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CEO

Modular Water Makes Startling Progress

Jun 25, 2021 9:21:03 PM

Insider Briefing of 24 June 2021

The breakthrough week just reported from Dan and Robb won't leave any doubt! Meanwhile, Environmental, Social and Governance (ESG) is a megatrend. And the $H2O™ coin? Forget bitcoin, the future is falling in line with our $H2O strategy and the BIG picture for water.

 


FEATURED/COVERED IN THIS BRIEFING — QUICK LINKS


 

Transcript from recording:

 

20210624 WITNG title

 

Introduction

Riggs Eckelberry

Hello everyone and it's time for the CEO briefing. I've got Tom Marchesello on board and he's got his special report coming up. He'll be joining us shortly. All right. So without further ado, Water is the New Gold. And it seems to becoming more and more true as water rates inflate like crazy, and we're helping you thrive in the world's only vital, scarce, and recession proof market. It is Thursday, June 24th.

Okay. Now, just to remind everyone that this is being interpreted in Spanish in real time. So if you go to the bottom of your Zoom screen there, your Zoom box, there's a little globe. Choose your language and Heather will be speaking to you in a beautiful fluent corriente Spanish. And I really appreciate that. All right.

Safer harbor

 

Forward Looking Statements

Safe Harbor statement, of course. We do our best to tell like it is, but of course it doesn't always work out that way in which case we correct it. All right, I'm going to make it through a quick video. Now, what this is, is we're building a reel and we're doing a ... Basically, this is the reel that we're sending out to the press. It's not complete, but I thought I'd give you a little first peek at what was done.


Start of video presentation

 

Riggs by the bay copy

 

Riggs: 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. Viruses, 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, kick it up a big notch.

 

Waater Solutions Worldwide

 

For we to be water-wise water, especially wastewater, has gone from being a liability to an asset. And that's if you treat it properly, you can reuse it for agricultural purposes, for industrial purposes, as drinkable water.

 

Riggs-Evangelist

Commentator: Joining the company is Riggs Eckelberry.

Riggs: Well, it's roughly 300 barrels.

Commentator:  We also have Jim Rogers. He's the chairman of Roger's Holding.

Rogers: What does it cost to make a barrel of oil from algae?

Riggs: Well, glad you asked because we just completed a study that showed with all the new technologies.

 

Riggs- Energy Equation

 

Riggs: And that's our role in the short and medium term. And it will build our industry.

France has a major thermo regulation that is requiring builders to meet.

So what you're watching is a time lapse of about an hour after we've done our a little process and what we do...

 

Riggs Oil Production
Riggs: And it's our position that if the oil industry can address this proactively, there's going to actually be perhaps a lowering of the temperature.

 

Riggs Water Cleanup

Riggs:... the water utilities, the large water companies, the device manufacturers, and so forth to the table and create a project together.

In the water industry, people are accustomed to being bought out and they go golfing and all their businesses destroyed.

 

Riggs -Exec Interview

Riggs: China, this year alone, has allocated a third of a trillion dollars to water cleanup.

 

Riggs -JRS Show
Riggs: So we have not been invited in our water system since 1960.

Interviewer: Wow.

Riggs: And it's catching up.

 

Riggs - Spain

Riggs: They will be able to take full advantage of the European market with this system.
We're kind of the mouse that roared. We're kind of amazed and blown away.
... is water as a career.

Show Host: Were you ever afraid of failing? And did you ever consider quitting?

Riggs: Every single day. I think you...

Host:Still?!

Riggs: Well, no. By now, I think I'm relaxed.

The decentralization of water treatment means that we no longer need to establish giant water treatment plants at the level of the city because there's treatment happening at the point of views. These are concepts that are blossoming all over the world and they're being enabled by the idea that do it yourself water treatment.

End of video presentation

 

Environmental, Social, Governance (ESG)

Riggs: That's getting there. It's kind of fun. And I'm going to turn off the sharing so I can put it back in the regular mode, but there'll be a better version of that soon, but it kind of gives you a first look.

All right. So we are going to now shift over to regular text mode, as I said, and I just want to get into the next chapter of this. There we go.

Voila, Tom, Tom Marchesello, Chief Operating Officer has been busier than a one-armed paper hanger. Lord have mercy. He's a busy boy.

Tom: Paper hangers. It's been an interesting week for sure.

Riggs: Well, you sent me an interesting report earlier today, which I wanted to quickly recap with you. So I took the highlights here and ESG, so tell me what's going on here?

