Insider Briefing of 5 November, 2020
We say Safety is the New Luxury™, and you'll see why in this briefing! People aren't traveling because they're scared...but OriginClear IS helping hotels be COVID-safe, and we dove into the details on HOW... In fact, water disinfection is a fast-growing market and when you look at the water quality… you know it needs to be!
FEATURED OR COVERED IN THIS BRIEFING — QUICK LINKS
- An update on the Water Philanthroinvesting™ book and locating a publisher.
- A sneak-peek at the documentary being filmed on OriginClear's COVID-spurred evolution to a new business paradigm.
- What we mean by Safety is the New Luxury™ and how it opens a whole new avenue for future business.
- The story of our landmark whole-hotel water system deal and where that stands.
- A glimpse at the quality of fabrication for the hotel project and why Progressive Water is at the top of its field.
- OriginClear's most requested product offerings.
- The proposal we made for the hotel system and the breadth of the system.
- OriginClear's hotel case study on carbon nutrient reduction.
- The world-class air disinfection system being incorporated into our whole-hotel system as part of the Safety is the New Luxury program.
- The use of UV against COVID and how this is part of our whole-hotel system.
- Shocking forecasts from Philanthroinvestors on global water over the next 30 years.
- A snapshot of water quality in America and why we must do something about it.
- How anyone can participate in doing something to safeguard and improve water.
Transcript from recording:
All right everyone and welcome to Water is the New Gold™. I'm going to start right away. So as people start showing up, thank you for your patience as we were getting ready. This is going to be a fast-moving and fun briefing. You will love it. Here we go.
The first thing I'm going to do of course, is do the honors with our little routine. Water is the New Gold. Helping you thrive in the world's only vital scarce and recession-proof market. We're very proud of being the most disruptive company in the water industry. It is November 5th. This is briefing number 86.
Okay, so moving right along here. We have a safe harbor statement and that's very simply that we are always very conscientious about what we say. We try and tell exactly what's going on, but we may not always be perfect. Of course these things are not guaranteed, shall we say? Quote, unquote.
Okay. Let's talk about something very cool that's going on here. Boom. We have a book in the works. How cool is that? Yes. The title of the book, well this is the sort of the description of it: Coronavirus: how an American company used the greatest economic calamity of our time to completely transform itself. I'm happy to announce we just signed up with a group called Lifestyle Entrepreneurs Press.
What's cool about that is that we've been talking to various people and they'd take money up front and all that good stuff, but then you end up with a book that it's kind of like the tree that fell in the forest, but nobody was there, so did the tree ever fall? Well in publishing, if you don't get noticed you don't exist. Well, Lifestyle Entrepreneurs Press is just an amazing group because they don't ask for any money. They will crowdfund it. Of course, with your participation. Then of course they get paid on the backend. By the way, if you're raising your hand, the best way to get noticed is to hit the chat line, hit the chat line.
Okay. Now what's happening? We signed the agreement. We are building the timeline of the transformation, which began on 23rd of January. That's when we first started noticing some crazy stuff happening in Wuhan. We know now that about a week or two before there was some intelligence briefings happening in Congress and so forth, but we were seeing a shutdown in Wuhan that we were very alarmed by.
There is also in parallel, a documentary that we're filming with some interviews. I'm going to play a little excerpt from what my brother, Stephen, here, "The men with too many cameras," what he's been shooting.
Transcript from recording:
Riggs Eckelberry: We know that the state of water is not great. We know that more people die from water than war. Billions of people don't have access to safe water. Many illnesses come from bad water.
You know, we're so concerned about viruses. Well, water is a very important transmitter of viruses and bacteria. What we want to do is to help take the general treatment of water in the world up. Kick it up a big notch. By that, I mean is let's take India for example.
This is an entire subcontinent that has virtually no water infrastructure. They have huge dam projects up in the Himalayas to deal with water movements up there.
But in places like New Delhi and Calcutta, there's people down in the sewers digging this stuff out. Many of them dying from the sewer gases. This is a terrible situation.
Now take a look at what happened with cell phones. When it came time to put Africa on the telecommunications grid, we bypassed the entire landline idea, just didn't do it. Didn't have to do that infrastructure. We went straight to cell phones. Cell phone towers, the phones are intelligent, you're done.
