EnerDynamic Hybrid Technologies (EHT.V) offers a number of products which combines solar, wind, and battery storage for pre-fabricated housing amongst others. We initiated coverage last February, with notes in August and October. Since then, the following release were issued.
Oct. 26 - Close private placement at $0.095 cents for $316K warrant at $0.15 cents.
Nov. 6 - Negotiated with its 18% debenture - settle $7.5M in interest. EHT.V issued 75M at $0.10 cents - See October 4th release for details.
Nov. 9 - Completed private placement for $2M - 8.1M shares issued.
Nov. 20 - Letter of Intent (LOI) to form a joint venture (JV) with Custom Complex Structures ("CCS"), a subsidiary of CampCorp USA. CCS deal target Southwestern US, Western Canada, for marketing, sales and manufacturing of EHT's ENERTEC modular housing system.
Nov. 30 - Joint venture (JV) with Groupe Nduom (GN) - ordered 100 solar systems to be installed on residential homes GN Power's customer. $5,000 (USD) per system, the increase represents additional revenues of up to $10M (USD) to EHT.
Jan. 4 - Complete joint venture (JV) with Custom Complex Structures (CCS) in AZ. - Target SW US and Canadian West. $20M in pipeline projects. Build a demo house for California (CA) in March 2018. CA has a Net Zero Policy - i.e. House built after 2019 need to have zero emissions.
Jan 4 - Debt Payment: $0.1M with 0.90M shares at $0.11 cents.
Jan. 8 -Preferred vendor status ("EPV") by De Sousa Costa International Inc. ("DeSC"). DeSC is a registered firm with the Clean Development Mechanism (CDM) of the United Nations Framework Convention on Climate Change (UNFCCC)
Jan. 9 - Supplying On Guard for Humanity (OGH) with Rapid Deployment Shelters for use in response to major disasters.
Jan 15 - Joint venture agreement (JV) with Brieke Family Assets Ltd ("BFA") in Puerto Rico and US Virgin Island. Also provided an update for the Peel School Board transaction closing. Deadline pushed back to Q2 2018.
Feb. 13 -Receives initial Puerto Rico ENERTEC Order as part of JV with BFA manufacturing of the EHT ENERTEC panels and solar systems in Puerto Rico as well as execute sales and distribution. JV will operate as CAT 5 Solar and Microgrids, LLC. ("CAT5"). the first order with EHT for 67 solar systems. Each system retails for up to $16,000 USD. Manufacturing facility (believed to be the first) is scheduled to open on July 2018.
Feb. 21 - Updates Ghana Joint Venture Activity - 30 ENERTEC Power Wagons ("PWR Wagon"). Each will retail for up to $20,000 USD, depending on capacity ordered - 30 PWR/month through Jun 2018. Then, 50 PWR per month from July toDecember. JV targets are estimated to 390 PWR.
Feb. 27 - Investigates Blockchain Technology for Capturing Carbon Credits. Estimate revenue of $5 to $10 per year for panels in jurisdiction.
Mar. 15 - Certification of Enertec by Ivory Coast Government. EHT.V will not need to ship EPS from Canada representing a substantial cost savings in shipping. Order from The Foundation General Akissi on behalf of the Ivory Coast Government. can now proceed.
Apr. 3 - Updates on Ghana JV: Canada Ghana Renewable Building Products Ltd - (CGRBP) 50/50 joint venture (JV) with Group Nduom is finalized. EHT received PO for inventory and production of $9M. EHT working with EDC to to facilitate these orders. EDC to provide 100% liquidity.
Also announced a non-brokered private placement for $0.3M at $0.095 cents with warrant at $0.15 cents.
Apr. 4 -Updates Negotiated Securities for Debt Transactions: (Re Nov. 6) finalized the settlement of a portion of the aggregate debt obligations through the issuance of shares and warrants for $3,1M shares ($0.10 cents) - Warrant ($0.15 cents). Debt reduced from $36M to $32M.
In the last six month EHT.V loss roughly half of its valuation despite new partnerships (CCS, DeSC, OGH, BFA), and progress with Groupe Nduom (CGRBP), as well as, the Ivory Coast Government. How does one account for this?
Debentures
Indeed, the re-negotiation of the debenture during the private placement had a negative effect on valuation. In short, EHT.V issued 75M shares at $0.10 cents as part of the deal. While debt reduction was achieved by conversion of debt to equity, this created an immediate selling pressure on the stock.
In addition, the timing was opportunistic as it enables debenture holders to sell some shares to participate in the ongoing private placement (September 11th) which was at $0.095 cents with warrant at $0.15 cents.
Peel
One of the major issue with EHT.V is that it is awaiting the closing of the Peel rooftops panels from Reliant First Nation Limited Partnership. The proceeds ($7M) will have a significant impact on strengthening the balance sheet. The transaction was supposed to close in late 2017 according to a July 13 2017 release, However, on Jan 15th 2018, this was delayed until Q2 2018. The original announcement is almost 18 months old (August 12th 2016,)
Summary
The debentures and the Peel closure delay explains why the stock slid (after the debenture announcement) and was unable to exceed $0.095 cents despite numerous announcement. In fact, the more announcements were made, the lower the stock price went. We believe that the stock hit $0.06 cents because both the latest Ivory Coast and CGRBP update had a marginal effect on the stock price (i.e. the stock did not break the $0.095 cents).
Investors who have been waiting for a while may have sold in frustration. While the potential revenue Ivory Coast deals and CGRBP are large, the number of revisions and optimizations made along the way delayed the initiations of some projects and valuation. However, more than six sizeable insider purchases were conducted in the last six months. These are a silver lining and give resilient investors hope in the process.
Despite the impact on valuation, significant improvement were made in the last six months toward reducing fiscal liabilities. Once, the issue with the Peel payment is settled and earnings come in, valuation should change.
For now, we wait for it.
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