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Fintech for Aquatech

Feb 5, 2023 10:36:24 PM

Whew. It seems we got the lightning into the bottle, now all we have to do is manage it! The forecast we showed for 2022 speaks for itself and gives you an idea of the possibilities, but did you see that green line? HINT: We demonstrated on the show just how significant Water On Demand™ could become to investors in only a few short years… Project management is clearly becoming progressively more important. And the projects themselves? Definite WOW material! Good thing Water On Demand's new operations manager, Colin Sherman, is a widely experienced veteran… Meet him here in the briefing!

Transcript from recording


Commentator: Due to leaks in pipes and other water infrastructure, the US loses enough water every year to meet the annual supply to its ten largest cities. This is why our pump station business, branded EveraMOD™, is so important and is growing so fast because a pipe may or may not leak. But a pump station is a connection point which has all kinds of joints and pumps, and it is a major source of leakage. And we have these high density polyethylene envelopes which are under patent, worldwide patent that provide a up to 100 year life cycle for these pump stations.

And since it's competitive pricing, competitive with the stuff that degrades after 20 years, mostly cities but also large corporations that need this kind of stuff, they say, "Well, what the heck, I might as well get something that's not going to leak for many, many years." So leakproof pump stations, I think are the future, and you're going to be hearing a lot more about that.



Riggs: Welcome, everyone. And yes, that's a look into the future because EveraMOD leakproof pump stations is going, is booming. We're doing an amazing job. I think I might cover that next week with Dan because that's our 2023 development, how we developed Water On Demand in 2022 and now it's rolling out in 2023. Similarly, we're going to develop EveraMOD as a separate business in 2023 to rollout in 2024. Super exciting.

Now, Pump Station is actually a different business because it's primarily sold to large corporations, municipalities. This is not your single site brewery type thing because it's about making water go back and forth, dirty water or clean water. So it's a different audience, but it's huge as millions of stations out there and they're all degrading lots of water leakage.

Robert Baxter, "Waters up. What's up?" Nice little, nice little pun there. Keith Roeten, "Happy Birthday, Riggs." Well, you still have six days. My birthday is the eighth, but next Wednesday. Thank you very much. And I don't feel 103 at all. Not at all. I feel great. So thank you for that.


230202 title

With that, I'm going to go ahead and get started. Water — The Blue Gold™. And it's February the second briefing number 196. How we roll.


safe harbor

All right. Usual disclaimers. You know the drill.




RE Armageddon

Now, something's going on in real estate. And this is something that I didn't expect to have happened. They're calling it an Armageddon. What's this all about? Well, it turns out that there's been a problem with the commission structure due to a lawsuit that prohibits certain activities and the commission structure. Could eventually turn into the seller paying for both both sides. Commission's super weird.


Housing Market

Dual Agency

And so there's this whole rule about offering buyers, brokers, a commission, etc., and that actually inflates all those costs. So basically, buyers agents would no longer be in the equation. And that's interesting. So I personally don't think this is going to happen, but this is one of those oddball things that happens in industry that can affect it heavily. If we remove the bias agent's commission, you'll see the listing agent representing the buyer and 90% of the transactions. It's called dual agency. Not healthy for the consumer, right? Because the buyer does not have representation anymore. Well, that's just to illustrate the continuing interesting stuff going on in real estate.

And speaking of which, we saw a quarter point increase in the federal rate, which is actually less than expected. They're actually starting to slow down already. So even though it was up and looked bad, it is actually less than what they had threatened. So that means that rates are going to remain high. But we are, I think, going to see a cooling definitely. I think by the early Q2, Very definitely. So that's kind of what's going on with the cost of money, which impacts real estate, as with many other things.


Water scarcity

All right. Dan Early sent me an email rather than pull up the article, he's talking about Tom Liakos, "Hello, everyone." Hello, Tom. Let's just take a look at what his comment is. So water scarcity and it can focus on companies that are buying up land along the Colorado River to get the water rights. And supposedly that this is a future asset. See, right now, the way the water industry works, the only asset that people get their hands on is the water rights.


Dan Early

Fintech for Aquatech

All of the water treatment and recycling is not much done, but the recycling is done. Is mostly under governmental control. And so this they're snapping up water rights for, because of water scarcity. Well, that actually is a validation of how we are creating a revenue generating asset ourselves. And then they said to water is the buzz for the 21st century, etc., etc.

