 Good evening. I'm Bob Baldacci and welcome to Baldacci on Business. This is our second show in a series that we're introducing to the viewers of CTN, Channel 5, called Pitch Me. And each month we're bringing to the studios and appearing before our very distinguished panelists, an entrepreneur who has a business idea, would like either to get consulting services or actual investment in their company. So this is our second show here in November and I'm very pleased to introduce our guest entrepreneur, Brian Crowder, of Life is Fluid. And Brian, we're really pleased to have you with us tonight. Thank you. And before you make your pitch, I'd like to introduce our panel. First, Mr. Hugh Stevens, Director of the Knowledge Transfer Alliance at the University of Maine. Hugh is an investor. He brings to the table a lot of resources from the University of Maine and is a former owner of a clothing manufacturing firm in the United States. Elizabeth Baldacci, my partner in Baldacci Group. A lot of experience, sales and marketing experience, 18 years. Elizabeth, thank you for being here this month. Again, we're very pleased to have with us our guest panelist, my good friend, Mr. F. Lee Bailey, who has an equally famous career in business as he does in the law. And Don Gooding, my good friend, Director of the Maine Center for Entrepreneurial Development, Vice Chair of the Maine Angels, and an investor as well. So panelists, thank you. Should be fun. Mr. Crowder. Thanks, all yours. Well, guys, as we see here, whether it be plain water, I emphasize plain or an enhanced beverage, we've got a problem with single-use bottles. In fact, two billion single-use bottles are thrown away in the United States alone every single month. Life is fluid, but it shouldn't be one single-use bottle at a time. So we've created a revolutionary new hydration system called Life is Fluid. And the idea behind this is quite simple. We intend to replace single-use bottles. And there's some other ideas that I will approach, including all U.S. manufacturing. And in case now, in the case now actually Maine, which Maine jobs, Maine production. The product itself is about three and a half years in the making. And a lot of that has been put into the R&D, different patents. We have some patents pending right now. We also have a flask skin. And the production in the United States is really what kept us going and kept us sort of moving forward and yet took some time. And now we have the Life is Fluid life flask. And the flask skin, which is, as you'll see in a second, is the sort of the branding mechanism, but also provides some utility. As I mentioned, the patent doesn't tail the twin chambers. You see this is a hydration system, more so than just a plain bottle. And there's two chambers. And within the second chamber, which is the real key, is a micro cartridge, which is filtration and enhancement. This particular one is just an NSF-42, so it's like a Brita pitcher on the go. But we can also add enhancement. I won't mention any brand names, but we can add a flavor. We can add vitamins as we move through the R&D system. One of the most interesting things about this product is the fact that it's essentially a living product. We mentioned before that we have a problem with plastic ball use, whether they end up in ocean gyres or landfills. This is a living product. It means it starts with 25 percent recycled material. It's made at main manufacturing in Sanford. And we start 25 percent recycled HDP, too, same as your milk jug. So it's the BPA-free, everything that you guys have heard about. The 75 percent virgin is then added in to make the whole product. If you buy one of these, or when you buy one of these, I should say, for the life of the product, we will, for the cost of shipping and handling, send you back a new flask, the Life Flask. And a return envelope, postage paid, to main manufacturing in Sanford. And they will recycle it on site, thus becomes 25 percent of the new one, and it becomes a living product. It really is designed, as you'll see in some of our corporate social responsibility strategies, it's been designed to get rid of single-use bottles, as well as produce main jobs and U.S. jobs in general. But recently I started working with Allen Manufacturing up in Lewiston. They're actually working on, you see here, we have two products, two different skins, essentially, and we're trying to decide which ones. If you mind, let's pass these out. You'll notice just slight differences. As part of the product R&D that we've been in for a few years, this flask in, which can now be made up in Lewiston, and they're doing a time study on both of those right now, as we speak. The entire product then will move from main manufacturing in Sanford through the material, which is expanded rubber products, also in Sanford, through Lewiston, which is Allen Manufacturing. They'll make and distribute from there. So it's something that, like I said, this is in the last six months, but we've really worked hard to make that happen. As you see behind me, we talked a little bit about the product and the elimination of the demand for single-use products. But the reality of the situation is we've also created a company and a brand behind Life is Fluid and the Life Flask that believes in the concept of redistributive consumerism. My own personal background is Wall Street Economics, Economics Degree from Michigan State, and then an MBA with an economics major at Berkeley. And when I started this company, the idea was, how can I take a for-profit mentality, make as much money as possible, which no doubt I'm a capitalist. For those of you who are maybe thinking about down-the-road