 

ESG Boom


Tom: I love ESG, so Environmental, Social and Governance. The buzz word for clean, green, and sustainability. The investment world finally got on board with this about a year, two years back, but all of a sudden it's become the mega trend. And it's the biggest mega trend that every major wall street firm and analyst shop around is mentioning. They're saying if corporations aren't on the ESG bandwagon and train, they're getting dinged. So everybody's on board, everybody's got a metric and everybody's drumming the beat, so we're seeing it showing up in real time.

ESG - Clean Water Finance Access

 

The Sweet Spot

Riggs: That is super cool. You spotted that out of the six major mega trends, two of them are this, right?

Tom: Yeah, clean water and access to finance. And you've been talking about this for some time and that's exactly what the repositioning of OriginClear's business model has been about. So we are right there in the sweet spot of what everybody's saying. They care about free ESG, so aren't we looking good?

Riggs: Now we are in the sweet spot and here's what's interesting, people go, "How could it be that, isn't there plenty of money for water?" And the truth is, is that there is a lack of finance. First of all, crumbling infrastructure, not crumbling water infrastructure. These are not our words.

This came directly out of this MarketWatch story. So we know this is happening and everybody else knows it too. And water demand is doubling every 20 years, which is kind of ridiculous because that's a lot of growth. And meanwhile, there's this lack of money and there's this core group of people, about 4.6 billion people in the world that just don't have the right access to water, safe water, finance, et cetera. Pretty amazing.

 

Thoughtful Leadership

Tom: Yeah. It's a really interesting moment in time where all this is really coming together and hitting all at the same time. And the attention is really put on it at the right level. And there's actually really thoughtful leadership being put out there, whether it's PWC, accounting, or BlackRock with their implementations or Goldman Sachs. And there's actually a lot of effort and a lot of thought that went into it.

Riggs: Somebody asked what is ESG? There we go. Ken just told us. Environmental, social, and governance, wall street investing big and clean and green tax breaks to companies, et cetera.

What it really is, is that you have to qualify. to be an ESG company. Right. So Tesla got on the list and I think he had to first say Bitcoin was no good. Then he was put on the list, right?

Tom: Notice the mining of the cobalt.

Riggs: Yeah. And now, of course, he's like, "Well, maybe it's okay after all." It's like, whatever. But putting aside the cynical statements that I'm making, ESG is basically an amazing focus and it's a $30 trillion asset market, it's shockingly huge. So it says a lot about what matters and it has become part of our daily corporate existence.

 

MWS 18M prospective bids

 

The Preferred Choice

So, now speaking of our own little ESG company, there's been some headway. Modular Water Systems™, we launched this while you were still working with me on WaterChain™. We did an acqui-hire, I guess you could say, we brought in Dan Early, who had been building another company, and we invested in Modular Water Systems.

And Bill Charneski was put on the job, and we've been building ever since. And my complaints are well known about how slow things happen in water, but nonetheless, we've got, you were telling me about these webinars. You've been jumping in on them yourself.

Tom: Yeah. I get involved in some of the webinars or just some of the business development calls with the executives. So what we found was that Dan, is an incredible talent, I mean, he's just so bright and so professional as an engineer in his space, where people really want to listen to what he had to say. So what we had identified was that if we followed a process where we engaged consulting engineers and we engaged builders and developers who were putting systems in place, we would be able to specify equipment that would help them on their projects.

We knew it was an education cycle then followed up by an engineering cycle. So we assumed a long process and what's happened is, now it's hit pay-dirt. Now, after talking to hundreds of engineering teams, as well as their managers, they're understanding what we do and how we're pretty much, prefabricated in a box, designs ready to go and we make their job easier. So now they're actually specifying us in their proposals, picking us as their front runner. And now we're winning contracts. And this week-

 

Basis of Design

Riggs: Wait, hold on. Before we go to that, because I'm about to do the reveal on that. What does basis of design mean?

Tom: So basis of design means, when they're specking their engineered design for a wastewater treatment or a freshwater treatment, they choose our equipment as the design, the preferred engineered design. Our equipment, our specifications, and our requirement as the baseline.

So now we become the standard that's going to go in to fulfill that requirement. Say, for the wastewater treatment, and we're the basis, that means that it has to meet that standard or better. And now we're green-lighted to get the award. As long as they get their contract, our equipment gets selected.

Riggs: So, in other words, you can buy any car, as long as it's got a flying lady on the hood, meaning Rolls Royce. It's very hard for anybody else to step in. Am I right?

