Listings: CSE Canada , Frankfurt and US OTC
Tickers: ERTH / VVIVF / WIMN
Market cap at time of publication: $11.35 MCAD
Stock price at time of publication: $0.08 CAD
Business: Regenerative agriculture
One of our largest portfolio holdings , Earthrenew, reported their Q1 financials alongside a business update on may 30th. We were surprised to see no market reaction considering the fantastic triggers that lie ahead of the company.
Firstly gross margins improved substantially. $0.4 million increase in gross profit over the prior year, from negative $0.3 million in the prior year to $0.1 million in the current year, a 14 percentage point improvement over the prior year.
Secondly and most importantly the company gave an update regarding their Debolt granulation facility.
“Replenish continues to progress through the final stages of non-dilutive funding for the Debolt granulation facility. The Company continues to be successful in obtaining various government grants that support agronomic research and development activities and capital expenditures. As previously disclosed, the Debolt facility would produce upwards of 50,000 metric tonnes of fertilizer per year and revenues of approximately $25 million. The project would also contribute significant economic and social benefits to the Peace River region in Northern Alberta.”
We interpret this sentence that the company may actually gain total non dilutive financing for the ENTIRE facility. This would be a game changer as the facility itself could produce revenues of up to $25 million annually!
Thirdly, the company reported very good test results showing that their products are far superior to any comparable product on the market.
Lastly the company seems to be pursuing real licensing revenue possibilities which would provide high margin revenues.
The comapany stated “The continued success of these independent field trials coupled with the proprietary nature of Replenish’s products and manufacturing processes provide unique opportunities to accelerate earnings and cash flow growth in the Company without the need for additional capital spend. The Company continues to be encouraged by its ongoing development of licensing opportunities.”
All in all we remain very positive of the future of ERTH and we have increased our position between 0,08-0.11 cents.
We own shares of this company personally.
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