Dedicated Water Infrastructure Funding
Can Water on Demand solve distributed water’s financing problem? An eye-opening interview with Dan Early gave us a whole new insight into how! What are the 6 key “Spokes in the Water Wheel” Dan talks about? Find out here in the replay!
Transcript from recording
Opening
News Show Host: OriginClear is a company that focuses on wastewater treatment.
CEO OriginClear — Riggs: And hello everyone. Welcome to the Water is the New Gold CEO briefing.
Riggs: Our mission is to transform the water industry.
OriginClear Chief Engineer: Decentralization offers us this opportunity.
CEO Manhattan Street Capital: The plan that you’ve built here is super impressive.
Investor: The world is experiencing a crisis in regards to water. It’s a great opportunity that you’re giving us investors.
Riggs: Decentralization of water treatment means that we no longer need to establish giant water treatment plants.
OriginClear VP Development: Let them fight over the 20%. Let’s work with the 80% that’s untreated.
Investment Advisor: Over 21 thousand unique alternative investments.
Riggs: Three million jobs in the US alone.
Investor: Making it easy for the regular investor.
Riggs: All the old trends just accelerated.
Investor: It’s lucrative and fulfilling.
OriginClear Chief Engineer: The vision I’ve got is to standardize these products. Design, Build, Own and Operate.
Riggs: We have 65 people in the room.
CEO AGM Agency: We’ve got an important message to give to the world.
CEO PhilanthroInvestors: We can put a guy on the moon but our water is horrible.
Pool Cleaning Technician: Recycling all that water, it’s a huge impact for the environment.
COO OriginClear: Bringing new infrastructure in drives the growth in America.
Riggs: That’s a critical part of the picture.
Progressive Water Engineer: It’s a twin 125 gallon per minute RO (reverse osmosis) system.
Riggs: I don’t think we’re talking about a 10 Million dollar fund, we’re talking about a series of 10 million dollar funds.
Overseas Partner: The opportunity itself is very big.
International Investor: You want to live? Take care of the water.
Investor: Not too many CEOs do a weekly briefing and are willing to talk to individual investors.
Introduction
Riggs Eckelberry:
And welcome everyone to the CEO briefing. And Bob asked for an update on Pondster™. We will give you an update on Pondster. Now let me go ahead and get this party started.
Short-term Boom Times
Ok, well, Water is the New Gold, and we are Thursday, the 20th of 22 and briefing number one hundred and forty three. That’s wow, that’s a lot of weeks. And so we have the world’s only vital, scarce and recession-proof market. If you think that there’s not a recession in the offing, then you probably should think about how it’s a really overheated market and everybody is out on margin. And when everybody is out on margin, then margin calls call cause a domino effect. So just make sure that you’re properly protected. It’s all I can say.
But in the interim, here’s what’s interesting. We are seeing so much demand for Progressive Water treatment and Modular Water Treatment Systems™ that we think that there’s a lot of use it or lose it mentality that basically the economy is going to keep heating up because people know that inflation is happening, so they want to spend sooner rather than later.
And so in the short term, I think we’re going to see a lot of boom times for a long time. The saying goes the last 80 percent of a bubble occurs in the last 20 percent of its run. So we will see interesting times ahead. Just be ready to cut your losses once things start to go over the top.
All right. With that said, let’s jump into, of course, Spanish language interpretation is available. Heather is doing a great job, just click on the globe.
Forward Looking Statements
And the usual safe harbor statement that, “we believe we estimate we may, we expect, we owe,” as qualifier statements, but we also try very, very hard to be accurate.
All right. Well, as I stated today in the CEO update email, and if you’re not getting my emails, then check your spam and white list emails from OriginClear because there’s lots of interesting things.
Putting Profits to Work
So as you know, we’ve been raising money for Water on Demand™, which is money used to purchase water equipment systems, that clients will not have to pay for up front, but they just pay as they go.
And we have actually put this capital to work, what have we? We’ve been doing well. Last quarter, the Progressive Water treatment was in a, they received a huge amount of orders, and what happens when that happens is you get a bit of a cash crunch. And we loaned some money, not a heck of a lot, only about $150,000 to them and this earned interest, and the investors in Water on Demand who were in at the time will receive their profit shares.
So now the way we treat the interest stuff is we don’t do a whole bunch of deductions for operations and so forth because that’s, you know, obviously meaningless. It’s just money. And so we take what comes in, we split it and boom, you have your profit share. But the big goal, as you will cover in a little bit, of course, is to put it properly to work. But we also don’t want to leave the money idle. Ok, more to come on this. There’s lots, lots more news coming.
