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Market-Based Solution for Clean and Affordable Drinking Water in Haiti Y1Q1 Board Meeting Board of Directors Jim Chu 1 August, 2013.

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Presentation on theme: "Market-Based Solution for Clean and Affordable Drinking Water in Haiti Y1Q1 Board Meeting Board of Directors Jim Chu 1 August, 2013."— Presentation transcript:

1 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Y1Q1 Board Meeting Board of Directors Jim Chu 1 August, 2013

2 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Agenda Summary Scorecard Kiosk 1 Progress and Lessons Learned Q1 Budget versus Actuals – Legal Costs – Kiosk Costs Q2-Q4 Plan – Kiosk Deployment Strategy – Deployment Timeline Cash Needs and Fundraising General Issues, Risks, and Mitigation

3 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Summary Scorecard Focus AreaNotesStatus Kiosk Launch Kiosk 1 build good; Commercial launch delayed; clear plan for cost optimization and scaling On Track, Medium Risk Community Engagement Site 1 positive reception; strong indicators of demand On Track, Low Risk Revenue Generation Commercial launch August 17 N/A Budget Management Pre-May Project Development Budget exceeded by $219K due to higher legal costs and longer close period; Q1 and kiosk build budget on track On Track, Medium Risk Personnel Negative team dynamic with too much time/energy spent on resolving team issues  not sustainable; Expat staff policy issues Risk of negative impact Water Quality Mgt Region 1 source water quality acceptable and SOPs and training in place for quality assurance On Track, Low Risk Fundraising $940K grant funding opportunities; 3-4 high probability leads for closing $730K investment funding by end January 2014 On Track, Medium Risk Government Relations Business permits acquired; risk of costly local permits; working with Ministry of Environment to establish process for water permits On Track, Medium Risk

4 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Kiosk 1 Launch Progress Build Cost: high but anticipated Timing: Operational now, but Grand Opening delayed until August 17 Vetted vendors Clear lessons learned for plan to optimize costs and to scale (next slide)

5 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Kiosk 1 Lessons Learned 1.One-offs are expensive  cookie-cutter approach faster and more cost effective 2.Not in the construction biz  outsource General Contractor role to vetted partner – Clear scope of work and detailed specifications – Contractual terms for meeting/missing targets 3.Communities have high expectations but short attention span  need short and well defined start to finish 4.Custom items expensive and difficult  Standardizing on locally available parts lowers costs significantly

6 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Q1 Budget versus Actuals

7 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Financial Close Legal Cost Breakdown ProviderPurposeCostNotes Shearman & Sterling Transaction Counsel $150,000Total $245K billing, $50K discount; IFC paid $45K Vicki ChoyCorporate Counsel during close $70,983Reduced fee by 10% and stopped billing at end April 2013 WalkersCaymans Counsel$50,469Billing was $65K. Capped fee at $45K + dispersements Hudicourt-WooleyHaiti Counsel$17,000 Multiple jurisdictions Non-standard terms Multiple rounds of negotiation

8 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Kiosk 1 Cost Breakdown Original Budget: $74,200/kiosk – $55,000 capital – $19,200 services and support for deploy Plus $75,000 kiosk development (from $150,000 for kiosk development from project development budget)

9 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Reducing Cost of Deployment

10 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Projected Versus Original Kiosk Budget

11 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Original Year 1 Roadmap Q1: May – July Q2: Aug – Oct Q3-Q4: Nov – April ‘14 Pilot Kiosk Optimization Scale Deployments and Ops Deploy 1 st Kiosk Establish core kiosk ops Test delivery model Deploy Kiosks 2-5 Refine core kiosk ops Rollout delivery prgm Kiosk 1 “break-even” Deploy Kiosks 6-15 Refine core kiosk ops Refine and scale delivery prgm Drive sales volumes (sales tactics, promos) Expand channels (consumer, institutional, distributors, other retail) Revised Year 1 Roadmap May – July Aug – Dec ‘13 January – May ‘14 Pilot Kiosk Optimization Scale Deployments and Ops Deploy 1 st Kiosk Establish core kiosk ops Test delivery model Deploy Kiosks 2-5 Cost reduction planning and specs of kiosk design & deployment Refine core kiosk ops Rollout delivery prgm Kiosk 1 “break-even” Deploy Kiosks 6-15 Refine core kiosk ops Refine and scale delivery prgm Drive sales volumes (sales tactics, promos) Expand channels (consumer, institutional, distributors, other retail)

