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CEO

A Watershed For OriginClear Technology

Dec 12, 2019 7:30:00 PM / by OriginClear Staff

Transcript from recording:

Riggs: Good evening, everyone. It is the 12th of December and we're racing towards Christmas holidays, Hanukkah, Kwanzaa, whatever you like. I keep hearing people say that they can't believe how fast things are going. Because we spent half of our time being mesmerized by Facebook, before we know it, boom, time has passed. That's my theory and I'm sticking with it.

All right, so we had an announcement this morning that was pretty significant, because what we've tried to do all along is to create killer applications for our technology. So for the longest time, we've been working to make our technology integrated into what we call a killer application. That is an application that would be major.

One of the things that is really underrated is just how bad pollution is from concentrated animal feeding operations, C-A-F-Os or CAFOs. For example, a 2,500-cow dairy farm makes as much waste as the city of Miami. It's crazy, completely crazy, and there's hundreds of thousands of these. So, it's a far bigger problem than we have in the cities and it's out of sight, out of mind. Except, of course, for the Carolinas when they get a hurricane and, of course, all the lagoons overflow and everybody gets nasty stuff in their living room.

The European Union has been working very hard to cut down the contamination problem, and they focused on ammonia. Of course, overall nitrogen contamination, which is very important, and then ammonia as a special kind of nitrogen, because ammonia is NH3, nitrogen with three hydrogen molecules. You end up with just a lot of the wrong kind of nitrogen being put out.

The problem is, that Spain has a very healthy hog farming industry, and they have consistently been bad boys when it comes to ammonia. They've been exceeding the regulations for a long time and it's now getting worse. Worldwide, we have a big scarcity of hogs because the number one producer, by far, China, is having to kill half of its swine. And then, other countries are reducing their production, like Holland. So, you have an opportunity in Spain to do a lot more production, and they are dramatically ramping up. We visited farms that were being built. The problem is that it's limited by this problem with the ammonia. So, if you can deal with that problem, then it's a huge opportunity for them to meet the demand that has been caused, not just by people eating pork in general, but also by the problem in China.

Okay, so, as you know, we went to Spain. Bill and I viewed what was going on. Very, very exciting. The people there are absolutely validating our technology as being cheaper, faster, better, et cetera. They are completely sold and we're an essential part of the process because we reduce the ammonia. That is a key piece of what we do, in addition to clarifying the water.

We negotiated an agreement to take their product, which has our technology embedded in several other steps, and have the rights to sell it worldwide, and they would get a royalty from that. Of course, they will continue to handle Europe. They wanted to market in Europe. But, for example, literally an hour or two of having put out the release this morning, we already got a lead in Korea, which was a genuine producer that had seen the news and wanted to build its system.

Now, that's in Korea and we're in the middle of working on our Asia representation. We're not happy with China, for a number of reasons, one of them, of course we know, is that they tend to steal intellectual property. It’s getting complicated over there. We have a wonderful partner in the Asian continent. I'm not going to get ahead of myself because that is the next big thing that's going to happen. That partner will be able to handle the Asian business for us and has already been talking to the Koreans.

In addition, in America, we have a licensee in Wisconsin that is very excited about moving ahead with some system sales in dairy farms. So that's off to a nice, big start. You know, it's crazy because it's taken us so long to get to something that was a finished product that included our technology.

We are working on the other stuff. For example, we're talking about the saltwater disposal wells, recycling their water. That is ongoing as a project. We have another project, very interesting, that's well along. We've signed a non-binding letter of intent with this particular opportunity, which is to create ultra-pure water for cosmetics. And this is a company that is ready to go, they know us well already, and they're excited to move along and they are going to fund this project up front. Of course, again, and I'm not going to name names and I'm not going to tell you it's a done deal, because it's not, but it's moving very quickly.

So, that's just going over in the technology side of things, with Bill Charneski running things. He's also very active in helping with the M&A activities, and again I have to be extremely wary of hyping the M&A.

What I can tell you is that we evaluated over the last month how fast do we have to grow to meet expectations, and organic growth is not enough. The length of water projects is just pretty amazing. It is what it is. We thought that we would speed things up with the modular systems, and it does make it faster, but it's still very slow.

So, with that in mind, we decided to put our focus yet again 100% on acquisitions and to accelerate our efforts, and we have several channels for acquiring companies that we are lighting up all at once. And I can tell you this, the targets, companies that we want to acquire, are very excited about being acquired. We have finance sources that are very excited, but at this point it's all about execution, and I have to leave it at that, unfortunately. It is simply the process, and I must warn you not to make bank on it, shall we say.

All right, so things that are already settling out in the company on the operations side with Tom Marchesello  running the day-to-day beat. What we've got going on in Texas is that we are integrating Modular Water Systems™ in with Progressive Water Treatment so that there will be a two-way benefit. One is that Progressive Water will get more engineering talent from Dan Early and Robb Litos who are on the Modular Water side, and Dan Early and Robb Litos will not have to worry quite so much about delivery, and they'll be able to do more design and implementation, but less of the actual fabrication or so forth. You end up doing that and you stop selling, and that's sort of a rollercoaster when you sell, sell, sell, and then you have to deliver, deliver, deliver, and then you run around back to the other side and you get back to selling. It's harsh.

