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U.S. Microbics is on the
precipice of major expansion-operations in Mexico over the next couple of years that
should dramatically change the nature of the company applying their technology for soil
and, groundwater clean-up and agriculture growth enhancement
U.S.
MICROBICS
INC.
Environmental
Biotechnology
(BUGS:OB)
U.S. Microbics, Inc.
6451 El Camino Real Ste. C
Carlsbad, CA 92009
Telephone: 760-918-1860 x102
Robert Brehm
Chairman and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
July 14, 2005
BIO: Robert C. Brehm has
served as CEO since July 19, 1997. He has a double engineering degree in
electrical engineering and computer science and an MBA from UC Berkeley in Finance and
Accounting. Mr. Brehm has operated a large chemical production facility for a
Fortune 500 company, owned several software companies, a finance company, and an investor
relations company. He fully understands the scientific aspects of the
microbial technology business as well as the business, marketing, promotion and financial
requirements for success in a public enterprise. His skill, knowledge and expertise are
invaluable for the rollout of the company.
Company Profile:
U.S. Microbics Inc. (BUGS.OB) is a business development and holding company that acquires,
develops, and deploys innovative environmental technologies for soil, groundwater, and
carbon remediation; air pollution reduction; modular drinking-water system development and
deployment; and agricultural enhancement.
U.S. Microbics provides proprietary products and services for applications in the global
bioremediation, waste water treatment, and regenerative agriculture markets using
"Pay-for-Performance" solutions that treat the source of the environmental
problem better, faster, cheaper and safer than conventional methods. With the use of
biotechnology-based solutions, parents and their children and grandchildren will enjoy
cleaner water and soil and healthier plants sooner rather than later.
Key product lines offered are:
Bio-Raptor™ & Microbial Application System™ Products
The Sub-Surface Waste Management Bio-Raptor™ is a
patented bioremediation shredder, sprayer, conveyor system for cleaning up hydrocarbon
contaminated soils. It treats soil contamination on-site, slashing costs, maximizing
material treatment surface area and aeration, reducing retention time, minimizing
potential liability through on-site treatment and elimination of contaminant
transportation-related risks and site downtime.
Remediline™ - Bioremediation Products
The microbial blends for bioremediation of hydrocarbons, animal waste, and green waste
using the Bio-Raptor™ and the Microbial Applications System™ for above ground
remediation have been proven over the past 30 years in a variety of environmental
situations.
Bi-Agra™ - Agricultural Growth Enhancement Products
The key benefits of the agricultural products include a dramatic increase in seed
germination and survival rates, less water and fertilizer usage, greener turf
applications, fruit and vegetable harvests that can be picked sooner, have higher weight
and yields and a lower mortality rate due to healthier plants.
CEOCFO: Mr. Brehm, what was your vision when you started with
U.S. Microbics, and where are you today?
Mr. Brehm: “Our vision dates back to 1997 when Bugs
acquired the microbial technology, with about a twenty-year legacy behind it. Our goal was
to feed the world and clean up the messes of water. At that time, we started to go into
the soil remediation business before we went into the agricultural business because you
have to have clean water before you can have vegetables and plants and food growth that
will work. Today we are on the precipice of a major expansion of the company, primarily in
work outside the United States, which is much more receptive to actually solving
environmental problems. Our operations in Mexico over the next couple of years should
dramatically change the nature of the company and allow us to apply our technology first
for soil and ground water and then for agriculture growth enhancement.”
CEOCFO: Will you tell us
about the Mexico project?
Mr. Brehm: “In the United States, over the past thirty
years, only about 20% of all the environmental projects have ever been completed. That is
a sad commentary on our industry but that is the way the industry works; they do not
really want to solve a problem, they just want to extend the solution forever and ever and
ever. That “pay-for-effort, study the problem forever” concept started in 1970
when the environmental protection agency was formed.”
“Mexico in 2004 enacted the similar
environmental laws that we enacted back in the 1970’s in the U.S., and created their
own Environmental Protection Agency. They now want to enforce these environmental laws
according to their agreements under NAFTA and The World Trade Organization treaties.
However, they do not want to repeat all of the problems that have plagued the U.S.
environmental market over the last thirty years, so they have taken a fresh look and
decided to implement technologies that have been approved by their EPA and BUGS is one of
the first five approved clean-up technologies and the only known biotechnology solution.