investing, it's a for-profit company. We've got 80% gross margins. We've worked hard to make sure our fixed costs are low and our variable costs are, you know, like I said, 80% gross. So we've got that really well under control. But when we sell one of these, we've created a program called You Buy One We Give One, which is similar to Tom's shoes. For everyone we sell, we're going to donate one to Just Causes. This range is from, I've already done a sponsorship with Special Olympics. We've also obviously with the filtration, as the filtration gets better, and we start moving into third-world applications. If you can also donate to the third-world applications. Our programs, or more importantly, how we're going to sell these, because as you see, we've created, we've sort of bitten off a lot in the last three years. We've got the USA main production now. We've got the You Won't Give One program. What we've now got to do is sell a bunch of these so that, like my hero of Anshinard, let's make a bunch of money. Then the more money we make, the more money we can give away. It really is the DNA and the background of the life is fluid brand and the life is fluid concept. We're going to do this through two main programs that both take advantage of direct marketing. The advent of, or the invention, if you will, of social media, social marketing, and QR coding. Different ways to reach your consumer directly means more profit for the company. It means shipping and handling. It's the Amazon model. We've all seen what's happening with Best Buy in Amazon. It's here to stay. In fact, in the month of June 2012, 25 million different people downloaded QR codes. This QR code, if I had a phone, which I don't because I have to be turned off, I could scan this code right now. It would take you directly to my site where you could purchase one and move on. We've got a wave creator program, which is essentially a multi-level marketing or a way to get our loyal active lifestyle brand people involved. If you'll notice, I'm going to pass these out as well, if you become a wave creator, not only do you receive free shipping, but you also receive 100 of these cards that are replaceable, which have a QR code that is specific to that wave creator. If you're on a share lift, we're going to actively attack in this first round the ski ride category. This is very active. As you can see, as the panelists can see, it's lightweight. It's something that, if you're skiing, you can fall on it. It's perfect for skiing. Matter of fact, I've been using it for a couple of years doing the R&D process. But if you're on a share lift and you take a nice swig of hydration or hot chocolate, the person saying next to you says, what is that? And believe me, they do. You can see on the top of the cap, there's a QR code. You may also have this code or your specific code. This is LIF 001 for life as fluid wave creator number one. When that person goes to the site directly from that code, you receive 10%. And the back end of this site has been engineered to handle all of this. It's kind of got my Wall Street background on it, if you will, because that is going to be a lot of tracking. But the way the back end systems in the web work these days, it works very, very well. Retail is a question that always comes up. We have talked to different retailers. We've had interest in retailers. But as part of the whole concept behind the Amazon Best Buy, what retailers are asking for in terms of 52%, 55% of gross in order to charge you another dollar for charged backs, and basically for shelf space, which in my estimation is really sort of overvalued these days. We've created a pipeline program. And the pipeline program is essentially a one by two kiosk, has a couple of sample products. The retailer has a code just like the ones on the wave creator that we mentioned. That retailer then gets whatever they negotiate, let's say 30 to 40%. LIF as fluid maintains shipping and handling. We maintain control of our brand. The space in a retailer, many of our retailers because of our active lifestyle segment, are smaller shops. They're Dave's Tahoe ski shop, Arlberg. As we get into these shops, these guys that we've talked to so far, which we have, have already liked the idea of a poster. Maybe a couple of these cards, they throw them in the bag. And all somebody has to do is say, oh, where can I get one of those? And in the case of the chairlift, by the way, the way that the UPS works these days, by the time you scan that on a chairlift and got home on Monday or Tuesday, your life flask is waiting for you there. So that's the general overview. And as I apologize, eight minutes for three and a half years, especially with somebody as verbose as me, isn't so easy. But one of the things I want to make sure I touched on before we move to the next level was the products in R&D. One of the great things about the hydration system is if you'll notice there's a, the handle, if you will, which is one of the patents, has a place for a clip. So we've got a bicycle clip. We call the flask clip in production right now in R&D at main manufacturing. And also we're calling the flask quiver, which is essentially a ski patrol type harness where this could sit right on your chest. And that just adds, obviously, a whole another level of marketing ability as we move into that active category and active lifestyle. Excellent. Brian, thank you. Panel, fire away. Questions. How many of these have you sold so far? I haven't sold. Well, I've technically sold as, as, as Bob mentioned, when we first got started, we started with a different product. We sold about a hundred of them. I realized, you know what, this is something