Insider Briefing of 28 May 2020
Helping You Thrive in the World's ONLY Vital, Scarce and Recession-Proof Market
In this Insider Briefing CEO Eckelberry interviews a long-term investor with knowledge on the hog farm industry and is joined by OriginClear Senior Engineer Dan Early, newly appointed to operations in Investor Water™, for an insider look at where things are headed in the water space. You'll get a close-up examination of what the Investor Water business model offers loss-suffering investors and also how the company's Modular Water Systems™ product line embraces water treatment issues and why the demand for MWS's "Water System in a Box™" roll-in and roll-out solutions is rapidly growing.
Transcript from recording:
Alright, everyone, and welcome to the briefing of the 28th of May. This is the last briefing of the month. And we'll be, of course, having the first Thursday briefings coming up. But lots to talk about today, so I'll get right into it.
What I wanted to start off with was a briefing interview that I did earlier this week with a long-time investor in OriginClear. In fact, he invested back in the day when we were doing algae. So, he'll tell us about that as he's been investing now. And he has a lot of insider knowledge about the whole hog farm situation, which I was talking to you about last week.
Long-Time Investor Video Interview
Randy: And I discovered origin oil. Yeah. I started buying stock in it. And I remember when y'all, when it came up with that in situ process, right?
Randy: Producing a higher, getting a higher yield of algae oil.
Randy: And then I remember when they took that same technology and they found they could start cleansing contaminated waters and so forth. I live in Colorado. These mine sites out West, they're all Superfund sites. Yeah, $3-$8 million a year easily in wastewater treatment. And it doesn't clean the source, right?
And I know personally that like waste management in the Southeast, just in one state pays about $1 million a month to have their sludge processed. With this technology you can go back to the source and you can regenerate usable water for crops, for livestock, right?
As well as take the byproduct and reuse it as treatment for the soils. You could create a whole secondary market for the farmers.
Riggs: Well, especially when I'm hearing this, I heard about a hog farm in Indiana on Route 65 that pays $4 million a month to waste management.
Water As A Service (WaaS)
Randy: Yeah. So the opportunity is definitely there. And to help those guys, you know, you could go as a service, right? Rather than selling a product, you sell a solution or a service. I got solar panels on my house. I had two choices. I could go capital and pay $45,000 upfront. And I was going to have to do all the maintenance myself and so forth. Here in Colorado, they allow others to come out. And this company called Sunrun came out and said, "Hey, we'll lease the panels to you. And we'll maintain them."
I went, "Really?" They said, "Yeah, could we look at your bill? What you paying on average?" So I showed them three months of utility bills, right, with Excel energy. Honestly, I was paying between, especially in the summer, easily $400-$500 bucks a month.
Riggs: Yeah, crazy.
Randy: They came back and said $160 a month. $1,000 down. 11-year lease. We'll maintain them. Right? And any excess energy you build up, you don't consume we'll bank it and you can use it in the winter months. They easily saved me about $3,600 bucks a year.
When you turn around to these farmers who are struggling right now on some of their prices and you take what's a waste stream and a cost burden for them. You make it usable. Reusable water. That reduces their well tapping needs and fees, right?
And then you also take the byproduct and help them create like a secondary market where they can use it on their crops, as well if they got any excess, right? Y'all offer them a rebate that you take it and you create that secondary market off that waste. It'll be a win, win, win for everybody.
Riggs: No, you're absolutely right. Now the twist that we've done on that, because one thing that that does require is capital. And what we learned about capital in this market post-virus is it's a lot of money, but it's hard money, right?
Riggs: So it happened in the great recession. All this money was fed into the system, but then the banks raise the requirements. People who needed the money couldn't get it, right? So it's kind of a vicious circle. So Ken and I really saw this problem occur back in January. We saw China shut down.
A Short Circuit
We're like, okay, here it comes. And we realized that what we need to do was to find a short circuit. This led to the realization that the everyday investor in America, the main street investor, cannot invest in a water project. Doesn't exist, right? They can buy shares in Veolia or American Waterworks or an ETF. Or they can, well, a Wall Street investment in bonds for the municipality.
