Insider Briefing of 30 July 2020
Helping you thrive in the world’s ONLY vital, scarce and recession-proof market
At long last, we now have an integrated process! We're very excited indeed. How is this going to improve public health in the world? Find out here. Amazing things are happening in Texas too. Find out in this action-packed briefing!
Transcript from recording:
Well, hello everyone again. And this is Water Is The New Gold, co-host Tom Marchesello, who will deliver the Tom Marchesello report, super cool. So, we have a very packed agenda. Water Is The New Gold, “Helping you thrive in the world's ONLY vital, scarce and recession-proof market.” It is today, the 30th last report of July.
First of all, of course I'll give you the important notices of the day, which is Safe Harbor Statement, where we say things are anticipated, intended, et cetera. You should not bank on them, but they are our very best estimation. And the regulation D is for accredited investors. And again, the Securities and Exchange Commission has not passed on the validity of these.
Now, Sharkpreneur. We're in the middle of an epidemic, a pandemic that is not very different from previous ones, but this time we're paying attention. Right? And it's good because we're reforming our practices, we're washing our hands and so forth. Well, maybe we need to take care of the water more because sanitation is why we are not going to have 80 or a hundred million dead like we did with the Spanish flu when there were no flushing toilets. Today, we do have the flushing toilets, but we still have a big problem. I believe that the best way to prevent future pandemics is to dramatically improve sanitation. The challenge is doing it. That's the challenge. You know, they'd say we've invented 50% of the anti-gravity chair. We've got the chair, right? So where is the point of leverage on transforming this industry?
The Ellis Martin Show
And that was that show. I'm going to move on directly to the next one. And this is the Ellis Martin show that was done two days ago. This is a sponsored show and he's on the radio. So, he's not normally... His kitchen is not normally seen, but I recorded it so that we would have it. Here's a short excerpt.
Ellis Martin Show Excerpt
Translation from recording:
Ellis: How does one potentially, and I know we've got some listeners out there, that may be interested in possibly investing in this methodology in OriginClear. How does that happen?
Riggs: For example, when Airbnb was first being developed, you couldn't invest in one of those Airbnb's because it wasn't rolling, right? So what did people invest in? They invested in Airbnb and it became a multi-billion-dollar company. Now, disclaimer, I'm not claiming it will be a multi-billion-dollar company, but I think we could be a lot bigger than what we are today by executing on this.
And then eventually people started doing the investing in Airbnb's and becoming little hoteliers, you know, micro chains of hotels. And that was a later business. It's the same thing here. Currently, we haven't built this marketplace. It's being built, we have all these lab projects.
A Virtual Circle
This Airbnb for water, I believe, will change the way water is done in the world because there'll be easy financing. Now, here's something else I wanted to share with you. That is a very, very recent development that you're the first to hear. It's a virtual circle because, let's say that somebody has a need, our Modular Water Systems™ chief engineer, Dan Early, develops a solution. We help finance it, get it going. And now it's one of our products being sold in the marketplace. We did that with a product called the Pool Preserver™, which is a wonderful little trailer mounted system that can pull up to a house and recycle all the water and avoid having to flush all that water out twice a year.
And that product called Pool Preserver was first financed using this creative financing method, creating a whole new business for these pool cleaning companies, which are all from one or two person shows and it has now become a product that we are selling And so there's this really cool thing where we're creating new products out of solving a problem that we got financing for. And I'm so excited about where this is going, Ellis, because we have a very strong division in Texas, which builds amazing systems. Well they built the first Pool Preserver for a pioneer who was just inventing the whole idea and they can build anything.
Creating New Product Lines
These guys and gals have built $2 million systems, $20,000 systems, everything in-between. You tell them what you want, they’ll do it. So, a whole variety of things that they can build. So, we have this ability to build things, solve the problem, get the system in place and now we have a product which becomes a standard product line, no longer custom. Isn’t that a great way to create cool new products, because, literally they’re being financed and everybody wins? It’s amazing.