About Titillating Sports
On the 19th. I was interviewed by Rick Tittle, who has Titillating Sports on USA Radio Network, and this is a really interesting article. Sorry, a very short, well crafted statement of where we are and why. So I’m going to go ahead and play that right now, so let’s get this party started.
Start of interview
Rick: And it is the CEO of OriginClear Riggs Eckelberry. He’s here because when you think sports, you think of the global water crisis. First of all, Riggs, welcome to the show and I have to say Riggs Eckelberry great name, huh?
Riggs: Well, I suffered for it when I was in, you know, grade school. But later years, the chicks liked it, can I say?
Rick: So you got called Eckelberry Finn?
Riggs: Oh, I think the best one of all was Pigs Wigglebelly!
Reliance on Centralized Water
Rick: Oh jeez. All right, well, most cities in America rely on centralized water systems. We know that. And so 80 percent of our water apparently is not cleaned after that. So what’s going on here, Riggs?
Riggs: Ok, well, let me just step back a bit. The 80 percent of all sewage is not treated is a worldwide term. By no means are we failing to treat our sewage at a basic level in America, but in places like Bangladesh, where virtually no treatment is happening. That kind of, you know, puts a thumb on the scale. But let’s talk a little bit about our centralized utilities.
America’s water system, is about 100000 of them, have been underfunded since going back to the 70s. The federal government has contributed less and less and less. And today, in fact, they don’t even give the money they lend it to the cities and counties. And so as a result, we’ve accumulated a backlog that gets worse by right now, about $75 billion a year of falling behind on essential infrastructure upgrades. And you ask, well, didn’t the Biden administration just approve a multi-trillion dollar infrastructure bill?
Well, the water part of it for sewage and storm water treatment, et cetera, was only $55 billion. So if you do the math, that’s less than one year of backlog, and that’s probably the last big thing that they’re going to do for infrastructure. So we have a problem with centralized water treatment, but we also have a solution.
Rick: Let’s take the example of Flint, Michigan, which got a lot of headlines, and they were on Detroit’s water system and they thought, Hey, we can save cash if we just start using the Flint River and people’s hair started falling out. What was going on there?
Riggs: Well, there was some terrible mismanagement, but it’s a symptom of what’s going on with not just Flint, but we’ve got, you know, Compton terrible story about Compton, California. One day the water started coming out brown from their taps and they called up the water district and the guys in the water utility said, “Well, that’s not going to hurt you. It’s just magnesium.”
They’re like, “No, no, no, we’d rather have clear water if that’s OK, because we do, you know, pay our taxes and we have a right to it.” And actually, the water district said no. In fact, for 10, 15 years now, you have not been funding us. We’ve been running out of money. The city council’s been doing nothing and here we are. And the same thing in South Bend, in Fort Lauderdale.
All over the country, we see failures of municipal water systems happening at an increasing rate. And you know, what they are doing is they’re holding the line with their promises to the consumer. In other words, if I’m a residential user, I get my water and I can flush my toilet. That’s, we’re not going to let go of that because it would be a, you know, massive illness as a result. But who’s suffering is industry, agriculture, business. The, you know, the commercial users who actually represent 87 percent of all water usage are the ones suffering from all these problems.
The Solution
Rick: So how, is it an issue where we need to quote unquote decentralize water?
Riggs: Well, if you recognize that for some reason and you know, we seem to spend a lot of money on other things, but we don’t spend it on water and I don’t understand why. But let’s put aside the psychology of it. We’re not, you know, we’re not going to see a centralized intervention anytime soon. There’s not going to be a Manhattan project for water to fix it. And you know, when you think of it logically, who’s going to install, you know, trillions of dollars worth of systems in urbanized settings, right? So it’s going to be a problem to, you know, it’s going to take 30 years and permitting and the NIMBYs and so forth.
So let’s just put aside the idea that we’re going to fix centralized water systems. Well, the next best solution is to reduce the job that they have to do, to unload them and make them, you know, deal only with water that’s already been treated at the point of use, which when you think about it, it’s kind of logical, right?
And in fact, we’ve done studies that shows that it is, you know, better for climate change, et cetera if you treat all your water right where it is instead of sending it all to some central facilities. So here’s the long story short. Decentralization is something that the water industry is encouraging because they just don’t have the infrastructure. It’s healthy, it’s good. And so now businesses, farms, industry are starting to treat their own water.
No Budget to Support It
But guess what? Where’s the budget for it? And that’s the next big question, is there’s all kinds of municipal bonds just to to pay for municipal systems, but there’s nothing going on that can capitalize. Your brewery, you’ve got to spend, you know, you’ve got expanding operations now you’ve got to start treating your water.