But all of these businesses, let's say a brewery expanding its capacity, it really has to go for conventional financing. We don't have a Sunrun. We don't have a "Waterrun" yet. And that requires its own special capitalization. What we said is, "Hey, why don't we crowd source it?" Right?
Let's crowdsource the capital so that we have an ordinary investor like yourself. And you go, "Well, there's a housing development here..." You're looking at a listing of projects because we have a marketplace. Well here's a housing development. They need a $100,000 system for their backwater reflush.
That way they won't have to go a mile and a half on the sewage line and they can take care of that stuff. And the clean water goes in the golf course and everybody's happy. And that $1,000 [the $1000 down Randy paid for solar] means that they'll pay $5,000 a month on a short-term rental.
I will continue to own that device. It will not go in the ground. It'll stay roll in, roll out, right? Because we are the top leaders of this modular system. So, it's got to be a Rent-A-Center model so that the three things that we know work in this economy, which is yield, liquidity and safety are all achieved. Right?
You got the yield because it's a short-term rental. Not that the end user, like you say, can always convert to a lease, not a problem. And we incentivize them to do that buy out. Number two, the liquidity is there in the sense that the investor gets a rent roll. That's good. And number three, safety, it is that investor's property.
They take the section 179 depreciation year one. So they get that nice, technically $100,000 accelerated depreciation. I know that it goes into his overall tax picture, but it has a definite value to that investor to take the accelerated depreciation. After five years if that thing is still not bought out by the end user, it reverts to the water company, OriginClear or whoever for $1.00.
Now the water company has an asset. The investor got his accelerated depreciation five years before and five years of rent rolls and everybody's a happy camper. So the reason I'm saying this to you is not so much to pitch you, but to kind of get, a reality check? Does that work in your opinion?
Randy: No, no. I totally get it. I mean, if you had to deal with a government municipality, the RFP process in itself would be at least a year.
Riggs: I know. We know it. Randy, I appreciate it. Thank you very much for your time. It's been very instructive and I hope that we will have a good and fruitful relationship going forward.
Randy: Sounds good to me, Riggs. Appreciate you taking time to speak with me.
End of Interview Video
Dan Early – Sr. Engineer OriginClear
Riggs: Well, that is the whole story. And I'm going to see if I've got Dan in this list here. I've got 42 participants. Hey! Dan the man.
Dan: Good evening.
Riggs: Now I was going to play, "Buy yourself a pair of cheap sunglasses" because during COVID you've become quite the ZZ Top. Right on, right on.
Dan: I have my cheap sunglasses.
Riggs: That's all right. Well, never pay more than $20 for a pair of sunglasses because you'll lose them.
Dan: That's right.
Riggs: And the ones you don't pay a lot for, they never disappear. It's a funny thing.
Dan: Yes, sir.
Riggs: Well, welcome to the show. Thank you. Hopefully you caught some of Randy Spires speaking about the model. He's a big believer. He himself is big in aerospace and defense industry. Also, in IT. And he has personal knowledge of this space it so happens.
So he is actually very, very interested in going ahead with not only investing in our private placement, but also investing in one of these hog farm projects. Now, before I go on I see that Grant Brandon wants us to talk about the changes in the private placement program, and I'll be happy to do that.
First, however, I'm going to cover, well, Dan, because we had some news that I'm going to bring up on screen here that is very cool news. It will appear in our annual report. I believe it's also on our website.
And as you all know, Dan Early is the assignee and the owner of five patents, which are for the Modular Water Treatment™ technology, which by the way, are starting to get some real traction. And maybe you'll be able to talk briefly about some of these deals without naming names that have been coming through lately. But on May 20th last week, we agreed to renew our three-year license for an additional 10 years and we added the right to sub-license and also to create manufacturing joint ventures. And I think that's, first of all, we really want to thank you, Dan, for trusting and having the confidence in us because we've been working together now since... Well, we're one month away from a two-year anniversary. So, it's a really good thing, so thank you.
Dan: Glad to be a part of the program, glad to renew, very, very excited about the future.
