Video Cast Webinar Briefing of 13 Feb 2020
Helping You Thrive in the World's ONLY Vital, Scarce and Recession-Proof Market
In this Water Is The New Gold live briefing CEO OriginClear Riggs Eckelberry is joined by COO Tom Marchesello to discuss rising water industry trends, OriginClear's innovative new high speed products and the company's strategic role in the growing decentralized, self-reliant water treatment revolution.
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Water Is The New Gold
Riggs: Hello everyone and welcome to the live CEO Briefing of 13 February. I'm very pleased to have with me, Tom Marchesello, who's our Chief Operating Officer. Say hi Tom.
Tom: Hey, how are you doing?
Riggs: So, Tom is speaking to us from his home in Florida, we're becoming a multi-state company. We're very virtual. We have operations in Los Angeles, and Texas of course, where the bulk of our people are. Also, up in Virginia where we have Dan Early and Robb Litos. The Modular Water guys are fully integrated now with Progressive Water, we'll be speaking about that. And then we have in Florida, a growing presence, both with Tom on the west coast of Florida, as well as our marketing agency, AGM Agency, Manuel Suarez. A great, great team that is helping us put together this particular briefing project, which I'll be telling you more about.
But without further ado, I'm going to open up the share box and we're going to get into the slideshow.
This is of course, Water is the New Gold. As I say, it's “Helping You Thrive In The World's Only Vital, Scarce, And Recession-Proof Market.” There is noise about the Coronavirus. I say noise, only because nobody knows what's going on. Chaotic news. But one thing is for sure, China is shut down right now. I've been hearing all kinds of news, like the stuff I bought on Kickstarter is not going to come anytime soon. I can survive without the Kickstarter stuff, but China is in a bad place and they are the world's largest importer of oil. So, their demand just crashed. So logically, you'd think there'd be a recession on the way.
But don't count on that, because what's happening is the central banks are now flooding the market with money. Interest rates are going to go, we think, to inverted rates in the United States for the first time, meaning that you'll have to pay to get your treasury bonds, which could be interesting. Stock markets love that, so right now, the stock market's fine. But, let's just say that, in any market, there's always the danger of a recession. You want to be with something stable. And people classically love Gold, sometimes they love Bitcoin, although who knows? But they haven't really been thinking about water as an investment. Why? Because there's very few places to invest in water.
Next week, I'll talk to you about these huge water companies that have had a tremendous stock rise. Why? Because they're the only water investment out there, and they're tremendously stable. Veolia, American Water Works and so forth. Being enormous and stable, they're not going to grow 50 or 100% in a year, but they're not going to crash either. They have very steady backlogs of business and so forth.
So, how do you invest in what you might call a pure water play? That's where I think OriginClear comes in, because as I told you last week, all about the decentralization of the water industry towards businesses doing self-treatment, and we'll get a chance to talk a lot more about that with Tom. It means that the smaller companies have an opportunity to move in and work with these clients at the edge. Kind of like how landlines became cell phones, mainframes became PCs, and now this new revolution where mass transit is apparently going to happen with the self-driving car. So, all these trends, of course, drive things to the small. And once they're at the small, then what do you have from there? You have a tremendous proliferation of product.
All right, important notices. We’ve got the Safe Harbor Statement with the forward-looking statements, so you know that whatever I say here is not gospel until it happens. And secondly, there's an offering which requires accredited investors who must meet certain requirements and there is risk.
Water Is The New Gold - Improved
Now, this webinar is about to change. Water is the New Gold, is about to become the full video thing, a monthly presentation. Now what does that mean? It means that we're going to make it more interesting, exciting, more of a production, less casual. What you're seeing right now is Riggs, in a relatively casual mode, and it's going to remain personal, but it's going to be better produced, which is a good thing. We are also going to have a bunch of cool things: videos, interviews, full summary of the month just passed, what is in store for the new month, and of course at the right time for the annual and quarterly results, we'll be discussing those, and really impart a very exciting story. There will be a lot of replays available to people for the rest of the month.
Announcing Weekly Podcasts
Now, what about the weeks in between? We go back to the previous model where I'd be on the phone and I'd give you an audio briefing, kind of like, “Thoughts of the Chairman.” What it is, is that in between these monthly live video cast CEO Briefings, “What has been going on? What is the latest ‘oops’,” “Something huge happened in water where we discovered that there are tremendous toxins.” Whatever is happening that's new in water, that's going to be covered. Now, we happen to have all this on our podcast.