Ellis: I was just going to say, it sounds like a win for everybody involved. That does sound amazing.
Investment Market For Water
Riggs: Think about it, there’s been no investment market for water. It doesn’t exist. Why? Because they were all huge. They were all billion-dollar municipal bonds. Remember how you could always invest in a “tax-free bond”, right, for a sewage system? Well, they still go on but you know they’re (scoffing sound). And now for the first time, ordinary investors, who were maybe investing in real estate, ouch, that kind of hurt didn’t it? Because it's not doing so well. Ordinary investors who got into oil and gas. Not so great this year either is it? Solar, which has been set back five years by COVID, water has not been a factor, it hasn't had a depression.
Why? Because there's never been any investment in it. And once people can invest in it, the demand for water is not going to change. COVID is not going to change the demand for water. No possible disaster could. In fact, disasters could only increase the demand for fresh clean water, right? So, it's really the ideal commodity because demand for it will never become less. And that's the pioneering we're doing that I'm so excited about. That I want to invite your listeners to come listen to me, report on every week on oc.gold/ceo. And I really want to see you all here.
Ellis: Well, Riggs, it's great speaking with you for the first time on our airwaves. Thanks so much for joining me today on the program. And I look forward to chatting with you again in the very near future. Thanks so much.
End of excerpt
The OriginClear Process
Riggs: So that's that show and the full Ellis talkshow is going to be available on the website, but I wanted to get on with it. We have something called The OriginClear Process™. Now probably the screen is a bit fuzzy right now because I'm still in video mode because the very first piece of this new PowerPoint that reflects what I was just telling Ellis about the breakthrough of the full integration is very interesting and I'll tell you more of a story about that in a second, but let me get going with this new video. The OriginClear Process™ For Solving Public Health Worldwide.
Video plays (watch above starting at 7:16)
Sanitation Is Survival
So, after that video, we talk about, so “sanitation is survival”. What does that mean? Well, we know that the Spanish flu, which is actually a Chinese flu, it was called the Spanish flu only because the only country that had a free press in 1918 was Spain. They're the only guys who reported it, and everybody else kept it a secret. It killed, actually, some say as many as 100 million people, and the cause was sanitation, in other words, the terrible conditions in the trenches in World War I. All the soldiers come back home, spread it all over the world.
Booms and Busts
Also, there was no running water or flushing toilets, and in fact, in most of the world. And that's true still in most of the world. But it's gotten better. So where are we at today? Well, we are better today. COVID-19 fatalities are much lower than Spanish hell, but we still have had the worst economic crash in history, worse than the crash that resulted from the Spanish Flu, which was, and you see, if you look at 1920-21 there, down 28.6%. That was the previous record, caused by up to 100 million people dying. So, it gives you an idea. Now 100 million people, compared to the population back then, is something like 300 million today. So, think about it. We have a very interconnected economy, and so it's really, really important that we stay on track with sanitation.
Still Using Outhouses
Now the situation's not very good. The United Nations reports that 1.2 billion people don't have safe water, and 2.6 billion do not have decent sanitation. They're still using outhouses and so forth. Worldwide, only one fifth of the sewage is treated. I say this very often, 30% of the industrial waste water is treated, meaning that 70% is not. And then finally, just in the USA, for example, we have 26 million septic tanks that generate 200,000 bacterial infections a year, and 100,000 viral infections a year. That's just from the septic tanks, and there's many other sources. So, we have to do something about it.
Unsafe Drinking Water
We also have safe drinking water violations. This is from the NRDC, Natural Resources Defense Council, and these are all the safe water violations that were reported. And you have a huge amount of violations here, and you can actually look these up by going to the Environmental Water Group, ewg.org, and looking under your zip code, and you will see the condition of your water. Not very pretty.
What is the problem? The big central water grid no longer works. That is the core issue. So, what does that mean? We've had infrastructure decay since 1960 at least. This is from a report by the Central Budget Office, Public Spending on Transportation and Water Infrastructure. This is from a Webinar by Lux Research. By the way, if you want the Webinar, just let Devin know. You'll see his phone number at the end, or his e-mail, and I'll give you access to the Webinar. Really interesting.
