Pond Technologies Just Announced A $100 Million Dollar Partnership

Palisade Research July 6, 2018
Category: Research

Hard to believe that a second company in our portfolio has declared a potential a $100 million partnership.

If you haven’t read our report on Pond Technologies (CVE:POND OTC:IOGID) and why it’s in our portfolio – you can check it out here.

Pond Technologies has announced a letter of intent (LOI) to receive US$100 million in project financing from Inventiv Capital Management – a sustainability-focused private equity firm based in Greenwich, Connecticut.

Share Price: C$1.60

Shares Outstanding: 19.4M

Market Capitalization: C$31.0M

Cash: C$6.2M

Total Liabilities: C$5.0M

Net-Total Cash (Cash minus Total Liabilities): C$1.2M

 

The LOI explores the creation and financing of a special-purpose vehicle (SPV) to develop a portfolio of projects that will use Pond’s algae-based emissions abatement solution. These investments will not be in Pond and will not result in any sort of dilution. This means Inventiv will front the majority of funds to get a project online.

There are several key milestones that Pond needs to hammer out before a definitive will be signed. . .

Obviously, Pond still needs to demonstrate commercial feasibility at an industrial scale beyond its existing trials at St. Mary’s Cement. This will be confirmed by completing construction and scale-up of two plants currently underway = targeting completion in early 2019 and revenue by Q3/4 2019. 

Secondly, Pond will also need to secure offtake agreements with algae buyers which shouldn’t be too challenging considering Pond’s technology yields a superior product.

While there are important milestones, the announcement is great validation of Pond’s technology and impressive growth trajectory. Its important to note the US$100 million is not a ceiling – Inventiv could invest as much as it can to grow its sustainable, cash flowing portfolio.

We maintain our target price of $3.50 – otherwise said, an increase of 220% from today’s price.

 

Palisade Global Investments Limited holds shares of Pond Technologies. We receive either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate. The information contained in such write-ups is not intended as individual investment advice and is not designed to meet your personal financial situation. Information contained in this report’s from sources we believe to be reliable, but its accuracy cannot be guaranteed. The opinions expressed in this report are those of Palisade Global Investments and are subject to change without notice. The information in this report may become outdated and there is no obligation to update any such information. Do your own due diligence.

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