Yes, OriginClear Has A Podcast!
Bet you didn't know we have a podcast! That is because we haven't been promoting it. But, here it is. WITNG, Water is the New Gold. And if you Google “Water is the New Gold podcast,” it's on Spotify, it's on Google, and all the normal podcast platforms. You can see that already, we have been posting our entire archive of the 47 previous briefings. They are all in this podcast. So, every Thursday at 5pm Pacific, 8pm Eastern, I will be speaking to you live like this, but audio-only, and as well, it will show up in podcast mode the next day or so after the audio is cleaned up, and you'll be able to get it there. So that's a useful way for me to stay in touch on a weekly basis, but to kind of do the big production once a month, and I think that you'll really enjoy that a lot. So, that's that story.
Permionics At Chennai!
Permionics, our extraordinary partners are in Chennai. Remember that the Indian Membrane Society had invited me to deliver a keynote address to their conference, which is right about the 14th, so around the same expo, and unfortunately, I had to turn it down because of concerns about Coronavirus.
I'm told that a lot of people traveling from places like China, obviously have turned this down. But nonetheless, the expo's going on, and you can see at the bottom right, we have OriginClear and Permionics on a poster, and we're a part of that picture. I'm super happy with our Permionics friends. Thank you guys. That is the best. We will get some videos and photos, and report on that.
And Now, Tom Marchesello
Here’s Tom Marchesello. He is going to tell us about some developments. First of all, before we get onto this high-speed products concept, tell me what's been going on with your team, and how you've been welding them into a fine streamlined operation.
Tom: Oh, a fine crew they are, Riggs. They're doing good actually. The guys in Texas, I'm actually really proud of them. I really feel like towards the end of last year, and definitely in the beginning of this year, they're really getting jamming you know. As people know from the past, we were merging the groups together, the Progressive Water team, traditionally, which we've had for many years with Marc Stevens and the team. Mike Jenkins running sales over there, and then Dan Early with the Modular Water side, they kind of come together now.
We've got them all under one roof, with Progressive Water, and what we've been able to do is, really balance the ship between our amazing history of manufacturing expertise and getting things done. Texas, I kind of like Texas. I call them, the guys who just get stuff done, real traditional rugged guys, right? You know, “Made in Texas.” It's their own special brand and then Dan Early, super genius, inventor slash engineer, and you put that together.
Now, what I get out of this is, I get to standardize some really cool stuff, that may be like a “cottage invention,” or a product that was done often, but now I get to do it often, GREAT! Because now I'm bumping the level up, and I'm taking something that we have done, and actually putting it under the process of going through AutoCAD and putting it through the design process and the engineering process, and turning it into a standardized product. We know exactly all the inputs, what pipes we're using, what pumps we're using, and how you measure all the pressure vessels properly, coming up with a nice solution that is ready to stamp out multiple times. That is actually what is happening now. We are rolling off the line these instant infrastructure type products, which are filling part of the supply chain for the water industry.
We have all talked about our pump stations, which we're very proud of, but, in the pump station world, there are a lot of variations of pump stations. Big ones, small ones, all sorts of stuff. Things used for industry or things used for water recycling. But then there's also the actual assemblies that sit ahead and behind the pump station. Sometimes they're as simple as a lifting station, and a lifting station is basically, you know, water conveyance. It's just taking water from point A, and moving it over to point B.
What Are Booster Pumps?
But guess what? What happens when point A to point B is not on level ground anymore? Boop. Now, the water has to go from a low point in the ground, up to a high point in the ground. Well I’ve got to use a booster pump, and I’ve got to push the water uphill. There is a lot of pressure that's going to backfill in there, right? So, I’ve got to balance the line by pushing the water from the low end to the high end, and therein comes this wonderful product called, a booster pump.
What we did recently, is we stamped out our own version of the OriginClear awesome, kick-ass booster pump SKID. The booster pump SKID is kind of our way of saying, “Hey, you guys buy thousands of these things all over the place.” We want to put a booster pump SKID out there, which we call the AquaSKID™. So you can see it here on the top left corner, and it looks like these wonderful gold heads on top of them, like a cylinder that you might have in your Mustang.
