May 2022 – Originally published on June 3rd 2022
ESGFIRE returns since 2018: + 1150 %
ESGFIRE returns Year to date 2022: -15 %
Markets remain extremely volatile and makro signals are still bearish although the reopening in some provinces in China after COVID-19 lockdowns provide some positive news. Oil prices remain very high which is bad for economic growth and are likely to remain high following the oil embargo on Russian oil announced by the European Union. OPEC late on thursday (2/6 2022) decided to increase their capacity during July and August to way up for the possible effect of Russian oil effectively being removed from the market (although some Russian oil is already being diverted to India and China at discounted prices) however the OPEC news has yet to lower market prices on oil.
Food prices and especially wheat prices have come down a little bit in the last month but are still on unsustainably high levels if we are to avoid a global starvation crisis.
Fertilizer producers (our top pick being Earthrenew) can expect to see a continued high demand for their products due to global food shortage and also the fact that fertilizers from Russia is under embargo ( Russia being one of the biggest fertilizer producers globally). The markets are keeping all fingers crossed for the hopes that the FED will be able to softland the economy however many big banks remain bearish about this hope and CEO of JP Morgan only yesterday warned that he thought we would be seeing a financial hurricane.
The monkeypox virus outbreak has yet (thankfully) to take a turn for the worst. However we do not think that the coast is all clear. Luckily we have yet to see any deaths related to monkeypox (unless this is being covered up and/or misdiagnosed which is not unlikely) but we are seeing the World Health Organization , the CDC and other health authorities making the same mistake with monkeypox as they did in the beginning with COVID-19. The mistake being made is downplaying the risks for the general public and trying to portray monkeypox as a “Gay disease that only transmits sexually”: This could not be further from the truth. Epidemiologist & Health Economist Eric Feigl-Ding wrote a highly interesting thread on june 1st about monkeypox virus potentially being AIRBORNE and not only transmitted via sexual encounters. There has also been other reports on Monkeypox potentially being airborne and it remains to be seen if these claims/reports are in fact correct. It would be devastating for the world if we went into a new fast spreading pandemic although it’s unlikely to become as severe as COVID-19 seeing as there are vaccines and therapeutics available. A hint of caution should still be raised since it does appear the strain of monkeypox virus which is in transmission currently has mutated way more than expected by scientists. What is especially alarming is that the virus in just 4 years has mutated as much as would be expected over a 50 year time period. Scientists are uncertain if we will be able to identify if this strain actually is more transmissible than previous outbreaks but by the looks of the increasing reported cases and also the fact that Monkeypox easily can be misdiagnosed certainly points towards the direction of increased transmissability.
The ESGFIRE portfolio remains highly liquid with a cash position of 60 % and a large hedge position in the worlds only Monkeypox Vaccine producer Bavarian Nordic, which also happens to have a very promising COVID-19 booster which should be ready for commercial stage by Q4 of 2022. We have also due to the changed market conditions begun to phase out companies that are far from substantial revenues which is why Chargepanel and Biofrigas has left our portfolio as of May 2022.
We have also slightly increased our positions in Absolicon and Earthrenew despite the expected market turbulence as we think these companies will outperform in the current market.
Current ESGFIRE positions with Monthly performance for May 2022.
Absolicon – Down 2,2 %
Absolicon received an oversubscription of 124 % which adds 10 MUSD to the cash position of Absolicon which means the company should be fully funded for atleast 12 months and possibly longer depending on required investments.The company is still expecting between 2-3 framework agreements to materialize into actual sales before end of june 2022 which would equal sales of 15-20 MUSD. We currently do not expect the company to be able to fullfill the sales of 2-3 systems by end of June 2022 but we still hope to see atleast ONE system sold in this time frame. Absolicon have signed in total 18 framework agreements and totals a sales pipeline exceeding $120 MUSD. We are waiting for the first framework agreement to materialize which alone should produce one off revenues of 4-5 MUSD and recurrent revenue of 3-4 MUSD annually. We expect even more massive interest for Absolicon’s solutions following the European Union ambitions to speed up its energy dependance of Russian fossile fuels.
