Financial Research and Quantitative Trading Strategies for TSX Venture Investors

SHRC - Next earnings.

March 18, 2019

  

Sharc International Systems Inc. (SHRC) is a company focused in harnessing thermal energy from wastewater. We initiated coverage on April 2017, with notes on September 2017, March 2018. and September 2018. Since our last update, a number of releases have been issued.


Sept. 5 - Engages The Howard Group to Direct Investor and Capital Market Communications Programs. The agreement is for one year effective September 1, 2018. The remuneration payable to The Howard Group will be $7,500 per month plus GST plus 0.4M options at 0.46 cents.

 

Sept. 25 - SHARC Energy Systems has started construction on Clyde Gateway, Scotland’s biggest and most ambitious regeneration program.       Initial 2MW of capacity, with room to expand further as the development grows.

 

Oct. 11 - Lake Louise Inn is the First Hotel in the World to Install Sharc Energy Piranha System. First time the waste water heat recovery system has been used to improve energy consumption in a hotel.

 

Oct. 12 -  Stock options (1,4M) granted to Officers, Employees and Consultants

 

Oct. 16 - SHARC Announces Addition of European Finance Executive to Advisory Board. Corporate banker Thomas Lauener, join the Company’s Advisory Board. He is currently the Desk Head Special Client Situation Competence Center at UBS Zurich.                        

 

Nov. 14 - Signs Development Agreement with Silica Desarrollos, S.A.P.I. de C.V. on a Real Estate Project in San Pedro, México.  Initiative (145,312 sq. ft) will be part of the residential and commercial project called Arboleda. Delivery and installation of the units will occur in the first half of 2019.    

 

Nov. 27 - Enters into $1.3 Million Loan Agreements. The Loan matures on December 23, 2018 and bears interest at an annual rate of 18%.  The Clyde Gateway Project is estimated to complete and begin generating cash flow in late Q1 2019.  Each Warrant entitles the holder thereof to acquire one common share of the Company at $0.35 per share for three years from the date of issuance.    

 

Dec. 10 - Announces Addition of Jas Sahota as Senior Vice President of Finance

 

Dec. 19 - Repays $1.3M in Loan Agreements.  The Company has utilized the loan proceeds for the purposes of paying eligible construction costs related to the Clyde Gateway Project. The repayment prior to maturity validates management’s commitment to building trust with capital markets.

 

Jan. 15 - Announces Strategic Equipment Financing Relationship with Partners Capital Group Inc.  

 

Jan. 29 - Announces $4 Million Private Placement of Convertible Debenture Units. Estimated 4,000 convertible debenture units (the “Units”) at a price of $1,000 per Unit for aggregate gross proceeds of up to $4,000,000 (the “Offering”) at 0.32 cents and warrant at $0.40 cents. 

 

The net proceeds of the Offering for development of the Company’s projects in the United Kingdom and for working capital purposes.    

 

Feb. 11 - SHARC Energy and ARGUS Environmental to Install Piranha T10 System in Affordable Housing Development in Ottawa, Canada.              ARGUS Environmental Inc. (“ARGUS”) with developer Claridge Homes to employ SHARC™ Energy System’s Piranha T10 system.

 

The expected delivery and installation of the Piranha T10 will be in the second quarter of 2019, and with this first installation. The Company expects this to lead to several more in the Ottawa area and in the province of Ontario with ARGUS.

 

Feb. 13 - Appoints Brock Trimble to Help Customers Access EfficiencyBC Funding. Ms. Trimble will assist SHARC’s customers access funding through EfficiencyBC will provide up to $200,000 for a commercial business to switch to high-efficiency heating equipment.    

 

Feb. 19 - Launches PIRANHA™ in United Kingdom and European Union.  

 

Feb. 28 - Provides Corporate Update on Clyde Gateway Building Project in Scotland SHARC Energy Systems Unit and equipment will be installed into the just completed building towards the back end of this quarter. 

 

Mar. 8 - Announces Closing of Private Placement of Convertible Debenture Units Closed the sale of 810 convertible debenture units (“Units”) for gross proceeds of $810,000 pursuant to a private placement (the “Offering”) of Units led by Echelon Wealth Partners Inc.

 

In addition to the continued advancement of Clyde Gateway, SHRC.V has announced deals with Silica Desarrollos (Arboleda), as well as, Argus and Claridge Homes. The company also made two appointments: an SVP Finance and an Advisory Board Member.  SHRC.V took a $1.3M Loan (which it repaid before the due date) and entered in a relationship with Partner Capital Group and disclosed an intent to raise a $4M private placement. 

 

To date SHRC.V reported only closing $0.8M or 20% of the total amount. Notably, the stock price has held up relatively well despite this news. Perhaps SHRC.V is due to make further announcements on that front but currently, the results are well below the mark. And if no further announcements are made, the company will have to find a way to raise more fund. Pending no major release, the likelihood is to be below $0.32 cents.

 

To put the current financing in perspective, the last round was back in May 2018 for $2.5M at $0.40 cents. SHRC.V was oversubscribed on this placement raising $4M of which $2.3M was raised in the first tranche. These warrants were at $0.60 cents. The current placement warrant are at $0.40 cents.

 

SHRC.V does have a number of ongoing projects and distribution partnerships agreement (i.e. ATC, Frontier.  Midwest Machinery Co, Johnson & Barrow, Highmark (NYC) , and ENGIE). Perhaps, more news and revenues are to come on this front.

 

In a early November 2018, Ross Burton reported that the company was expecting $1.5 to $2M in the next three months. The $1.3M Loan seems similar to this forecast. It may be that the the market is awaiting the next earnings from the company to factor in valuation. 

 

 

 

DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions. 

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