Happening in Water
A similar thing is happening in water. The decentralization of water treatment means that we no longer need to establish giant water treatment plants at the level of the city because this treatment happening at the point of use.
We have a partner in Mexico who makes a business of carting away the sewage from different companies to a central plant. There's no sewage pipes. Well, his idea is: Why not put at each place a little water treatment system? Brilliant. Then he doesn't have to drive his trucks around and he makes much more money.
These are concepts that are blossoming all over the world. They're being enabled by the idea that do it yourself water treatment.
End of video presentation
That is a little taste of this documentary. As you can tell, it's being very beautifully shot by my brother. What I'll do now is I'm going to talk about where we're going next.
As you know, I've was telling you today, if you're looking at the CEO update, that we have a very interesting situation. That's kind of taken over the story here. Safety is the New Luxury. What do we mean by that? Well, imagine trying to attract people to hotels. We're working specifically with a large hotel chain of which only 6 out of 16 are actually operating. They are super stressed. They are like, "Oh my gosh." Well, how do you differentiate them? How do they stand out? Well, one thing is, and I did a little survey of one. I asked my wife, "So honey, would you go to Hawaii if the hotel was COVID safe?" She goes, "Yeah, that's absolutely true."
If you think about it, COVID safety is a big deal. Disney World is operating at 30% capacity. In part because of course foreigners can't come, but also because people are just, they've gotten in the habit of staying at home. If they travel, they go very close. We have this problem of: How do we get people to travel again?
Ultra-Pure and Sanitized
One thing we can do is to make sure that the water that's coming into the building is ultra pure and sanitized. By the way, there's another part of it, which is treating the outgoing water, but that's later. Then ultra clean disinfected air that is proven against bacteria and viruses. That is the concept that is super important
Paul Fetscher said something very interesting. "The phrase you're looking for is Margaret Mead's concept of the retarded lead. If we're not overly invested in infrastructure, we can immediately move to state of the art technology i.e. China's growth in cell phones." It's a very good point, Paul, which is the retarded lead means that when you are retarded, not dumb retarded, but you're a laggard in technology, you can then leapfrog because you didn't invest in the earlier tech. Now you can go to the latest stuff. These are very good points and I appreciate them.
5-Star System for a 5-Star Hotel
Let's continue with this topic here. As you recall, in August, we sold a whole-hotel water purification system, and this was really where we really started paying attention to what we're doing because for the longest time we have been just selling systems. Our Texas operation, you want something built, they'll build it.
But over a year ago, a very prestigious hotel chain reached out to us based on our talking about these Modular Water Systems™. And they wanted that thing, that box and Tom Marchesello, our COO took over that process and very patiently worked with the chain because as you know, politics is everywhere.
So of course the chief engineer of the chain tells the hotels to adopt a particular technology. The first thing you're going to do is try and find something else. And this went on for months, but eventually we sold this system which is 260 gallons per minute.
We sold the system to this high-end luxury hotel chain. And what it is, is it's in a very competitive tourist location where there's dozens of hotels already. And it's a brand new hotel. It's actually a hybrid of a regular hotel with nothing special and this really high end one and the special water is going on the high end one not the lower end one. The system is being built now.
Now what it was was that this was sold not to the hotel chain, because as you know, in the hotel business, hotel chains typically are just the operators, and the developers, the landlords, so to speak, pay for all the development. So the hotel chain told the developer, you need to put this in and that's the deal that we sold.
UV Unit for 30 Gallons Per Minute Potable Water System
Great Quality Fabrication!
So this was our first step into formally doing this. And here's an example of how the tech is just... Progressive Water Treatment makes just the finest, finest production. This is only a 30 GPM water system. And so it's not the scale, but the reason I selected it is I just loved... Look at the quality of those welds and completely just the execution of the skid and so forth. So that is a really, really cool example of the kind of work. Okay.
Now let's talk about the package because we have a hotel and resort system package, right? So I'm going to zip over here to hotel and resort systems. So what do we have here? I'm just going to go through it quickly because obviously I don't want to spend all the time, but basically we have over 20 years of building these systems for real estate properties, but now we're turning into products. Tom Marchesello's job has been really to take our custom business and upgrade it into a product line, standardized because that's the only way you grow.