Riggs: Right on. And I'll have to do another sunglasses joke. The future's so bright, got to wear shades, right?
Dan: It is, it really is.
The Business Model
Riggs: All right. So that is great news and it really settles our technology nicely. The next thing that I'm going to get into is the Investor Water™ business model. All right. So, we're going to review this concept for those of you who have not seen it. And then we're going to get into the nitty gritty. We have built a financial model that you're going to find exciting if you were at all geeky like me. What is Investor Water all about? Well, we got a problem, which is that, well, first of all, the good news is that the coronavirus, we don't believe it's going to kill 50 million people as happened in the 1918 Spanish flu, which by the way, was not a Spanish flu. It was a Chinese flu. But it was called the Spanish flu because the Spaniards were an open society at the time and they were the first to have to report it.
We're not going to have the 50 million dead, I'm sure, but we still have a lot and there is also the danger of continuous waves of coronavirus. Obviously, we can't do anything about the current wave it is what it is. And the world I believe is going to recover very, very fast economically, but we don't want to be constantly subjected to these uncertainties, these business uncertainties, these humanity uncertainties to prevent these waves of depression type events. 2.6 billion people in the world do not have a flushing toilet. And of course, virus infections from our septic tanks are common. So, there's a lot of work to be done. Now here's the problem, only one fifth of the raw sewage is treated, less than one third of industrial waste. And that creates a problem because of course, that stuff makes people sick potentially.
In previous videos, I've talked a lot about how. This is an excerpt from one of our videos and it shows how we have this decentralization, which is the future, but there's no funding for it. Why? Because wall street knows how to fund the big central systems with the big billion-dollar bonds and that's wonderful, but it's kind of like our electrical grid. You don't fix that, it's just too old. The future is at the edge with the micro water grid, you might say. So, what we realized was that main street investors are really, really interested in tax advantage investments.
Water Companies ⇒ Water Projects ⇐ Investors
And here's what's interesting, many, many investors today have passive losses from investment in oil and gas, real estate and they are very, very interested in having gains to offset them. So, they're looking for tax advantages that will offset their losses and that's us. So, this is simply a draft of the website and it shows the model where we bring about this union of water companies, investors, and at the center of it is the vetting of the water projects. I think it's a good time to mention that Dan, you have joined us to help Investor Water. You're still working over at Modular Water Systems, which is integrated with Progressive [Water Treatment] to keep doing systems, but you're now actively involved. We brought you over the fence into OriginClear to now be the technological king and also work on the execution side.
And so the model is, first of all, fast funding investment models, then water companies, initially OriginClear, but eventually others post their micro water grid projects. We verify them and that's where your job comes in, Dan. Then of course deals get done with and we take a small fee. And by the way, I will show you that financial model, very exciting. Now we're proving the model ourselves because that's what you got to do.
Projects In The Lab
And this takes us to the projects that are in the lab. The pools project is unofficially I'm going to tell you it's wrapped up, but I need to get the new owner of this fantastic system to sign off on his quote for the cool press release and so forth, but that is rolling. And then Dan, you've been working on our Troy Alabama project, getting that all spec'd out, right?
Dan: Yes, that is correct. Yeah. The Troy Alabama mobile home park opportunity, it's using a new advanced biofilm reactor system. Very pleased with the progress we're making with that one. The regulatory agencies in the state of Alabama have reviewed our proposals and they and their consulting engineer are working with the end user, with the owner, they are definitely onboard and have green-lighted the effort for us to continue to move ahead. That project I am pleased to announce is moving into the final engineering phases and I am of the opinion that probably within 30 to 45 days, we may have that unit fabrication completed and ready for delivery.
Riggs: Excellent. So, where this one stands is we need to unite, you've got your solution. We have some candidate investors who are interested in doing it. This happens to be an inexpensive one, so this is actually good for a small investor. And then over in the animal farms, we're working with our Wisconsin based partner and also an investor in the company on a couple of live projects. One of those very large and will not be part of Investor Water it's about, what's that the pork deal is about a $600,000 deal, something like that?
Dan: Just a little bit less than $700,000, 675.
