CLARIFIYING CIELO’S USE OF RAILWAY TIES – OFFICIAL COMPANY COMMENT

Cielo Waste Solutions
Ticker: CMC.CN / CWSFF
Listings: Canadian Securitites Exchange / US OTC
Website:https://www.cielows.com/
Market Cap: 326 MCAD at time of publication
Share price: 0.84 CAD at time of publication
Industry: Converting waste to renewable fuel

After the very positive press release today 7/4 2021 in which Cielo announced that they would be granted contribution of 500 000 CAD from Alberta innovates and also reannounced their cooperation with a large railway company in Canada ESG decided to ask IR at the company who’s supplying the rail ties, and also ask for clarification on what the grant is about in terms of the testing of the ties specifically. The answer below was provided by officials at Cielo Waste Solutions:

“We are happy to be receiving 600 tonne of rail ties from our feedstock partner, to conduct these commercial volume tests for AEP.  To be clear, Cielo isn’t conducting these tests to determine if the rail ties are a suitable feedstock, that has been proven out already in smaller quantities.  AEP’s mandate is to ensure that environmental concerns are addressed in the safe disposal of these ties, compared to the current methods of burning or simply land filling them.  Before we start processing hundreds of thousands of ties in Dunmore, we are going to show just how environmentally friendly our process is for a final solution for this decades-long waste problem.  Through this process, we will be producing a high volume of fuel, which is ours to sell, giving even more financial benefit to this Alberta Innovates grant.”

I own shares in these companies personally and this is not to be considered financial advise, always do your own research!

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CIELO RECEIVES CONDITIONAL GRANT FROM ALBERTA INNOVATES FOR $500,000.00 TO PROCESS RAILWAY TIES

Cielo Waste Solutions
Ticker: CMC.CN / CWSFF
Listings: Canadian Securitites Exchange / US OTC
Website:https://www.cielows.com/
Market Cap: 326 MCAD at time of publication
Share price: 0.84 CAD at time of publication
Industry: Converting waste to renewable fuel

Cielo Waste Solutions today 7/4 2021 announced the very positive news that it has received a conditional grant from Alberta Innovates in the amount of $500,000.00 toward a nearly $900,000 commercial demonstration of the use of used railway ties as a feedstock at its flagship facility in Aldersyde, Alberta.   

Cielo Waste Solutions stated that they right now have a feedstock agreement with a large Canadian railway company that is looking for a more renewable and circular economy to dispose of their used railway ties. The company stated that the current feedstock agreement is for up to 1,000,000 used railway ties per year with incentives in place to increase this number.

The company has a clear plan to scale up the demonstration “Cielo’s engineers have been working since last fall to complete the material testing, bench-scale trials and process modeling that will help facilitate approval from AEP. Cielo intends to then implement a 100 tonne demonstration, followed by a larger 500 tonne demonstration. The timeframe for the demonstrations and analysis is anticipated to be approximately 3 months.”

The application was apparently done last spring of 2020 and if this demonstration goes well it will allow Cielo to produce renewable fuels from used railway ties on an ongoing basis.

Don Allan, President and CEO of Cielo, stated in the press release “We believe that the eyes of the Railway Tie Association are on us to see these results and that, when successful, Cielo will have the most environmentally friendly solution for 10’s of millions of used railway ties per year from all across North America. Currently, many used railway ties are being incinerated by cogen facilities for power but already some states in the US and provinces in Canada are banning the incineration of these ties due to potential toxic ash and other harmful emmissions. Cielo is proud to have developed a process that does not currently have any toxic waste or emmissions “

Support was also shown by The Honourable Finance Minister of Alberta, Travis Toews which stated “I am pleased to hear that Cielo Waste Solutions Corp. has been awarded a CDN$500,000.00 conditional grant from Alberta Innovates. This funding will support Cielo as it tests its ability to utilize materials in its process to create renewable fuels. Cielo is a great example of the innovative and entrepreneurial spirit of Albertans. I am eager to see this Alberta based company expand their operations in the province and contribute to Alberta’s economic recovery.”