12 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Possibilities Low cost of generator usage  Reducing Solar Installation, Direct Solar only High Market penetration rates (> 20%, > 3,000 gallons/day)  fewer kiosks with larger capacity – Serves same number of people with higher profitability – Still need multi-region model

13 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Fundraising: Grants DonorAmountNotesProbability PROPARCO$240KTo support staff technical training and training of delivery agents. Cleared preliminary approval; due diligence trip scheduled for August in Haiti 60% Caribbean Compete$500KIn second, final round. CC has assigned consultant to develop submission. Submission for development of delivery model and financing of trikes 60% LEAD (PADF)$200KBusiness plan competition. Funds can be applied to general budget 50% Cisco$75KPartnering with Dalberg’s 501c3 entity. To support development of open source RMS and POS system 40%

14 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Fundraising: Investors for $730K InvestorAmountNotesProbability MMA Global Investments $200K - $500K 50% Vital Capital$730KFirst round of discussions40% Grameen Foundation’s Pioneer Fund $250K - $750K Will start due diligence in October60% Doug Lee?Individual investor30% Pepsico?Early stages of discussion; more interested in Series B offering ? Target close: January 2014 Price per share increases by 2% points each month with a cap at 30%

15 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Issues, Risks, and Mitigation Financial Shortfall – Must raise $730,000 by March 2014 to reach 20 kiosks – Must secure grant funding and/or earn revenue > $250K in Year 1 to reach 20 kiosks Top Three Continuous Risks 1.Government interference 2.Community acceptance 3.Haiti Personnel issues

16 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Corporate Housekeeping

17 Market-Based Solution for Clean and Affordable Drinking Water in Haiti

18 Proposed Salaries and Stock Option Allocation Monthly Gross SalaryEquity % Shares Vesting PeriodVesting Terms Officers and Key Staff James Chu, CEO$9,0003.0% 133,3904 yearsone year cliff, 1/48th per month thereafter Kenneth Michel, COO$8,0003.0% 133,3904 yearsone year cliff, 1/48th per month thereafter Jane Choi, CFO$6, % 22,2324 yearsone year cliff, 1/48th per month thereafter Elaine Burke, CTO$6, % 22,2324 yearsone year cliff, 1/48th per month thereafter Camaria Holder, Water Quality Manager$5, % 6,6695 yearsone year cliff, 1/48th per month thereafter Iain Silver, Technical Manager$4, % 6,6694 yearsone year cliff, 1/48th per month thereafter Sarah Schlessinger, Product Manager$4, % -4 yearsone year cliff, 1/48th per month thereafter Nanoucheka Olis, Adminstrative Manager$2, % 4,4464 yearsone year cliff, 1/48th per month thereafter Other HQ Staff Polifranc Mackenson, Office Assistant$250 Maxo Sajuste$500 Advisors Mark Straub0.15% 6,6693 years1/36th per month, no cliff Kit Myamoto0.10% 4,4463 years1/36th per month, no cliff Eric Henning / Eric Kacou0.10% 4,4463 years1/36th per month, no cliff Unallocated SIP pool7.25% 322,359 Total SIP Pool15.00% 666,949

19 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Commitments greater than $50,000 to approve $71K deferred legal fees to Vicki Choy for legal fees associated with financial close (pay in March 2014 after close) Upcoming Subcontractor contracts – Veerhouse GC contract – Borehole driller – Nimbus water treatment systems – Solar equipment provider

20 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Kiosk Deployment Strategy Kiosk Deployment Planning Jim Chu 1 August, 2013

21 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Kiosk Build Lessons Learned One-off deployments are inefficient DloHaiti should not be General Contractor Contracts must have penalty and incentive clauses (timelines and quality) Communication with subs must be streamlined (one spec, one voice) Quality Assurance important at every step Local and standard is preferred

