FinTech for Clean Water

and good evening everyone this is rick zuckelberry waters the new gold and as people start joining i'm going to go ahead and do the the intro stuff and uh ken behringer is with me a voice on the radio and we're back and we're back so yes water is the new gold we have a new splash motif for our powerpoint it is increasingly uh looks like it's well it's vital scarce center session proof we are briefing number 106 mid-april and so we're just moving right along here into the second quarter okay so um quick safe harbor statement of course as you know we try and do our best to to guide you straight and what actually happens could differ materially all right so i'm going to play a quick video here um this will take you back a bit because it was an actual podcast that i shot back in september and it should be kind of fun because a lot of it it was pretty prophetic so let's take a look riggs echolberry is uniquely qualified to ride the huge wave of do-it-yourself water treatment that is transforming industry which is really a niche right rigs came to the water industry from a quarter century in high technology specializing in commercializing breakthrough technologies and as we go through this covered pandemic it's really interesting to understand what are some of the commodities that are going to be affected how are you going to be affected by what's happening in retail the changes with industry and the fact that part of the way we're adapting is to become less of a consumer society if we work more from home there's not such a need for makeup or new clothing and this is shifting the way that the world is going to operate so riggs is going to give you an insight as to what's happening below the surface of the earth with his years of experience so i'm thrilled to share this conversation with you so let's get to it what i'm more concerned about raqqa is the basic commodities right and we are origin clear my company we're in water and what we've seen i came out of high tech so i was interested in disruption and the long story that i won't bore you with i ended up running a water company that's public and trying to change things because i'm a disrupter that's what i do and finding the water industry does not want to be changed and it's but it's just getting worse and worse gradually so what do we do and that's where january february for us was intense because we realized we had to do something and we attacked the most important part of it of course which is if you can't change the monolithic you can't change the big change to small right so there's a trend towards people doing self-treatment a brewery that that wants to increase its capacity finds the local water district says nope don't have the capacity never will goodbye you know truck it somewhere else and then instead buy the you know build their own self-treatment system and now they're independent and they can recycle all kinds of good things happen and so now all of a sudden you have independ water independence micro utilities but let's talk quickly about water if you go to the environmental environmental working group website ewg.org you will put in your zip code and you find out what's in your water and you'll go oh my gosh my water is not great now municipality will say well we're delivering water to the requirements and it's true that will not immediately kill you right it doesn't have typhus and stuff in it it's disinfected but it has all kinds of weird things that whatever it's not a good picture so we have to more and more take responsibility for water ourselves water purification incoming and also treating the waste water because more and more businesses are being told by the municipalities give us treated water don't give us dirty water we can't handle it so failure of infrastructure i think rock that the biggest problem in america is that years ago we became a pure consuming economy stopped manufacturing stopped building infrastructure and kind of just coasted right which is like hey we'll consume people will sell stuff to consume and by the way the manufacturing is somewhere else you know tried to build a high-speed railway in california now let's just do the self-driving car why because the freeway is already there so why not just do the self-driving car makes sense in a way but it's also a symptom that we've we've moved away from that ability to do things ourselves and i think that's the biggest shift in the economy is away from consumption because we're definitely being retrained to consume less to more because basic building and construction but it's going to be micro infrastructure look at fort lauderdale look well the miami-dade has over 100 000 septic tanks because they never bothered to build sewage systems when they were expanding back in the 20s and so good luck tearing up streets for 20 years and where are you going to get the money well you can do local you can just give a rebate for each one of those locations to create a self-treatment system so more and more local responsibility uh building your own stuff your own solar system your own it's all going down to a self-reliance thing which is in a way kind of refreshing yeah government's no longer doing things for us which we thought they would do in the 50s now like i don't think so that show was was recorded i think september 20th and um it's fine it finally appeared this week so i'm not actually just randomly uh playing something here this was um this actually appeared uh finally this week the fact is that we have a lot of decentralization happening in this i was discussing with relation to miami-dade and you're going to see more of that happen later in the show all right what's this plimsoll well it turns out that plimsoll is an analysis firm and market intelligence and uh what