Riggs: But that's conventional, got to get the capital. They got the money, but then it’s the usual development hell process that you go through, which we’re solving with Investor Water and at the same time, we have prospects for what I've shown in these videos that are very, very interested. That video with me talking there, I played it a couple of weeks ago, and it's also, so you can watch it if you go to my briefings, on originclear.com/ceo. I don't want to take too much more time in this briefing because I want to show walk through the models, but the phase one and phase two approach, where you use that bacterial remediation step in the pond buys time for the owner. And then it's also a pretreatment for the eventual large solution.
Cost Effective & Affordable, High-Tech Solutions
Dan: That is correct. What I love about the two technologies we have for the mobile home parks and for the animal farm lagoons, is that the lagoon systems, it's an existing asset, and a very valuable asset. And the really nifty thing about both of these solutions is that we are able to leverage that asset and able to compliment it with an advanced treatment system that really, really improves the efficacy and the treatment capability of the overall system, helps to achieve much more stringent effluent performance standards. And we're able to do it very cost effectively and very affordably.
Project Investment Structuring
Riggs: Well Dan, speaking of cost effectively and affordably, we're now going to go into the finance model, which we've been working on very hard with some help from tax attorneys, two different tax attorneys. This is preliminary it's subject to compliance structuring, but I think it's going to give you a very good idea. So this is where the rubber meets the road. In this model, I'm going to increase it because it's very hard for people to see in Zoom if I keep it the normal size. So, the way the model works is that the operator, if we go over here, the operator, which is the water company in the market gets 25%. Now that is, again, all these percentages are subject to evaluation.
Water Company Gets 25%
The market, Investor Water currently we have it getting 5%. We've allocated 10% for service and there is also downtime. We estimate that one month per year will be down. That's a generous estimate. I don't believe it will be that much, but you want to allow for that and that gives us a reserve to pay for it. So now, these are how the years work going all the way down into year five. So that's how the months and years work. If we go over the left-hand side, we see how the actual, the first case is a full-term rental. Now the full-term rental is where the renter never buys out the system. I don't think it's going to happen that often. Why? Because it's relatively expensive. We give them a buyout allowance so they can actually end up owning it, but let's take a look at this model.
The Fees & Costs
So the rentals, the end user paid for 75,000. Well, first of all, let's talk about the thing here. The actual cost of the equipment in this case was 75,000 and we have this rippling through. So, if we change it to 100,000 everything would ripple through, but 75,000 is the, for instance, cost. Includes everything to put this piece of equipment to work. And this is a roll-in roll-out system. It's very, very important that it not be buried in the ground because the investor continues to own the equipment and has got to be able to take it back if the end user stops paying his bills. Here's the operator, which is the water company, getting that 25% of the margin on the sale. The water company does not make money on this cost, that's straight cost.
So this is the operator or management fee. Then there's an incentive for the investor that is paid by the operator. It can be zero or it can be 25%. We have assumed a 15% incentive. And then the market fee, which is what Investor Water would get.
All right, so let's move down and here is by the years. And we get a 31% yield for the investor per year. He or she is making almost a third on their money every single year. Now, here's what's interesting. There is a taxation benefit. So, you work in, assuming you have a 35% federal tax rate, and again, that is modifiable too. So it tells you, you can play with that. And you end up with, instead of 31%, you end up with a 38% average tax yield. And that is extremely exciting.
Depreciation & IRR
So the effect of these negative, these are artificially negative, of course, which creates in the early years, you see it's 48%. We run through this $75,000, we can only depreciate. Now, Section 179 tells us that you can depreciate all of it in the first year of your five-year life. This is what we're taking advantage of. So now you're making more than a third, you're making 38%. And your internal rate of return, for those of you who understand it, for the full five years is 17%. And for the tax, internal rate of return is 29%. very strong model. And this, I think, is going to be very attractive for investors.
Offsetting Other Investment Losses
Remember that this is subject to compliance. That we have to put in place structures like limited partnerships, et cetera. This is not an automatic. Each state has regulations. And I'm meeting early next week with an expert in doing this for solar, and it's very similar. But the good news is that somebody who has suffered losses in real estate or oil and gas, for example, or solar, for that matter, although that really hasn't been hit, would love being able to take advantage of this gain here and offset their losses.
