VIDEO: Current Water Technologies is Using Their Patents to Clean Public Water Around the World

MidasLetter Live
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Ron Hrynyk, President of Current Water Technologies Inc. (CVE:WATR) talks about their patents and methods of cleaning water which include electrostatic de-ionization. They are already modestly profitable and see their technology as a game-changer in today’s climate of clean-water scarcity.  They are operating in Saudi-Arabia as well as other parts of the world and are making acquisitions that compliment their business.

TRANSCRIPT:

James West:    Ron, thanks for joining me today.

Ron Hrynyk:    Thank you very much, Mr. West.

James West:    Ron, tell me a little bit about what Current Water Technologies does.

Ron Hrynyk:    Current Water Technologies has two proprietary, disruptive technologies: one is using a legacy technology called Electro Static Deionization that came up, by the way, over 50 years ago by the US Department of Defense. So it’s been around for a long, long time; we have two patented technologies, one for cleaning water and the other one for cleaning ammonia, called AmmEL. So ESD is the technology which is called Electro Static Deionization.

James West:    Okay. So essentially, you’re producing electrostatically deionized water from what kind of sources?

Ron Hrynyk:    Groundwater, municipal water…

James West:    Sea water?

Ron Hrynyk:    Sea water as well, too. Taking out salt for boilers, for piping, all sorts of different applications that it can be used for.

James West:    Okay. So where are you producing this water in the world now?

Ron Hrynyk:    We have a pilot project right now in Saudi Arabia, in Jeddah, with a very significant material investor in our company as well, too. They took a $1 million placement in the company a number of years ago at $0.10 a share. That particular, we have a contract right now for a $1.8 million delivery, which goes in the second quarter to Jeddah for that enterprise. And we believe that will be one of very many significant orders for Current Water Technologies.

James West:    Okay. So do you license the technology, or do you actually recognize a royalty off the volume of water cleaned or produced?

Ron Hrynyk:    No. they are partners of ours, effectively, in the Middle East; they have the marketing and the license rights for the product, and they do our sales for us. They’re a strategic alliance and partner for us, which will increase our sales.

James West:    Okay. So is this a bottled water product at the end of the day?

Ron Hrynyk:    No. it’s used for more municipal or industrial applications.

James West:    I see.

Ron Hrynyk:    So if you take industrial right now in Jeddah, the water that they use has high levels of salt concentrate that’s still in the water. So they would have premature failure right now, because using their water has high levels of salt in it, so a typical boiler, for example, what they use in their industrial city like Jeddah would last, I would say, a typical lifespan should be somewhere between 20 to 25 years. Because of the salt, they can’t pull it out of the water, they have premature failure of these boilers and their pipes, and they break down within 3.5 to 5 years.

James West:    I see.

Ron Hrynyk:    So with that materially shift changes their production and shuts them down, so they need…

James West:    Okay. So in the news lately we’ve been listening to the idea that Cape Town, South Africa, is facing Day Zero in April of this year where they’re actually going to run out of municipal water supply.

Ron Hrynyk:    Correct.

James West:    Is this technology applicable to that kind of a situation?

Ron Hrynyk:    In a municipal application, absolutely yes. Most – our largest competitor to the industry you would see is reverse osmosis, or filtration membrane type of technologies, and that’s what they would use in most desalination plants or in Cape Town or for a city of Toronto or a city of Vancouver or a city of Calgary. We augment those processes, and what we can do is, our water filtration standpoint is more effective and complements, okay, those sort of water situations or filtration units.

So we don’t compete necessarily against the membrane technologies, we can augment and support it and help it, and provide fresh drinking water.

An example would be, take Walkerton, which was a big story a number of years back. Our electrostatic deionization removes 99.9997 percent of e.coli through ESD technology.

James West:    99.9997? Wow, that’s pretty close to five nines! That’s a fact.

Ron Hrynyk:    That’s a fact.

James West:    Great. Okay, so what exactly, how does the revenue model work, where do you get a profit, what’s the revenue picture look like going forward in 2018?

Ron Hrynyk:    So we just recently acquired a company called Pumptronics out of Oakville. Revenues for 2017 for the company would roughly range in about the $5.2 million range. We’re profitable. We make a little bit of money right now, which is about $400,000. We’re looking at 2018 sales at around $13 million, which should probably take our profits up to around $2 million. So we’ve got a backlog of orders from the legacy company that we just acquired, Pumptronics out of Oakville, but we also have significant orders that we believe that are coming onstream, particularly the ones out of Saudi Arabia that we believe are pretty material.

We have also a material contract out in Calgary with an oil and gas player as well too, who is very significant and deals with major, major clients like Shell, BP and etcetera. And that happens to have a royalty income stream revenue on that particular model, so you know that, but it’s not actually used for water; it’s actually being used in the petrochemical business. We’re using ESD technology for removal of an organic solvent.

There’s lots of applications that you can use this ESD technology for.

James West:    I see.

Ron Hrynyk:    So you can use it for removal of ammonia, you can use it for cleaning of water, and it just so happens we use it in the petrochemical business for removal of an organic solvent.

James West:    Okay. So what are the big – what’s the revenue picture look like for 2018, would you say?

Ron Hrynyk:    I would say we’re, for 2018 we’ll be in around the $13 million mark, and we’re looking for probably about a $2 million profit for the company.

James West:    That’s not bad.

Ron Hrynyk:    It’s not a bad start for the company. We’re just ramping up. We just closed a financing for the company right now, so the company just completed about a $2.5 million capital raise for the company. So we’re just getting up and starting to (unintelligible) [0:06:28]

James West:    How many shares out?

Ron Hrynyk:    Right now, about 137 million shares. After the financing is completed, we’ll be closer to about 150 million.

James West:    Okay. Great, then, so what would be the big milestones in 2018 that investors can look out for that are demonstrative of increasing shareholder value?

Ron Hrynyk:    The first one I would watch for is the transaction in Jeddah. So this is a material order that’s going out the door, as I said, it’s a $1.8 million unit that’s being delivered to Jeddah in Saudi Arabia; I think that will go in the second quarter, and I think that’s probably really going to shift change the sales for this company. So as I said, it’s just close to a $2 million unit, but I think it’s going to be a showcase in the Middle East, okay, for cleaning water. And I think our partners will really be adding value by growing those sales initiatives for the 2018-2019 year. And we would expect some very positive outlook for those sales revenue side.

James West:    All right, Ron. That’s a great introduction. We’re going to leave it there for now; we’ll come back to you in a quarter’s time and see how you’re doing. Thanks for your time today.

Ron Hrynyk:    Very grateful for your time as well, too. Thank you, James.

 

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