 Today I have the distinct pleasure of speaking with Fred Frederick de Grey from H2O innovation. How are you today Frederick? I'm doing great yourself Tracy. Frederick H2O innovation of course just had a tremendous year for achieving benchmarks And you have just been working basically day and night you have to be and I see that you just announced again The commissioning of the largest ultra filtration project to date in Colorado All right, this seems like big news to me. Can you tell us more about that? Thank you Well, it is certainly an important achievement for the company itself again the the project and Cliftern that we delivered a few A few weeks ago is an important milestone both in our business plan and in terms of commercial development We launched only 24 months ago this new technology called the fiber flex Which essentially provide the customer with a strong advantage to Interchange different membrane modules when it comes to membrane replacement So it gives tremendous ability and advantage for the end user to use this platform and it was the first successful Commissioning that we have done on it since then we signed 15 more new projects using the similar platform Okay, and for those of our shareholders and investors out there that may not understand this completely I know I'm learning a lot more about this You basically taking water from the Colorado River and turn it into drinking water. Is that correct? That's correct And that's what this system does is that correct? Exactly. So it's a drinking water application for the district of Cliftern in Colorado and of course I also read that you have brought in new contracts Just over 7.6 million and that you're at you've got a sales backlog to a record high of over 50 million Is that correct? Yes? This is a new a new record high for us a 51 million dollar in backlog The the latest projects we have announced that bundles to a 7.6 million dollar or three projects Again, it's not a surprise for us. It was by design. We added an expanded or sales team over the last year So finally it's a result of these efforts as I said earlier We also launched new innovations including the fiber flex in the 7.6 million dollars There is one project using the fiber flex in DC in British Columbia So again to see this backlog wrong to a 51 million dollar level Again, it's not a surprise. We see our sales pipeline is getting bigger and bigger The average size of projects also are getting bigger and obviously the demand for water infrastructure in southern US is also Pretty demanding. So okay, I understand that you just brought in your first significant project in British Columbia Can you tell us a little bit more about that? Yes for us? It is the first project in BC for the community of Endlishman River It is a certain a significant size project for us As will be commissioning also in installing a water treatment plan drinking water application Again using this ultra filtration platform called the fiber flex There's two things that we have happening to that are coming up number one You're gonna be the keynote speaker at the clean tech and technology metal summit specifically on clean tech Can you talk to us a little bit about the themes that you're planning on addressing? Well, I think you know the the team of these days is definitely water we use and it is one of our key expertise When I say water we use is how can we use? technology to clean sewage water or Industrial water and turn it into either water for irrigation or water for replenishing aqua fears or groundwater reserves It is definitely a field of expertise of HDO and it is an important nexus in these days If you look for example at the I don't know if you saw in the news But the current price increase in vegetables and fruits It's it's quite amazing to see how this could potentially leads to a water shortage as well And and that's why I think you know today being able to provide solutions for small mid-sized community With water reuse solutions will help them to better phase the shortage but also provide, you know solutions for their existing either agriculture needs or Municipal needs and of course I would like to just reinforce to the investment community and the investor Intel audience that you do have a sales pipeline of over 50 million is that correct? Well, the backlog is 51 million the sales pipeline is much bigger is is north of a hundred million as we speak right now But again what we announce and what we present as numbers is sales swap is a sales backlog Which are sales that are already secured under contract that we need to deliver the incoming quarters What a lovely way to be corrected I think what else I'd like to add is right now the Canadian dollar is at a 13 year low And of course you sell most of your technology to the US is that correct? That's correct In our current backlog, I would say about 70 75 percent of our sales are currently in the US market And we do have strong profit center coming from our Divisions such as PWA T the chemical division the coupling division Piedmont or both a very successful division based in the US providing strong Profitability and contributing obviously to the to the whole consolidation of our results However some costs on executing these projects are also in US dollars So yes, we do benefit to some extent of of the US strong US currency I'd also like to just reiterate that you're not new to the water game You were one of the first leaders and entrepreneurs in this industry Can you just back up and tell us how you got involved and the launch of H2O innovation? Well, it happens 15 years ago If you remember in 2000 or early 2000 there was this crisis in a walker to an Ontario where seven people die from Ecolite contamination so for me it was to some extent the the vision I had was like wow How can we provide again better solution for these small communities because I feel that it's is the poorly served market right now And it's still today the small mid-sized communities needs help needs solutions need well adapted Technology to to fit with their needs. They have limited resources. They have limited personal So since the beginning it was the vision that I've been pushing forward to Make sure that we're going to address this market and provide solutions for communities just like walkerton across Canada and the US So what should we Frederick has shareholders anticipate over maybe the next two quarters and early on for 2016 well Starting with the strong backlog sales backlog of 51 million We're just going to execute this backlog and turn it into sales and coming quarters So this gives excellent visibility in the coming quarters, obviously The second thing also is that all of our different divisions Pability piedmont all the specialty products and services are contributing Significantly to the profitability and the growth as well. They're doing tremendously well So this should impact positively as well the coming quarters second also The innovations that we put forward and presented then start to launch more Including the fiber flex For the ultra filtration as I announced earlier allowing us to secure numerous new projects The spmc a software we have developed to make sure that we provide sustained Support to these small communities are all innovations contributing to improving the gross margin continuously Well, thank you so much for joining us. It's nice to speak with you. Thank you very much Gracie