We have been invited down to Mexico to put together an environmental plan for the entire
country. We are in the process of doing that so they can accurately assess what their
problem is, determine the magnitude and figure out a solution that will solve it which is
cost effective and environmentally friendly. Our technology and our engineering services
interact perfectly with that concept so I think we are going to have a bright future in
Mexico.”
CEOCFO: What are the
challenges in working with Mexico?
Mr. Brehm: “Some of the challenges are the same as
working in the United States. Whenever you are bringing on an alternative technology and a
new way of doing things, there are three cornerstones to that challenge; one is financial,
the second is technology and the third is political; whether you can get the political
people behind you to affect that change. In our case, Vicente Fox, current president of
Mexico, will be out of office in approximately 22 months and I believe and he wants to
leave a legacy for his political party and himself that shows that he did something
beneficial the people of Mexico. He has chosen the environmental area to show that his
administration can solve a major health concern caused by lax environmental enforcement of
prior administrations. In addition to establishing their own Environmental Protection
Agency program (SEMARNAT), they have also instituted substantial funding to solve
environmental problems. Thirdly, we have very good political contacts up to the highest
level of the country now, which was the piece that we were missing in the United States.
We also have a pro-active government that who wants to see the problem solved, not just
prolonged for many years. We have been able to get the technology and the politics
together, plus we have an established credit line through our public subsidiary,
Sub-Surface Waste management (OTC: SSWM) and many interested investors waiting for
significant news, which gives us with all the ingredients to create a successful,
profitable operation in Mexico.”
CEOCFO: Will you tell us about the magnitude of the
environmental problem in Mexico?
Mr. Brehm: “The magnitude of the problem is significant.
PEMEX, the Mexican National Oil Company, which provides approximately 80% of the revenue
for the entire country, wants to spend about $3 billion dollars over the next five years
to clean up their mess. They have currently allocated about $1.1 billion to do that.
Currently, there are very few vendors who tap into that funding. We have been given the
opportunity, by meeting with the top officials in the PEMEX subsidiaries, to pick prime
projects that are of deep concern. We expect significant project revenue over the next
couple of years from both PEMEX work and State government work related to the environment.
throughout Mexico. It is interesting to note that most of Mexican water is classified as
contaminated in different degrees of contamination. There appears to be very few areas
classified as “clean water” in the country, and that is why most of us in the
U.S. that go down and drink the water, get sick. Therefore, BUGS is going to help solve
that problem for the locals and for tourists.”
CEOCFO: What are you
going to do in the way of equipment, personnel and technology to affect these projects?
Mr. Brehm: “We are going to be forming a new company in
Mexico as that is required to get contracts in Mexico, by having partners down there. Our
philosophy, which we already utilized in Mexico, is to have a Mexican partner. We have a
philosophy of teach, train and transfer, which means that we will teach our partners how
to use the technology, train them on the intricacies of how to order different types of
equipment and transfer the technology to them so that they can follow their own problems.
We are providing engineering services and proprietary microbial blends for clean-up and
they are utilizing local labor and contracting sources to solve their problem. They like
that joint work process, we like that process, and we do a split on the revenue and
earnings so that it works. We have chosen Grupo Bartlett as our labor vendor, which was
owned by the largest power plant contractor in the United States and the world, as well as
Mexico. They are our partners down there and they provide all the labor and the equipment.
We provide the technology and the microbial products. By doing that, we do not have to
spend a lot of money on capital, equipment but still get the job done and stimulate the
local economy as well.”
CEOCFO: Are you working
with partnerships in other countries as well?
Mr. Brehm: “Yes, we have announced a partnership in
Germany and they are currently looking to get bids on particular projects. We have also
announced a partnership with C-TRADE USA, with a joint venture company called Worldwide
Water Systems and that is to put pure water machines in various countries around the
world. That project is moving along too, so the partnership concept has worked well for us
because it gives the people in the country the ability to control their own destiny with
superior U.S. technology and project management techniques, which most countries do not
have. It is very exciting, both emotionally as we help others and financially as we see
the company grow and prosper for our shareholders. It has taken us a long time to find
which market our technology is readily accepted. It turns out it is our neighbor to the
south.”
CEOCFO: You just
announced a new patent for carbon reactivation technology; will you tell us about that?