You don’t have a cool million dollars sitting around and you’d rather put your credit line to work making beer. So who’s going to finance this distributed water system? And that is the problem that has been really, you know, perplexing everyone. And we, there’s a story behind this about how we think we came with of a solution.
Rick: Well, that’s my last question. OriginClear, Water on Demand. How does that work?
Riggs: Well, what we learned was, this came out of our experience because we have an operating business in Texas that does wonderful work with with companies to treat the water. But we were accumulating in early 2020, we’re accumulating a huge backlog. You know, at the time, we think it’s $45 million worth of business that was ready to go. Most of it needed financing and we realized, “Hey, it’s the money stupid.” We have got to solve the money problem.
Water Like an Oil Well
And then the next big realization was, wait a minute. Investors like you and me can invest in oil wells. They’re called master limited partnerships and MLPs. And it’s been a very healthy piece of the oil industry for, since 1980, since the 80s. Well, why don’t we have this for water?
And we realized that no investor can invest directly in water systems and yet they want to. People love water and it’s, you know, there’s always going to be more dirty water. It’s a very stable problem. It’s a life giving commodity and we can return the same kind of wins that the oil industry gives from the water industry. And investors, frankly, are flocking to it.
We call it Water on Demand because literally a business can just sign on the dotted line, get their their system fully maintained. You know, Water System in a Box™, we call it, and they’re off to the races. And so this has been very, very popular, and we’re actually very proud that we’re enabling everyday investors to jump into water investments like an oil well, get the royalties, get them and in our case, get stock, et cetera. And it’s all going to add up to better conditions for water by solving it right where it’s used.
Rick: That’s Riggs Eckelberry from originclear.com. Riggs, thanks for your time.
Riggs: Rick, it’s been a pleasure, thank you so much.
Riggs: Well, there we go, so that was a very interesting and basically concise statement of our quick story. All right, let’s go Water on Demand operations with Daniel M. Early, professional engineer, chief engineer of OriginClear.
Start of interview
Riggs: Well, good afternoon, Dan. So it’s nice seeing you in 2022.
Dan: Happy New Year, Riggs. Good to be with you.
Riggs: Yeah, and I think you should have been with me when I was up in Steamboat Springs over the break, you know what I’m saying?
Dan: I saw the videos Riggs and I’m desperately, desperately jealous. I should be there. Years are passing by. I need to get back on the slopes.
Riggs: Well, let’s make it happen. Warren Miller famously said, You know, the guy who kept touring with all those ski videos, ski films, he famously said, “Each year you don’t ski is a year you didn’t ski.”
Dan: That’s exactly right. Right? That is exactly right, my friend.
How to Deliver
Riggs: So with that in mind, let’s just aim for that. But the purpose of us talking today on the 20th of January is really to explore how we’re going to be delivering Water on Demand. Now, money is coming in. Investors are very excited. We’re soon going to hit the million dollar mark in the fund that is needs to be spent on assets. But the question is how do we do it now?
The first thing we understand is that Progressive Water treatment and Modular Water Systems as fabrication organizations are already pretty maxed out and we can add personnel and so forth. But the danger is we won’t be able to to expand fast enough for the amount of money being raised because money is raised faster than you can add staff and build organizations.
So the natural answer is, well, why not delegate it to water companies in the local area like and it makes you very popular because all of a sudden like manna from on high, boom, here comes the Bluebird and it’s a contract without all the negotiation we’ve selected you and so forth. So that is the first layer, which seems obvious, but it also makes us scale up. It means that we don’t have to rely on our production capability in McKinney or in in your in your neck of the woods in Virginia.
The Role of Consulting Engineers
So that’s my first thought. And then you emailed me before the break, actually about your idea about consulting engineers. Tell me a little bit about that.
Dan: I’ll be glad to Riggs. In the course of my day to day practice, as I am out working and promoting the Modular Water Systems division and our product lines, I’m routinely engaging with the consulting engineering world.
The consulting engineers, they play a major role as an independent third party agent working on behalf of an end user or a customer that needs a piece of equipment, a piece of water equipment or wastewater equipment.
And invariably conversations talk about technology, and normally they talk about funding. How much the, how much the piece of equipment is going to cost. And that is hugely important. How to finance and how to fund a project. A water project is usually that’s where the decisions are made and that’s where the projects live and die.
Alternative Funding Source
What I, what I’m really seeing and I have seen this firsthand and have experienced this firsthand over the last several months, is that I have been introducing the Water on Demand program and concept of what it is to the consulting engineering community.
And I will and I can share with you, Riggs, that the engineers that I work with when they learn about Water on Demand, what they’re recognizing is that, hey, not only does Modular Water and Progressive Water treatment and OriginClear have really nifty packaged wastewater and water solutions, now they have this funding mechanism, this finance mechanism that basically helps streamline things.