So sure enough we got that commitment in August and not only are they going to do this water cleaning, but also they're going to replace plastic water bottles, and you'll have in-room dispensers. It's all super cool. And of course unlimited, nobody's going to charge, you know, $4 for a bottle of water. Okay. But this is all super hip. And if they're using it to market.
Inbound, Onsite, Outbound
Okay, so then what are the three things we do? We of course clean the water, coming in disinfect it and purify it. Then we recycle it, if you want to buy that. This hotel didn't, but if you recycle the water, then you can use it to water the grounds. And that's typically used more in places like California and Arizona, not so much, let's say Florida, right?
And finally wastewater onsite treatment. Now that last one is where you treat all of the black water, not the gray water, because the gray water gets recycled into, you know, the shrubbery, but the black water gets treated in a way that you don't need to be connected to sewage.
And that is very much used for these more heavy duty environments where you've got to basically treat, let's say oh, glamor camping, glamping, right? When that camping site leaves, everything goes. And so you have self-contained water treatment, which of course we are experts at. I'm not going to keep on going here, but of course the laundry water is a major, major source of water waste. And that's typically what can be reused.
Number nine is that, is that rugged and isolated locations. Again, people want to go to the most beautiful desirable places, but those don't have any sewage. So we do all that great stuff.
And then what are the most requested product offerings, drinking water systems with kiosks sometimes, ultraviolet equipment, closed loop, toilet re-flush, which basically is, you know, the poop ends up in a tank and then every six months or a year, a truck comes by and takes it. But the water of course can be reused for a number of other purposes.
Not necessarily to drink. Toilet to tap is not a very popular concept, but I guarantee you that Israel did not get to 90% recycling of its water by avoiding toilet to tap. That's a major source. Anyway, you can drink the water if it's properly treated. And finally there's even cool things like outdoor agricultural water treatment, where you have organic farming gardens used for the kitchens. Anyway, really interesting stuff.
Here is the actual proposal that we did and I've scrubbed it. So you wouldn't know what the client was, but basically these are samples of the systems, the work that we do, systems that we buy and it talks about the city water quality, as you can see, for example, TDS, total dissolved solids, which is the salts and so forth running around 142 milligrams per liter down to three to 15. And then we have things like, oh, look at disinfection from 12.8 to less than one. That's huge. And then the pH is manageable as you can see it can vary with 6.5 to eight, and you just dial it in, the hardness, check that out.
Longer System Life
Now, hardness is very important because when you take the hardness, in other words, calcium and stuff out of the water, you've now made a lot of the equipment, the pumps and the kitchen equipment and so forth last much longer. And so it's actually really, really good for long-term usage. Okay. So these are some of the items that go into it. As you see pre-filtration, softening, carbon filtration, the RO, these are all things that you might have in your home hole system, pH adjustment. We have the ultraviolet light system, ozone generation, various control panels, and so forth. This is a complete system. It's state-of-the-art. I won't go into all the detailed stuff here, but as you can see, this is roughly the price.
Now, there were two choices. There was one major system that would be in the basement. And the other one was looked at, 13 floors. But then it didn't work out, it's $57,000 per floor. That doesn't really work out. You'd have more control, you know, they're smaller, but in fact it's much better to go with the central system in general. Okay. This is all the boilerplate, the small type. This is not one of our cool tubular looking containers, but it's still very, very cool. We do a lot of these containerized systems. So here's a little article about how, you know, what's special about this and so forth. And we have a case study, which I'm about to show you shortly. And here it is.
So now this case study goes into some of the, you know, the centralized versus decentralized systems and some of the standards that are being required for these hotels. As you can see, for example, if you're turning potable water, let's say 30,000 gallons per day into wastewater, then you have a certain amount of carbon, nitrogen and phosphorus. You can do something about it and you're removal of 19 tons, et cetera.
Now this is better than shipping it down to the central plant because you have a lot of this stuff escapes and it's much less efficient. It's better to actually do it on site. Paul, excellent statement. The long-term clogs of pipes akin to hardening of the arteries. Very nice. Soft water requires less soap, et cetera. Another very good point. Thank you because those laundries really, Paul is one of our, he's probably our principle real estate expert among our investor base.