So there's your pump – that is basically doing a lot of work. It's moving a lot of gallons of water, really fast, from one point to another, and making sure it pushes, it pressurizes the line. That is essentially what it does. You will see this kind of apparatus used anywhere in pipelines, industrial piping, to common things which I see all the time here in Florida actually. There is a ton of water on the ground, and they’ve got to move water from an open pit water pond into the water collection system and send it to another spot. So that is where booster pumps come in, all of the time.
This kind of product can help with our pump stations, because pump stations sit at strategic points in infrastructure. So, say two pump stations are 20 miles apart. Well, what happens if you get a little bit of lag in the middle, about five miles down the line? You're not pushing the water so good, or it's not getting to the right spot, so you use a booster pump to push it the rest of the way. Does that make sense?
Riggs: So, this is interesting because, what you're saying is, this about a $30,000 product. I mean, big custom projects are fine, but they don't scale up well. So, what is your product strategy overall, that this is one token of?
A Bread & Butter Product
Tom: This is coming actually from two points. One, is because we want to have a lower price product that we can sell more frequently, and is a more common bread and butter product. A booster pump is used all over the place. Everybody has got to use them. It's something that they also have to replace often. So, you'll get these in a lot of replacement and recycle projects. They're easy to order, you have to get them done fast, because if one goes down you’ve got to get a replacement, right? There is a lot of that kind of request all the time, and we're basically putting our hand up right now on a project, where somebody came to us even more recently and said, “We need 2,000 of these things.” I'm like, heck yeah, 2,000 of these things. That sounds great! We might make a few hundred, but I want the opportunity to make a couple thousand. We are basically trying to put ourselves at the right point to get an easy sale.
Riggs: We are talking about putting in a carpet, a base load of these products. Inexpensive, Tom was talking about 2,000, turning fast, they don't take six or eight months from sale to delivery. And also, they turn into larger sales. So, it is a great way to seed the marketplace. This brings us to a major strategy of ours, having to do with these low-end products in the industry. We've learned that there are two ways to expand a business and get into the whole world of “becoming large.” You can try and buy high-end water companies, even if they are small, they're still relatively expensive. It will be a two, three, four, five million-dollar acquisition. Then you get into this whole thing about raising money.
I progressed from this concept of the carpet of low-priced products that create a lot of turnover, but also create upsell opportunities to the big deals. So, you get the best of both worlds. But you, Tom, get to scale up this business as opposed to having to wait out a huge deal that takes eight months to complete.
The OriginClear Way
Tom: Right, because there are lots of things in our industry which are common. Whether it's membranes and filters, or whether it's booster pumps, or whether it's just, a station or a control panel. Those get used in lots of different ways, so we have expertise there obviously, and we also have our special version of why we do it because we try to make it a little bit more solid and industrial, commercially friendly, and we do it in ways that use remote monitoring. The OriginClear way of doing business. So we are basically saying, let's take these common things but put our spin on them. That's our innovation and it makes a very competitive product that is priced low, but is a nice introduction to the rest of our product line.
Riggs: Yeah, and so, we have that and then I was getting into how this is also affecting our acquisition strategy in that, it's very hard to buy expert water companies. Even if they're small, it's you know, these companies have been around for a long time, they have a lot of expertise, they have a lot of expectations for liquidity events, and so, is a three, four, five million dollar type transaction. That's all very well, but then you’ve got to start getting involved with investment banks, and not all of them are nice people. They are kind of destructive to a company to raise that much money, when it could be toxic.
So, what we've been doing is looking at the low end of the business, where we believe that we can deploy our amazing fundraising capability, and this is one thing that we have for sure is the ability to raise a large amounts of money because accredited investors, frankly, are a lot less toxic than Wall Street. Why? Because Wall Street doesn't care about your product. They care about their product, which is money. Whereas an accredited investor, and for those of you who don't know what that is, is basically an investor who is making at least $200,000 a year as a single filer, or a tax filer, or $300,000 as a joint filer, or has $1 million net worth excluding his or her home.
And so these accredited investors are interested in our cause, and they are not likely to try and damage the stock and things like that. Over the last year and a half, we developed this capability of raising money from retail accredited investors and getting away from the toxic money, which frankly, has been what is damaged our stock, has been this, this Wall Street money, these people, I love them dearly, but they're not in the game for us.
So we managed through the incredible diligent work of Ken Berenger, and now Michael Mann, helping out and Devin Angus, we've been able to develop a funding capability and create an acquisition plan which I'll be able to tell you more about, which focuses more on small investment requirements, lots of turnover as Tom is talking about, and very simple products and businesses that then flow business to the more expert veteran companies like Progressive Water Treatment in Texas, which Tom will tell me I should refer to as our manufacturing division, Texas, but it's also branded as Progressive Water Treatment.