You may have a developer or a contractor who may not be flush with cash, or they may be looking at their performance on how the cash flow of the projects are going to work, especially if it is a development that needs a water or wastewater utility.
And so what happens is when we introduce the Water on Demand concept to them, they’re like, OK, now I’ve got another alternative funding source that’s not conventional lending, not conventional loans. It’s not a government backed bond, It’s not as onerous relative to the red tape and that the interest of the interest level that I have seen over the last, say, 60 to 90 days has been very, very positive. I do.
Win-win Situation
I can report that I do have several customers, both consulting engineers and specifically developers and users that I’ve spoken with in the last two weeks that I’ve introduced the Water on Demand concept to and they want to learn more about that. Because it helps that, they can find that it’s a different form of funding and it gives them the ability to use conventional loans and in funding where they need to use it.
And then they can use this alternative funding specifically for their water infrastructure and their water asset program. So it’s, I really am excited about this. The message that I want to communicate is that consulting engineers are supremely important to this, they are specifiers, they’re third party independent agents, and this gives them the ability to bring this to bear and it helps us, it helps them as a win-win situation.
Projects Guardian Angel
Riggs: Ok, so in addition, we’re looking at potentially embedding their fee into the package so that they are assured of being paid. I think that’s a good thing, right?
Dan: Yeah, it is. You can do that. That is, that is one of the upsides for the consulting engineer is that by bringing this to bear, we can work with them and aboveboard. Everybody understands who doing what and what their fees are. And in the private sector, it works extremely well, very streamlined. So it does work that way.
Riggs: Good. And then the other great thing, in my opinion, is Consulting Engineer represents the client, but they also represent the greater good like so they are not really in opposition. They’re really almost an ombudsman in the middle to make sure that things are done correctly and in a way they or even think of it as a guardian angel, right? They’re there to really make sure that the thing comes off right.
And this, I think, helps us not be stranded out there with no help and what’s going on even even if we bring in a contracted water company to do it, we know that there’s a consulting engineer who is part of the financial package. And as you say, it’s fully above board, it’s not a bribe or anything like that. It’s a bundled fee and so in that way, there’s someone who is kind of looking after the whole thing now.
Channel Partners
What we’re talking about was just before the call, we were talking about potentially saying, look, we will always have a consulting engineer with Water on Demand, and if someone perchance does not have one, we will assign one to the project. And of course, for the consulting engineer, again, it’s manna from heaven. Like, Oh, nice, that was that was nice, I didn’t plan on that.
But it also means, you know, my experience when you make a channel commitment, you say, “Look, we will always work with a particular role in every contract,” it it kind of brings about reverse loyalty like we’re loyal to them, they’re loyal to us. It kind of creates this long term relationship and a brand that has a trust brand. What do you think about that?
Dan: It’s fantastic. It’s quid pro quo. It works both ways. It builds a mutually beneficial network and a mutually beneficial relationship. I will also share with you to give you a sense of how important I think Water on Demand is as it compares to conventional loans and lending and financing.
Municipal Sector Application
Water on Demand will work very, very well in the private sector. I personally think it will work very well, as crazy as this may sound, in the municipal sector, and there’s a reason for that. In the Muni sector, it’s very common for a consulting engineer or consulting engineering firm to go out, they’ve got there’s a customer, has a project and they need to fund the project. It’s a water project or wastewater project.
The conventional loans are Community Development law grants, they’re SBA-funded loans, a myriad of other federally funded sources of money that’s used to support these infrastructure solutions. The Build-Back-Better would be a good example of that. The problem with that, it’s a fixed amount of money. It’s a lot of money, fixed amount of money, and it doesn’t come anywhere remotely close to covering what is needed. Now in the municipal world, I think this would work as well, we can cut through red tape. That’s where this thing, it speeds things up. And so it is an alternative, an alternative funding mechanism where private sector funding gets introduced to a municipal public sector project that I think there’s tremendous upside for that.
$100M Addressable Market
Riggs: Well, you were telling us in the management meeting on Monday that in fact, there is a a municipal area that has over a thousand pump stations that are, because of the way they were built. They’re coming to end of life and we have an opportunity to blanket to get a thousand pump stations, which is a thousand times, what is it about a $200000 product, something like that, right?
Dan: It could be about a hundred thousand. The ones that I looked at where, I think it’s about a hundred million dollar addressable market is what I think it is, just in that one region.
Riggs: A hundred million dollars addressable market just for that one…
Dan: For that one type of infrastructure product, by the way.
Riggs: Just one. And we love pump stations because it’s a tube with a pump. Thank you very much.