Anyway, Aging Infrastructure, Widening Investment Gap. I did not do the typo on Aging. That was not me. But it shows that, I mean, in 2012 adjusted dollars here, it went from something like 14 billion to 72 billion, so almost a seven-times increase. That's like when you don't maintain your old Toyota Celica, and it starts to bleed a lot of oil and stuff like that, or you have to keep maintaining it. You're not getting a new car. You just keep trying to maintain the old car.
The problem's getting worse. The investment gap will turn into 150 billion, added each year, over the next decade. This is horrendous. So we have this enormous gap. And you can see in the graph there, it's not a small number. The spending is the blue, very small, and it's what, on 2025, it's around 45 billion, whereas the need is 160 billion. So, you see how fast this grows. It's horrendous. Now, you and I don't feel it when we can flush our toilets at home. We have clean, clean-ish water coming in, but this is not the case with businesses. And that's where the problem occurs.
So the answer is micro water systems, in other words, decentralized treatment at the point of use. I say micro water systems, because in energy, you have the central big grid, and then you have the microgrid, and more and more electrical activities occurring in the microgrid, not the central grid. Similar thing here. What is it? What do I even mean by this? It's also called point of use.
Point of Use
Well, here we have a picture, all these different locations, and they're doing their own treatment. As a result, the bottom there, the central wastewater treatment plant, is much, much smaller than it has to be. So low or lower volumes of wastewater, less water loading to downstream centralized facilities, and advanced treatment technologies, that's us, enabled localized reuse.
Technology barriers, there are issues. Scaling down from the huge is very hard. Number two, remote monitoring, meaning Internet of Things, IoT. Industrial Internet of Things, IIoT. System reliability, regulations, that's being solved. So technology is very much needed.
Okay, finance. Wall Street finances big central water projects with bonds, but there's no such marketplace for newer micro water projects. As a result, funding takes months, if it happens at all. That's a big issue that we noticed is slowing things down. And the micro water projects are the ones that are going to save us, because they're small, and they can be rolled out quickly.
The OriginClear Process
The OriginClear Process. This is really interesting, because a few months ago I was saying, "We've got an old part of our business, which doesn't grow fast, which is the Texas operation, and Modular Water, and so forth. And it's doing fine. It's not going to grow fast." And separately, we're building Investor Water™, which is the financing thing.
Recently, they became integrated. This was a result of our pilot programs. This is so exciting. And Tom's going to be telling us about it, about this in a minute, but let me just run you through it. First of all, of course, we raised millions of dollars to develop this process. What are the investments? For example, our core technology and acquisition, licensing of patents for self-standing Modular Water Systems, and the current pilots of direct investment in micro water systems. So that, these things have all added up.
Our Texas manufacturing operation, right there, the silver haired guy is Marc Stevens. He's the head of it. On the left is Dan Early, our chief engineer for the entire company. He's an amazing guy.
And he is the inventor of our unique modular technology, roll-on, roll-off systems that can be deployed quickly. Also, if financing goes sour, you can always take them back. That's what's the key thing there. And that's Dan Early, who licensed it to us for 10 years with relicensing rights.
And then, our water investment pilot, which you've heard a lot about, which I won't get into, but basically it's how you create this Airbnb for water that I was talking about.
Okay. Now, here's the full process integration, and this will be animated. This is going to be cool animations. Literally, I wrote this today, so bear with me. Customer requests a solution. "I've got a problem with my," well, let's say, "a 200-home subdivision that I'm building in Alpharetta, Georgia. It's off the grid. I need a closed-circuit wastewater treatment system." Dan Early or Marc Stevens design the system. Then we work out the financing, either normal leasing, or this new alternative of it that we're working on. The custom system is delivered, then we standardize a product. And now we market the standard product.
