, the following policies could be deemed to be critical within the SEC definition.

### Revenue Recognition

We recognize revenue when services are performed, and at the time of shipment of products, provided that evidence of an arrangement exists, title and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured.

Revenues and related costs on construction contracts are recognized as the performance obligations for work are satisfied over time in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Under ASC 606, revenue and associated profit will be recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). All un-allocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss as it is determined. Revisions in cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts for the revisions become known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements, may result in revisions to costs and income, which are recognized in the period the revisions are determined.

### Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as the disclosure of contingent assets and liabilities. Actual results may differ from these estimates.

Significant estimates include evaluations of goodwill and long-lived asset impairments, revenue recognition for percentage-of-completion contracts, allowances for uncollectible accounts, inventory valuation, valuations of non-cash capital stock issuances, and valuation allowances on deferred tax assets. These estimates are based on historical experience and other assumptions deemed reasonable under the circumstances. They form the basis for management’s judgments regarding asset and liability carrying values. Changes in assumptions or conditions could result in materially different actual outcomes.

### Fair Value of Financial Instruments

Fair value of financial instruments requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of March 31, 2025, the amounts reported for cash, prepaid expenses, accounts payable and accrued expenses approximate the fair value because of their short maturities.

### Results of Operations for the three months ended March 31, 2025, and 2024.

### Revenue and Cost of Sales

Revenue for the three months ended March 31, 2025, was $2,097,050, up $1,153,613 from $943,437 in 2024. The increase was driven mainly by equipment-contract revenue, which rose to $1,512,503 from $363,358 as larger projects reached billing milestones. Pump-station sales grew to $316,564 from $296,360, and component sales increased to $258,864 from $206,387.

Cost of goods sold rose to $1,404,436 from $1,055,940, up $348,496 (33%), in line with the higher sales volume. Gross profit improved to $692,614 from a gross loss of $112,503 in 2024, and gross margin moved from (-11.9%) to (33.0%).

### Selling and Marketing Expenses

Selling and marketing expenses for the three months ended March 31, 2025, and 2024, were $362,992 and $588,964, respectively. The $225,972 (38%) decrease was attributable to a project-specific marking, lower service sales commissions compared to the prior year period, and a decline in advertising, website development, and other promotional activities.

### General and Administrative Expenses

General and administrative expenses totaled $1,173,570 for the three months ended March 31, 2025, down $42,220 (3%), from $1,215,790 in 2024. The decrease was driven by reduced legal and professional-services fees, which more than offset a $126,746 bad-debt provision and higher payroll-related costs in the current period.

### Other Income and (Expenses)

Other income (expense) for the three months ended March 31, 2025, was $(76,914), compared with $(14,189,728) in 2024, an improvement of $14,112,814. The swing was driven by a $1,371,191 gain on re-measurement of derivative liabilities versus a $12,767,194 loss in the prior year, a $249,334 gain from the write-off of loans payable, and the absence of the $590,000 SPAC-receivable impairment and the $902,702 conversion-settlement charge recorded in 2024. Offsetting factors included $773,444 of preferred-stock incentive compensation, a $115,871 increase in interest and dividend expense, the absence of last year’s $687,678 gain on redemption of common stock, and a $36,167 unfavorable change in unrealized investment gains.

### Net Income/(Loss)

Net loss for the three months ended March 31, 2025, was $(767,034) compared with $(16,106,985) for the same period in 2024, an improvement of $15,339,951. The variance reflects a $1,371,191 gain on re-measurement of derivative liabilities verses a $12,767,194 loss in the prior year, a $249,334 gain from the write-off of payables and absence of the 2024 SPAC-receivable impairment and conversion-settlement charge.

Offsetting these items were $773,444 of preferred-stock compensation and $115,871 increase in interest and dividend expense. Derivative values are highly sensitive to the Company’s stock price, volatility, interest rates, and other contractual terms: shifts in these inputs can produce significant period-to-period fluctuations in reported results.

### Liquidity and Capital Resources

On March 31, 2025, the Company had cash and cash equivalents of $1,898,564, compared with $550,884 at December 31, 2024. The working-capital deficit was $(44,488,716) versus $(45,437,508) at year-end and shareholders’ deficit was $(53,938,041), an improvement of $919,547 since December 31, 2024.

Net cash used in operating activities was $221,342, reflecting the net loss adjusted for a $1,371,191 gain on the change in fair value of derivative liabilities, $773,444 of preferred-stock incentive compensation, and working-capital movements—including a $1,832,431 increase in contracts receivable and a $820,888 decrease in contract liabilities.

Investing activities used $7,500, primarily for fixed-asset purchases. Financing activities provided $1,576,522, largely from the proceeds of Series A preferred stock issuances and common stock sold in a Regulation A offering.

The Company expects negative operating cash flows to continue over the next 12 months and has scheduled debt-service and lease obligations of approximately $3.2 million during that period. Management plans to satisfy these requirements through additional equity or convertible-debt financings now under discussion, but no binding commitments exist. If financing cannot be obtained, management will reduce discretionary spending and defer expansion projects.

Because of recurring losses, negative operating cash flows, and large working-capital and equity deficits, substantial doubt exists about the Company’s ability to continue as a going concern for at least one year after these financial statements are issued. The statements do not include any adjustments that might result from this uncertainty.

The Company’s prior Regulation A offering of Series M Preferred Stock may be subject to rescission claims. Although no claims have been asserted, any successful claim could adversely affect liquidity; the potential liability is not presently determinable.

### Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity or capital expenditure.

## Market risk

As filed, 969 characters.

As of the date of this filing, the Company remains in default on four preferred stock series that have reached their contractual redemption dates. The defaults comprise 50 shares of Series F Preferred Stock with an aggregate redemption price of $50,000 that became due on September 1 2020; 25 shares of Series G Preferred Stock with an aggregate redemption price of $25,000 that became due on April 30 2021; 25 shares of Series I Preferred Stock with an aggregate redemption price of $25,000 that became due between May 2 2021 and June 10 2021; and 297 shares of Series K Preferred Stock with an aggregate redemption price of $297,150 that became due between August 5 2021 and March 26 2022. The cumulative unpaid redemption obligation is $397,150. No penalties have been assessed, and no waivers or amended terms have been negotiated to date. Management plans to address these arrearages in connection with its ongoing capital-raising and liability-management efforts.

## Controls and procedures

As filed, 1,750 characters.

### Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2025. These controls and procedures were determined to be effective in ensuring that information required to be disclosed by the Company in reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and communicated to management to support timely decision-making regarding required disclosures.

### Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the fiscal quarter ending March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### Limitations on Internal Controls

Management recognizes that no system of internal control over financial reporting or disclosure controls can provide absolute assurance. A control system, no matter how well designed and operated, can provide only reasonable assurance that its objectives will be met. Accordingly, management must exercise judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Filed May 19, 2025.
Source: SEC EDGAR, the filing index for accession 0001213900-25-045089. Last ingested by Listed: Oct 24, 2026, 15:09 ET. No prices; not investment advice.