So that is going on right now. We're integrating these things, especially with the idea that we may be acquiring more companies. And part of that is the organizing of all this into a project management system that's universal in the company, a very good one called Insightly, and that is ongoing.

We're also continuing to expand our efforts in other parts, for example, in the animal farming area. We have a great new licensee, Aqua D&P, who were with us in Spain, and they have very strong ideas of their own. They're going to create their own thing, which they're certainly welcome to, and we'll be covering that further. They're very, very dynamic, and they have presence in the Middle East. It's very important to know that in the Middle East, there's a lot of pork production. Those populations are not supposed to eat pork but they can certainly produce it, and they do.

So what I see is happening right now is there's a lot of movement in the company, a lot of things are happening, productivity is improving on a daily basis. We have, as I was saying, deals happening both in the technology network as well as the regular business. I've seen sales occur of the water systems, the Modular Water Systems and the regular custom water systems, that PWT builds, and right now they're going all out to deliver as much recognized revenue as possible.

There is a challenge which I spoke about last week, which is that you can't just track cash. We do a great job of operating on cash. Progressive Water Treatment has always been very, very responsible in that sense. But there's a thing called recognized revenue or Generally Accepted Accounting Principles, GAAP revenue, and that means that you can't recognize something as a sale until you've met a milestone. At that point, even if you have not collected the money, it's considered revenue. It's very weird. But it's an assets and liabilities thing, so it's a liability until you've delivered part of it and eventually all of it.

So, that new mindset is being implemented throughout the company. I have to say that I was not happy about the fact that we were missing our numbers by so little because of the lack of internal awareness. And as Bill Gates said, what you measure, you get. So, we'll be measuring revenue recognition, that's for sure.

At this point, we are going all out to wrap up the year. It's an opportunity to maximize this recognized revenue. We're also going to continue to be rolling out this manure effluent product, which goes, I believe, all the way up to 200 tonness a day is the current scope of the product line. The team built an excellent case study around that, which I invite you to take a look at.

Also, there will be more videos with interviews with the various Spanish people, which will lay out a lot of the vision and implementation of this very important market. It is a huge marketplace. I did the numbers in my last CEO update, and it's really, really, I think, an area that we can do really well, because our technology is really so good for that.

I think that's going to be it for now. I'm going to be updating you more next week as we move closer to the Christmas period. Today's being the 12th, we are looking at the 19th being the last briefing. I'm not going to run one on the 26th, I don't think it's productive, but I will do a recap on the 19th on what's going on. I expect to have more news for you on how we're progressing.

All I want to say is that I'm extremely happy with the productivity of the team. Tom Marchesello, he was a captain in the Air Force, and we definitely got some command intention going on in the ranks because of what he's doing. So, he's being very, very good with implementing and resolving situations that have been floating around and making the team work together. So, very proud of that.

We are wrapping up the current round, very important for everyone to know that this is an extremely favorable round. We have some ideas for what we're going to do in 2020, but this particular thing is something that we're really doing it to catch up our existing investors and make them whole, which I'm very proud of doing, because you go through these long development cycles, the stock is diluted, and your earliest investors get harmed. And that's something that always bugged me. And so, when we finally found the formula for our existing investors to be made whole, then it became amazing. I can't tell you how happy I am that we've been able to bring our angels back and make them really whole. That's how I see it. And of course, whatever they invest now is fully protected. New investors in the company, should be thinking about moving ahead because, as I say, I don't think we're going to be as generous in the future.

So, (323) 939-6645 is the number. I would like you to talk to Ken, extension 201; Michael, extension 206; and Devin, extension 116. (323) 939-6645.

To just look at it from the point of view of a new investor, you're faced with the uncertainty of what could be a huge success and something that could return a lot on the upside, but at the same time, you're worried about losing money, and rightly so, which is why Ken Berenger, who's our VP of Business Development, so brilliantly put together this package, because essentially you're not buying stock. You're getting the stock as a grant. The stock itself is price protected. And then, of course, where there's various commitments regarding the principal amount.

So, you're doing a wonderful thing here by helping us roll things out, and we think that we've done a good job of solving the biggest problem in microcap investing, which is the dilution problem. I invite you to talk to us. I'm available. If you do want to talk to me, the best person to talk to is always Devin, who's my assistant, extension 116, and of course, Ken, extension 201, will be happy to connect us.

Again. I really, really appreciate what you guys do, and gals, and as we steam towards the holidays, remember to take care of your families and remember that we appreciate you tremendously. Thank you and good night.

 

Topics: Industry, Advanced Oxidation, CEO Briefings, Featured, Black Water Treatment, Animal Farming, Electro Water Separation, Pig Farm, manure, ammonia, Depuporc, Technology Adoption

OriginClear Staff

Written by OriginClear Staff

OriginClear (OTC: OCLN) leads the self-reliant water revolution, deploying advanced technologies at the point of use, with modular, prefabricated systems that create durable assets and water independence for industry, commerce and agriculture.