22 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Kiosk Deployment Plan 1.Greatly simplify and streamline structure with cost, speed, and flexibility in mind (Miyamoto) 2.Design cookie-cutter specifications (Miyamoto) 3.Establish General Contractor for land prep, foundation, structure, finish for Fixed Build, “Fixed” Price at <$40K – Perform inspections at key milestones (Miyamoto) – Hold subs accountable with delay penalties and rewards for cost reduction

23 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Current Structure

24 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Simplify and Streamline Stem-wall foundation No internal structural walls Replace exterior EPS walls with windows Eliminate custom or expensive fixtures – Standard size windows – Openings without windows – Eliminate water tank stand and foundation Reduce build time by grouping deployments (lowers costs and speeds it up)

25 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Remove Back portion

26 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Simplify Structure

27 Market-Based Solution for Clean and Affordable Drinking Water in Haiti General Contractor Model Single GC manages land prep, foundation, structure, and finish (electrical and built-in plumbing) Fixed build, “fixed” price – Variables include distance and soil/terrain type Detailed specifications are important: Miyamoto to develop low-cost design and perform inspections DH takes over for water treatment unit installation and delivery systems plumbing (internal team) DH controls flexible, water quality related items

28 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Reducing Cost of Deployment

29 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Company Mission, Values and Success Factors

30 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Core Management Team Core Management Team Member ResponsibilitiesObjective / KPI Jim Chu, CEOFundraising Setting company direction Building management team Raise $4.1M Get right people in right place Establish company goals ST, LT Ken Michel, COOKiosk Management Community Engagement Kiosk PROFITABILITY Customer/community satisfaction Jane Choi, CFOFinancial Management Compliance Financial integrity Staying on budget Elaine Burke, Project Manager and RMS Deployment Management and Project Management Remote Monitoring System On-time project delivery Sarah Schlessinger, Product Manager Product strategy Product Rollout Kiosk REVENUE Iain Silver, Technical Manager Deployment Management Technical Ops Quality, on-time, on budget deployments Camaria Holder, Water Expert Water Quality Tech ops (water related) WHO Water Quality Standards Customer satisfaction with taste Nanoucheka Olis, Administrative Mgr Facilities Management Fleet and equipment Mgt Efficient office and logistics operations

31 Market-Based Solution for Clean and Affordable Drinking Water in Haiti dloHaiti Mission Make essential products and services better and more accessible for underserved Haitian consumers to improve quality of life and to drive sustainable economic development in Haiti.

32 Market-Based Solution for Clean and Affordable Drinking Water in Haiti dloHaiti Company Values Transparency and Open Communication Understanding Customer Needs Innovation and Learning from Mistakes Empowerment with Accountability Recruit the Best, Retain the Best Focus and Delivering on Commitments Investing in Haiti’s Future

33 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Key Success Factors Hiring the right people for the right jobs Staying close to the customer/community and their needs Constant Community Engagement and Acceptance Implementing efficient decentralized processes at each kiosk Designing for repeatability and scalability Using data, listening to front-line staff to contantly improve

34 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Brand Promise: Clean, Affordable Water for Better Lives Improving the quality of life for your family Quality products are within your reach dloHaiti is a company that enriches your community and is part of it dloHaiti is for Haiti’s future

35 Market-Based Solution for Clean and Affordable Drinking Water in Haiti Brand Promise: Clean, Affordable Water for Better Lives PromiseDeliverablesVisibility Improving the quality of life for your family Basic products and services that improve quality of life delivered with better value & convenience: clean water, consumer solar products Water kiosks emphasizing clean water, promotions that help consumers save for investing in these products Quality products are within your reach Pre-sealed water jugs, delivery services, other technology offerings that bring high tech to basic life Culligan-like products at 1/2 the price; Using high technology to apply international standards to local business dloHaiti is a company that enriches your community and and is part of it Jobs and biz opportunities for local community; CSR programs Visible local hiring, promotion of local entrepreneurs; High visibility CSR programs dloHaiti is for Haiti’s futureInvesting in infrastructure and job creation Visible kiosks, delivery vehicles, visible jobs


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