Now, we gamed a buyout. Let's say year four, $30,000 in buyout allowances have accumulated. So, the end user gets the machine not for $90,712, but for $60,712, of which the investor gets $42,000. Of course, now, of that a certain amount has to be recaptured. So down here, you have a recapture at a 25% tax rate of depreciation. You still end up with a very good yield. Why? Because it was a big chunk of money that hit. But the IRR is not as, remember, this is four years, not five. So, you've made your money. Your internal rate of return is roughly the same, but it's happening a year earlier. And your tax advantage yield has bumped up to 43%. Even the pre-tax yield is 35% as opposed to 31%.
Opting For Buyout
So it's in everybody's interest to go ahead and create a buyout option. This is something we love. Now, by the way, if you take the buyout options too much more, that reduces the yield. There's a sweet spot where you don't want to overdo it. So that's why we like to find a sweet spot, give the user this $10,000 per year seems good.
So that's the state of the art of this model. As you can tell, we've been working hard on it. And if you become interested in investing in this, you don't have to be accredited to do this. But you do, as I say this, compliance structuring needed. And I correct myself. You may need to be accredited, but I don't believe so. And the reason is this is not a stock deal. This has nothing to do with our private placements. Now, Brandon wants to know about our private placement. So, Dan, did you have any remarks to make about this?
Investor Funding Is The Future
Dan: A comment I would make Riggs is that the investor funding, being able to fund projects like this as an individual project, or even maybe as a group of projects, hugely important to this industry. I mean I cannot, having been in the industry for 25 years, funding and the ability to get a project in the ground and get it operating, cash and the ability to make things happen, that is the way. This is the future right here. I do know this because the conventional funding mechanism's too clunky, too slow, too complex. This is definitely the future of this. Very, very excited to see this come about.
Riggs: And in fact, now you can take a brief moment if you'd like to just discuss the nature of some of the deals that have been happening lately that are finally paying off after all this time of working hard to develop the product line and live through these capital phases. So, feel free to make a couple comments.
Groundwork Bears Fruit
Dan: Okay. First comment, without specifically naming the project due to some confidentiality concerns, I'm very, very pleased to announce that we have landed a project with the US Federal Government with an institutional facility. And it is a project that is going to take possession and utilize one of our advanced wastewater treatment systems. And I am just tickled to death being the author and the engineer behind this technology to see this come about. A lot of road work, a lot of mission work has been involved to get the Modular Water Systems product line to where it is now. A pretty long runway. But with the investment we've made in engineering, the investment in standardization, working with our outside OEM supply chain partners, working with our strategic reps that are out there in the marketplace in all the different localities, that is really starting to bear fruit. The influx of new opportunities coming into us from the Modular Water product line. And for that matter, for Progressive Water as well as a whole. Very pleased with the pipeline development that we are seeing on that.
So that's the first comment about that. Just to let everybody know that's attending today's meeting, the particular treatment system that we're delivering is a 12,500 gallon per day, high strength, domestic wastewater treatment system designed for reuse and reclamation. So, this government institution is a big proponent of reuse and reclamation, and they will be recycling their treated water for irrigation and other ancillary purposes at this particular facility.
Heavy Adoption Of EveraMOD Pump Stations
The other project that we just recently have been awarded is another one of our EveraMOD pump stations. This is using the heavy plastic manufacturing model. And this is more of a bread and butter product line for us, but a very important product line, with regards to the fact that it is a sustainable infrastructure component. And I will tell you, and I'll share this with the audience, that we are starting to see very, very strong adoption of the EveraMOD pump station in the marketplace. In the last four months, I've probably had the opportunity to meet with and to present to and consult with at least 250 consulting engineers at various firms, and the response has been very, very positive.
We have got a number of projects that are moving into the permitting phases, working with these partners. And I would say that by this time next year, we'll probably be selling four or five pump stations a month, based upon my projections and the things that I'm seeing around that particular product line. So, all in all, the progress that we have made, especially in the last six to eight months, is really starting to show. Things are starting to get easy on this end, and that means that things are working very smoothly. So very pleased, very pleased.