Dan: It is. It is as simple as it gets.
Riggs: In fact, you should be paying them for the privilege of doing something so simple.
Dan: Yes, that’s right.
Why Municipalities?
Riggs: But seriously, it is a way you could say, OK, look, municipality of Toledo, Ohio, we’re going to help you with this. And by the way, we packaged it all up. It’s one bank, big thing and you’ll just pay on a periodic or whatever basis it is and and sign on the dotted line. And they can always later when they get grant funding, whatever they can roll it in and buy out the contract, that’s another thing they can do, right? So it’s kind of a way to accelerate. It is what I’m getting from you.
Eventually, they would want to get out of the rent-a-center model. Right? But but they could do it when they had the funds. And meanwhile, they’ve solved the problem. And so that’s, you know, you have already you have a, you know, a huge advantage in market because so many of your projects are designed to build. In other words, you, your specific technology and package and license and patents are embedded in a requirement of the contract. So how is somebody going to circumvent you?
And here this adds another incredible benefit, which is, by the way, you got the you got the financing. And no, it’s not an SBA loan and it’s not a lease. It’s not all these crazy things that require all kinds of backups. No, here it is. And by the way, you know, until you buy us out, it is. The product is ours. It belongs to us and we have title to it. That is really, really. And you know, I wasn’t even thinking about municipalities because I tend to say, Well, you know, the trend is towards self-reliance by businesses.
But the truth is that the municipalities still have a shortfall. As you say, they there’s not enough money going around and they got to get, but they got to do something. The leakage, for example, non-revenue water, the water loss to leakage because of faulty pump stations starts to add up. Now they’re losing major revenue. Right. So there’s all kinds of interesting features to that.
Benefit to Small Communities
Dan: Water on Demand, I really do believe that Water on Demand in the small public sector of utility world, little small towns and the little hamlets that are off the beaten path, they would benefit greatly from the Water on Demand model. I mean, you’ve got the private sector, which we obviously know that’s going to work and that’s where the future is at least and getting away from the bureaucracy of the public sector world.
But in this, in these instances where you have these established municipal utilities, they’re beholden, they have to provide service and they cannot stop providing service and finance and funding and those types of obligations that come with that are hugely important.
Water on Demand is, they know their solution is another viable opportunity for them. And if it can cut out all the red tape, if they’ve got immediate need and they’ve got to solve a problem, a regulatory issue or notice of consent or a violation, they’ve got to remedy that in the next 12 months. The funding process sometimes can take 18 to 24 months.
Meanwhile, they are getting hammered with fines and go to jail orders and those types of things. This would speed that process up. It would be an interim solution. And then later on, is there a more conventional funding might come into place? They can buy it out. Very, very, very effective model, in my opinion.
Key Factors
Riggs: Wow, that’s really fascinating. And I think that we’re going to add that to it now. It’s probably slightly different. It’s probably not a consumption model. I think they probably would want a flat bill, I’m guessing. But for the wastewater treatment plants, perhaps not so good. That is so, so we recovered so far is, of course, the idea of contracting out to water companies all over America to do the actual work and the onsite support so we’re not stuck with replacing a membrane or something like that.
Number two is is making us available to the consulting engineer to really be an enabler and to embed their fee. Number three is to make it a policy to work through consulting engineers. And the number four is this idea of of enlarging the addressable market to include the small municipalities to which we already sell systems. I see small towns always, you know, city of so-and-so show up on your forecast on a regular basis.
And also, of course, Progressive Water does the same. Now there’s a final piece which Tom brought up to me the other day, and I think it’s really interesting, which is you’ve got an engineer out there, a water engineer who’s trying to provide a solution to their customer.
Let’s say it’s they need a large booster pump or something like that and and they’re going to get a contract. But the contract, of course, is paid over time. This, that and the other thing. So we we can provide a machinery a to be put in service, right? So they, it’s not the end user who’s who’s paying us it is the service point who’s paying us, which is really interesting because of several reasons.
That’s good, number one. Already, the performance and quality is taken care of. That engineer, he or she is taking care of performance. That’s their job. We’re basically just again, just like what you’re talking about with the municipality, we’re simply providing a jump, a time jump, and enabling that, and it might be short term or long term. So that again, another channel player that we would work with to provide them their tools for the job, right?
And of course, again, they could buy it out because over time they might want to so that, you know, these these five pieces are are really, really interesting and they give us so many ways to play.
Like Tesla — 2004
You know, we like to say that we’re Tesla 2004, right? When Elon Musk came in and and invested $30 million and then they built a really piece of crap lotus with a bunch of computer batteries, but they started.