that I need to take larger. That's when I started working on my own patents. But we are pre-revenue. The site and everything is up and ready to go. When I get the time study, I should find out from Allen Manufacturing, we're about three weeks off from the first order. And I already have 5,000 of the units with the filtration sitting at main manufacturing ready to go. So we're pre-rev, but we're ready to go once the flask is in our hands. So, so by the end of the first quarter of 2013, how many do you hope to have sold? We have, we went through in the pamphlet that you looked at earlier. We have the sports and sports, SGMA is called the Marketing Association, which breaks down users of different active categories. For instance, ski ride is the first one we're going to. We've broken down that market, core enthusiasts only, people at ski and ride more than 50 times a year. We took some measures of that, right? 6% of this captures some reasonable conservative assumptions. We're expecting approximately 25,000 unit sales in ski ride category by the end of ski ride, which fits in, I think, with your question, which is right around April, May. We'll pick up some extra. We'll pick up mountain bikers, hikers. I moved out here from California. As, as anybody knows, we call it a ski ride category. Out there you can golf in the middle of January, February as well. So other categories will pick up extras, but we're going to really focus on earning and owning that active category, the influencers within the ski ride category. So to answer your question, 23 to 25,000 just in the ski ride category. Mr. Bailey. The wave creator phase sounds a lot like a multi-level marketing system. Amway stuff. Excuse me? Amway. Amway stuff. Good example. Correct. It is. I mean, I think that's a great way to put it. Amway obviously has a name sometimes, depending on how you feel now. I'm from Michigan, so I know a lot of people from Grand Rapids, and they may feel differently about Amway than most of us do, but to be quite honest, the multi-level marketing is a very successful sales marketing technique. It can be overrun. It can become, if I dare say, cult-like. In this particular case, because we are going after an active lifestyle market, and we do, we believe, have a wonderful branding from the name, Life is Fluid, the Life Flask, everything that goes around it, the you buy one, we give one. We're sort of trying to build a base that, if we do it right, could become cult-like. And with the margins that we've got, we can step through sales. We don't have to step into this product now after three years in the partnerships that we've made with main manufacturing, et cetera. We can sell a thousand a month for two or three months, build a base, go through the outside magazine channel, go through some of our connections, and really start to build that base up. We don't have to sell 10,000 in the first month, 50,000. Just an observation, but I see that you have arranged for bikers to be able to carry one with them. What about people who own cars? Well, it actually fits. There's a lot of different ways for it to fit in the car. The best way for it to fit in the car is actually it sits right down to your right side between the console and your seat. We also, because of the Flask Clip, and again, the easiest way to describe it is if I can grab one real quickly from one of you, Joe. The design here has created what we call a Flask Clip, and the Clip is very, very lightweight. If you notice here, it's hard to read, but it's under 25 grams for a stainless steel, which is very inexpensive to make. That's a very lightweight Clip. It just sits in like this. So what we have on a bicycle is it clips in like this. This Clip system can be put anywhere. So the next, one of the product R&Ds around this Flask Clip and this design is to put it in your car, or maybe it sits up just like a regular bottle holder, and it just sits in this Clip. And that Clip is inexpensive to make. I mean, where we price that out already on an R&D basis with main manufacturing, made out of carbon, made out of stainless steel, and made out of an ABS plastic, like a high-end canoe, we have huge margins in that as well, which may lead me to the money aspect. Well, Elizabeth. I just want to talk about the practicality of the use of this. So you buy the container, and I know you have some patents pending I'll talk about in a second, but so I have it, there's Nike has them, everybody has these containers. When I'm driving in my car or I'm on a mountain, I think people get these single use bottles because they're easy to get. They're inner refrit. It's an easy source of the product. It's not, you know, it may not be the right thing to do, but you can grab four of them and get out. Where do you get your water from? Well, that's the beautiful thing about the filtration system. So, and again, the way this works is there's two chambers, right? You can mix, you can have two different fluids if you want, but the reality is tap water goes in here, and I use it for my children. Any tap water? Any tap or a creek. I could dump this into a creek. I've used a circle of golfing and dip it into the creek. When this caps on, you squeeze it, and it goes up through the filter, and what's in here becomes filtered or enhanced. Okay. So to answer your question, part of the reason I came with is I have a bunch of small children, and when you travel, we used to drive to Tahoe three and a half hours. There's a McDonald's. Well, trying to convince a six-year-old to drink McDonald's water out of the tap in the bathroom is not that easy. So instead you end up buying a $2 bottle of water, which we've already discussed