So and this is this last week I was covering how we have Aquatech. Aquatech's the new hot space. And in fact, Water On Demand is Fintech for Aquatech™. It's kind of cool. All right. And by the way, let me know if you like that, fintech for aquatech. That's kind of something we're playing with as a tagline for Water. On Demand. Pop in the chat, if you like, or email me ceo@originclear.com. All right.


Will they collaberate

Now there's an article on the Western drought. Will they collaborate? This is interesting because I'm going to play this for you shortly, but my concern is that water rights are deeds. They're actually deeds in perpetuity. You know, you own a water right. It's called a taking in terms of the federal government. Doing takings and takings have to be compensated. Could be very, very expensive. So let's take a look at, it's a listen, let's take a listen to the audio right now.


Start of presentation


7 states arrow

Newscaster: Another deadline for the states there, the Colorado River. They all agree they have to collectively cut how much water they draw. But months of negotiations have not produced a plan to share the pain. So now it is up to the Biden administration to find a fix. KUNC's Alex Hager has more.

Alex Hager: The Colorado feeds America's two biggest reservoirs. Lake Powell and Lake Mead. Both are now lower than they've ever been due to climate change. For years now, the 40 million people who rely on the river have been drawing more water out of the reservoirs than is coming back in by a lot. So something needs to be done. We've never been here before on the Colorado River, so we don't really know. Sarah Porter directs a water policy research center at Arizona State University. She says that if the seven states that share the river can't figure out how to use less, Lake Powell and Lake Mead will soon be too empty to run their massive hydroelectric turbines.

Sarah Porter: It is possible that the states will not be able to come up with an agreement because what they have to agree to do is so very hard getting water users within the state to agree to use less water.

Alex Hager: The Colorado River supplies big cities like Denver, Phoenix and Los Angeles, but it also flows to the Southwest's multibillion dollar agricultural sector. John Berggren studies water policy with the conservation group Western Resource Advocates. He says that has led to big tensions about who gets to use it.

John Berggren: "What you're talking about are people's livelihoods. If you're an irrigator or a rancher or a farmer, your water is your most important asset."

Alex Hager: Water managers say protecting the interests of everyone, cities and farmers from Wyoming to Mexico is nearly impossible. Just ask Becky Mitchell, the top water negotiator from Colorado.

Becky Mitchell: "We all have to be able to sell this and it is really hard to sell something when there are winners and losers."

Alex Hager: Mitchell was speaking at a Colorado River conference in Las Vegas last month. There states talked a big talk about needing a collective solution to this collective problem. But so far they haven't come up with a plan. And if they don't produce an agreement by tomorrow, the federal government could impose its own cutbacks.

Becky Mitchell: "I think there is some heavy optimism that hopefully everyone will come to something that we can all agree on, but it is going to take mean real cuts to everyone."

Alex Hager: Felicia Marcus, a fellow at Stanford University's water in the West Center, says, "It's no surprise that the seven states that share the Colorado haven't reached a solution on their own."

Felicia Marcus: "You can't just put the parties in the room and think they're going to give their water away and figure it out. Somebody's got to come and say, how about this way?"

Alex Hager: Marcus has worked with state and city water agencies in California and was in the EPA during the Clinton administration. She says, "It's a bad look to come back to your constituents, saying you volunteered to give up water. But if the feds are the ones who asked for the cutbacks, states can blame a higher power."

Felicia Marcus: "The beauty or the value of that £800 gorilla stepping in is that it gives people either the motivation or the cover to make the decisions that the gorilla probably wishes those people could make on their own. But you really can't expect them to be able to."

Alex Hager: The federal government hasn't been in a hurry to be the gorilla. It's mostly stayed out of Colorado River management, instead offering carrots and sticks for the states to figure out how to pull less water from the reservoirs.

Felicia Marcus: "In the case of the Colorado, this is definitely a case of everybody hanging together or all hanging separately."

Alex Hager: Whether the states come up with a solution or one is imposed by the Biden administration, it will likely end up in court. Meanwhile, despite some heavy rain and snow this winter, the Colorado supply is still far less than the demand for water. For NPR News, I'm Alex Hager in Fort Collins, Colorado.