Reviewing The Offerings
So coming back to the presentation, there continue to be questions about the offerings. So, I'm going to review the offerings. Now as I was saying, this current offering is wrapping up. We're busy planning a next offering relating to these acquisitions, which I really can't talk about because it's still a private matter, but at the right time very soon, we'll be into that business. But the current offering then is you must be accredited, again, making $200,000 a year pre-tax, or $300,000 as a joint filer, or you're an investor based abroad, okay? So, you're not a foreigner, but you're a foreign investor not investing from the US.
Let's say that you invest $100,000 which is the unit, right? It can be less, but let's say it's $100,000, we will pay an 8% dividend on that, so you're making $8,000 a year, paid every quarter, so $2,000 a quarter, and then a full repayment of that investment in two years, and it's secured by our Texas manufacturing division, and then a grant for 50% of the investment of stock. So, this is cool because now you get $50,000 worth of stock, that you didn't have to pay for, and right now, that's smart because the world is really about protecting investments, it's about security, about how can I have, you know, something to back me?
This is not the wild 80s and 90s, this is the 2020s, and frankly, it's about what you can feel and touch, and that's what this is about. It has been a very successful offering. It has allowed us to do a lot, as I said to get away from Wall Streeters. The people that we love so much, as I said. It is even price protected, which is great.
Now I contrast that with the Regulation A Offering that we filed. This does not require accredited investors, it can be unaccredited. Let's say you make $40,000 a year. You can invest up to $4,000 in OriginClear and these things are preferred shares at $25. People say, well what the heck is a $25 share? You're trading at 10 cents, what's up with that? That's because these are not stock in the company. They are a special class, almost like a coupon, right? So you invest, let's say $500. The average typically is around $2,000 per investor, that's what the industry says. Let's say it's a $2,000 investment. You'll receive $200 every year, paid every month. One twelfth of that paid every month, and that will go on forever.
Now, we don't want it to go on forever. After about the seventh or eighth year, we've now paid you more than you invested, and so this is something that we would plan to redeem. People who are making a small investment like that, are investing in something stable, the water industry. And they're doing it with relatively little risk. We redeem it at our option, but again, we have a motivation to redeem it, because we are paying 10%. That 10% is going to be a lot, over time.
Remember that interest rates are going to negative at the federal level, probably. Certainly, Japan has already. China has. China is fully negative, and most of the European ones as well. 10% is really, really good. And it's secured by our good faith as a company, so it makes it kind of like a bond.
So I'm not pitching this to you. I am simply informing you of what we have already filed. How long will it take? A sister company of ours took 52 days. It could take longer, perhaps 60. It's hard to say, but it's not the same as a full initial public offering, which is called an S-1. So that's going to be very good. Why? Because accredited investors are a small percentage of investors in America, and frankly, they get the pick of all the best deals. I don't think that's very fair.
So this Regulation A offering allows unaccredited investors to make a relatively safe investment in a water company, an inherently stable space, and a water company that they think is going to do really well, and of course they're contributing to our projects, to acquire companies, to retire debt, to expand our sales and technical staff etcetera. So that is going to be in the second quarter. I'm pretty sure we'll see it in the second quarter. And at that point, you will have the option to go with Regulation A, or that future offering that I can't yet tell about for accredited investors only, which I think will relate to acquiring companies. So that's the story about that. I hope that I've fleshed that out a bit more.
With that, I'm going to tell you about the contact people that are there to talk to you about this stuff. Ken Berenger is the most brilliant money man that I know. He really understands how an investor thinks. He's on the side of the investor. It's a win-win because he makes sure that things work out for both the investor and for us. He is the author of these relatively well-protected offerings on the accredited investor's side. Michael Mann has been our VP sales on the products side. He's done wonderful things. In fact, I'll have Tom chime in on that in a bit. And finally, Devin Angus, our long time CEO's assistant who is really, really knowledgeable about what it takes to be a shareholder. You can always email us at email@example.com and next week, it will not be a webinar, it will be an audio podcast. And we will be sharing with you how it's done. I believe it'll still be happening in Zoom, but not in a video mode.
Bring us back to Tom. Tom, I wanted you to tell me a little bit about Michael Mann and what happened when he came on board at towards the end of 2019.
