Executive Summary

Q2 2020 revenue rose 4% year over year to $1.055M, while loss from operations narrowed 8% to $(0.748)M; gross margin compressed as cost of sales rose faster than revenue .
First-half revenue increased 22% to $2.147M, and first-half loss from operations narrowed 22% to $(1.500)M, reflecting cost controls in selling/marketing and G&A .
Non-operating items dominated the quarter: a large, non-cash derivative liability revaluation drove a GAAP net loss of $(6.234)M in Q2 despite positive first-half GAAP net income, highlighting volatility in EPS metrics unrelated to core operations .
Management emphasized execution despite COVID-19 constraints and continued operational streamlining; CEO and COO cited focus on driving revenues and cost efficiencies as the key narrative for H2 .

What Went Well and What Went Wrong

What Went Well

H1 revenue up 22% YoY to $2.147M; Q2 revenue up 4% YoY to $1.055M, showing resiliency despite lockdowns .
Operating losses narrowed both in the quarter and first half (Q2: $(0.748)M vs $(0.809)M; H1: $(1.500)M vs $(1.929)M) due to lower selling/marketing and G&A .
Management execution and tone: “Going into the second quarter, we went all-out to ensure COVID-19 work restrictions didn’t impact our business… It appears we succeeded.” — CEO Riggs Eckelberry; “We will strive to continue to drive revenues and cost efficiencies for the balance of the year.” — COO Tom Marchesello .

What Went Wrong

Gross profit fell in Q2 to $0.152M (from $0.191M), with gross margin compressing as cost of sales increased faster than revenue .
Non-operating volatility: Q2 recorded $(5.486)M in other expense largely from derivative liability changes, driving GAAP net loss $(6.234)M despite narrowed operating losses, complicating EPS comparability .
Liquidity risk persists: working capital deficit remained high at $(20.082)M at 6/30/20; auditors and management disclosed substantial doubt about going concern, despite PPP/EIDL support .

Financial Results

Quarterly Comparison (oldest → newest)

Metric	Q2 2019	Q1 2020 (Derived)	Q2 2020
Revenue ($USD)	$1,014,922	$1,092,438 (H1 $2,147,438 − Q2 $1,055,000)	$1,055,000
Gross Profit ($USD)	$190,873	$213,293 (H1 $365,564 − Q2 $152,271)	$152,271
Gross Margin %	18.8% (190,873/1,014,922)	19.5% (213,293/1,092,438)	14.4% (152,271/1,055,000)
Loss from Operations ($USD)	$(809,196)	$(751,884) (H1 $(1,499,914) − Q2 $(748,030))	$(748,030)
Net Income (Loss) ($USD)	$(6,786,171)	N/A (not disclosed separately)	$(6,233,838)
Basic EPS ($USD)	$(4.39)	N/A	$(0.66)
Diluted EPS ($USD)	$(0.04)	N/A	$(0.06)

Notes: Q1 2020 values are derived from H1 totals and Q2 reported figures; Q1 quarterly net income and EPS were not disclosed separately in filings .

H1 Disaggregation of Revenue (by type)

Revenue Type	H1 2019	H1 2020
Equipment Contracts ($USD)	$1,199,080	$1,397,335
Component Sales ($USD)	$488,265	$706,840
Services Sales ($USD)	$59,620	$43,263
Licensing Fees ($USD)	$10,000	$0
Total Revenue ($USD)	$1,756,965	$2,147,438

Key Operating Expense Components (Q2)

Metric	Q2 2019	Q2 2020
Selling & Marketing ($USD)	$354,849	$338,877
G&A ($USD)	$607,306	$522,238
R&D ($USD)	$26,810	$25,085
Depreciation & Amortization ($USD)	$11,104	$14,101
Total Operating Expenses ($USD)	$1,000,069	$900,301

Liquidity Snapshot

Cash: $786,686 (6/30/20) vs $490,614 (12/31/19) .
PPP loan proceeds $345,000 and SBA EIDL loan $150,000 plus $10,000 grant received in Q2 to support working capital .
Working capital deficit improved to $(20,081,673) from $(38,598,414) driven by derivative liability and note changes, but remains substantial .

Guidance Changes

No formal quantitative guidance was issued for revenue, margins, OpEx, OI&E, tax rate, or dividends in Q2 2020 filings or press releases .

Metric: All | Period: FY/Q3-Q4 2020 | Previous Guidance: None | Current Guidance: None | Change: Maintained no guidance .

Earnings Call Themes & Trends

No earnings call transcript was available for Q2 2020 [List: earnings-call-transcript returned none].

Topic	Previous Mentions (Q-2: Q4 2019)	Previous Mentions (Q-1: Q1 2020)	Current Period (Q2 2020)	Trend
COVID-19 impact	SEC relief and COVID-19 filing delay; pandemic risk factor disclosed	Not specifically disclosed separately; management integrated operations per MD&A timeline	Executed through restrictions; maintained operations in Q2 per CEO	Improving operational resilience
Cost efficiency	—	—	S&M and G&A down YoY; operating loss narrowed	Positive cost discipline
Technology/partnering	—	Announced AlMansoori agency agreement (June 25) and Permionics APAC strategy (Jan 22)	Ongoing licensing/model development; Investor Water concept incubated	Building channels; early-stage initiatives
Capital/liquidity	—	PPP/EIDL support in Q2	Working capital deficit remains; going concern doubts disclosed	Liquidity support, structural deficit persists

Management Commentary

Strategic message: Management emphasized operational continuity and streamlining amid COVID-19, aiming to drive revenues and cost efficiencies into H2 2020 .
Quotes: “Going into the second quarter, we went all-out to ensure COVID-19 work restrictions didn’t impact our business… It appears we succeeded.” — T. Riggs Eckelberry, CEO . “Our efforts to streamline operations quite apparently are paying off… We will strive to continue to drive revenues and cost efficiencies for the balance of the year.” — Tom Marchesello, COO .
Business initiatives: Modular Water Systems integration, partner expansion (Permionics APAC, AlMansoori agency) support medium-term growth optionality .

Q&A Highlights

No Q2 earnings call or Q&A transcript was available to extract analyst questions or guidance clarifications [List: earnings-call-transcript returned none].

Estimates Context

Wall Street consensus (S&P Global) for Q2 2020 EPS and revenue was unavailable for OCLN; the company appears to lack active analyst coverage. As a result, estimate comparisons and beat/miss analysis cannot be made. Values retrieved from S&P Global.*

Key Takeaways for Investors

Core operations are stabilizing: modest revenue growth and reduced OpEx narrowed operating losses, but gross margin compression warrants monitoring .
Reported EPS is highly volatile due to non-cash derivative liability marks; focus on operating loss, cash flow, and revenue mix for a cleaner view of fundamentals .
Liquidity improved with PPP/EIDL inflows, yet structural working capital deficit and going concern disclosures highlight continued financing dependence and dilution risk .
Revenue mix is shifting toward equipment and components; scaling Modular Water Systems and channel partnerships could sustain topline momentum if execution continues .
No formal guidance; near-term catalysts include operational streamlining and potential order conversion, but absence of visibility keeps the narrative execution-driven .
Risk-management posture: litigation, preferred stock complexities, and derivative liabilities add capital structure complexity; expect continued non-GAAP volatility .
Trading implication: Without consensus coverage or guidance, stock likely reacts to incremental order wins, liquidity events, and gross margin execution; monitor quarterly OpEx discipline and backlog conversion for signals .

ORIGINCLEAR, INC. (OCLN)·Q2 2020 Earnings Summary