ESG comment: This conditional grant and the details of the feedstock agreement with a very large canadian railway company ( which I suspect is Canadian Pacific Railway) gives both credibility and financial stability to the continued operations of Cielo Waste Solutions. With this large feedstock agreement in place and if the demonstration succeeds this will provide yet another continued flow of feedstock for the ongoing operations and expansion plan. To have the financial support and blessing of the provincial government will last a long way to execute the company’s plans to build 40 facilities in a 5 year time plan!

I own shares in these companies personally and this is not to be considered financial advise, always do your own research!

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SOLARVEST BIOENERGY ANNOUNCES POTENTIAL BUSINESS RELATIONSHIP WITH 4,6 BILLION DOLLAR COMPANY

Company: Solarvest Bioenergy Inc.
Listing : TSX Venture, Frankfurt
Ticker: SVS.V , 0ZJ:FRA
Market cap at time of publication: $18 MCAD
Stock price at time of publication: $0.41 CAD
Business: Patented plant based pharmaceuticals from algaes and Clean Energy Hydrogen production
Comparable peers: Else Nutrition market cap : 306 MCAD
Website:http://www.solarvest.ca/ and for the omega 3 products: https://eversea.ca/

The latest addition to the ESGFIREAT40 portfolio namely Solarvest Bioenergy introduced yesterday to the blog timely enough announced a very big and impressive potential business relationship today 6/4 2021 with 4,6 billion revenue company Scoular . The objective of the potential cooperation is to develop a sustianable supply of Omega-3 fatty acids. The goal of the development program is to develop protocols and process data for the efficient production of commercial volumes of Omega-3 fatty acids .

The development program satisfies both companies goal of sustainable supply of health enhancing food and will utilize the SVS algae plattform expertise combined with Scoular’s extensive knowledge, experience and activity in the global agricultural supply chain. Scoular is a supporter of responsible marine product sourcing and provide the marketplace with alternative food and feedstuffs that have a positive environmental and social impact.

ESG comment: My interpretation of this very exciting potential business relationship is that Scoular will likely test and analyze the algae platform by Solarvest in regards to the Omega-3 product line and if they are pleased with the results this should open up a massive opportunity for Solarvest both in terms of large scale production and also sales within the big network that Scoular has with actors in the agricultural business! Scoular is a 128 year old company with 4,6 BUSD in sales and has over 100 offices and facilities in North America and Asia. The company employs over 1000 individuals and the business is to buy, sell, store, handle and process grains and ingredients as well as manage transportation and logistics for customers worlwide.

 I own shares in this company personally and this is not to be considered financial advice, always do your own research!

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Vicinity Motors Buses Selected for Washington Statewide Contract!

Company: Vicinity Motor Corp(formerly Grande West Transportation )
Listings :TSXV , US OTCSOON to be up listed at Nasdaq
Ticker: VMC.V (previously BUS ,BUSXF at US OTC
Market cap at time of publication: $258 MCAD
Stock price at time of publication: $8,8 CAD ( reverse split price 2,93 CAD)
Business: Leading supplier of electric, CNG, gas and clean-diesel buses for
both public and commercial enterprise use in the U.S and Canada
Comparable peer : Greenpower Motor , Market cap $572 MCAD
Website: https://www.grandewest.com/

Vicinity Motors today (6/4 2021) announced that their Vicinity buses have been selected in a statewide purchasing contract that gives Washington State transit agencies the right to purchase from the Company’s diverse bus portfolio.
What’s also good about this is that the company can produce vehicles for this order from their Buy American Act” compliant assembly facility in Washington state,. This facility which will be able to produce 1,000 electric, CNG, gas and clean-diesel units annually across all sizes and powertrains which equals well over 300 million USD in potential revenues if run at maximum capacity.