Tom: I love Mike Mann. He's fun. As a matter of fact, you undersold Ken a little bit. I’ve got to say, Ken is probably the most fun guy I have ever met. He is hilarious, I love that guy. He's incredible. If you get a chance to talk to him, you definitely what to talk to Ken. And Devin's always helpful, Devin's got a great personality as well. But Mike Mann, wow, what an acquisition in my opinion.
An Amazing Acquisition
All of a sudden we're doing great, we have got these guys who are stable that we have been with a while, and here's Mike Mann, who has known Ken for some time and has this great background, and he joins our team. We get this high caliber guy, Mike Mann, to join us. How awesome. Well, Mike Mann has an incredible sales background. He has an amazing M&A background. He was a CEO and founder of a couple of companies, and he has wonderful sales acumen. Sales acumen, being always important, we want guys who can sell.
So, Mike jumps in immediately, and helps me figure out how to sell more pump stations, right off the bat. So we were smiling and dialing, sending emails out, and getting people through the whole industry to find out that we have got these kick-ass pump stations, and Mike's on the phone and he's emailing people, letting folks know, and all of a sudden, we got hit with like a couple hundred inbounds of, whoa, pump stations, that thing is so cool, I want one, how much does it cost? What's going on? Mike, you know, was a guy who just jumped in there right from the get go and helped me do that.
He figured out what we need to do, and got out there and helped us get those campaigns going. We went from pump stations, and some of our waste treatment. What was cool was, Mike helped us land this really incredible opportunity actually, that came from this guy who was doing a series of government projects around the world, and it was a pretty sizeable opportunity, a couple million bucks as a matter of fact. We bid on some pieces. We didn't get the whole thing, but we got a part of it, and actually that kicks in, I think in the third quarter of this year. We should actually see that drop in as a contract and be developed, which is super cool. That came right out of the Q4 stuff that Mike did.
Riggs: Wow, and I think that, is it right that Dan Early is busy following up on a lot of the leads that Michael developed?
Tom: Yes he is. Dan and I have been jogging through, a couple of them have been coming through as opportunities. I think two of them were pump stations that we won, what is called basis of design, where we are the picked choice. Then that lines up with the consulting engineers who put the whole package together, where our product gets stuck in there. Another one that came back was an opportunity where an engineering consulting group really liked us, and then they asked Dan to come in and speak to them in person because they liked the product so much, they wanted to see the guy who was responsible for having created this, the Modular Water System™ with us. We had to follow up with them. Then we also bought in another sales rep, as a matter of fact, who I'm going to go visit in person, because he's up the road in Florida. Has lot of municipal- and city-based projects for pump stations as well.
Riggs: That's amazing because now of course, Michael, who happens to be a former public company CEO, so I actually have somebody who could step in and just start doing it for us. But what he is showing us is, that he's super strong in the mergers and acquisitions area, so currently what he's doing is really working on, you know, the whole coming acquisitions program, and he's brilliant. I mean I love what he's doing and he's working incredibly well with our own Bill Charneski, which is cool.
Tom: Yeah, those guys are on an exciting project right now. I know that is going to be a really great future. So I’m very excited about that.
Sample OriginClear Projects
Riggs: Good, well, while you were talking, I was looking away because I was pulling from our forecast, some of these sample projects. Of course, I eliminated all of the money, likelihood, and so forth, because I'm not trying to represent that these are deals that we have, but more projects that are samples.
Oh, Keith Roeten has made a great chat, “Best presentation ever, thank you sir. Simple to understand. When does the quarter end?” Quarter ends March 31st. So, January, February, March. So, we are about literally half way through the quarter.
What I'm going to do, is I'm going to reshare the screen, and I'll bring up this page, where I pulled up what is on Dan Early's board. I'm not going to discuss how likely is it to happen, percentages and such. Just give me a flavor, Tom, of what these are. Give us sort of, what is going past Dan's desk, and what is he busy bidding on?
Tom: Well it is actually, it's fairly balanced. I'd say the majority of this, you're looking at pump stations obviously, different sizes from the 48 inchers to the 96 inchers. Those are mostly our bread and butter modular pump stations and then you're also seeing WWTPs, our wastewater treatment pre-packaged programs. They generally range at about 7,000 gallons up to about 20,000 gallons per day kind of systems. This one here, a 10,000 gallon waste treat, with a reverse osmosis.