End of presentation


Our Mission

Riggs: There we go. So, this is why it's so important, our mission is so important because, we can actually improve the water supply by implementing recycling through water decentralization. It's one of those reasons why businesses would do their own water treatment is that they get to have more water to work with. So this is extremely political. It's going to take years. Meanwhile, you'll see the reservoirs will hit bottom. It's going to happen. We're going there. So it's really important that we go ahead with this stuff.

And I have a note from Dwight DeBacker, who said, "In the area of Fintech for AquaTech, our innovation could integrate with your objectives. We can optimize water production and offer a series of valuable community based services. Et cetera, etc." So yes, we will connect. That's amazing. So it sounds like Fintech for AquaTech does resonate because there certainly is at the root of all production is capital, right? So and we've already seen that aquatech players are saying everything is great, it's wonderful, technology is wonderful, but where's the money? Right. So there we go. All right. Excellent. Thank you. We'll follow up.



Continuing. Garry Tan, I wanted to play this because even though it's a general piece, but it's really good. What you'll see, you'll see. I think it's really interesting.


Start of presentation


Garry Tan

Garry Tan: We all want to build something that catches lightning in a bottle. But can you hold on to it long enough to make it the company in your space?

[excerpted in Garry tan's presentation from the film "The Founder" about how Ray Kroc turned the McDonald's brothers "speedy system" fast food model into the international franchise giant]

Ray Kroc: This is the most remarkable restaurant I've seen in all my years in the food service industry, and I've seen it all. I want to hear your story.

Garry Tan: Today we're talking about the two huge milestones. Every founder who makes it has to figure out. Catching lightning in a bottle and holding onto it. What starts like this? Lightning first captured a rare miracle can become this a powerful machine that harnesses lightning into something that can touch everybody on the planet. And if you watch to the end, you'll find out which of those two stages is more valuable. Let's get started.

How do you catch lightning in a bottle? It's a big mystery, but in the case of McDonald's, it was the original founders who figured out something magical. They had an idea and it blew all of our minds.

Ray Kroc: Here you are. How the heck did you come up with this?

Mac McDonald: Well, I didn't. We did. Dick McDonald, my brother.

Garry Tan: When you're making something from nothing, there is a moment where you have to figure something out. The spark of genius. And then that spark becomes lightning.

Mac McDonald: And you were going to love how we did it. Dick, you got to tell him.

Dick McDonald: Tennis court.

Mac McDonald: Okay. He brings me up to this tennis court, and he's drawn this line the exact dimensions of our kitchen sink.

Dick McDonald: On the right, extruder on the left.

Dick is running around with his stick marking where all the equipment should be.

Dick McDonald: Tuck in. Tony, are you going to skip the pickles when we're really doing it?

Tony: Yes. No. No.

McDonalds employee: Here's to lazy Susan.

Dick McDonald: And pickles and pickle and mustard.

Mac McDonald: The speedy system is born and it's off to the races.

Garry Tan: The speedy system was how the McDonald's brothers did it, by measuring time and motion and literally trying it out in person live on a blacktop. They prototyped something that had never been done before.

Ray Kroc: And the lean is time to clean.

They didn't just create fast food as we know it. They had to invent all the things that we take for granted that didn't exist back then. So one of the things they did was they created a little machine, like a flour sifter looking kind of thing, that they would just push a button and the right amount of ketchup would drop right on to the bun every time.

Ray Kroc: Now, where did you get those?

Mac McDonald: We made them.

Ray Kroc: Made them?

Mac McDonald: Yeah. Custom built. Whole kitchen is.

Garry Tan: It's a really incredible story because it shows you the excitement of this company at the beginning and what it must have felt like to stumble on this for a businessman like Ray Kroc.

Mac McDonald: A fresh, delicious burger from grill to counter in 30 seconds.

Garry Tan: Now, while the brothers created the system and caught lightning, it was an entirely different person who came along, who found a way to hold that lightning and harness it to build the future. That man was Ray Kroc, and this is what it was like for him to experience McDonald's for the very first time.

McDonalds employee: Hi. Welcome to McDonald's. May I take your order?