Tom: It would be hard to push us out, yeah. They would just have to lose the contract technically, for us not to get it.

 

Repossessable:

 Riggs: Okay. And then the final thing really is very important for us because we're busy doing the business, Water On Demand™, which is financing these systems. And we are in a place that is facilitated by this technology because, if we pre-fund somebody's water system, and there'll be an update shortly from Dan on that, then it needs to be something we can take back if they stop paying. And that's unique, I think, right?

Tom: Yep. Hook up the truck and tow it out of there.

Riggs: That's right. Repo man.

Tom: No, not kidding, it's like that movie.

 

MWS 558k order

 

Big Breakthrough

Riggs: That was a good movie. Good movie. New breakthroughs. Dan Early and Robb Litos, the dueling duo. What do they bring us? Well, the first thing they brought us was, baboom.

Tom: Boom. And I got that up in front. It's actually a little bit higher than that, which is fantastic.

Riggs: Okay. I'm going to, what I'm going to do is I'm going to see if I can pull that up, the actual redacted version and show you guys this, I just need to get on the right... Here it is. All right. I'm going back into share. There we go. And here it is.

Tom: Right. Purchase order in hand. That is what you're looking at. That is somebody signing and sending in that they're going to pay us money and buy that thing.

Riggs: It is a town actually, a town system. Membrane bioreactor, what's the two B's. What does that stand for?

Tom: You know, biological.

Riggs: Biological bio. Okay. Membrane biological bioreactor. That sounds redundant.

Tom: Moving bed bioreactors, typically MBBRs are, it means that we're using a process where we're moving the water around between these bio reaction filters to push the waste against the membranes and clean the water.


EveraTREAT MBBR

 

EveraTreat

Riggs: And this is called the EveraTreat™. It's one of our key Water On Demand™ systems. And this is for, as I say, it was for a town and there's all the specs, all that good stuff. And here's the price. So basically it looks like there's about 20% up front and about 30%, so they'll have paid by commencement of manufacturing, they'll have paid 400 grand, about, right?

Tom: Correct. Yeah. So it's important, we try to make our contracts strong. So that basically where upon delivery of that machine, we've made sure we've covered all of our expenses and we even built in some buffer and some process, plus there's even engineering fee in there, so that we're really collected upfront on this. So it's a good example of us billing more strongly too, for the product.

Riggs: Fantastic. Well, that is really cool. So let's, gosh, and there's more.

 

MWS 3 sales

 

Effective Equipment

Tom: There is more. Dan and Robb Litos have really done a great job. They've really stayed on their follow-ups, as well as, making sure they're in front of the right people. And so what happened is, we were starting to really clip off getting another one. So then this EveraMOD™ deal popped in, which is our pump station, lift station deals. And it's a perfect example of, again, one of our highly engineered prefabricated solutions, engineers loved it. They're ready to sign and get going on it.

Riggs: I'm pulling it. I'm busy pulling it up because here it is, I have to be discreet about the parties, which is why I keep going in and out of share here, there we go. Here it is. So this thing here was approved. It is, there it is, 91,000. Is that small, medium or large for a pump station?

Tom: It's pretty standard. It'd really be right smack dab in the middle of the range, because 48 would be the smaller end and 92's are on the big. So it's just right in the middle of it. And it's a fairly normal size, it's a good size.

Riggs: Yeah, no, it's, 66 inches is a pretty large system, from what I understand.

Tom: Yeah. And these are really effective pieces of equipment, but they're very, very capable. They save a lot of time with the guys that are engineering the final implementations because this is going to show up and just be ready to pop right in the ground. That's a big win for everybody.

Riggs: Well, that's excellent, but that's not all folks. You got another one.

 

AquaSKID BroncBoost


AquaSKID 

Tom: It's like roll back the curtains. Go AquaSKID™, which is basically our BroncBoost™ on steroids, which we're really excited about these booster pump skids, and so we had a opportunity to make a really big one and really helping industrial clients get out there with what they needed on a really powerful booster pump skid along with a water storage capability so includes some specialty tankage along with the skid to really push extra pressure into a needed area. So that's a really a powerful, it's triple a booster system basically. Sometimes we do one pump, two pumps, or three. This has three fairly sizable pumps on it.

Riggs: So are we starting to think about a BroncBoost product line or what is your thinking on that?

Tom: Yeah, BroncBoost is a product line, so we're basically... we were looking at it really for the smaller end. We were trying to really make something a fast mover that was easy capability, but then what's happened is now that they see it, now they're also specking it for some larger opportunities. This one's a little more specialized, but again, once we get it in the flow, this becomes a product we can make over and over again.