They did something right. And then now, over time, Tesla has become many things. It’s got the the corporate fleets and it’s got the, you know, the idea of the robotaxi that your your car works for you all the time. They got the Powerwall. They’re sort of like they’ve got a bunch of plays.
And this is where I think Water on Demand is going to go is going to have a bunch of plays where we can basically be a finance organization, an opportunistic finance organization that does not require you to, for example, you know, have a lean in place.
Of course, we have lean powers because that’s our property, but we’re not leasing. It’s not a finance program, it’s not a loan, it’s simply a service. And that, to me, is really, really interesting. So in the short conversation we’ve explored, you know, five different spokes to the Water on Demand concept. You know, I’m, you know, I realized that that this is our own baby and everybody loves our own baby. But this is fascinating I think.
Spokes in the Water Wheel
Dan: It really is Riggs. And using the spoke, using the spoke analogy is correct. If you look at water, if you look at the water world as a wheel and all the spokes are in part of the wheel to make the wheel turn: finance, technology, service, engineering, all of those and ownership and operation.
All of those things represent a spoke in the wheel that is the water wheel, and you have to have all of those things. Right now, the problem with the industry, and it’s plagued the industry and it’s just terrible is that, you’ve got spoke on this wheel, a spoke on this wheel, and a spoke on this wheel, but none of them are, you don’t have enough spokes to make the wheel turn! And that’s, really what has plagued this industry.
This really centralized concept in this business model, enterprise model that we’re pursuing, both internally using our own capabilities, our own internal technologies, bringing to bear the Water on Demand, but then working with channel partners like consulting engineers and other vendor, other equipment vendors that are not under our fold.
Everybody, this will help everybody to accelerate solutions, water solutions in the world, decentralized solutions where they where they’re really, really important and really, desperately needed. So this is really, really a big thing here. This is huge.
Consolidator of a Financial Resource
Riggs: Well, it makes me think of Amazon because Amazon is more than just a buying and selling platform. They perform many, many services to various audiences. And, you know, they’ve created this, they’ve accelerated the pace of e-commerce tremendously, which has made them, of course, a dominant platform. But it’s also very beneficial.
You know, I tend to buy from Amazon by default because, you know, I’ve got, you know, as a business, for example, I’ve got one place with all my darn receipts, you know, things like that. So it’s really interesting to be a consolidator of a financial resource.
And then what we like, final piece is this idea that you’ve got this proprietary technology, five patents and a tremendous reputation, you know, credentials and you do the webinars with the engineers and, you know, people specify your technology. So there’s the design is specified in the contract.
So then we go, OK, let’s provide that technology to XYZ Water Company for them to use in the contract because it’s technology we know, that you can manage and you can make sure there’s best practices.
Now we start getting license royalties and we will expand the use of the Modular Water Systems product line vastly beyond our own capabilities right now. I mean, right now you’re a one-armed paper hanger, right? You like going as fast as you can and it’s going crazy. But there’s a limit, even if you had 10 people assisting you that still be a limit, right?
Whereas if we start doing licensing and it’s all technology transfer, now, we’re talking about this amazing technology getting out there. So I think that is sort of a final cherry on top. So, it’s so exciting and fun. And what I like about it is we can accomplish real change, right? I mean, I see it as a way to unblock so much of what goes on in water.
Change Mechanism — Change Agent
Dan: Yeah, the change mechanism there being a change agent and a change agent in this business, that’s hugely important. It really is.
Riggs: Fantastic. Dan, listen, it’s been really fascinating talking about this and you know, this is something that. As we build the Water on Demand team, we’re going to have all these features in it and you know, there’s going to be a book about this. There’s going to be a book.
Dan: Yep, I do agree. Riggs, I will tell you, I will share it with you before we drop off that Twenty twenty two, we are three weeks into it and this the forecast for Modular Water Systems program are the division. There is just phenomenal. Just, I’ve been, the first three, the first three weeks of this year have been surprisingly…
Just I’m just shocked at the the inflow of business and new opportunity prospects. And it’s just the 2022 looks to be a stellar year. I mean, 2021 was good with really, really good. But I think 2022 and looking beyond that in 2023, the way the program is evolving, the way the our team has come together, I am just very, very excited for what the future holds.
Riggs: Well, with the market rewards, of course, the stick-to-itiveness, right? We’ve been doing this since June 2018, the last week of June 2018. I think the 20-30 was and we’ve been doing it steadily and building and you’ve been doing all that influencer marketing, working with the manufacturing sales reps, establishing a reputation for high credibility with these organizations so that they go, “OK, you know, we can give this to Modular Water. They’ll do it, they’ll handle it just fine.”
