The Kinrot Incubator A Rainbow of Water Technologies

The Kinrot Incubator A Rainbow of Water Technologies Assaf Barnea CEO March 2008

Israel- Positioned as a Know-How leader in the Global Water Market • World largest Desalination plant Ashkelon (RO) • World record in waste water reuse (75% of total consumption, next Spain 12%). • Leading position in Dripping Irrigation systems. • Unique integrated water management system (4 water sources to one system). • Unique National carrier project including • 4 th largest Filtration plant in. • Leader in Technology Innovations

A Known Hub of Innovations & Technologies

The first “Exit”… in water. . probably not the last

Ben Gurion: a new perspective on Water and Science (Sede Boqer 1955 ) • “The prophets in the Bible never accepted the droughts of the Negev and envisioned that one day “water will flow out of the desert and streams from the Arava valley. ” • “It is here in the Negev that scientists and researchers are faced with the challenge of transforming sea water into fresh water”. .

Israel’s national program for promoting the country’s water industry -Agamim 10 “New. Tech” Comprehensive governmental policy Dedicated Incubators for water technologies Supporting international cooperation Funding and capital Mekorot’s Encore Role Strengthening Academic Research

Israel’s Incubator Program

The Kinrot Incubator-Profile • Israel’s first and only Water Dedicated Incubator. • Privately held by the Canadian Stern Group in cooperation with the Israeli Chief Scientist and a local management team. • Strategic Partnership with Israel’s national water company Mekorot. • Advisory Board composed from Israel’s best water experts. • Focusing on screening the most promising ideas from Israel’s top academy and water institutions. • A solid platform for developing and commercializing water innovations.

Mekorot – Israel’s National Water Company Total Assets- $ 3 B AAA rating $ 600 M revenue 2000 employees 80% of the total water consumption

The Kinrot’s Incubator Portfolio • Eltav –Wireless solution for valves in the process industry. • C Filter- membranes from Composite materials. • Agrifect. ppt • Aqua Digital- digital flow meter • Locyan- Biological solution for cyanoric acid in swimming pools

The Incubator Platform. Idea Patent Exit towards an Exit Technology Initial sales, external rounds of Financing R&D of the incubator company towards Beta testing Following the approval of the OCS-a start up is born in the Incubator Initial screening of the Deal flow by the Incubator

The ROI -Evaluating the Start Up DNA …”Show me the Money…” The Market & Needs Technology & IP People

“A Genius is an African who dreams up snow” Vladimir Nabokov • Promising Entrepreneurs. • Ideas that can transform into technologies. • Strategic Partners. • Potential Investors. • Beta Site with potential customers.

It just looks transparent… but there is no such thing as “Just Water. . ”

Water Technologies- Atlantium Bio films and Fish tank disinfections

Water Technologies – Blue I • Blue I offers advanced analytical systems and support for total water quality management . • About 25 people, offices in Tel Aviv and Production line in Jerusalem. • Initial sales through global distributors. • Beta Agreement with Mekorot- Multi Parameter sensor • Estimated time line - 6 Months at Mekorot Premises.

Israel Water Industry by Sector (2005) New companies Established companies (108 companies) m en t 36 8 30 1 Irrigation and Agricultural projects & products 70 70 Engineering & Projects l ntro r co e th &o Others 9 ve Filters Water Purification and Improvement on ati lin sa ure m Ana ent & lysi s 7 Me as w De im pr o Flo Desalination 4 ty uri nc y ec cie Efficiency Improvement Pipes rs ate W Ef fi ($900 M, Export activity) 400 115 14 Valves & Meters Wastewater Treatment 30 Quality Improvement 190 Flow Control & Management

Israel - the Beta Site Bridge for Water Innovations Southern MID-West California Arizona Nevada Death Valley

Water Technologies Market (2006) Water Treatment • (municipal, industrial) Desalination and • waste water treatment Water monitoring and • control equipment 80 -100$B Water security • • d an $B r s • he ting g uct -40 Ot nsul eerin rod 35 Co ngin tial p e den si Re Water Technologi es $400 B Infrastructure (Construction & management) Basic equipment (pumps, pipes) • Construction • Basic agriculture equipment • Municipal water utility • management 230 -260$B

Depleting Resource – Future Global Water Shortage Areas 1 B 2004 3 B 2025 People living under water stress* Water Demand Growth Exceeds Population Growth Source: Seckler et al, 2002 *varies according to definition

A Significantly Growing Market Forecast for annual growth rates for the years 2004 -2008 A comparison between global markets $600 -800 B $600 -650 B $500 -600 B 7 -8% $400 -450 B $400 B 10 -12% $300 B 6 -7% $200 -250 B $40 B Traditional segments Accelerated growing segments Electric Power (E) IT Cellular Pharma Water Semi Biotech Telecom conductor Equipment

Singapore-a tip of the iceberg

es Targeting Water Market Opportunity Designated funds • (enhanced in 2005) Traditional investment • entities taking part States om pa Global Water Market C est Fun ment ds ni Inv

Israel- “The Silicon Valley of Europe” M&A Transactions (1996 -2005) Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Total Number of Deals 9 12 21 38 63 28 65 61 58 34 389 Total Volume ($M) 456 666 1, 306 4, 267 16, 065 581 2, 273 1, 189 1, 834 2, 475 31, 112 Source: Israel Venture Association

“Come on in, the Water is fine…” Thank you Assaf Barnea, CEO abarnea@kinrot. com

Agrifect Fertigation Control & Management March 2008 26

The Need - Filed Crops Optimize Water usages (Irrigation) Optimize Fertilization usages Improving (Quantity & Quality) yields Saving costs. Comply with agriculture standards (Eurep. GAP etc. ) Minimize detrimental environmental – Aquifer Pollution 27

The Problem Mass labor procedures (manual) aimed at meeting the “Repeatability” test. No available agronomic consultant support Analyze Test Results - knowledge gap. Many years of habit (Culture) Currently Fertigation price is not too high None Standards Bodies Enforcement 28

Agrifect Mission Delivery of a comprehensive solution An automatic Sampling, Monitoring (i. e. NO 3, EC), and Farmer Fertilization recommendation to the Precision Farming market. 29

Potential Market Crops required chemical fertigation in: Ø regular soil Øcombined media (soil and substrate) Millions of farmers worldwide 30