Ray Kroc: Yeah. Give me a hamburger and French fries and a Coca Cola.

McDonalds employee: That'll be $0.35, please. Alright. $0.15 is your change. Here you are.

Ray Kroc: What's that?

McDonalds employee: Your food.

Ray Kroc: No, no, no. I just ordered.

McDonalds employee: And now it's here.

Ray Kroc: You sure? All right. Where're the silverware and the plates and everything?

McDonalds employee: You just eat straight out of the wrapper and then throw it all out.

Ray Kroc: Alright.

Garry Tan: Kroc decided sometime around then. Eventually he had to buy McDonald's and bring it to the world. It did mean buying out the original founders to try to realize his own vision for the brand and the restaurant. And as he scaled McDonald's, he said, "Perfection is very difficult to achieve. And perfection was what I wanted in McDonald's. Everything else was secondary for me."

Actor: Ray Kroc's vision of the McDonald's future was endless, was boundless.

Garry Tan: Now there is a view out there that I don't entirely agree with that says Ray Kroc, was some kind of villain. I don't think that's the real lesson for you and me. Founders have to realize there are truly two totally different parts to building something that can change the world. The first part is the genius of the McDonald's brothers going from 0 to 1. That stage requires a brilliance of a particular kind, bottom up resourcefulness and a willingness to diverge from how it was always done.

The second part harnessing that energy and bringing it to the world requires almost a totally different skill set that requires you to scale something unique and valuable to becoming the ultimate winner. Even in an extremely competitive space. You can't really get more competitive than fast food, in my opinion. Ray Kroc said. "Nothing in the world can take the place of persistence. Talent will not. Nothing is more common than unsuccessful men with talent. Genius will not. Unrewarded genius is almost a proverb. Education will not. The world is full of educated derelicts. Persistence and determination alone are omnipotent."

The McDonald's Kroc story is more common than we care to admit. Reed Hastings was chairman and investor of Netflix before becoming CEO later. Elon Musk did the same for Tesla. It turns out some of the most famous business people today that you and I know started as investors who later realized they have to come in to make sure the market is secured.

The McDonald's brothers made $2.7 Million in 1961, which in today's value is about $27 Million. Ray Kroc Widow inherited over 500 million in 1984, or about $1.4 billion in today's value adjusted for inflation. If you're looking for what is valuable, at least by market standard, this is a very counterintuitive thing. Now, inspiration is valuable, but execution and winning in a crowded marketplace is sometimes, and in this case, worth far more.

Ideas are always a multiplier on execution. And that's a weird thing for founders especially, who really focus on 0 to 1. Catching lightning in a bottle is far more rare, but execution, it turns out, is far more valuable. But if you're a 0 to 1 founder like me, not all is lost. Some of the most amazing founders I've met, like Brian Armstrong at Coinbase or Brian Chesky at Airbnb, they've been able to do both. But you have to know it's like shooting a bull's eye twice back to back. It's that hard. Know what stage you're in at any given time? Finding lightning in a bottle or holding on to it and knowing that will let you work accordingly. If there's a lesson, maybe it's this. The only thing harder than catching lightning in a bottle is holding on to it. I'll see you next week.

End of presentation


How it Applies to OriginClear

Riggs: Well, that is really, really interesting. There's several different foundings that have occurred, but the ones that are currently super relevant are when we brought in the founder Dan Early, gave him a home and now he transitioned into execution. He's done a marvelous job of executing stats have just taken off. And in fact, I can promise to do this in my CEO update today. So I'm supposed to actually do that, which is to show you some of the revised stats, which I'll do in that 13 seconds here, because it's important.

The new 2023 investor presentation, which is on our website in the investor section, I'm just going to go straight to the graphs, which is the only major part that's been updated so far. Here we go. All right. So right there, existing operating units. We have now a forecast still, this is not a final, but it's a good forecast. It's 2022 will come in just over $9 Million. It looks like just more than double of 2021. Pretty astonishing.


Forecast 1

And then the forecast after that will occur incrementally. Now whether they, you notice that we're not assuming the double again, that's too much of an assumption because part of what goes on is as you grow, you have to keep adding more resources. For example, Dan Early really needs a fabricator to get him so he can he can get himself to 20 to $30 Million a year. He's got the potential business, but he's got to have the fabrication network for those plastic blown plastic receptacles, you might say.


