Current Water Technologies Inc. (WATR.V) applies patented and proprietary “Electrochemical Technologies” to the treatment of waste water, desalination water and drinking water contaminated by metals or nutrients. WATR.V also operates Pumptronics Incorporated, a pump station manufacturer specializing in custom design and automation.
Coverage began February 2017 with notes March 2018, June 2018, December 2018 , July 2019, and April 2020.
News Releases
Apr. 16 - Private Placement for up to $500,000, Extended. Expected to close on or before May 13th, 2020.
The Private Placement is available to all shareholders of the Company as at March 10, 2020 (the “Record Date”) and are still shareholders and are eligible to participate under the “Existing Shareholder Exemption.
Apr. 27 - Completed the second tranche - $190,000 of the Private Placement announced March 06, 2020 and updated March 11, 2020. The Company has raised a total of $410,000 of the proposed $500,000.
The Company is continuing to raise capital at a price of $0.02 per unit (Warrant 0.05 cents). Each Unit is comprised of one Common Share in the capital stock of the Company and a full share purchase warrant (“Warrant”), which is exercisable for a period of five (5) years from the date of closing.
In order to participate in the Private Placement, existing shareholders must notify the Company no later than 10:00am Eastern time on May 9th, 2020.The Private Placement is expected to close May 13, 2020.
Apr. 28 - Announces Postponement in Filing of Financial Statements
May 15 -Closes Third and Final Tranche of Private Placement: Closed the third and final tranche of $90,000 of the Private Placement announced March 06, 2020 and updated March 11, 2020 and April 27, 2020. WATR.V raised a total of $500,000 and issued 25M common shares with a total of $10,800 and 0.54M Purchase Warrants granted in finders fees.
June 3 - Announces Postponement in Filing of Financial Statements: related Q1 2020. WATR.V is continuing to work diligently and expeditiously to file the Interim Filings and currently expects to file on or before July 16, 2020.
June 16 - FY 2019 Earnings* (no press release)
June 29 -CWTI's Pumptronics Division – Equipment Sales of $517,001: CWTI suspended operations in April – May, 2020. WATR.V reopened in late May and remains vigilant in protecting our staff by adopting strict health protocols.
Mr. Peter Kennedy, who joined the Board of Directors of CWTI in September 2018, has tendered his resignation.
July 16 - Q1 2020 Earnings* (no press release)
Aug. 26 - Q2 2020 Earnings* (no press release)
Oct. 15 - Retains Proconsul For Investor Relations: Proconsul will assist the Company by increasing market awareness for the company utilizing a number of financial market communications initiatives. The core of which will be facilitating in-person introductions for the company with institutional and retail brokers and investors.
The Board of Directors of the Company will grant to Proconsul 500,000 incentive stock options to acquire common shares at an exercise price of $0.05 cents. The options will be vested at six month intervals over a period of eighteen months with an exercise termination date of two years from the date of grant.
The Company has granted of 6,750,000 incentive stock options, almost half of which are to replace expired options, to be issued on October 15th, 2020 with 3,850,000 options going to 4 Directors and 1 Officer; exercisable at a $0.05 cents.
Nov. 30 - Q3 2020 Earnings* (no press release)
Summary
Financing
WATR.V raised $0.5M (three tranches) by issuing 25M shares at $0.02 cents (warrant at $0.05 cents). The placement was initiated in March 11, 2020 and was completed April 27. Roughly six weeks right in the middle of the Covid-19 period.
The proceeds will be used for current equipment sales activities and current general working capital purposes.
Insiders appeared to have participated to the placement with Mr. Kaszuba contributing more than $220,000 (44%). The Shelps brothers appears to have contributed $100,000 in total (20%).
Source: CEO.ca
Earnings
As exhibited below, WATR.V's financial performance has taken a hit in FY2020. YTD, revenues are down by 50% or so.
Q1 and Q2 2020 were most affected year over year, while Q3 2020 was slightly better but still not in par with Q3 2019.
In the MD&A the company provided little rationale for its decline in revenues. It is suspected that Covid-19 has a role to play but this is not confirmed in the filings. However, WATR.V disclosed that it "obtained loans financing totaling $80,000 under the Canada Emergency Business Account". Unfortunately, the MD&A still contains a generic filers.
Overall performance
Current Water continues to focus on marketing and business development efforts during the current year via establishment of strategic alliances and non-exclusive and exclusive distributorships. The Company is currently marketing its technologies in North America, Asia, Europe, the Middle East, South America and Africa.
The only specific project that is mentioned is the Chemsbro ESD Unit.
Status of Chemsbro ESD unit
The Chemsbro 900K ESD unit remains to be completed due to unexpected cost overruns. The cost of the unit was US$1,212,400 plus an estimated cost of installation and commissioning of US$36,250, with an additional US$208,244 in client requested modifications, bringing the total estimated cost of the unit to US$1,465,894. To date, Chemsbro has paid $1,392,544 towards the total estimated cost of the 900K ESD system. The Company is currently pursuing financing activities to raise additional funds to complete the unit at the earliest possible opportunity.
