Current Water Technologies Inc. (WATR.V) uses an electro-chemical process to purify water, primarily through a) An electrostatic discharge (ESD) and b) AmmEL which converts ammonia into nitrogen. In addition, Pumptronics Incorporated (“Pumptronics”), is a full subsidiary of WATR.V
Jan. 31 - Receives $0.36M Payment From Chemsbro. Working closely with Chemsbro to successfully launch its innovative Electro-Static Deionization (ESD) technology in the Kingdom of Saudi Arabia with the installation and commissioning of the ESD 900K unit later this year.
"SBCC is very excited about the ESD technology because of its ability to produce water of exceptional quality, which is suitable for boilers and cooling systems employed in the petro-chemical and energy sectors in the Middle East. SBCC has already pre-sold over 70% of the high quality water that will be produced by the ESD plant currently under construction. Based on the level of interest, additional near-term sales with major petro-chemical companies are expected following commissioning of the ESD 900K unit".
- Mr. Nizar Kammourie, Managing Director of Chemsbro, Business Development Director of Saudi Brothers Commercial Company (SBCC)
Feb. 5 - CWTI's Pumptronics Division - January Sales Of $330,000. In addition, new market opportunities have been identified for vertically integrating its patented water treatment systems with the automated pumping systems and services offered by Pumptronics.
Apr. 3 - Receives Funding From the Government of Canada in Support of Test Program in China. Funding of up to $0.12M from the National Research Council of Canada Industrial Research Assistance Program (NRC IRAP). In May 2018, CWTI participated in a trade mission to Hebei Province in China sponsored by the Canada China Trade Innovation Alliance (CCTIA). With research and development funding from NRC IRAP, CWTI is constructing a mobile demonstration unit which will be shipped to the partners’ sites in Hebei Province, China.
Apr. 4 - CWTI's Pumptronics Division - Equipment Sales of $178,242. Received in March 2019. WATR.V anticipates an increased equipment sales in the second and third quarters based on historical seasonal trends.
May 7 - IIROC Trading Halt.
May 17 - IIROC Trading Resumptions
June 10 - CWTI's Pumptronics Division - Equipment Sales of $353,110. Received new orders between April 1 and June 9, 2019.
June 14 - Grants Stock Options. granted 5M incentive stock options to 5 employees and 4 directors at a price of $0.05 cents for 10 years.
Despite a number of announcements, WATR.V went from $0.07 to $0.025 cents in the last six months.
The Chemsbro payments ($0.36M) and NRC IRAP Award ($0.12M) had little impact on valuation. Otherwise, four different recent sales announcements regarding Pumptronics amounting to over $1.3M - (1) Feb. 5, $0.33M, (2) Apr. 4, $0.17M, (3) Jun. 10, $0.35M, (4) Jun. 17, $0.57M - also uneventful.
At $0.025 cents, WATR.V reached a 52 week low today. The earnings released (only via Sedar) add some color to WATR.V's fiscal situation.
May 7: Q4 2018: Revenues $2,4M vs. $0.53M YOY: Net Earning ($4,79M) vs. ($1,29M). While revenues increase significantly, so did the losses.
WATR.V was not profitable due to high expenses (acquisition). Also, cash-on-hand at the time was low $0.09M vs. $1.24M last year.
May 30: Q1 2019: Revenue $0.54M vs. $0.66M YOY, Net Earning $0.099M vs. ($0.36M). Revenue decline but company was profitable due to lower expenses. Similarly, cash-on-hand is still low $0.10M vs. $1.15M last year.
Hence, low cash-on-hand is an impediment and increase the likelihood that the company will need to raise funds in future. Unfortunately, their last attempt yielded a 50% completion rate; ($0.2M out of $0.5M). The offer was at $0.07 cents (warrant at $0.12 cents) back in November 2018. While recent announcement of Pumptronics revenues are mitigating factors, showing that the company can raise funds is paramount.
More importantly, the hiring of Paradox (investment relations company) has been uneventful. The fact that there is no bids at $0.03 cents is telling.
This painfully shows that demand for the stock at said price is simply not there.
There is also a weak performance of the water division. The results from the August 2018 announcement regarding an Ammonia Destruction Validation Program mini-plant and updates from the November 2018 release regarding assessing the water treatment options are absent.
This does not bode well for a team that just survived a failed proxy. At the time we thought WATR.V was de-risked. Wrong! Is it now? Perhaps.
Certainly, a way forward for the company involves showing that they can significantly grow sales of their patented technology, as well as, leveraging Pumptronics' assets in conjunction with ESD and AmmEL technology.
WATR.V will need to execute in order to avoid the possibility of another yellow proxy.
The rationale for it will be simple, the stock price trajectory will be referred to.
Nonetheless, this is WATR.V's opportunity to deliver.
And that's our two cents.
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