Forecast 2


Anyway, so let's take a look at some of the breakdowns here. So PWT is the green line and they took off nicely. And as you can see that the blue squares there, that's Modular Water Systems growing. So we had to live through 2018 with almost nothing. And then as you can see, we finally got just short of a million on 2021. And then in 2022 looks like we'll end up having had about close to $2 million from Modular Water alone with EveraMOD which was previously part of the 966. So you could say that it's more more than like a triple there.

So PWT tripled its orders, driving a 2X revenue forecast. MWS got order growth there, which is driving the latent or the later years revenue growth and finally the pump station line being broken out. And because it's scoring some amazing national accounts which are very good for steady business and we've been adding engineers like Mark Mazochette and that has enabled Dan to not be so focused on engineering. But now we need to build a fabricator network and what we want to do is acquire a fabricator. We know who it is. So let's take a look at profits.


Forecast 3


Now, as you can see, operating profits of the units were were negative or just barely positive. That's $1000 in 2019, $22,000 negative in 2020, and then boom is suddenly became profitable. So they are really starting to take off. For a long time we had, MWS was very, very expensive for us because we had to carry them, which meant that Tom Marchesello, who runs all these units, Amazingly, this is his work, was being paid by our investors, right? Now that's paying off.


Forecast 4

5-Year Forecast

Okay, let's take a quick look at the five year forecast. And here we have Water On Demand coming in. And that really, you see the green is the 25% distributions. Here's the revenues in gray and there's the profit. It becomes quite profitable. Notice why? Because we're not trying to make money from machines. We're making money from money, which is different kind of margin.


Forecast 5


And this is consolidated all the units. So Water On Demand is the red and then everything else, which almost doubles. So Water On Demand is almost half of the total, more than half of the total. And then the consolidated operating profit, which we've calculated this on purpose with Water On Demand, if you look back on the operating units, they're profitable already. So really what it is, is we've injected a negative profit line with Water On Demand Inc, which is what we get there and some other factors as well. So that's what that looks like.

So I just wanted to cover these items to show you that I'm super proud of the execution. And so founders goes 0 to 1 and then the execution guys goes one plus, right? Zero to one is very hard, and much more unique. But there's so many people out there who are founders who did the 0 to 1, but they weren't able to do the one plus. You got to combine the two. And that's really where we're executing today. We have the Modular Water Systems Tech, which has now been executed. So we have a 0 to 1 plus one plus situation going on.

And then we have the Water On Demand financial model again, which was created by Ken and myself during the COVID era and following. And there's all kinds of interesting stories about that. And then now we're in the one plus with the help of the operating people. And I'm going to now do a quick interview, the gentleman who is on board as operations manager. Let's go ahead and play that.


Start of presentation

CEO Briefing interview with Colin Sherman ft

Riggs: Good afternoon. Welcome, Colin Sherman, to the CEO briefing. I think this is like the 196th one and they basically started in late 2019. And little did we know, of course, that it was going to turn into the major way we were going to communicate.

Colin: Thank you for having me on the program. What I do in the company is I'm the the project manager or production manager to ensure that we deliver to the client what he requires. And that it's done on time and within budget. That's basically what I, what I do.

Riggs: Well, what in your own words qualifies you? What's your background? Where did you come from? How did you sell yourself to OriginClear?

Colin: Okay, so I was born and educated in South Africa, Johannesburg and Cape Town. I began out in the chartered accounting space, moved into business management, and then basically all my time in South Africa was involved in financial management. I then emigrated to Australia in 2085 and that took me into the project management realm. I just happened to fall into it.

When I arrived there, they were just implementing the general sales tax and having come from a country that had the tax, I became a subject matter expert, as it were, and got involved in implementing projects in government, government agencies, public companies, etc.. That's what I did for 25 years. And I've been a project manager till I immigrated here in 2018. And my projects varied from all sorts of things. Implementing electronic ticketing, building levies, flood levies, all sorts of things.

Riggs: Wow, that's cool. That's interesting because a lot of engineering involved.

Colin: A lot of engineering, and I did one or two civil projects as well. So which was very interesting.