And just building that rep over time, getting on the radar, delivering, delivering and delivering. And then, of course, the fact that you are proprietary so that these darn, you know, opportunistic companies can’t just rip it away, which we’ve seen it again and again when when we don’t have that kind of design differentiation.
Establishing the Team
So it’s really interesting. And I’m, I’m agog. I’m watching the numbers. I’m like, “Darn, this is, this is crazy, right?” So let’s make sure that we attend to your survival by adding people to your team. I know that Tom is working a whole evolution to properly staff the line of business directly at corporate, and I think that’s incredibly important. So, you know, you’re going to be contributing revenues and profits. That is fantastic.
Then with this Water on Demand, you’re going to be able to consult to it and provide your knowledge on licensing, et cetera. I think that we’re going to have some fun. And also, I think that we’re establishing, you know, new standards and new ways of doing things and which is why we’re in business, right? We’re not there to just punch the clock, right?
Dan: That’s exactly right. That would be boring.
Riggs: I don’t know some people live by that mantra, like, “Hey, I paid, you know, I’m good, right? And I’ll go to the Poconos to go on vacation. But other than that, I’m just punching in and punching out.” But fortunately, not me.
Dan: That’s not who I am.
Riggs: All right, my friend. Well, listen, Dan, thank you so much for your time. I appreciate it. And I’ll play this tonight and a couple hours. But you have a good evening and keep up the fantastic work. We’re extremely happy with what you’re doing for us. Thank you.
Dan: Thank you, Riggs. Let’s get back to get back at it.
Riggs: Stay cool, calm and collected.
Dan: That’s right.
6 Key Items
Riggs: Wow, what a great, what a great show that was, I mean, the amount of stuff that we came up with in that short time. You know, I was taking notes of some of the stuff that we talked about. So there’s really six key items here.
The first one, of course, is the contracting water companies that have, that we use to scale up so we don’t have to do it ourselves, then embedding the consulting engineers in the contract so that his or her $75,000 is assured, and that’s going to make sure that they participate.
Number three, a policy of always using those consulting engineers and letting, making that known that if there’s one missing, we will add it. So not being short, short-minded and going, Oh, let’s do without. No, no, no, always use them. And that’s very important.
We’re enlarging the addressable market to include small cities. That was a big breakthrough tonight. That was huge. We’re not just saying, Oh, we’re just going to do business, though, because these cities themselves, as we know they are running out of money all the time, but they have problems.
If you’re losing 20 percent of your money to leakage and you’re able to solve that, get the money back then it’s worth doing a quick deal, a Water on Demand deal to get the machine in. And then later, you can buy it out because you started making more money. Or if they never get the money, they’re endlessly on the rent, and while that is what it is, right? And then rent to engineers who themselves use it as a service.
And then finally, this idea of licensing the technology a technology transfer to make sure that the technology is viable and that we know it right, if we know the technology, every one of our installations cannot be circumvented. And we also know how to get quality out of it. So really, really interesting. So that interview, I thought, was just so, so great.
Pondster Update
Let me just take a look at some of the well, OK, here you go. Thank you for all your input. I really couldn’t stop the minute I click on chat. Somehow the video stops. So bear with me. All right, let me take it an order. First of all, Bob Roos, update on Pondster. All right, here’s what’s going on. We are the Alabama. The Alabama site was a pilot. We’re still learning how it works. And you know, we make it out more alkaline, more acidic, et cetera, et cetera. That’s been ongoing. Dan Early works very, very, day to day on it. But we have a second site, which is a mobile home park in Pennsylvania, that not only is going to use Pondster technology, but is also going to be Water on Demand. At least the owner is talking with us about it. So, that’s huge.
From the Audience
Now also, our good friend Ivan from PhilanthroInvestors, tells us that he is scheduled to broadcast us in the Top Impact Investing podcast in the U.S., and that he’s sharing stage with John Maxwell with a 10 of the top notch entrepreneurs in the Create Number One Southeast Entrepreneur Conference. PhilanthroInvestors will have a booth with three people receiving interest in the future, while PhilanthroInvestors…that investment is fantastic.
All right, then we have a person who’s interested who gave us an email address and for some reason not able to expand. Just bear with me, and then we’ll take Maurice. Thank you. So, Ken, we’ll follow up, Maurice.
Keith wants to know are more small businesses like the hotel and car dealership, realizing it is essential to have a self enclosed water purification system? Well, that’s happening naturally. As as businesses and people move to the rural areas.
They have to have it they’re off grid, and they can no longer dig septic tanks. That’s over because you have to have, I think, 80 feet. Is it to the from the house to the septic tank and it’s no longer really tolerated. So.