Aduro Clean Technologies – Down 10 %
Aduro is moving closer and closer to commercial phase with no real appreciation from the market as of right now. The company has during April closed a successfull and oversubscribed private placement which adds gross proceeds of C$2,352,666, which exceeded the previously announced funding target of C$2 million. Aduro also during April announced the hiring of engineering firm Rally which we have written a previous post about and can be found on Aduro’s corporate page on our website.
Char Technologies – Down 5 %
Char Technologies recently finished a private placement which gave them gross proceeds of C $4,894,881. The company’s stock has gone down on no negative news the last few months, this downward spiral is likely to a change of sentiment for growth stocks. Char has a sales pipeline of about 100 MUSD and it should become to materialize into sharp deals within a not too distant future. We think a lot is happening behind the scenes and would not be surprised if big news materialized soon.
Desert Control – Down 4,5 %
Desert Control is constantly adding new team members for their growth which we view as a great sign. Desert control is now in commercial stage! On March 23rd they announced they had completed the deployment of the first liquid Nano clay treatment for american soil in a validation study with the University of Arizona. Large parts of the United States have issues with desertification and are in desperate need of the products which Desert Control offer since they can restore soil and reduce water usage. The company also announced that they have now entered commercial stage in the Middle East and launching validation initiatives in the United States. We are satisfied with the latest development of this unique ESGFIRE portfolio company.The company is gaining more and more news as fertilizer prices are exploding upwards and the need for alternative methods are being sourced globally.
Earthrenew –Down 14 %
Earthrenew has impressed us with great financials and also the launch of their new processing facility Beiseker. Fundamentals are very sound with increasing revenues. The stock is currently up by alot this year after reaching all time lows in January of 0.16 CAD per share. Patience in investing is a virtue which this development clearly shows.
Lion E-mobility – No Change
The company recently impressed us with a HUGE order for 2022 that was 48 million euro in size, much larger than their current market cap. The current harsh climate for micro caps is clearly visible since the big order was not permanently reflected in a higher share price. Lion E mobility recently announced an impressive battery cooperation which should generate revenues. The company is keeping shareholders regularly updated with investor events which we find reassuring. The company has also finished the deal with BMW for their own serial production of batteries.
Vicinity Motor Corp – Down 7 %
Vicinity Motors is getting punished by the market heavily despite good news of new distributors. Vicinity Motors shocked the market with a capital raise lately that sent the stock down with more than 26 % on a single trading day in March. We think this event was a mix of overreaction and punishment for the management’s decision not to let current shareholders participate in the financing. However The company recently received analyst coverage from Catalyst research and Spartan capital indicating 15-32 CAD as a price target constituting 350-750 % upside from current levels.
Leading Edge Materials Corp – Down 25 %
We hope to soon see some revenue generating news as the company is about to start production in one of their projects which should prove to be a major positive catalyst. Since mining company Beowulf mining in Sweden recently were approved for their Iron Ore mine in Kalla this should have positive spinoff effects for other mining companies such as Leading Edge Materials with a more positive governmental attitude for new mining projects in Sweden. The company also should have some short term catalyst coming up within the next few months. It is possible the company may fall further since they are in pre revenue stage.
Hydrogenpro – Up 3 %
Hydrogenpro continues to impress us with new orders. On April 19th they announced an order exceeding 3 MUSD for electrolyzers from Mitsubishi heavy industries.
It’s also worth mentioning that the initial order of 50 MUSD from Mitsubishi power Americas has now been converted into an actual purchase order which is the largest of its kind for electolyzer systems ever. The stock however , in our opinion, is even more undervalued at current levels with this order which proves their concept is working than when it was trading at around 12 NOK. Conviction is high for us with this position as Hydrogenpro aim to deliver hydrogen at a cost of 1,2 USD per kilo in 2022.