Riggs: Like what? What kind of civil engineering?

Colin: When we were implementing the electronic ticketing system on the heavy rail system, every single platform on the network had to be changed. And that involved a lot of civil engineering, electrical engineering. It was a $1.4 billion project, so it was fairly large, decent size.

Riggs: So good background in finance, financial management, project management, civil engineering. And this is why we like your being on board is because you're not just, we have water specialists, we have plenty of those. But as you know, we've made a decision that we're going to let local water companies do the building of these systems.

The real challenge at the level of management and Water On Demand is contract management, project management, getting compliance from the partners, making sure that the service level agreement is met and all that. And that's why I felt it was very good to have someone who was accustomed to dealing with these upper level problems as opposed to, yes, you probably should learn how to install a filter, but since we've delegated that, it's more important to know how to run the network, which is I think the background we're talking about.

Colin: Correct.

Riggs: So with that in mind, Colin, I know that you just started recently. In fact, I think you're, I think something like today or tomorrow is your first full time employment.

Colin: Yeah.

Riggs: The last couple of weeks. Welcome aboard. Right now where we stand is I know that I've been reporting to our audience that we have four or five projects that we're working on for Water On Demand. I think we're, I think one is really well along. Right. What's happening with that first one?

Colin: Well, well, the first one, we've had some requests for additional information, which we have given them. And we're just waiting for a reply, if they have any more than we are happy to give it to them. But we definitely down, far down the road on that and we are hoping to have that in the bag one day.

Riggs: In fact, that extra request was for an early buyout clause, which we learned is popular. And you know what's ironic is that I was designing early buyout clauses in 2020 when we were working on something called Investor Water. That was an earlier version of Water On Demand and Investor Water was a way that investors could invest directly into their own machinery. And there would be a buyout clause or so forth.

Now, investing directly in a water system is has regulatory issues, which is why we do now do buckets. It's a whole other story. Water On Demand became more like a, like a cluster of projects that people invest in. But the word is we're learning all the little pieces of what people need and want out of these water as a service type projects. So this client seems to be well qualified, funded, ready in principle to go ahead. And then I know that there's some new ones that have come that are even much larger. I heard something about like a $65 million project or something like that.

Colin: Correct. And we've already had negotiations with our maintenance and control people. That's a separate resource that we use and they're very, very excited about that as well. But these are going to be fantastic projects going forward.

Riggs: And our partner, of course, as we know, as we've announced, is Envirogen.

Colin: And they're very, very professional and I'm very, very impressed with them and what they have to offer.

Riggs: That is a prime role of yours, because we have up here, we have Water On Demand which has money, capital and the contracting process and the project management process. And we have execution down here, which typically is going to be by other companies. And you sit right there at that connector.

Colin: Nexus. That's right.

Riggs: Nexus is a good word. So that you are basically the person who's ensuring that the client commitment is met, that the service level agreement of X amount of suspended particles or whatever, arsenic, whatever the requirement is, are met. And if not, of course, do we have to take action and so forth. And so that makes you kind of an important person with the general manager, Manual, able to focus on client interaction and negotiations, and you're kind of pulling things away from him, right?

Colin: Correct. And he's got time now to to market and sell the products and and I can get the job done. And that's what I've been brought on for.

Riggs: Well, that's exactly what I had in mind when we were speaking. We've talked for a long time, and I finally felt the time was right to bring you on. So it's a great pleasure to welcome you to the, to the company, this new company, Water On Demand. And we can't wait to see some projects come out the other end. Like real estate, it takes time. You have to you have to do a lot of action. So it's not an overnight process, but I'm delighted to hear that it's well underway.

Colin: And thank you for getting me on board. I enjoy the management team. They really a great bunch of professionals. We have great resources in the fabrication side in our organization. We have great support on the maintenance side and and I think this is going to turn out very, very well.

Riggs: Colin, thank you so much. I look forward to great things.

Colin: Thank you. Thank you for having me.

Riggs: Thank you, my friend.

Colin: Okay.

End of presentation


A Book?

Riggs: Well, that was Colin Sherman. And Ken is busy teasing people about a book because I was talking about the process of creating Water On Demand over two years and so forth. And he's just going,"Stay tuned." He's being very mysterious. What's going on is that, as you know, we reported constantly in these briefings on the process from the very beginning. And so what we're doing here is we're collating all the materials into essentially a "as it occurred" type book.