Riggs: Well, I have a question with regard to the pump stations, which is, was this strong uptick in interest related to us, remember, we priced them competitively as a standardized package?
Vertical Integration & Cost Effectiveness
Dan: Yes. Yeah. Two things, two things. One, we are, because of the vertical integration, our overarching goal of continued vertical integration, that has driven internal costs down. And then we've been able to adjust our price points down, which now makes us more cost effective than conventional concrete and steel materials that are typically the materials of choice when it comes to delivering wastewater pump stations and that type of infrastructure.
Riggs: So we're not only four times better in terms of lifespan, we're cheaper too.
Riggs: And then the installation time's much shorter, right?
Dan: It is. Faster installation time, saving total costs. It saves money on the first total cost of installation cost. So yep. All upside.
Riggs: So for everyone to know, this is what these pump stations look like. It's on modularwater.com. And this is a typical inside. What we have here is we also have... Here's a good picture of one which shows the human scale. So these are big, long pipes that are vertical, versus the horizontal ones, which are more for wastewater treatment. These are big wells with machinery at the bottom to pump water up. And this is that long-lasting envelope that your patents are written around.
It’s Actually Happening
Riggs: There we go. Well, thank you. It was fun geeking out there for a little bit. So that's what's going on. The actual business that I've been complaining this takes too long, it's actually happening, which is wonderful. All the courtship that we got to go through is actually yielding results. And in fact, I've asked Tom to work this summer very intensively with the Texas team, and really put aside all of the administrative activities. He's the Chief Operating Officer, he's got a lot of things to do. We're just going to clean off his desk and we're going to focus his efforts, he's not that far away, he's in Florida, they're in Texas. So, he'll be able to go on site quite a bit and really work on helping them expand and deal with what appears to be a tremendous growth in bids and business. You're in these Monday calls and you see how it's going.
Dan: That's right. That's right. I really enjoy working day in and day out with Tom. The professionalism and sophistication that he has brought to our team, that is really starting to show as well. And thank you. Thank you, Riggs, for helping bring him on board with the OriginClear team. Tom is a treasure trove of professional knowledge, operations, planning, strategic planning. He has had a very definitive impact on the way that the Modular Water Systems product line and Progressive Water Treatment have evolved and changed in the last 12 months. The efficiencies and control mechanisms and operational processes that are being implemented, those things are really, really starting to bear fruit as well.
While we deal with Modular Water System product line, and that's what we've been talking about here for the last few minutes, the sister side of the company with our clean water product line, Marc Stevens and his team, they are really starting to see the benefit of platforms and programs and ISO initiatives, UL508 initiatives, and those types of things. That is all really good stuff. The stuff is very important to the water industry and for what we do.
More Of A Hub Guy
Riggs: Wonderful. I'm also going to mention that we are having you deal with some of our international partners. Their technology requirements, for example, Permionics and our Spanish partner Depuporc, our Romanian partner, Aqua D&P and others want to really maximize the use of our core technology, Electro Water Separation™. I think what you're going to find yourself as more of a hub guy now that you've managed to offload a lot of your process work onto Progressive Water. Now you're going back up the org chart, which is really great. That's good news.
I'm going to start to wrap things up. First of all, I wanted to mention we got a little press. I'm going to reshare the screen and show you this cool little article that showed up. It's fun. OriginClear creates water marketplace to finance new form of water treatment, it believes will sentence pandemic wannabes to lonelier death. I did not write this. This is called purple copy. It's cute but what he's really saying that all headlines it's deceptive. But basically, he's saying can sanitation drown future COVID-19 is before they surface. That's where he gets into Investor Water. He's a brilliant man. He's helping us with PR. He wrote a very good article, which is on our website. Of course, in which you can look at. That I greatly appreciate.