We have a case study. Pool Preserver. So, this device here was built originally as a custom solution. And what it is, you see the little pipes snaking into the pool and back. It's basically a recirculation system. What it does, over a period of six or eight hours, is it completely replaces the water in your pool, and you don't have to drain the pool.
Important, because when you drain pools, they crack. On the bottom right, you'll see a pool that lifted up out of the ground. Because the water table, like in Florida, is so high up, that when you empty it out, the pool goes up. These are all very common problems. So, you don't want to empty out your pool. This is a very expensive problem, by the way.
We worked on a recycling solution. Here's the guys working under the trailer. Here at the left are the membranes that are going to go in, and then the final solution is there.
Financing. Now, we did some creative financing for the Pool Preserver and as a result, it was possible to do, and now we are piloting how we can do this more and more. Because we set this program up and publicized it, we have a lot of leads, people who are interested, and Tom is dealing with those leads. And again, we're still in pilot. This is not an investment offering. We're doing this stuff on a one by one basis, working with leasing companies or sophisticated investors, but it's not an investment offer.
Now, here on the website, you'll see that we've actually put the business model in place. So, we have all the ways that it creates benefits, and there's a whole what they call pro forma, which is the theoretical business model. And it goes on, the page goes on and on. It's all up there in the website. And it's now a center product on OriginClear.com.
So, that is the exciting thing. Product line now has... We've developed an entry level product, which is inexpensive, and a full size one. We're achieving price efficiency. We're getting leads being generated through our marketing. These financing solutions are putting pool cleaning people into new business. Here's Ryan Koistra who, like millions of others, found himself without a job, and he said that, “The timing could not have been better. I'm super excited, already thinking about a second one." He's making good money. He's, I think, paying something like $3,000 a month for his unit, and last I heard he was doing 14 - $15,000 a month. And this is what's great. You deliver the machine, you plug it in, you go do your other pools. Come back, take it out, it's additional revenue at the same time. And we're planning strategic partnerships with pool companies and distributors.
The winning combination for this was Progressive Water Treatment fabricating it custom. Modular Water, doing the prefabrication, the designs of it. Then the financing that was done. We standardized the product line, total win for pool industry, water savings, pool saves from cracking, businesses created at a time of major recession. This, I feel, is the winning combination.
An Amazing Group
Now, PhilanthroInvestors is an amazing group that has done a wonderful job in real estate. And that company that they've built is number 128 on the Inc. 500, 3,000% in two-year growth. And they basically have the philosophy of helping people, in this case, getting into houses they could never get into in the first place, and also making money for the investor. Now they reached out to us to go into partnership with us. And I hasten to add that none of what we do, they don't endorse it, because here's what they do: they engage in the rigorous screening processes to certify, and so they are actually interested in making sure that these things are high quality products and services, et cetera. So they certify, they educate, they entertain, confer protection, create a community. Very exciting people and we're honored to be licensing their brand from them, and also to be working with them on improving our process.
Now, you ask, how can I invest an OriginClear? Remember you can't... It's the Airbnb story. In the beginning you couldn't invest in the actual Airbnbs, they didn't exist. You invested in Airbnb itself. And this is the opportunity itself.
Well, it's for accredited and offshore investors only. There is this corporate bond where you get double digit yield. You get an immediate grant of a quarter of your investment as stock that is in a protected zone that you can then, when you convert it into common stock, it's converted at the price then. And also, by the way, if the price goes up, you capture the current low price. And then you can redeem the investment at any time for twice... If you invested $100,000, at any time, you can redeem it for $200,000 in the stock. Priced again at the time of conversion, which tends to protect you. Of course, there's no such thing as a sure thing in stocks, but we've done our very best to protect you guys. It's $100,000 unit, but you can invest in fractional.
So, why invest? Well, to help us develop a direct investment marketplace, the Airbnb for water, and also this unique OriginClear process, we think, will drive the micro water systems market. So we'll become dominant, we believe. You get paid to wait. You get double digit dividends, convert to stock when the time is right. And you will have a chance to join the PhilanthroInvestor network of investors who also do great work in real estate, as I said.