And my brother, Stephen Eckelberry, who's our videographer, has volunteered to pull it all together. The problem we have is we keep having more developments. In other words, where does the story end? But I think that we can start, we can start thinking of what we expect will happen later this year, which of course, I can't discuss as being maybe where we get to, who knows. But it's super exciting.


WOD update

So with that, I want to show you a report on what has been, what the deals are. Of course I have removed names. I've redacted it. David Johnson, "Very happy to see additional key resources accountable to make WOD happen." Absolutely. Yes. Well, staffing up is key, but it's got to be the right people. And I'm very happy about Colin. He's a veteran. All right.


Redact 1

Quick Update

Here we go. This came in this morning. So there's a administrative facility in a, I can't say what kind of complex it is. It would give away too much, but it is in Texas, and that's 1.2 million for basically these administrative buildings, standalone buildings. And it's kind of crappy the way it's done right now. I use the word crappy as an unintended pun. As you can see, these Water On Demand things, the initial fees are very small, like $9500, but the CapEx is what they get to avoid.

And now our partners who are working on this for us because again, we're working with channel partners to tell us how this is going. That's number one. Number two is one in Texas, where we submitted a proposal, 1.35 million for 40,000 gallons per day, two phases. And Mark Mazochette, who is the program manager in Modular Water Systems. It's been a decision this week or very soon, so that's a really good one.

Another opportunity that Envirogen has been working on for years, but lacked the capital, see, this is where these things are kind of hung up at the water company level. And there's a ton of hauling going on here. And the idea is, instead of hauling $5 million worth of water, mostly water in trucks, then it only requires one of two trucks instead of 18. And capital costs 10 to 12 million.

They like the DBOO idea, design, build, own and operate, which is our pay per gallon thing. And Envirogen will operate it and then we're going to fabricate it. So it's a hybrid. So this is interesting because looks like there's going to be a couple of months of due diligence and testing.

And then finally, there are two opportunities that may develop. And that is where that $65 million thing came in. All right. So that is that and Dwight is trying to guess what it is. I'm not telling what it is.


Ken & Riggs 12 Jan 23

Freewheeling Discussion

Well, that actually brings me to halt. I had, I did a podcast today, 17 minutes. But rather than overcrowd this briefing, I'll run it next week. So with that, I want to invite my friend, my friend Ken. And hey, we got a lot of people in this show. We got a bunch of people so.

Ken: Jam packed and here I was trying to be mysterious and, you know. It's all good, you know it was funny. While you were going over that project, that last project, the first thing that caught my eye and when I describe this to investors is like the guy spending $5.5 million hauling away what's 90% water.

Riggs: And 99% water.

Ken: Okay. Right. 99% water. So you've got to figure the net savings on that thing is, what, 4 to $5 Million a year?

Riggs: Oh, unquestionably it's huge.

Ken: And avoiding. So in other words, you know, back when you had to sell high ticket items, you had to go. "Mr. Jones, it's, I'm going to save you $1,000,000 a year for the next ten years. Right. And it's just going to cost you $1,000,000 up front." The guy goes, "That's great. The only thing I don't have is the million dollars." Right?

So the ability to bring in just incredible OpEx savings to these businesses, which is I mean, some of this stuff is an existential threat to these businesses, right? To be able to alleviate that enormous OpEx and deliver it without a CapEx, you know, if you can't sell that go home. Right. So I think that as the market starts to become adjusted to the fact that this is even available, because I really believe right now 99.9% of the industry of the market doesn't even know this solution exists yet. And I believe that there will be a network effect that will take place. That's super exciting.

Riggs: Yeah. And this is where things are accelerating and we're using this period now where we're not over marketing because we really need to make sure the process is locked.

Ken: Sure.

Riggs: Manuel and Colin get the whole thing done working with the engineers at PWT and MWS. So that's all, it's all happening. But I'm going to trot out an old joke that I, that I sometimes tell, which is "They've invented 50% of the anti gravity chair. They have the chair."

Ken: They got the chair, right. Yeah.