Riggs: That's porcine, so that is actually a pig [manure treatment system].
Tom: Yes, that is. What you're seeing there is actually one where they are going to do the wastewater treatment on the animal waste, and then they are going to do the reverse osmosis to basically clean the water itself and do recycling. So you can use it for irrigation, or whatever you're going to do there. That whole package there, that's pretty healthy. You're dealing with a couple hundred grand on something like that. It's a pretty solid one.
You know, the thing down below where, you're looking at a 72 inch pump station package, that's like our home run shot of exactly what we're trying to sell right now. That is what we've been trying to promote, because it is a very standard sized pump station package that you'll see used all the time by either commercial or industrial clients and/or by small city or municipal locations. Pretty common, you know, they're going to range on price anywhere from 75k up 180k depending on what features they have in there, and what the application is. So, it's a pretty common product as well. The one down there which says public park Everus™, that is actually a wastewater treatment system.
Riggs: What is an Everus? We branded it but I don't think people know what it is.
Tom: Yeah so, this is an old holdover branding. Everus was the brand name of our wastewater treatment pre-packaged platform that's on the trailer. So basically, if you had a 40 foot container on the back of a tractor trailer, which is a mobile waste treatment system, that's the Everus. So you can just drop and go and pop that wherever you need to go and treat waste. So yes, that's treating effluent, which is our polite word for, you know.
Tom: There you go. That's what we are doing. Move down the line and I would say these are pretty common. You're getting the same seeing the EveraMOD™ again, the 120 inch one. That's a really big pump station. Obviously, we like that one because that means it is a really healthy project.
Water Storage & Boosting
Notice here in the one right above it, which is the containerized 10K storage and booster. That actually goes back to what we were just talking about earlier. So what you have here is a water storage tank, which is basically just a water holding container. It's not doing too much, right? So it's not really a pump station. And then you have a booster, and the booster needs to be able to push that water in or out basically. That's where those SKID boosters come from, which is just, there's a bunch of sitting water, and it is going to stay in the same exact spot until you push it. That is where the booster comes from. You will see it often, especially in places in the south where it's wet. So, Texas, Florida, Georgia, Mississippi and Alabama. There's water everywhere. If you drive around down here with me in Florida, I can't go more than, less than a quarter mile and see another open pond with a bunch of water sitting in it.
And guess what? There's a booster pump over there or some kind of irrigation pump over there that's got to move that water around. There are so many of them. Crazy amount of them. Dan told me a number once. He said in the city of Miami for example, he said there's at least a half a million of these pumps and pump stations all around the city. That's nuts! It's like, think about the numbers of these things that are actually out there. It's a lot. And you know what happens when they build them on the old technology, those guys would do in the old days where it's concrete, or some kind of steel? They corrode. And they corrode pretty quick. Like every 10 years, every 15 years. That's no good. So, a lot of replacement out there.
Riggs: Remember that on Monday's call, Dan was telling us about how he got approached by somebody, a township that's been putting in fiber glass pump stations, and they are corroding as fast as they're being put in.
Tom: Fiber glass is a nightmare. Plus, they crack, they crack them just putting them in the ground, which is hilarious. It's like, oh my god, so ridiculous.
Riggs: They should be for surfboards only, right?
Tom: Yeah well, you'd think so.
Riggs: But at the very bottom here, we have 11 wellhead pump station packages. That's a nice little project.
Tom: Sure is, absolutely. Any time you notice they're ordering buckets like that, that means there's going to be more buckets. Because you are dealing with a major industrial supplier here, and that means they're going to have a lot of other projects like that.
Riggs: Far out. This is a nice little list here. It kind of gives us a view of what is being worked on. I think we've made sure that these are not just, pie in the sky, but nonetheless we can't say they're done deals until they are.
Real Estate Development & Compact Modular Systems
One of the things that's important, Tom, as we discussed, is that, remember last year we were visiting that real estate developer. He was blown away that we could make the footprint of the storage, literally much smaller because of our modular systems, and he loved that now he can make more money because the necessary pond and storage is all, let's say, under the parking lot. So, ways that we have a much more compact format.
Tom: Yeah, when real estate developers get involved, they're dollar per square foot, right? When you're wasting a square foot on water sitting on the ground, it makes no sense to them whatsoever. They were just losing it because they get hit with fines and all these different inspections. They were like, “Wow, to actually put it into an actual container makes a lot of sense!” So they get to save space and actually make it more efficient.