some of the evils around that, despite the fact, despite the fact it's $2. With a product like this, a mother, a father, a child, wherever the source is, they can flavor it, they can enhance it, they can filter it. It now becomes, like I said, a bit of pitcher on the go. And that's really the value add. It's one of the best value add. I mean, the other value add that we didn't get into, but it is an active lifestyle. On a triathlete basis, this is a measured amount. So as you get more and more what I call the aspirational athlete up to the more accomplished athlete, knowing exactly what your intake is of your chosen beverage is very important as well. It's something that in our R&D phase over the last couple of years has really come back well. And do you have any disclaimers or legal protections against if somebody does take basically non-potable water, that there's some signs in restaurants and hotels, and they use this and they get sick? Standard. I mean, we've got, as part of our sources and uses, we've got corporate counsel out of Boston. They've worked through some of those. But the good news is both the same with the NSF 42, which is the, it's just basically changing the aesthetics of water. It's very straightforward, which you explain. And then with regard to that, yeah, your standard sort of look, if you drink this and you don't have the filter in, you could get sick. The good news is because it's ACP2, because of all the hub, you know, all the hub hub about BPA and everything that hit the last few years, ACP number two, which is water, which is your milk jugs, et cetera, has been, has pretty much been covered. So I think everyone's comfortable with that. Tell me a little bit about your company as it is now, structurally. Sure. Well, like I said, I'm the CEO slash chief wave creator. And I've been at this obviously from the beginning. I've worked with main manufacturing now on the manufacturing side for about three and a half years. So they're a partner, although it's through supply agreements. We've got the guys that I mentioned before on the production side. As far as the company itself, I work with Jim McGinley. He's with the Fin studio, their design and branding, and also a main company headquarter here in Falmouth. We work with KL Gates on the patent. We worked with University of Maine, with Woody, initially about three years ago, and he gave us a stack of information about potential patents and what to get in trouble with. But our patents pending are through KL Gates out of Boston. And then we work with Perry, Crumsick and Jack out of Boston on the corporate side. So we've got what I would call a production team in line. We've got two different people competing for the distribution. Shipwright Solutions out of Portland, and also SPM Distribution who handles Toms of Maine. They're in Sanford. And of course, Allen Manufacturing, as you would expect out of anybody trying to gain more business. They would like to do our distribution. That makes a lot of sense because shipping a bunch of these lightweight containers to Lewiston, and then having the final step of the process be the one that kicks it out is a really good idea. Okay, other questions? Comments from critique. From our panelists. I have to say that spending three and a half years to get to this point without having sold more than 100 is kind of unsettling for me. Because you created a very complex set of products and marketing and programs and all of this stuff. And I guess I'd like to hear what kind of validation you have that any of this makes sense at all. Because, as Elizabeth was saying, it's an extremely competitive market that you're going into. Absolutely. And it gets back to two things. It's a great question. And like I said, believe me, no one feels this three and a half you're paying more than me. But a lot of that had to do with trying to maintain U.S. production. I could tell you it's some horror stories, but the reality is we got here. On the branding and the personnel, on the decision of what it looks like, how does it work and how well it works. Two years ago, I started in earnest getting them out in little groups and even though I haven't sold any, I've donated in the neighborhood of 700 to different events, including ski events, golf events, biking events, even pre-clip because it does fit sideways. To sort of test the idea, do people like to squeeze? What's the shape? Does it feel good? We've made changes throughout, including adding a filtration. But in essence, to answer your question now, we're counting on the fact that the team I've put together, including Jim and his team at the Fin and everyone else, significant backgrounds and activities such that we're attacking, ski ride, et cetera, in addition to mountain ice or race mountain bikes. We've tested it extensively within our own group. So it's that we're pretty secure that the first one that goes out isn't going to be perfect, but it's going to be really close. And because of our gross margins and our fixed cost being so low, we will be able to change on the fly and make adjustments on the fly and figure out exactly what part of a market. For instance, golfers may find that they like a part of this much more so than a ski ride category. We're a camper who's just going to use it for the filtration. As we move through the process, we've kept our fixed costs so low that we'll be able to direct market, affiliate market, event market to those people at relatively light costs on a fixed basis. Comments, questions. What are your needs? Well, we need money. How much money? We're asking for $250, up to $250,000 on a royalty basis. With my finance background, I could talk equity