William Trainer , CEO of Vicinity Motors gave the following comment to this press release
“We are pleased to announce that Vicinity Motor Corp. has been chosen as an OEM supplier for Washington state’s growing fleet of buses – driving forward the transition to a more sustainable public transportation system,” said William Trainer, Chief Executive Officer of Vicinity Motor Corp. “This contract win marks yet another exciting milestone in our expansion into the significant U.S. market, where our purpose-built Vicinity™ line of products’ quality and consistency allows us to capture market share.” Our guidance to deliver over 100 buses in the first half of 2021 is a testament to the value proposition that Vicinity brings to private and public transportation operators. I look forward to continued execution in the months ahead, creating sustainable, long-term value for our shareholders,”

ESG comment: With this new Washington State contract it serves to further build on to the already impressive amounts of deals made lately by Vicinity Motors. The compant continues to trade at a considerable discount compared to its closest peer Greenpower motor. One big advantage for the company is that I estimate that their production time is between 9-12 months in comparison I estimate that Proterra and NFI have upwards of 18-24 months in their respective production time. The Company also announced that certain Eligible Directors have requested that their respective director’s remuneration for the calendar year 2021 be paid in Deferred Share Units . I find this to be a strong signal from insiders who beleive the company is on a very good growth path.

 I own shares in this company personally and this is not to be considered financial advice, always do your own research!

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A hidden gem in the clean energy & booming plant based sector!

Company: Solarvest Bioenergy Inc.
Listing : TSX Venture, Frankfurt
Ticker: SVS.V , 0ZJ:FRA
Market cap at time of publication: $ 15 MCAD
Stock price at time of publication: $0.345 CAD
Business: Patented plant based pharmaceuticals from algaes and Clean energy hydrogen production
Comparable peers:
Website:http://www.solarvest.ca/ and for the omega 3 products: https://eversea.ca/

Solarvest Bioenergy is a new and extremely exciting nanocap position in the ESGFIREAT40 portfolio. The company has recently launched the worlds first organic made omega 3 from algae which is both patented and vegan friendly. If anyone has watched the stock price of the plant based baby foods company Else Nutrition which so far has soared a wooping 1000 % from december 2019 till today (4/4 2021) you are surely aware of the massive interest and demand for sustainable plant based products.

What separates Solarvest Bioenergy from other plant based food companies is that they also have a leg in Clean energy hydrogen production and high value proteins and astonishingly enough also CBD oil from algae. Solarvest Bioenergy has an impressive 68 patents filed in virtually all commercially important countries, many granted. Also a HUGE advantage is that the production of the company is Carbon neutral which will open many doors to sustainable capital, partnerships and goodwill!

The company has a truly impressive patent and possible product portfolio and the following are among the most exciting ones:

• Production of algae biomass without using chemicals – Organic Omega 3

• Controlling the expression of chloroplast to induce the production of hydrogen gas and or the expression of therapeutic proteins which could cover CBD oil.

• The company has completed a feasibility study and has implemented a research and
development program to supply Cannabidiols (CBD +)
The Solarvest Algal Expression Platform is an ideal candidate for CBD production with substantial
advantageous over hemp and cannabis production

• Transgenic Algae for Delivering Antigens to An Animal
An Animal Vaccine Patent for feeding transgenic algae with an expressed antigen to provoke an immune response

• Dental Composition and Method for suppressing plaque formation on canine (and other animal) teeth

• Method of Making Microalgae-based Animal Foodstuff Supplements
Trace metal binding system that delivers chromium, cobalt, copper, iron, manganese, molybdenum, selenium and zinc to animals

• Antimicrobial protein (AMP) expression for the treatment of malaria

Business model

Solarvest Bioenergy describes their business model in terms of three different applications all using algae that has big synergys, as explained in the picture below. The common demoninator is that it’s comparatively inexpensive to produce algae.

My interpretation in discussion with management is that their business plan is to finance their most promising projects shown above with the revenues expected from the omega 3 product launch. This will maximize shareholder value while keeping dilution to a minimum. What really makes this plan exciting is the patent to source hydrogen from algae which does NOT require massive amounts of electricity which almost all other hydrogen alternatives require and is a problem since renewable energy still is hard to store. It would make sense for management to sell their omega 3 business division (for the right price) to global actors if such a bid should materialise in a future scenario after building value. This could in turn finance other possible products from the possible portfolio line.