In Short
WATR.V is currently trading at an all time historical low ($0.015 cent). The share price is somewhat explained by earnings, but mostly the apparent future outlook. Overall, WATR.V continues to under-communicate with the market.
It is evident by the very few news releases issued, including the rare sales announcement. Furthermore, the absence of an investor presentation painfully validate the point. Hence, future outlook perception for the company are weak.
The continuously declining stock price since WATR.V survived a yellow proxy fully reflect this. WATR.V went from $0.08 cents to its current $0.015 cents and has managed to sustained itself by raising funds at lower and lower prices.
Looking at the slate to the next AGM also speak to the fact that WATR.V has not retained many board members.
Previous directors: Zachery Dingsdale, Peter Kennedy, Bertan Atalay, Sunil Ghorawat are not on the slate.
Mr. Kennedy resignation announced (June 29 release) but Mr. Dingsdale and Atalay and Ghorawat status are unknown.
The bulk of the income generated in the last two years is coming from Pumptronics. It is clear that WATR.V is still struggling to fully commercialize its water technologies in Canada and Abroad.
The hiring of Proconsul for investment relations come across as an attempt at obtaining financing to complete the Chemsbro 900K ESD unit. However, this project has been in the works for at least five years now (circa 2016).
Mr. Kammourie projected that USD $60 billion is the anticipated investment over the next six years and highlighted the importance of water re-use for many industries. The National Water Company plans to increase the re-use of water to 30% by the year 2020. Water re-use currently accounts for 1% of the water supply in the KSA.
Mr. Kammourie commented, "As a significant shareholder of ENPAR, CHEMSBRO's Group is committed to the success of this venture in the Middle East and to the overall success of ENPAR globally. CHEMSBRO has established a dedicated marketing and sales team that is currently focusing on specialty water treatment opportunities in order to establish a market presence in a timely manner. We have been working closely with ENPAR for the past few years in order to gain an intimate knowledge of the strengths and advantages of ENPAR's novel systems.
In 2017, WATR.V received the first payment of $0.8M to initiate construction of the ESD Units.
Dr. Shelp commented, "This initial payment officially launches the design and procurement phases. The Company believes that following installation/commissioning in Jeddah, Kingdom of Saudi Arabia in early 2018, this facility will represent the largest plant of its kind in the world.
This world class showcase will act as a catalyst for aggressive marketing and sales throughout the Middle East.”
March 2018, WATR.V received another payment of $0.425M
To date, CWTI has received a total of CAD $1,400,000 toward the purchase of the ESD 900K system. The final payment of approximately CAD $400,000 will be received immediately prior to shipping the system.
The system is being constructed inside four 40-foot shipping containers. The Company expects the system to be shipped this summer, and its installation and commissioning to occur in the fall. The system will be installed at an industrial site located near the city of Jeddah, which is situated in western KSA on the shore of the Red Sea.
January 2019, WATR.V received another payment of $0.36M.
CWTI is working closely with Chemsbro to launch its innovative Electro-Static Deionization (ESD) technology in the Kingdom of Saudi Arabia with the installation and commissioning of the ESD 900K unit near Jeddah later this year.
Mr. Nizar Kammourie, Managing Director of Chemsbro, Business Development Director of Saudi Brothers Commercial Company (SBCC) and a board member of CWTI, commented that “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.”
November 2020, WATR,V recorded in its MD&A.
Status of Chemsbro ESD unit
The Chemsbro 900K ESD unit remains to be completed due to unexpected cost overruns. The cost of the unit was US$1,212,400 plus an estimated cost of installation and commissioning of US$36,250, with an additional US$208,244 in client requested modifications, bringing the total estimated cost of the unit to US$1,465,894. To date, Chemsbro has paid $1,392,544 towards the total estimated cost of the 900K ESD system. The Company is currently pursuing financing activities to raise additional funds to complete the unit at the earliest possible opportunity.
Bears say "WATR.V is not viable" as the stock is not performing. Its understandable, as the lack of communication by the company and declining share price have frustrated investors. However, reviewing the financials the current valuation of $0.015 cents is not fully warranted, and is mostly a function of poor outlook and not the actual earnings.
Even without Current Water, Pumptronics is a viable business. Most importantly, Mr. Kammourie continuous involvement and Mr. Kaszuba recent investment are discounted.
Mr. Kammourie is a board member and long time shareholder who is also the CEO of Sawaco Water Desalination.
Mr. Kaszuba recent addition to the board and his participation in the last financing ($220,000) is noted.
Infrastructure project builds take years to come to fruition. The paper trail suggests that WATR.V may be closer. However, WATR.V has continued not to communicated that potential. The catalysts at this point is whether WATR.V is able to complete the Chemsbro ESD unit in 2021, and whether it will finally unlock value for its shareholders. Let's see.
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