Then also, I also wanted to Ivan tells us also and this is very true, that Steve St. Angelo, who was on this show and is just an amazing manufacturing expert. He was a former Toyota South America’s CEO. He reported personally, he was the number one Westerner in Toyota worldwide. He has decided to become an advisor for Water on Demand and to support the company. And he’s made a tremendous investment in Water on Demand. All right. And that’s really appreciated. You’ll hear more from that from him.
Khadijah says building a reputation over the course of nearly four years. Excellent, and I’ve seen a war, you know, money bags and a big award thing. Thank you very much. Andrea d’Agostini says, “Wonderful interview.” And then so I think this.
Manhattan Street Capital?
Oh, and Bob Roos wants to know when does Manhattan Street Capital start their program? Well, here’s what’s going on. We actually, what we had to do first is we had to take this whole Water like an Oil Well™ concept and translate it into what is now our own promotional funnel.
And the numbers just blew up as crazy. I might show you next week just how crazy it is. Cost of acquisition just drop like a stone because it’s a really Water Like an Oil Well, is like a golden concept, and it attracts attention like crazy. So maybe I’ll show you some of the art. And then once we had that, we had to work on that all the way through the holidays. Then we transferred we I went ahead and wrote the The Portal for Manhattan Street Capital.
And then, Andrea, this is magic, and in one day he turned around and designed for this portal. It’s beautiful, and now it’s being coded. So long story short to set, Manhattan Street Capital does not itself promote. They’re merely a platform by law, they can only be a platform.
And so they say, “OK, you guys take care of all the marketing, et cetera.” So the same company that does our Facebook marketing who knows us very well, Dysrupt is going to handle the marketing, the advertising for Manhattan Street Capital, and we’ve got the whole portal in place now and it’s ready to go. So it’s proven good, it rocks.
The story is so powerful that, you know, it really is the result of months and months and months of, I don’t know how Ken and I do it, but we, “do doo doo doo doo doo doo doo,” and somehow it squeezes it out. I don’t know. It’s like an elephant giving birth, it takes a long time. And it’s not a pretty sight, but it results in something that I think is very, very useful. So that’s huge.
So now next week, let me well, you know, I’ve got to get back to this presentation, but I’m going to tell you about what’s happening next week and just one second. So this is a section about participating in our future. And remember what the $5 million club, what does that mean? That means that if you invest in Water on Demand now you get the conversion ratio reserved for people investing at least $5 million at once. All right, that is a much that’s a huge difference.
Let me tell you, now there’s all this, “dum da dum da dum da dum da dum,” here’s the bottom line. You are investing in water equipment and then also the company developing the systems, and you will get a chance to hear all about this. Also, I plan to give you more updates about this digital bearer bond that’ll happen later.
Way too much to talk about tonight, but this hidden feature is the sweet spot which you want to talk to Ken about and please do.
Now, oc.gold/Ken is the fastest way. Just drop that in your browser. Boom and book him. He’s nonstop all day. I forced him to put in a 15 minute buffer between meetings because he was like he was just getting, he wasn’t even getting up for the toilet for, like eight hours. It’s ridiculous. He was like filibustering. He was the filibusterer.
State of the Company
Anyway, here’s what next week I’m going to do the state of the company. I’m going to tell you what’s happening, where we’re at, where we’ve been in twenty twenty one. Obviously, we can’t yet report the final numbers for twenty twenty one, but I’m going to give you where we’re at, where we’ve been, where we’re at today and where we’re going. And that is going to be fascinating. So be there. I think it’s going to be extremely powerful presentation and it’ll be a great way to kind of report on how things are.
All right. So with that, I’m going to just pop out of the mess supposed to do this to you? I’m not supposed to. I’m not supposed to show you the stuff in the background, the wizard, the Wizard of Oz. But anyway, thank you, everyone. It’s been so great, and Gosh, that interview with Dan, that was pure gold. We gathered more information in that one meeting, and literally none of that had been really discussed thoroughly. The consulting engineer thing had and the contract and the water companies.
The Mouse that Roared
But this whole small cities thing, the more we work with Dan… I mean, he’s one of the creative people in the industry, and we’re so happy to have him because a lot of people in the water industry are like very serious people and very solid, and they march down the road and nothing comes out of the box. Dan is thorough, he’s brilliant, he does a quality job, but he’s also willing to think outside the box and that’s what we need.
Because we are, if anyone remembers that Peter Sellers movie, The Mouse that roared, we are the mouse that roared. Ok, everyone well have a good night. Heather’s going to wrap it up. So I’m going to turn off the video now. But please do be there next week. Spread the word. State of the company. Twenty twenty two. It’s going to be a good one. Thank you so much and have a good night.
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