Rising Costs and Water Loss
This is the picture. I'm not going to get into. This is an interesting graph. Check it out. Since 1956, operation maintenance has only risen, but capital investment has lagged. That is a big problem. Global water losses, non-revenue water and there was the water you don't make money from is one-third of all water supplied. We could serve another hundred million people, one-third of the United States without further investment if we just saved half of this. Scary, and it's going to take a trillion dollars, great. Trillion dollars we tend to spend it in other ways. Have you noticed?
Declining Federal Spending
Okay, here's another interesting thing. Federal water spending since the seventies has dramatically fallen and we have a real problem. Of course, how are you going to putting in new systems in built up cities is even more expensive.
All right, and I won't get into all this good stuff, but basically it says you can't fix central utilities, so you have to go decentralize. Okay. That's the water packages, as we say. We're fully capable of doing this.
Air Disinfection System
Now, the second ingredient is the air disinfection system. We've already sourced it. We were in talks already with the company, and they already have been certified by several academic institutions for effectiveness in reducing viruses and bacteria. I believe including COVID, but certainly they offer a complete disinfection.
Now, you have a choice. You can have the central air handling. Typically in a 200-room hotel, it might be six or seven of them, or you can have one per room and there's different philosophies on that but again, you spend less if you put it in the central air handling. I'm not going to tell you what this is, because we would like to properly announce it and I don't want people to get around our good connections just yet, but we don't love circumvention.
Audience Questions and Comments
Oh, Marilyn wants to know, "The loss of carbon, does that work for carbon dollars or credits?" Absolutely. It definitely has. It has a benefit in terms of carbon credits.
Darrell Polson, "Very nice. UVA with electrostatic precipitator that's really good."
We're going to go ahead and continue now.
What about UV disinfection and what does it mean now in this era of COVID? Research and Markets just came out with a market analysis, and this is the summary, and basically, of course, ultraviolet... I mean, this reinforces what you would think, right? Which is that the ultraviolet disinfection equipment market will grow during the analysis period.
Now of course, for water industry, big growth and water industry is 12.4%, but we're talking big dollars here. The water treatment market will be reset to a new normal, which going forwards in a post-COVID-19 era will be continuously redefined and redesigned. That is a fact, isn't it? Okay. If there's a new normal, well I'm tired of hearing that word.
Okay, and here's the second part of it. Even in areas that are very worse hit, then there's definitely, more business being had, but very interesting. The China, world's second largest economy, will grow 17.1%, which is really, really good. They are moving fast to catch up. The ultraviolet disinfection equipment market landscape is one that we are in and it's very exciting.
What it Means
Now I want to talk a little bit about where the world is going. These are forecasts. They're provided by our very, very good partners, PHILANTHROINVESTORS® and they researched this. Population is going to end up in 2050 at 10 billion. What does that mean?
Well, first of all, for 2020, we have a water consumption increase of 50%. Obviously over a decade, 1.8 billion people will live in regions with absolute water scarcity. Two-thirds of the population or 64% of the people on earth will experience water stress. That is shocking. In 18 countries, the water demand will exceed available resources. Just in other words, it's just not enough water. Period. That's one-tenth of the countries in the world.
All right, now, by 2050, this is the really scary stuff. Crop yields in Asia and Africa will decrease by 8%. One out of every four persons will live in a country with chronic and recurrent freshwater shortage. Finally, the most shocking of all 50% of the agricultural land in Latin America will experience desertification. That is very, very dangerous stuff. Well, you say, "Fine, but the US is okay, right?"
A Snapshot of Water Quality
No, I'm going to take you to the EWG, Environmental Working Group's, tap water database, and you can do that too. I'm going to show you, and you're not going to be very pleased to see what you'll learn. This is what it looks like and I just jumped directly to Los Angeles.
Now everything's below the legal limit, if you notice arsenic. The legal limit is 10 parts per billion. Well, in fact, science that's way, way lagging behind science. It's 520 times what it should be, which is 0.004 parts, and very similar for bromate, which all of these create cancer. Look at them. All of these things, they all have cancer effects, uranium, trihalomethanes, nitrate, all of these things, they're all well below the legal limits. These places can say they're legally okay, but you're not going to love it. That's the situation there.
You Need to Treat Your Water
Four million people are being served by the Department of Water and Power and I'm not saying the Department of Water and Power is bad. It's just, the standards have lagged and the government is not keeping up. In fact, you need to treat your home water and of course, the water in commercial buildings.