Envirometal – Down 2,5 %
EnviroMetal Technologies Inc. is developing and commercializing economic and environmentally sustainable metal recovery technologies for applications in the primary and secondary metal industries. EnviroMetal extracts precious metals from ores, concentrates and E-Waste by deploying its proprietary non-cyanide, water-based and neutral pH treatment process. Extensive analysis by ESGFIRE is coming shortly!
Fusion Fuel – Down 2 %
There are many interesting projects which we think could give positive catalysts for this stock in the coming months.
FUSION-FUEL’s mission is to provide the world with innovative green hydrogen solutions that accelerate the transformation of the global energy sector and enable the sustainable reduction of carbon emissions.FUSION-FUEL has developed a revolutionary new electrolyzer design – the HEVO – that will allow them to produce hydrogen using renewable energy at highly competitive costs without any associated carbon emissions. FUSION-FUEL’s team has a long history in the solar energy industry and in developing concentrated photovoltaic technology.
Compleo Charging Solutions – Down 15 %
Compleo Charging solutions has so far not announced any problems with supply chain issues due to covid lockdowns in China and we hope that this will remain the case however it’s a risk that needs to be considered as it could slow down revenue growth.
Compleo manufactures high-grade charging stations and prove solutions for electromobility.They are active in several European markets including Great Britain and Germany. They offer AC and DC charging points and wallboxes that comply with calibration law for energy suppliers and operators.Compleo enables electromobility with high-grade charging stations coupled with comprehensive charging infrastructure know-how. Major companies, operators and energy supply companies throughout Europe depend upon AC and DC charging points from Compleo. They are expecting to deliver 150-160 MEURO in sales for 2022. The company is growing fast both organically and through acquisition. The company recently stated they aim to turnover half a billion Euro by 2025. More can be read under the Compleo corporate page.
Bavarian Nordic is a fully integrated vaccine company focused on the development, manufacturing and commercialization of life-saving vaccines.
The company currently has the only vaccine approved for all age groups in Monkeypox and are also working on a promising COVID-19 booster which will be most likely read by Q4 of 2022.
We have a number of positions in unlisted companies which we anticipate will go public through initial public offerings within the next 6-12 months.
Evanesce packaging solutions
As a sustainable technology innovator,Evansesce is revolutionizing sustainable packaging with 100% compostable and affordable plant-based solutions.
Likely going public in the second quarter of 2022 on one of the Canadian stock exchanges.
Expected returns: Current estimate is that the round our community invested in will return somewhere between 10-15 X our original investment.
The vision of Captico2 is to be the world leading in offering high impact Carbon Capture Utilisation and Storage technologies (CCUS). Captico2 can capture mineralize and transform carbon dioxide into a valuable and sellable commodity in less than 60 seconds. The company aims to pre-sell 10 full scale units in 2022 creating potential revenues of 160 million EUR.
Captico2 is about to close their current 10 MUSD financing which will enable them to proceed with their TRL 7 testing. After this is finished they have a written order of 10 units totalling 160 million EURO with a possible net profit margin of 20 %.
OLA MEDIA is a network of interactive touch screens located exclusively in the backseat of Ubers. By leveraging innovative technologies and captivating spaces, they help brands create engaging experiences with a high value audience.
Likely going public during the second quarter of 2022 at either Canadian exchanges or NASDAQ.
Expected returns :We expect our community to materialize somewhere around 400-500 % returns on the investment round on which we made our original investment.
Alchemy is developing innovative nanocoating solutions to the challenges faced by many industries. Their coatings are designed to repel water, dirt, and ice while maintaining the high transparency, mechanical durability, and weatherability specifications for advanced sensor systems used in harsh environments. The company has a deal with the Canadian army.
IPO status: Most likely going public by end of Q2 or beginning of Q3 of 2022.
The stock price development above was calculated by taking the opening price at the first day of May and the closing price at the last day of May.
We own shares of these companies personally.
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