Riggs: That's a beautiful thing and that is what happens when a water company works with the end user, versus the central municipality. Municipalities tend to have a lot of space, but of course, they don't have a lot of ability to expand. That's really the issue we're dealing with. More and more what is happening with end users, and what they put a premium on, and why this is important what we do is, it has to be simple, it has got to be in a box, Water System in a Box™, and there needs to be some upside. I wanted to just have you briefly cover this high-end hotel chain that we've been talking with, and why are they driven to do hotel-wide water treatment, and all the recycling and so forth?
Tom: Yes, so hotels. Hospitality has always been a good market for us because the way I explain it is, in a hotel situation, or a restauranting situation, you have customers. Those customers tend to be high end or premium and they want an experience. They want to be treated well. They want luxurious beds. They want to go to a spa. They want to eat good food.
Well, you just paid a big premium, hundreds of dollars to have all these wonderful things, and now you're going to serve them tap water? Which, they are worried may be contaminated? People think, hmm, there's something not matching my experience level here, and it's my water experience. They were saying, “Well how do I bring my water experience up to match this premium experience I'm trying to have in my hospitality environment?”
So, OriginClear steps into the space with, “Well, I can make sure your water is very pure, ultra-pure. I can rebalance the water, I can add minerals to the water. I could do all sorts of stuff to tune your water to be custom water.” Which I like to call, craft water. Because, we all like craft beer, craft cocktails. So, craft water.
Riggs: Sam Adams craft water.
Tom: Sam Adams water. Thank you very much. Yes, absolutely where I'm at. So yes, that's kind of the concept. That was what we offered, and of course, you were there with me, and they said, “Wow that's, thank you, you get us.” And I say, “We do get you, we totally understand what you're trying to do.” Our systems are tunable, which is great, but they're also affordable, because when you're dealing with an existing hotel, you're doing a retrofit then, for a room that only has so much space to stick one of these water treatment systems. Good thing we have a nice Modular Water System that will fit inside an eight by 16 foot room that you access through the garage, right?
But if you have got a brand new building, you're building a brand new hotel, well now we have got a lot more space. So, that's the other project that we have. Now we can do a more advanced water system, not just for water treatment for making drinking water, but now I could do water recycling. Now I can make them a green experience to not just give them great drinking water, but then I can take the water that's coming out of the shower and I can take that and recycle it, and then I could pour it over their nice agriculture outside, and then they could put a nice plaque on the front that says, hey, we're being environmentally smart.
We're recycling our water here, we're basically reducing our carbon footprint. So not just, oh we do nice things for the environment, but they can actually prove it, that they were doing it, and calculate the carbon benefit that they were actually having on society.
Tom: That's one of the things that the hotel really cared about. Not too many other water companies were willing to do that. But we were. You know why? Because we have Dan Early, and we have Marc Stevens, and we have 39 years of doing it down at Texas, so yeah. It was us.
Riggs: Yeah it was cool because, you know, we were working with the chief engineer of the entire chain, and then he sends the mandate down to the hotels, and of course they immediately try and get a competing deal. The competing deals blew them completely out of the park. They realized that we were actually the competitive and the quality bid both.
Tom: Well it was funny, on one of them was, they went to a plumber. It's true. One of their guys was a plumber, and a plumbing supply guy. We offered them this really wonderful little reverse osmosis system, which was very efficient and they literally went to a plumber and plumbing supply guy like, “Hey, can you go get us all the parts to do this?” The guy was like, “Oh yeah, of course I can get you the pipes, you know, but how do you put them together? Can you? And that doesn't actually treat the water anyway.” So nonetheless, they came back also with five times the expense that we were going to have. So, it all did come back to us, which was kind of funny.
Riggs: Which we're happy to do, and really, as you can tell, we're just keeping this loose and conversational, but we are trying to express that, businesses are looking for a reason. Not just, “We're stuck with treating water” but, “Well what can I do?” Maybe instead of having little bottles of water that I charge five dollars for, how about just all the water, the shower water, the kitchen water, all of the darn water in the hotel, is great, and not only that, it's tuned, it's the Sam Adams craft water. You know, we think that way and they love us for that. We're not the ordinary, “We'll do a 14 inch pipe.” To hell with the 14 inch pipe! We're looking for the benefit and the same thing with the hotel's showing everyone that they're good stewards of the environment.