Withdraw Up To 100,000
Next week, we will have a very important interview with a rep from Millennium, which is a trust company that does IRAs. If you have an IRA and you want to invest, this rep will tell us how it can be done. But also know that there's very interesting features related to coronavirus. First of all, you can withdraw as much as $100,000 from your retirement plans and keep them out for a three-year period without any penalty. Also, there's a little-known feature, which is taking loans from your 401k. As Ken just pointed out, you can actually delay the repayment to your 401k plan. You can also increase it to as much as $100,000. This has been adopted, not just for IRAs, but also 401ks. Being able to borrow from it without any penalty.
That is going to be good, not just for the PPM, the private placements. But also if you invest in an investor water deal, we can set it up so you're out in three years. That financial model I showed you, that is entirely we're in the experimentation phase. That's what we're doing. We want to play with you on this. It's going to be fun.
Our Investment Offer
I'm going to wrap up by showing you a little bit, what our investment offer looks like. Now, this, the rest of the spreadsheet, I'm not going to show you. You're going to have to talk to Ken about it. Why? Because it gets into a lot of details about what you might do with it. It's something that really you want to discuss with him. But assuming that it's $100,000 investment unit, we will break it down based on people's ... if somebody wants to buy half a unit will probably approve it or a quarter, whatever.
Added Stock Dividend
It's not a big deal, but you must be accredited. There was an 8% annual cash dividend we have now added a stock dividend. Now it's 12% and then here's what's cool. You get to redeem your stock for twice as much as the principal. Now you're going to see any time you want to redeem it a $200,000 return, assuming you invested $100,00 with pricing at the time of conversion. It's a form of price protection. Then we give you a stock grant for in this case, $25,000 also priced at when you convert. This is a beautiful offering. Now what has happened to our regulation A offering, Brandon wants to know that as well and rightly so.
Regulation A Offer Improved
What we've gotten some feedback about our unaccredited investor offering what I call the almost everyone in America offering. The water crowdfunding. That we've received some feedback that we could improve it. We've paused it to quickly improve. It's going to be in my opinion, much sweeter, talk about yield. This thing is, when I told our marketer about it. He was like, "wow, I did not expect that." We've decided to really make this generous. It's going to take a few weeks to turn around because it has to be approved by the Securities and Exchange Commission. We're going to keep you apprised of that. Anybody has any questions please call and we'll be happy to tell you the details on it.
I think it would be very, very exciting because this is how I've always wanted unaccredited investors to be able to put a little bit of money in, minimum $500. Now it's going to be very sweet. Having said that it's not going to be as beautiful as this pattern. I strongly recommend you speak with Ken. He will also introduce you to the operations team. If you want to invest in one of these water deals and get that yield, that's entirely up to you. By the way, you do not have to invest in the private placement to put money into the equipment deal. Those are two separate things. Whatever incentives are given on that side are not related to your being an investor. Again, I must underline that all investments done in these equipment deals must be compliant and we will make sure that they are. All right well, it's just been longer than expected. I really appreciate everyone coming on board.
Forward Looking Statements
I'm going to end off with, well, first of all, I'm going to give you the required safe Harbor statement. So, going here, we have the safe Harbor statement, which it basically says anything we say in this call is subject to actually performing and there's disclaimers relating to our offerings. The regulation D1, which I was just going over the regulation D1 basically says that the security exchange commission does not guarantee the offering is the bottom line there and there is risk, of course.
All right, please call Ken Berenger, who is amazingly smart at this stuff. Also, I wanted to mention you can just call up Ken, which is the number there on screen and Devin Angus as well. Or email firstname.lastname@example.org. I believe that it is www.oc.gold/ken. That will get you , you’ll schedule right into Ken's calendar. He's just so smart. I strongly recommend that you speak with him.
All right, well, that's it for today. Thank you very much for your patience. I'm glad so many of you stuck around for this. Have a great weekend. The first Thursday is coming up. You'll want to be part of that because usually we make those things much more of a production. I believe next Thursday is, yes. Thursday the fourth is the first Thursday webinar. We're going to probably get Tom Marchesello onboard, maybe Ken Berenger. We're going to have fun with it and have it up the production quality. Thanks again, everyone. It was great to have you guys listening to us. We always appreciate it. Good night now. Thank you, Dan. Have a nice evening.
Dan: Take care.
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