All right, and here's the action which I'm going to get to later. And the notice is, okay, so that is our new standard corporate presentation. And so I'm going to flip back here to...
The Tom Marchesello report
Riggs: Tom, it's all yours. How're we doing in Texas? How's it going?
Tom: Texas is actually doing great, man. I tell you, the team is just cracking this month. I'm very impressed and very proud of the team. Honestly, probably the most amount of active inbound leads, plus new purchase orders, plus new proposals all at once. Our big discussion today was that we need to actually hire another person. We need another engineer and we're probably going to need some improvement to our process just to get all the workload done. So that's on the table and I have to actually wrap that up tomorrow with the guys, because we actually have that much work. It's really cool. So very excited.
Riggs: Wow. Well, in fact, what I thought we would do is, is I went ahead and redacted one of the proposals that you sent me as an example.
Tom: Yeah. So, I can explain what this is. We put proposals out when folks ask us to do things like pump stations. So our Modular Product Line of pump stations has caught on with a lot of the consulting engineering community who service small cities and towns. And so, what happens is when they get an order for pump stations, typically they'll get an order for multiple pump stations. In this case, this is an order for four pump stations, actually, of our design, where we basically just do one right after the other for a municipality. So basically, shows how we put the whole thing together. These are pricing in at about $115,000 a shot, plus our services and some other costs for installation and startup.
And you can go through, it shows a little bit about the design, shows actually our equipment, shows the materials we're going to put in there. That's an example of one of our pump stations on a big flatbed that's being delivered.
They're fairly sizable obviously, and this gets into the actual equipment that's inside the pump station basin. So, you can see the pumps and grinders and so forth that we'll use in the device. And it goes through our terms and conditions and so forth.
The reason why we're showing it is because we're getting good at standardizing not just our products but also our business process. So, this way we can turn around our pricing quotes and we can turn around our proposals quicker. Those go into the hands of the engineering teams that we work with. They're able to understand them and then repeat the process again. So, we can bid on more projects more frequently.
Riggs: Fantastic. So that's the last page there, and this shows all the things that Progressive Water does. And now we'll turn to a very cool product, which is really interesting for us now. Why are the booster pump stations so interesting for us?
Tom: Yeah. Booster pump skids are just like a bread and butter product for any kind of issues in water. So especially in industrial and commercial environments, a lot of times they have pumps in place for some different processes. But often what'll happen is they'll become overloaded or they're just too small. So, they need a bigger pump, a booster basically, to make the water flow faster. So, a booster pump skid, because we assembled the entire thing as a unit at our factory, and it's ready to go, you basically can drop it in and plug it right in, turn it on and just start pushing the water. And there's no downtime for waiting and so forth. So it's very, very popular, very important product because then the manufacturing process or the industrial process does not have to shut down at all. It basically continues to just rip. So that's why these are really important from an industry standpoint.
Standardized Products and Consumables
Riggs: I love what you're doing because what you're doing is creating all these standardized products and, in fact, the other interesting thing that's going on is we know that a very important business builder is consumable sales, right?
Riggs: When you're selling the filter, replacement filters and such.
Tom: The membranes, gaskets.
Riggs: So what happened? You had a big pop. What happened?
Tom: Yeah, we had 200 grand in one month on that.
Riggs: Usually it's 50, right?
Not Just “Waiting for Business”
Tom: Yeah, 50's pretty common. We're always selling filters and so forth, but in this case we had some additional orders, we also actively have been out selling membranes. Literally we sent an email out to more people, saying, "Hey, we're here in Texas. We're still doing-"
Riggs: Wait. You didn't just wait for the business to come?
Tom: No, we didn't. We actually told the people we were alive and doing things, and people respond to that. Look, it's important to tell people every now and then that we're in America, we're in Texas, we're doing stuff as Americans, and people respond to that because there is some issues right now with supply chain, of issues coming from overseas and people are getting hurt with it on their project. So, they like the idea that we're trustworthy and we're right here.