Riggs: Wow, well that is meaningful, and I even did the math.

Tom: I know. How about that? Nice, right?

Riggs: 811,000. I think that does some good things to our quarter. I realize we don't collect it all at once, but-

 

Powerful Sales Cycle

Tom: It's recognized revenue which is always entertaining until you figure it out, but this is a really powerful sales cycle for us. So we're really excited.

Riggs: Yeah. I think to put it in context, the entirety of Dallas does a million dollars a quarter. Here, Dan and Rob, who use Progressive Water as their manufacturing facility, but they are the brains of Modular Water, have pulled in off almost a million dollars in one week which is... It just literally... If I'd had dentures, they would've fallen out, but unfortunately, I don't.

Tom: Yeah. I can tell you're excited. You probably had to stop whatever you're doing when I sent you the messages. I was so excited. I'm like I didn't have time to write the email. I'm like I'm going to text you and just tell you. You're like what? Well, that's great.

Riggs: It's kind of like when I was reading this week about this Russian who managed to turn a Ferris Wheel one full revolution by hand, and that's kind of how it's been feeling since 2018 like moving the Ferris Wheel by hand, but now it's starting to turn.

Tom: It is. I mean, I can tell you, even the emails I got today has two other projects that are right on the door that could even still drop in over the next 10 days in June. I'm like that'd be great. Yeah. I mean, we could really make some powerful stuff happen so-

Riggs: This is without even the water-on-demand stuff that we're working on, which I'll brief everyone on separately, but basically now, I want to make it clear to everyone that not all of the 811,000 is recognized in this quarter. It's milestones. So it'll be some percentage of it, but it will do good things, really good things for our numbers in Q2 for sure. So that's wonderful news.

 

Design-Build-(Own)-Operate

Riggs: Let's take a look at what Dan's got to say. He tests referred to DBO, design, build, operate, because he's not going to assume that OriginClear is going to come in with the capital, which is our separate project. The DBO model is fully outsourced, fully operated on behalf of the client, but the client is still paying for it. Then you can add the own part, which is where we own it and they don't have to pay for the hardware.

Let's take a look at some of their deals. Mobile home park in PA. Final review on construction plans, modular water systems and OriginClear to meet with the buyer final terms, discussion of focused on the DBO model. I can tell you this, some very exciting things happening on the funding side, which I'll discuss in a second.

Craft brewery. We are basically... It's kind of in the process. It looks like this is one of those process updates, not much to say. Same thing for the RV park. New design own prospect agri customer, and the poultry industry has reviewed it.

 

DAn 4


Tom: We actually talked to them this week also. That's going very well, and we're really motivated about that one. So we're hoping for something.

Riggs: Well, the poultry, the animal farming in general but especially poultry, is a very polluting industry. If we can show a big win there, it's going to lead to a string of other adoptions in the space for sure.

Campground. We had a technical communications. Regulatory agency is giving the customer a hard time. Yeah, baby. We love it. We love it when the law's on our side, and the DBO is on the table, which is good.

Dan 6

 

New Prospects

We've got a consultant specializing in decentralized, which is a growing group of consultants, and also new concession products. So that's a good step forward.

So all in all, what's happening is on the operations side, which you're responsible for Tom, you've got organic growth of the Modular Water Systems™ division while Progressive Water just continues to move along. Remember Progressive Water does the custom work, engineered solutions, whereas modular water tries to do things more standardized.

The boom in Modular Water is great because it's scalable. Progressive Water has a problem because to do more business, they got to constantly add more people. Modular Water leverages two people. That's the beauty of it.

Now, we'll have to add people I'm sure, but so organic growth on one side with modular water, and then on the other side with the DBO stuff, the outsourced water treatment happening, that's ongoing.

 

Offerings

Now, I promised everyone that I was going to give you an update on what's happening with the funding, and I have to tell you that Ken and I are beyond excited about what's happening. What we call the Series V, well let me get to that.

 

Accredited U

 

Series U is this regular offering, hundred thousand dollars plus-or-minus-type investments. Very, very, very good. When people finally figure out what this is, they can literally have it to four times leverage, et cetera. They are very excited. So this is very, very good.