happened this week we were awarded a strong mar rating in a new market report and so as we operate in the agricultural space well there's 14 of our rivals that are in real financial danger i haven't spent the 669 dollars to buy this uh report but we are rated as strong and well placed to succeed in 2021 so that's cool news isn't it and doesn't look like we're vulnerable to takeover either so that's excellent let's continue now it was a big news for a big week for news we had news on both sides the water on demand side and also the what we call tech these days what we've done is as i've told you in in past reports we've pushed all of our technology activities and our subsidiaries etc into originclear.tech and that's going to go live sometime in the next week or so and you'll see the website come together as being water on demand fintech for clean water and so the first announcement was exactly that launching water on demand fintech to accelerate water treatment by private businesses and it really headlined the continuing drop in fed spending on water which i fear is not stopping anytime soon we talk a lot about the infrastructure bill but it seems that the infrastructure bill has a lot to do with transfer payments um and so it's not not great but we we can always hope and it talks about this design build on operate model which is what the water industry knows as completely outsourced water treatment and paying on the meter and this is a risk that smart managers will outsource so you know we gave the analogy of what happens with websites none of us have a server and house running our website it's done on a service level agreement or sla level and the equivalent of course is these water purchase agreements so this was kind of like a first announcement of our new business model but meanwhile our progressive water treatment division in texas continued to do a bang-up job and they came out with a great piece of technology called bronc boost the texas sized booster pump station and this is really important because last week we covered uh piney point in tampa with big big dumps of toxic water in fact piney point lately has now been shut down but their solution is not to de-water and clean up like they should their solution is to inject it all deep in the ground where it will never show up again nonetheless we have a really great endorsement of this huge industrial grade pumping system from consolidated water solutions and you'll get to see the video in a second and basically this thing cranks 500 gallons per minute and it is really really needed in scenarios like this piney point situation all right so let's take a look at what our friend jim had to say i'm tom marchessault origin clear i'm the chief operating officer and we have the pleasure of talking to jim davis at consolidated i'm jim davis with consolidated water solutions i'm an account manager and i focus on project work and we did a project several projects with pwt but most recently we did a project where the customer a mining company wanted to de-water their tailing storage facility and we use the pump booster systems that pwt utilizes to feed both ultrafiltration the first stage reverse osmosis and the second stage reverse osmosis we needed a system that would maintain a even pressure flow going in even though the day tanks behind them might fluctuate and we need something reliable it wouldn't trip out and it's worked very well they've had no problems with these pumper boost systems we're really pushing the booster pump markets out there why is it that you feel this kind of a product really has a great niche in the market not just for this product but also other areas like what does it really do for you guys and for your customers well it gives us a way to reliably feed us a certain pressure and pressure is very important that these systems like an ro likes to have at least 30 psi and and the ultra filtration requires a certain amount of pressure to to push through and this just smooths out the the operation everything balances out you have this even pressure you don't have tanks going dry and you don't have things tripping out if you try to put these systems all together without a brake tank without a pump boost system like progressive water treatment makes you run the risk of tripping out the slightest pressure variance and this could be quite irritating if guys have to go out and two o'clock in the morning and reset their system so we've avoided this by making it a simple and safe system with a good pump boost system and this this is uh what the customer has ordered again which means they're very happy with it jim's uh the engineer on projects he's the process guy so jim and i started working together because we're both process folks and uh we started uh bidding and doing some projects together we've got a really good history of working history working together we are integrators and we do put pieces of equipment together to get a smooth system and we found that pwt is great at if we need custom work and they've been a great partner to help us with various ancillary systems associated with these total systems we've really appreciated the support we've had real good success the river quality and their ability to help us integrate things is greatly appreciated a kind of a niche that we've also developed that we've worked with you on jim is a number of containerized systems yeah containerized systems are very important uh both to these uh what you call mine remediation companies that go in and take care of something for them and also for the mining companies themselves to move things around when they hit when their needs change so yes containerized systems are coming on as you know something that the customer is looking for that's fantastic thanks a bunch jim thanks