Riggs: This is the problem people have. They have a project, but there's no way they can get the capital. And we are basically the equivalent of anti gravity for these.

Ken: They've got a chair and we can make it float, right? And that's really, a really cool way. I thought you were going to say if you don't come in Saturday, don't bother coming in Sunday. I thought that was going to be your, that was gonna be your joke.

Riggs: You know my repertoire, this is not good.

Ken: That's your. Oh, that's right. That's, it wasn't useful here. But it was also really nice to see that Envirogen is now starting to kind of become a focal point of a lot of these projects which, this is exciting. I mean, this is just really just weeks and it's already starting to kind of, the tires are starting to grab. So I'm very much looking forward to what we'll be able to discuss with these folks in the back end of this year. It's going to be very exciting stuff.

Riggs: It's too bad that we have to do so much teasing about the things we can't talk about.

Ken: And they won't have to wait for the book to come out. Right.

Riggs: Well, anyway, you know somebody told me the other day, remarked the other day that instead of reading people's books, just listen to their podcasts.

Ken: Well, at this point. Right. That's where we are. Yeah. I mean, books. What are those?


Limited Slots

Riggs: So really important to speak to Ken, because remember, that slots are limited on the royalty. Once we're done with the royalty pool. There's going to be no more. We're going to Wall Street. We intend to go to Wall Street. Institutional investment, which is less expensive. But we need you guys and gals now because Wall Street looks and they go, "Well, you don't have a fully scaled up, blah, blah, blah." Yeah, that's true.

So that's the same problem that Elon Musk went through when he had that famous Christmas time, when he basically had to go to his best friends and just throw it all in. That's what we have today with this team of investors. Once that's established, then getting the "me too's" on board is like no problem, you know.


call ken

Call Ken

Ken: By the time, right, by the time the MeToo comes on, the premium is enormous, right? So we're approaching this from such a significant discount. The other thing I would also talk about is the reason that the first 20 million is important with those royalties. You saw that upward green line, right? If you track that thing for a long time, that's going to be a huge number.


Institutional Investors

As we go institutional, institutional investors aren't really in it for an ROI like a REIT. They want those numbers, that green, they want that to reflect in future stock price because they're not really thinking, they're not looking at Water On Demand and saying, "Okay, well, what are you guys going to do next quarter?" Where Apple, you know, has disappointing numbers and drops $40 a share? That's not what they're looking at.

They're looking at what can these numbers represent? Represent a reflect in future stock price in 5 to 10 years. So I think that's where cutting this off at the 20 million mark really gives enough investors enough opportunity, but it still allows for the rest of it to be distributed into share price in the long run.

Riggs: You got it right, my friend. Well, I just want to comment that Janet Winkelman says, "Books are for burning." "Just kidding," she says. Coletta Sharpe says, "I appreciate you both kings". Thank you, ma'am. I appreciate that. So wonderful feedback. James Wright, "Very excited about how well things are developing. Thank you for the wonderful work."

Ken: Oh, wait. We'll be able to tell James Wright some good news soon, won't we? He's been patiently. Patiently. I mean, this James, you just you have been like a saint. Well, we'll have something to report. Days. Weeks. Who knows? Who knows? We'll have something to report.

Riggs: Yes, something will happen one of these days. That may be fun, right? It's funny to be so muzzled, but you guys, guys and gals understand how it is. Bob Roos. "Speaking of books, I paid $20 plus for a book on water some years ago and never did receive any anything. Do any of you know what I'm talking about?" Interesting. That's a riddle. We're going to have to take that offline. But anyway, thank you very much, everyone. It's been wonderful. We have a big crew this time. Thank you for the vote of confidence. You are marvelous. And James Wright continues to talk wonderful things here. But I'm going to let you go. Thank you, everyone. And next week...

Ken: Craig. Craig Alan Reeves, you raised your hand. We can't. If you want to type in a quick question. If not, you can send your, send your question to invest@originclear.com.

Riggs: With that, I'm going to wrap it up and we'll do some fun stuff next week. I've got that podcast I shot today, which is very, very relevant to what we're doing and then we'll have some more interesting things to discuss. Do join us. It gets more exciting each week. Thank you, Ken. Everyone, have a great weekend.

Ken: Goodnight, folks.



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