Mr. Brehm: “That patent has been pending for three
years. The concept is simple to understand as everybody is familiar with how a coffee
maker works. There is coffee put into a filter, water goes through it and you have your
coffee at the bottom. We have a very similar process, but we put activated charcoal, very
similar to the charcoal that is in your water filter, and when that gets clogged, you
throw it away and get a new filter, however large business cannot throw it away, they have
to clean it. We have a process where we take that carbon filter and put it into something
similar to a coffee maker and we run water and bacteria, also called bugs, through it and
in less than a couple of days, that charcoal is 100% clean and can be reused. It is a
dynamic change to the industry in terms of a cleaning carbon. The alternative is to take
the carbon out and send it to a carbon roaster, which is a big incinerator and they burn
the contaminants out, going into the are, which isn’t good for the environment and
then they give you back about 70% of the carbon that you gave them forcing the user to buy
more. We have essentially cut out the recycling cost to the entire carbon user industry.
It is a good opportunity to us to show people that there is a different way of doing
things and there is an economic incentive to do it.”
CEOCFO: Will you tell us
about the financial picture at BUGS?
Mr. Brehm: “It is improving as always. We have a $6
million credit line through our subsidiary. In Mexico, we are already doing about $1½
million project in Mexico. We expect to do more starting in 90 days. We have a credit line
available in case we need that. We have the support of many of our investors and
approximately 5000 shareholders in BUGS and three or four hundred in Sub-Surface Waste
Management. They have all been good supporters of us over the years just like any biotech
company who brings a new vaccine to market; often taking twenty years. It has taken eight
years for us to find a market that would accept our technology and we have good support
with shareholders and a good credit line. With the technology and the political support,
we now have all the pieces of the puzzle.”
CEOCFO: Is there any
direct competition?
Mr. Brehm: “When you clean up contamination, there are
three ways to do it; we call it the three B’s, you burn it bury it or bug it.
Typically if you want to get rid of contamination in soil, you dig it up, put it in the
incinerator and burn it. That is being phased out, although it is still popular in Asia,
but causes massive air pollution. The second method is to dig it up, put it in someone
else’s backyard; that it what is done with landfills. In Mexico and other countries,
they are realizing that hydrocarbons are all hazardous materials and you cannot put them
in landfills anymore and you cannot burn them. There is only one effective method to get
rid of contamination and that is called Bugging it (also called bioremediation). The
process is fairly simple to understand; you put Mother Nature’s natural bacteria in a
recipe on the contaminate and what they do is literally eat it up and the excrete carbon
dioxide and water. Over time, the contamination will be completely gone. Mother Nature can
do that in approximately 50 to 100 years, and we typically do it in a period of less than
a year. That is the way Mexico has decided to do the majority of their waste treatment.
The technology has to be approved by Mexico. Currently, we are the only known bio
remediation company that has an approved technology down there. There will be more. People
have not figured out how to get approved and do business in Mexico. We have been able to
go to the highest levels and work ourselves down the chain rather than up the chain. As a
result, there are classical competitors that only offer the classical solutions, which is
bury and burn. We probably won’t see much competition over the next few years as we
have an opportunity to be first in the market and to make sure our solution is the one of
choice. Any environmental clean-up process that is approved in Mexico is usually approved
throughout Central and South America. Magazines and financial reporting news agencies in
South America do interviews with us to see how our technology can be used in their
country.”
CEOCFO: Why should
potential shareholders be interested and what should they know that they might not realize
when they first look at the company?
Mr. Brehm: “Investors have to understand that the
environment is a concern for the entire world and water, clean air, and clean soil are
important for all of mankind’s future. This world is supposed to have nine billion
people by the year 2050 and the way that we are growing food using polluting fertilizer
and not enforcing environmental polluters, we will not be able to sustain that population
growth. We have to do things differently. What we have chosen to do is utilize Mother
Nature’s forces to provide more food production and to clean up soil and ground water
all around the world. That basic idea will not go away and how fast or slow it is
implemented depends on investor interest and political acceptance of an alternative way of
doing things. I think with the increased environmental awareness, people will readily
accept change or die. Investors should look at the progress we are making and the
contracts we are getting and try to ride the wave with us because I think it is going to
be a fun ride over the next five years. If people would like to get a hold of us they can
find us on our website at www.bugsatwork.com; they can
learn about this technology and how to contact us.”
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