mike [Music] there's a reason why i'm playing this um because you know we would not have the the confidence that we could handle this kind of water on demand which is a money for money play it's all very well to have money to invest in equipment that you put out at the customer site but if you're not able to do it reliably then you could get in real trouble we have in progressive water a 20 year old company that we bought you know back in 2015 that has amazing reputation for integrity and consolidated of course is one of our main partners and it's really great to know that they have this confidence in us and that this wrong boost is such a powerful piece of equipment okay so um that's super cool and i'm going to now move right along here a really interesting report and you know it's hard to find good analysis on the water industry as it's lagging a bit in terms of what you know what's hip so the action is happening we find ourselves to be very much of a pioneer let's take a look at what they're saying in a related space called the built environment well what is the built environment uh let's let's take a look at that i came across a report by shadow ventures why tech investors are investing in the built environment this is very interesting it's actually one of the world's largest asset classes and it also contributes greatly to our gross domestic product four percent it's also the second least digitized sector in the world so it's very very un-tech yet it's at the same time huge so let's go ahead and take a look at the actual space we can see that it's way behind it's huge it's wasteful it makes me think exactly of water what are the what are some of the trends well i actually got a hold of the report for you so i'll go ahead and run it okay so this is the report from shadow ventures and um the built environment investment thesis so the built world is basically real estate construction architecture and engineering and it is huge and you'll see that that water is mentioned to a small degree here but this is primarily about stuff that is built so it's a built you know huge world 40 trillion dollars it's uh very large interestingly enough there's not a heck of a lot of being spent on technology in r d and is the second least digitized sector in the world all right and here's an interesting thing 68 of the world's population is projected to live in urban areas by 2050 many countries blah blah blah and they will need of course much infrastructure including water so again the message i've been saying for years now which is infrastructure is in real trouble is echoed in this presentation what is a non-consensus market it means that people don't agree that it's the thing to invest in right for example remember when bitcoin was like really really crazy now of course everybody agrees it's wonderful so non-consensus means before people think it's great productivity is declined in construction the amount of spending in r and d and innovation is very low in real estate and construction and also the amount of venture capital in the built world is very small so again this echoes because water is part of the built world this is part of the situation we are operating right now origin clear and water on demand in a non-consensus space in other words we're just nuts the reason why this is on the verge of large scale disruption is again thinning margins there's a crisis to innovate and this is where we feel that water on demand is going to dramatically help with the margins so that water companies can deal more effectively with the need to grow the workers problem there's a silver tsunami quote unquote in the water industry similar thing and productivity terrible there's a big environmental crisis we know that all kinds of upgrades needed in buildings and treatment and everything and now here's the good news there's more and more technology available and this is really interesting and finally there's all kinds of interesting advancements and things like 3d printing autonomous equipment all the sensors we need and so forth so this is a great moment for what's called the build world again problems i won't go into them it's pretty much the same stuff that we've discussed payment issues again this is something that we identified as the key issue in water which is how do we fund the water projects and if we can provide a pay you know a basically a water equipment as a service then we solve a major problem in the water industry all right so again the technology is to to automate all these things the investment scope for this particular venture capital firm is in all these interesting areas and um which is really important stuff obviously and there is a growing this is we're early right it's early on the amount of money that's gone into the space is relatively small compared to for example high tech and but nonetheless it's been growing very very fast look at the growth just between 2017 and 2018 tripling of the venture funding in these in this build world and real estate investments that will make be made is fairly large so people are investing in the build world again you see the the trends it's obvious what's going on here this is some of the exit multiples that got achieved so this stuff looks really good of course zillow you know zillow was zillow i'm i'm not going to try and confuse this space with water specifically this is a lot wider and bigger but it shows that there's a lot of activity going on in this real world environment innovation to save the planet climate change is the defining issue of our lifetimes and this is very very important because people may disagree about climate change but it's for sure that we have problems with water tables we have problems with saltwater intrusion we have a tremendous amount of issues and there is