Water stress is a reality in the US and the world. We must act now. What does that mean? Well, the first thing that you need to know is that we can and should continue our job, our mission.
Oh my gosh, Darrell Polson tells us more. He says, "Lithium mining takes up probably 500,000 gallons per ton and gosh knows that lithium is a major, major, major piece of our supposedly sustainable society, right?" That's the grim underside of electrical, for example."
You all know that I'm strongly in favor of going electrical with cars and so forth, but we have to move beyond lithium and chromium and other heavy metals and minerals because they get into people's bodies. Simple as that.
What You Can Do
Okay. Now, a key thing you can do is you can help us create our future. Now, we make it worth your while. Why do we do that? Well, it's very simple. You give us the freedom. If we were doing everything with the resources of Progressive Water Treatment, our manufacturing operation, we would go very slowly indeed. It'd basically be me plus the guys at Texas and an accountant.
I mean, I do a lot, but in order for us to get places, to have world-class people like Tom Marchesello on board, it takes a bit of finance to grow into these new things. Developing this COVID, Safety is the New Luxury™ and so forth, which we think is going to be a huge product, that requires extra resources. And that's where we offer this bond:
Alternative Investment — Last Days!
Now, these are the last days of this bond. We are changing. And I just want to let you know that it's not necessarily worse, but if you like this model, then you might want to just talk to the team. Now, if you are not accredited, but you think you're close to it, we have a solution for you too. And that is to start with the unaccredited investment and then graduate. We have a graduation program that basically assists you if you are doing well.
The Y Economy
And this is the Y economy. Right. There's one side going up and the other side going down, it's an unfortunate fact. So some people are doing very well and they're maybe not yet accredited, but they will be. And so, it's where they might invest in the unaccredited round. And then over time, they might graduated into the accredited offering, which is this one. Very, very good economics on this. And of course, we have paid on time dividends for a long, long time.
Water As A Career
And of course, remember that we're building Water As A Career™. Let's say, for example, a hotel system gets put out as a product. Well then we're going to finance it for our Waterpreneurs™ so they can offer it to a hotel or hotel chain. And the hotel or hotel chain doesn't have to pay capital upfront because we have financed it.
And of course, that machine that goes into that hotel remains our asset because we're financing it. And that gives us the ability to create an asset base, to eventually go on to a national exchange, which is our ambition. My personal ambition anyway
And of course, eventually we want to get to that incredible Airbnb for water vision. You get paid to wait. You get those double digit dividends and you can convert to stock. The time is right at the price at the time, so that you don't have to worry about stock prices.
Take Ken's Call
And if you're an existing investor, please do take Ken's call this week. It's very, very important. I think you'll be very happy to hear about what's going on, but it's going to be for existing investors only.
And I'm going to wrap this up by saying that this is an offering that I just told you about that is not registered. The Securities and Exchange Commission is called a private placement. And of course, you should know that there is a risk of loss.
All right, well, next week we're going to discuss more on COVID peace of mind. And we're going to hear more from our friends at Philanthroinvestors who have some amazing things going on. And also, we always like to have excerpts from video material, podcasts that we get on and so forth. And I'll provide another one.
And Bob Roos wants to know, "When do third quarter results come out?" November 15th. And so that'll be just after next Thursday. I expect that it's going to be good news. And so, not next week, because that will be the 12th. It will be three days after that. I think the Monday. And we typically take the grace period. So the Thursday after that, the 19th, is when we'll be discussing the quarterly results and thank you, Bob.
All right. So, that's the show for this Thursday, the fifth. I have a friend who had a podcast where he told everybody, "Just to be very serene. Whatever your politics are, remember that all it is politics. What matters is family, health and your own wellbeing and doing something about the planet. The politics will take care of themselves."
Thank you all. It's been a great pleasure. Tim wants to know how to get into pool systems. Very simple. Type poolpreserver.com, and you will see a form. And you'll be able to get into it.
Ricardo Garcia says he completely agrees with my sentiment and likewise. And Marilyn says thank you.
So everyone, have a great weekend. Remember, stay cool. And Jen Contini would like the contact again. Yes, firstname.lastname@example.org is the email. Jennifer, just go ahead and email email@example.com and Devin will get onto it right away. Thank you all. Have a great weekend.
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