 

Accredited V

 

Now here's the one that is intended to raise us $20 million for high net worth investors. So it's a million dollars we're looking for from an investor, and they have a secured position in the subsidiary that we've created. They have a security interest in the equipment, and they get a share of net profits for up to 25 years, which is the life of the equipment actually last longer, but we've only gone 25 years out. This is the net profits that can be packaged into a coin ultimately.

Now, this is going incredibly well, and I really can't get into it any further, but we have
multiple commitments, verbal commitments that have been made. And we're just going to, I think we're going to have some very good news there. And what that will do is, it'll enable us to fund those systems that Dan is talking to, and Dan can go back and go, "By the way, don't bother coming up with $350,000 for the whatever. We got it." And that will get these deals done very quickly, and it's also a more profitable model for us. So that's super exciting.

 

$H2O Coin

And along with that, there's developments. Ricardo Garcia, our advisor, he sent me a ... I wonder if I can pull it up. He sent me a signal, or was it a telegram where he ... oh, let me see Ricardo, I didn't put it in the ... yeah. Where the heck is it? Anyway, he had posted a trading picture of Bitcoin at like 38 cents.

And he said, "Wish we could turn back time," and I said, "Excuse me, the $H2O coin is going to be that opportunity. Why worry about trying to capture Bitcoin now that it's basically, oh, in the 30th. Okay, it's going to go to 100,000." Well, that's only three times as much. The people who went from 38 cents to 40,000, those are the people who made the money. So the whole market is looking for the opportunities to start low and benefit from these huge rises.

 

Lifetime Revenue Flow

What we've been doing is focusing on how do we have, basically right now, the coin that we have, that we've established, is for delivering the payments. These payments, it's kind of like investing, not in a UPS truck, but in all of the stuff that goes through the UPS truck for its entirety of its work. So that UPS truck is in service for 10 years. If you had all of the business that went through that truck, that's what the package is. That coin, quote unquote, conceptually is this revenue flow for the life of the program, this water system program.

 

Water Coin for the World

Now that's good, right? But the audience for this is going to be relatively small. These have to be accredited investors, high net worth, it's going to be an elite thing and crypto is not supposed to be elite. So now we have a much wider concept we're developing. I can't really get into it right now. It's so freaking exciting.

And it's going to happen really fast too, which is a true democratic community water coin for the world. I can't tell you how excited I am about it. Things have been going very, very fast. Ricardo has been super helpful. I think he's now no longer sleeping, because of course he has a more than full-time job at Red Hat, and now he's got this. So that's why I've put him in the audience, so he doesn't have to speak up.

 

CAll Ken

 

Call Ken

Anyway, that's the exciting stuff. So we have some great offerings in place, and I just want to remind everyone that Ken Berenger is really, really, really in the loop on strategy. He can tell you a lot that I can't tell you on this briefing. He still won't tell you stuff that is material, non-public information, he's very careful about that, but he can give you a bit more flavor, that I normally wouldn't give here. So, he's very, very professional about that, but he's also very helpful. And I think he'll be able to flesh things out. So you ask, well, what is this, blah, blah, how does this work, et cetera, he will walk you through it. So I recommend it. Please be accredited when you talk to him. We don't yet have the regulation A on accredit offering up and running, but we're working hard on it. There'll be more updates as that comes.

Thank You

 

Thank You

There's super exciting stuff happening with that, but I'm going to call it a day. It is a relatively short briefing, 8:31. I want to thank everyone for coming and next week, I hope to have you. I've been teasing you about this coin. I hope to have some updates. David, if you're raising your hand, just do a chat because we don't actually let you open up your screen on the webinars.

So anybody raising their hand is been better off chatting. So I'm just double checking. Ivan Anz, says your knowledge on investments will 10 X when you meet with Ken Berenger. True. Ron says have a great evening. Thank you very much. And well, there's been a lot of chatter in the background and anybody raising your hand, please always do the chat thing.

 

Creating a Social Movement

Everyone, thank you very much. Get your friends to show up next week, because I think we're going to have some amazing updates relating to the crypto area, and crypto is not just a fad. Let me just put it this way, every single tangible piece of asset in the world one day will be tagged as a token. That's a fact, that's where it's going.

We plan to have it happen for water. That's the domain we're carving out. So this is not CryptoKitties, although strangely enough, it's based on the CryptoKitties technology, weirdly enough. So it is a very important time to step in and own that space. How do we tag every gallon of water that's paid for? That's the core thing.

And then the wider thing is, how do we create a social movement around water? Isn't that exciting? I'm blown away. So thanks everyone. It's been great. Catch you next week, and it gets better all the time. Enjoy your weekend.

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