definitely you know buildings are a major piece of the picture and so climate risk is an important risk to manage and this absolutely applies to water all right so um just getting started again more of these numbers i won't bore you with them because this is not exactly water but it's very very close indeed now why now for green building tech which again tells us that we want to be doing things for green buildings that relate to water and that is that institutional investors are starting to move into the space and about 36 billion has been invested in climate tech in 2019 alone sector trends now the goal of net zero quote unquote is very important for buildings in that buildings are supposed to be not damaging the environment in other words it can't be parasites they have to be net zero which means uh designs that actually you know for example let's say you take heat and you turn it into cooling uh you know you take heat turn into steam which turns which which runs uh air conditioning for example things like that there's all kinds of interesting things that can be done and there's also water conservation here and there's you'll see there's a brief mention of a couple water companies that i'll talk about to give you some context here and finally the corporate carbon management and i won't get into the carbon stuff that's a bit beyond the scope of this discussion but basically it also talks about quote unquote new normal and that is impacting big time technology has gone from being a nice to have to a must-have and that i think is very very true of what's happening in water now as we know the bite administration has stated they want to upgrade four million buildings across the country and this is huge and it's also every part you know not just the the the package the envelope but every part of the building and how does that work and look at how old half of the buildings are they were built you know over the 40 years between 60 and 2000 that makes them very very old you know as old as 60 more than 60 years old in some cases and there is a growth in demand for market the marketplace of grain now i'm not going to get into all the details but very very important to discuss the internet of things industrial internet of things which directly is needed for us in the water space this venture capitalist talks about all the different startups that they've been involved with there's a couple over here bottom left epic has been working to try and decentralize water treatment for municipalities in other words help municipalities shift the load to local buildings and kairos is a leak detection technology so this is good it's only a beginning as you can tell it should be a much larger piece of it but it is appearing on the radar so that's that's what these shadow venture peoples have people have done and i think they're doing a fine job excellent uh presentation for which we thank them i'm going to move right along here i wanted to talk a little bit about how we are gearing up to fund water on demand so let's why don't we cover that ken is fascinating isn't it about this uh built environment you know it's funny if you close your eyes if you don't look at the powerpoint you just listen to the things that you're talking about these are the things we discuss in strategy sessions in a completely i i you know it's the first time i'm hearing this and i'm going holy smokes you know you might be on to a good idea if other people are thinking of the exact same thing in a different space maybe you're on to something so that that's certainly encouraging it's it's amazing and um again technology is coming into the built environment and that's huge and then i'm going to be looking for a little bit of your input ken also because we basically are looking at four major ways we are going to be using we have this amazing investor base that is helping us first of all build capability there's this basic offer that we have that that ken talks about every single day to potential investors with the double-digit dividends choose when to redeem your stock triple warrants and that is needed because we're going to be building out it's all very well to have funding to get equipment done but then you have to be able to track productivity software metering put personnel on site add more staff etc so that is needed on an ongoing basis that is what we call this is the outgoing series r which is was very good um going into what's now called a series u then there is the investment in a water on demand unit and that is the special purpose entities the investment required is a million dollars minimum a lot of people are contributing assets that's already started to happen we'll take assets but you know obviously cash is great but we'll work with the assets again 100 stock redemption with a double warrant and earning a percentage of the proceeds from the water on demand fund with a secured creditor position on that fund and again for the use of proceeds there is the funding of the equipment for the rental or pay-per-use rigs i want to jump in here i had two conversations in the last two days you know we talk about real estate as assets i talked to two fairly significant oil and gas investors that are really you know they're they're kind of down and you know they're they're frustrated with uh the oil and gas and i think there's a real appetite for a asset based interest-bearing investment in that area and i i think we're going to see more and more people who want to diversify out of oil and gas not not abandon it but kind of offload uh allowing that to come back um and and i think we're going to see a lot of folks in that space have a keen interest in this because they do dovetail right you know there's going to be a lot of water work in the oil and gas industry as well so it