Riggs: Reassuring. In fact, we're getting a lot of mileage out of the fact that we are Texas, not China or wherever.
Tom: Yeah, absolutely.
Riggs: I like where the numbers are going, and Tom I appreciate your hard work on it.
20% of a Home’s Value
Tom: Thanks. And thanks for your mention of the Pool Preserver, I literally was on the phone a bunch today and yesterday and the day before by people interested in the pool product, which is really great. And then we have some awesome new designs that we're excited about, that'll help as well. It was funny, actually. Dan and Mark and I, we were trying to explain to each other actually why it was so important, and we came up with something that we thought was useful, because when you think about a pool at somebody's house, they're spending on average about $55,000 to a hundred grand for these beautiful back yard pools, right? And it's kind of an elite or premier status issue to have great stuff and they want really awesome water, so when you think about it, it's like 20% of some home value is in the pool. That's a lot, right, in America.
The Best Water Possible
So think about that, that 20% of your home value is all around your pool activity, so you want to really take care of it because you don't want the chips and the dings and the stuff. And when you really start explaining how valuable the pool is and how much money went into it, people are like, "Oh yeah, reverse osmosis pool cleaning is totally what I want because I want to take really great care of that. I want the best water possible." So people are... they get it. They're like, "I really like that."
Riggs: Yeah. And speaking of reverse osmosis, we can't say who yet, but that hotel chain that we're working with is starting to give us orders. Very exciting. Again, a testimony to your incredible persistence, Tom, because you have been all over it for months.
A Steam Roller
Tom: It has been a while. No doubt. I joke every now and then, going, "At least we're slow in the industry for water." But that's kind of the irony of it all, right? We know that the industry historically has been slow and there's a process to it, but Dan would like to tell you it's more like a steam roller or a train or Titanic. Once it's on track, it just keeps on plowing, so I honestly think we're on this track now where we're just hitting it and repeating it, and now it's just going to chug its way along and we'll just keep executing stuff.
Riggs: Amen, and again I appreciate that. I'm hearing great things. And of course, we're still carrying out this financing pilot when we believe is going speed things up.
How Can You Participate?
How can you participate? Again, preferred stock offering a corporate bond, double digit dividends. We've covered this before. And here's your contact information; 877-440-4603. Ken Berenger; the amazing Ken Berenger, at extension 201. Devon Angus at extension 116, or email email@example.com. Schedule a call with Ken. This is super cool; oc.gold/ken, grab a slot, you're talking to him. Feel free to harass him. Tell him that he needs to, I don't know, shave. Something. But call him. Schedule a call with him. I'm just trying to give him a hard time.
Anyway, so I'm going to just check some of our chats here, and with that I'm going to... So, Darrel. We've got Darrel saying, "Glad you're here, they like the heat of north central Texas, from Weatherford, beats the Florida humidity for sure.” Actually, both myself and Tom on this show; we are in Florida, and in fact the company's headquarters recently was relocated to the Tampa Bay area, but our manufacturing is for sure in Texas.
Darrel wants a tour of the Texas facility. Just email firstname.lastname@example.org, we'll take care of you. It's been a packed discussion. I'm super excited again about the OriginClear process. You're going to be hearing more and more about it. It's more holistic. Where I was working on it before, I was doing the financing here and doing Texas over there, and Modular Water. Now it's become one whole and it's all generating a product line.
And I invite you to go to the actual website, which is originclear.com, and there is a whole page, as I've told you, for the Pool Preserver, and you're welcome to take a look in detail. This is a super cool product, here I'm showing you. It's under “Water Purification — Pool Preserver,” and right here you've got this cool thing with the video presentation and all the cool stuff. I won't get into it with you because we are out of time but there is a whole gallery of photos. Kevin Pruett, our content marketer, did a great job here. The benefits, the proforma, all the way down, technical factors, the announcement that we made, and the form. So, do join us. Feel free to reach out.
Everyone, I want to thank you for being with us; for sticking, virtually everyone stuck around, so thanks for that. And have a great weekend. I'll see you in August.
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