L Capital Partners Leads $7.5-Million Financing of Aquarius Technologies, Inc.; Milwaukee-Area Company Brings Sludgeless Solutions to Wastewater Treatment.

NEW YORK -- L Capital Partners, L.P., is the lead investor in the $7.5-million financing of Aquarius Technologies, the first U.S. wastewater treatment company to provide sludgeless solutions.

The company holds the global license to market proprietary processes invented at Elif Technology, Ltd., a 12-year-old private environmental engineering company in Ariel, Israel. L Capital Partners invested $6.5 million to establish Aquarius Technologies in Port Washington, Wis., led by a U.S. CEO with deep industry experience. Private investors contributed $1.0 million.

Says Oded Weiss, partner, L Capital Partners: "Aquarius Technologies' solutions are based on processes that don't just reduce waste sludge, but actually prevent its generation during the wastewater treatment process.

"Sewage sludge is the product of traditional wastewater treatment," he explains. "It consists not only of human waste, but also of pollutants and toxins from commercial, industrial and household wastes, as well as compounds added to and formed during the treatment processes. It is considered a hazardous waste of environmental and public-health concern, and its disposal is regulated by government agencies.

"A key factor driving the business," continues Weiss, who is the venture firm's CFO, "is that turning waste sludge into EPA-acceptable 'biosolids' for use as fertilizer or soil conditioner, or for landfill disposal, can account for up to 50 percent of a facility's operations costs. So, the sludgeless outcome the company provides not only helps facilities meet their obligations, but also dramatically reduces the cost of doing so."

Aquarius Technologies CEO Tom Pokorsky, who has more than 30 years of experience in the industry, says: "Most treatment facilities use the return-activated-sludge process to degrade and settle out particulates, which creates waste sludge. But with our multistage activated biological process (MSABP), no waste sludge is created.

Most recently president of the Advanced Water Treatment unit of ITT (NYSE: ITT) in Milwaukee, Pokorsky continues: "This process for treatment of biodegradable pollutants is based on naturally occurring microbial food chains, so to speak, in which microbes are consumed by primary microorganisms, which are then themselves consumed by higher organized microbes. The end result is sludgeless, highly purified effluent, or outflow."

Pokorsky adds that there also is a proprietary sludgeless solution for treatment of non-biodegradable and toxic pollutants: "Aquarius's electro-catalytic process (ELCAT) also is a chemical-free and sludgeless process," he says, "but for treatment of such pollutants as textile dyes, detergents, cyanides, pesticides, herbicides, hydrocarbons and phenols. Unlike processes that simply add oxygen-containing chlorine compounds, the ELCAT two-stage process is based on electrochemical oxidation followed by catalytic oxidation. Compounds present in the wastewater serve as catalysts for the oxidation processes, so there's no need for chemicals."

Says Weiss: "The technologies developed by Elif clearly were in synch with our strategy to invest in the development of products, services and processes that provide superior performance at lower cost and greatly reduce or eliminate negative environmental impact. So, we established Aquarius Technologies in the United States to tap the huge potential of the North American market, where there are some 20,000 sewage plants."

Weiss, who joins the company's Board, along with L Capital Partners Managing Partner Jonathan Leitersdorf, notes that L Capital Partners headed the search for the CEO and had to convince the recently retired Pokorsky, who had his eye set on the golf course, to take up the post. "Tom," says Weiss, "was naturally skeptical about the technology claims; but when he saw it with his own eyes and talked to some of Elif's 30 customers, he was eager to come onboard."

The processes have been successfully deployed in the United States, Indonesia, Israel and Spain," says Pokorsky, noting that the company has sales offices in Madrid, as well as in Tel Aviv. Two pilot plants, he adds, "are scheduled for installation in the U.S. next year."

The capital raised will accelerate sales and marketing activity, says Pokorsky, who says that in North America "we will sell our solutions through independent agents and won't provide facility operation as part of our offering. But outside of North America, we could also operate as a total solutions provider, which means that the offering can include installation and operation of wastewater facilities."

About L Capital Partners

L Capital Partners, L.P., is a midsized venture-capital firm with $165 million under management. Established in September 2004, the firm is, in general, a development- and later-stage investor interested in diversified companies within emerging industries or in emerging companies within mature industries. L Capital Partners, which currently has nine portfolio companies, also seeks higher-risk opportunities with companies involved in developing transformational products or services regardless of the industry stage. Focused on healthcare and technology companies, the firm is a committed multi-round investor that typically invests in a range of $1 million to $6 million per financing round in the tech sector, and $3 million to $6 million in the healthcare sector. Based in New York, N.Y., to avail itself of the wide range of tech innovation in Israel, the firm has an office in Tel Aviv. L Capital Partners is licensed by the SBA as a Small Business Investment Company. For more information about L Capital Partners, go to www.lcapitalpartners.com.

For more information about Aquarius Technologies, go to www.aquariustechnologies.com.

Note: MASBP and ELCAT are trademarks of Aquarius Technologies. The names of actual companies and/or other products mentioned herein may be the trademarks of their respective owners. Patents for the ELCAT process have been granted in Israel and applications have been applied for the rest of world. Patents for the MSABP have been applied for globally.