might also be an in for people who are more on the off on the operational side as well but those were two discussions i had just in the last two days fascinating well you know basically commodity diversification is a very good idea these days and we've got real estate investors who are coming from that built world and recognizing that water is a huge piece of the action they see the water problems and they also see the water rates rising dramatically and so there's a real opportunity there so there's a third category here which is just hitting our radar now and this is called reg cf which is stands for crowdfunding reg cf enables us to do a series of these special purpose entities that are funded maximum five million dollars they're fast i'm thinking about a thousand dollar minimum investment this is widely marketed and we see doing a stock plus warrant type proposition plus again a profit share and this does the same thing as number two but it's for unaccredited investors very interesting and finally the return of our regulation a plus offering that that became obsolete on the 27th of march uh because it became a year old and we're going to come back in but we're going to add a stock redemption feature which is going to be very useful and we hope to enable the people who invested in last year's offering to roll over into this one and what this is good for is a larger amount of money it'll run all year long and it's going to be to build management teams operation teams facilities and acquire companies we need to do some acquisitions to build capabilities as a well to buy capability as opposed to building it so those the this is the the layout this is going to be a lot of hard work fortunately we have a growing investment banking team and of course ken is doing a masterful job he is the man who has the full picture on these investing options and he's there to discuss them so ken i think that you've got you know if we're looking here at what you're going to have available it's going to be very interesting you and your team gary and charles and and more as you need them to put people into these various instruments it's going to be a way that people can pretty much choose how they invest in this fast-growing asset yeah i think the flexibility is also really a delightful problem to have generally in my business it's kind of like well this is what it is and you know uh you're basically trying to assure people that it's the right move i think having four distinct different types of platforms will really be able to there'll be something for everybody in here i mean the story itself what we're doing is that important finding a person who can find a good comfort entry level is is i think we've i think we've unlocked that with this love it love it so um again i wanted to encourage everyone to simply put oc dot gold slash can in your browser have a discussion with him the current offerings are rolling over into the new a new format and if you're interested at all you should definitely discuss it with ken okay next week the panzta what is the ponza well it is our trailer park solution and we sold a poster for mobile home parks it is now going to be rolling out and we're going to see if we can get some interviews and so forth speaking of interviews we're going to start interviewing our investors as they invest because they're we're very interested in their points of view and you'll get to see excerpts every week with that i'm going to go ahead and wrap it up for tonight it's been a another fun-filled discussion daryl polston your oil and gas investors are looking at sustainability bonds well that's also very good i would i would argue that that water is really proving to be the ultimate sustainable space it is non-consensus for a lot of people but that's where all of the gains are i kicked myself to this day for having not paid attention to bitcoin 10 years ago i'm just well it was never known around 10 years ago but you know when it started in nearly early 6 months ago stopped but there's an opportunity really to do um you know generational transformation both of the water industry in our own portfolios bob wants to know if the annual report's out yet and i have to tell you it is not and we are hours away from it coming out and thank you all adam wagner wants to know i'm familiar with investing and buying stocks but i'm not sure familiar with the warrant is can you please explain the warrant okay well a warrant is an opportunity let's say you invest ten thousand dollars and you get ten thousand dollars with a stock if you get a 100 warrant meaning a full coverage warrant it's an opportunity to buy another 10 000 worth of stock at a predetermined price so let's say that you invested at five cents and you get a warrant for five cents a year from now the stock is i'm just hypothetically saying let's say it's uh 50 cents you can still buy that same stock for five cents your price is guaranteed so it's you kind of rolling the dice there but the good news is it doesn't cost you anything it's an opportunity to purchase down the road if the conditions are right and you can also do something called in many cases we have something called cashless exercise which means you just trade pieces of the warrant back and forth and you know what to pay that's not the most brilliant thing to do if the stock's gone up a lot because you're going to give give up a lot of cheap stock but it's a way to do it and again thank you all it's been a wonderful evening uh talking things over with you i love where things are going stay tuned for a magical wonderful new website and a lot of pr activities as we roll out water on demand a fintech for clean water goodnight [Music] everyone [Music] you

2021-04-21 02:16

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