Tom: Well it goes back to what you said the other day. Remember you talked about PFAS, and all the issues coming from the chemicals related to that.
Riggs: Yes, that stuff that's on the Teflon pans.
Tom: Well there's also the same related issue with water bottles. Water bottles with their plastics, being one of the contaminant issues is, we can't say too much, but there are theories that are maybe linked to cancer.
Riggs: We need to watch out for that of course. Here's the other thing. My birthday was on Saturday, and I was at a birthday party at this place. Beautiful bottle, tap water, and I thought it was good water. I pour it, and it was tap water. It smelled of chlorine. I'm like, that was dumb. They gave me a beautiful bottle, but they filled from the tap. I'm like, oh my god, please.
Tom: It's terrifying. I gave you that other article on my old hometown of San Diego, who had wonderful lawsuits all over the place for all the arsenic that was in the drinking water in the city. One of my personal pet peeves, which will be an entirely different show in the future. Arsenic does really cause cancer, really fast, and it's really, really toxic.
My gosh, they were totally caught, red handed. It had everything to do with a lot of mismanagement but there was a point at which, if you remember, a bunch of cities went bankrupt in California, and their whole actual government failed. So, San Diego went bankrupt as a city, which is super bizarre. So what they did is, as their budget was crushing, they started really cutting back on all their budgetary requirements including police, and teachers, and all the normal stuff, but also water. Guess what? You can only cut it back maybe so far, but these guys went the wrong way on this one, and the result is, they poisoned thousands of people.
Riggs: Well that was what happened in Flint, Michigan of course, when they went into bankruptcy and they saved $500 a day on the anti-corrosion additive, and they created a multi-billion dollar health disaster, which has affected tens of thousands of poor individuals. That lead is terrible. Which means, of course, what's happening is, that a municipality will say, “Well, we can't handle this arsenic requirement. We're just going to delegate it and we're going to make the arsenic producers do their own treatment,” which of course now, literally hands the business over to the business, which will do it's very, very best.
What is going to come out of that of course is water independence. Because now, that industry, or that apartment building or hotel, they are now free to maximize their benefit from water treatment, which they never could before when they were beholden to a very indifferent municipality. So I think this is a very, very good trend that we're taking advantage of here.
I see Bob Roos saying, “Happy, a little belated, birthday.” Thank you Bob, and, “This has been the best and most informative briefing ever.” Well part of it is because, you know, Tom knows a heck of a lot about what the heck's going on. We're going to do more of this, because it really does inform these briefings to have the cool people in the company, I want to have Ken Berenger, we had Dan Early last week, I'd love to have Marc Stevens on board, Mike Jenkins. These guys are amazing, and you will get a flavor of the depth of the company, and you know, the strength we have here.
So, with that I'm going to wrap this thing up. It's been wonderful Tom, thank you for being on board, and I know it's late for you in the east coast, and for everyone in the east coast. But it's a lot of fun to do. Ken Berenger wanted to answer this live. He wanted to, in the Q&A here, to say “The point is, there are tens of thousands of opportunities, literally waiting out there, that are only now becoming aware, we can do this.” What's happening and this is what's amazing, you know, I notice, and you've noticed this Tom, is that, we'll do a press release, and a couple weeks later we start getting leads. And we're not paying for those leads. OriginClear, it used to be OriginOil, has this amazing page reputation, so that Google promotes everything we do to page one and we just say we do something, like the blackwater reflush that we talked about with that Pennsylvania car dealership, and now you're getting leads for blackwater reflush.
Tom: Absolutely. We get the leads and they're pretty amazing actually, and they're really informed leads too. The people are actually contacting us saying, I watched your webinar. I read your article. That was really interesting. I want to learn more about it. I work in this industry. And they're pretty smart folks when we call them back, so it is actually, it's cool. It's really a cool process to watch the full lifecycle of the marketing, and the PR come back in the form of business. It's actually, it's really neat.
Riggs: This is a great time to be dealing with these businesses that are saddled with the problem and giving them their Water System In A Box. Thanks again Tom, for jumping in. Thanks all for being a part of this.
You will get more information about how to join me by audio next Thursday. More the style of what it used to be before, more casual, but more intimate, but also sharing some of the interesting updates in between these, and then the next full webinar will be Thursday the 5th of March. And we will make it a top-notch, even better than we're doing it. So it's been almost a full hour, but it's been really fascinating being with you guys, so thank you so much and catch you soon.
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