and equity valuations until I'm certainly tired of hearing myself talk. But the reality is the margin basis that we've set up, which like I said is in the neighborhood of, it's 80%, which works out to be about $24 each after sales, marketing, et cetera, allows us to do what I like to refer to as our sort of PO program, right? If I went into LOB and I sold $10,000 on a pre-order, that sounds really good, particularly in a panel like this. Oh, you've already sold $10,000 to LOB. The problem is I sold $10,000 at $14. I had to produce $10,000. I had to ship $10,000 to them, et cetera, et cetera. The finance side of my brain said, why don't we just treat investors, somebody who believes in the product, as somebody who is a PO? And we'll say, we'll give you in this case, we're offering $6 a unit until you get to 150% return. Projections, given our margins and given that you're a top-line item. So you become a top-line royalty expense item. Obviously, you want to make sure we keep playing money around for marketing and everything else to make your sale. But that's what we're offering. Up to $250,000 at $6 a unit. I'm open to other conversations. It's just as very difficult, as you can well imagine, to really value a company like this because we have spent a lot of money. We do have a lot of partners that have spent a lot of money. So just valuing it on a pre-revved basis is very difficult. What is your suggested retail price? $29 for the full set, which fits pretty nicely actually into the market of, for instance, a camelback is $21, single chamber, no skin, neoprene, carabiner. So from a pricing standpoint, that's the other thing that we've been able to do over the last couple of years. We've paid for different marketing studies and different things like that over the couple of years to say, what do you think about $29? What do you think about $7 shipping and handling? And it fits pretty nicely in, filtration, for instance, is $40 enough. And recently they came up with BobaWater and some others that are $9 or $10. That by the way, BobaWater sold 400,000 units in the first six months. It was $10. It doesn't work very well. It's made out of PET. You can't leave it in your car, but it's another issue. So $29 plus $7 shipping and handling. Can you give one away for the $29 or is that a different price? Excuse me? Though buy one, give one away? Is that $29 and you give one away? We give one away. Okay. And what ends up happening, as I said before, the actual cost to produce these is actually, you know, we've got it with a very good manufacturer, from a competitive standpoint, by the way, not much different than what I could have these produced overseas now with main manufacturing on a per unit basis. The flask in that you see, and you've seen a couple here actually, will be, you know, just a basic skin with a basic information that this is that you want to give, we give one. Panel, we only have just a minute or two left. All production efficiencies are thoroughly and exhaustively been researched in your... They absolutely have. The only thing we're dealing with now is breakpoints. So I've worked with these guys. Okay. Any interest in working with Brian from the panel? Feedback, quick. We only have just about a minute left. Yes. When the Advanced Manufacturing Center was in conjunction with my program, KTA would be very interested in helping in assisting. Thank you. Thank you. Elizabeth? I just don't know enough about the space. I think your marketing and branding is brilliant. I love it. I think you've done a really good job with it. So I'm going to pass. Lee? If they can master you for multi-level selling, call me. Okay. And Dawn? I'm skeptical, but I've been proven wrong many times. Okay. All right. Well, we have three minutes left. Reaction, obviously you've got strong interest from the University of Maine, and Hugh does bring a lot to the table. Is that something that you would like to... Absolutely. I mean, one of the things as I hope to hit on earlier was the whole Maine concept, moving out here from San Francisco, moving my family here, working with the University and working with Hugh would be fantastic. And I agree with Beth. I mean, some of the problem of doing this for three and a half years is we need money, and we do need expertise, but we've got a team that we've been working with for a long time. I'm glad to hear that you like our marketing. I like a lot. It's clearly taken a while, and we're finally happy with it. And if anybody comes after me, I'm definitely going to give you a call. And Dawn and I have known each other quite a while, and I think what he's doing at Top Gun and everything he's doing is fantastic on the startup front. Yeah, and if I can't... I just want to advise one thing, and I've known Don a while now since the Maine Angels. He's brought new energy to that program and to the Maine Angels, and I think to the extent that you can kind of work with him and work with his resources, including the Top Gun program. Now, I think that would be a great way to go. I like... I think the world of you, and I love your concept. And again, I really appreciate you being on the show, Brian. Thank you very much, guys. Thanks for your time. And panelists, thank you very much. So we conclude our November show, and again, I want to thank the viewers who are watching tonight for their time and attention. I hope you've enjoyed it, and I look forward to you folks joining us for our next season. If you have any questions or comments, please feel free to give us a call. You have our website information on the show or call the TV station. So again, thank you very much. We really appreciate it. Thank you. Brian, thanks.