The omega 3 business

There is currently a HUGE problem with overfishing in the seas globally. Fisheries harvest 93.4 Million tons of fish per year and out of this 31.4% of commercial fish stocks are now fished at biologically unsustainable levels, triple the level of 1974. This unsustainable fishing affects the eco system. Since many shallow water fish stocks have become depleted and/or outright collapsed, fishers have resorted to targeting fish stocks in deeper and deeper waters.  The average depth of catch has increased in recent years to over 1000 meters and in some cases to 1800 meters. Fishers are literally reaching into the bottom of the barrel. 
Omega 3 production from algae is a safe and sustainable production method which could be a solution to this problem!!!

The Omega 3 market is a huge potential revenue source for the company at a total adressable market worth 24 billion USD . I estimate that the unique product by Solarvest has the potential to become a mainstream adopted ingredient in all of the healthy food business products globally both as an additive in standalone products (protein powder, smoothie blends, baby foods etc) and also in separate products sold directly by the company either by own brand or rebranding to customers ( for example chocoate bars, omega 3 pills etc). It should be noted that the company markets this product under the brand name Eversea. The omega 3 business is competitive however the advantages of the companys Omega 3 product are extensive:

• FDA approved
• Totally sustainable production
• First and only Organic Omega-3 (DHA & EPA)
• The most valuable/bioavailable forms of Omega 3
• No solvent residues
• Hexane and acetone are typically used to extract oil from fish and krill
• Free from toxins found in fish from the ocean (mercury, PCBs and dioxins)
• Non-GMO product
• Patented
• Vegan/ Vegetarian

Market strategy
My estimate is that Solarvest Bioenergy will have a relatively easy task of convincing major plant based product producers to include the companys plant based omega 3 additive in their products. This is also based on the fact that their is a BIG demand for organic products in North America . 18% of Americans look for organic ingredients and consumers are prepared to pay 24% premium for organic products. Current organic options (plant based) are short chain (ALA) with less than 10% absorption rate meaning the human body can only take up 10 % of the omega 3 in the actual product. The product line from the company is a Global First. There are no Fish, Krill or Algae Products on the $15 billion Omega-3 market that are 100% organic. The company currently has its omega 3 production outsourced to a division of a German multi-billion dollar food company and the strategy is to build the order book so that a Canadian facility improves the economics of North and South American supply.

The go to market strategy is further explained in the picture below:

The advantages of the algae platform

There are many advantages of using algae based production which Solarvest Bioenergy bases their product platform on.
Firstly the common demoninator is that it’s comparatively inexpensive to produce algae. Algae production is also able to use low cost inputs (ingredients) able to feed the growth of bioactive proteins on the algae platform. It’s able to produce consistent, high yield concentrations of final products. Also the versatility provides the ability to produce multiple complex products and the company has demonstrated the ability to produce complex therapeutic proteins. Another application includes the sequestration of carbon dioxide (CO2). The process makes it easy to control the production environment and a replicable process allows expedited product development.

Other advantages of using the Algae platform is that
• It can produce tons of Biomass in as little as 100 hours.
• Algae can be produced inexpensively and are inherently safer than current expression systems since algae harbour no known human pathogens.
• The same algal culture, production system may be utilized for numerous protein targets.
• There are 400 proteins used in human medicine; many of these have a high market value.
• Insulin is worth $42 billion
• Erythropoietin is worth $9 billion
• Bone Morphogenetic Protein is worth $1billion

Management

Solarvest Bioenergy has a very impressive management teams for a small nanocap company which bodes extremely well for future growth. The management team as experience from buyouts, executive positions at large pharmaceutical companies where they have specifically worked with acqua marine harvesting. My opinion is that the management team is well equipped to execute the growth strategy for Solarvest Bioenergy and insiders hold 28,4 % of the shares and have only bought shares (i.e no selling) over the past 12 months. Full description of management in picture below:

Source: Solarvest Bioenergy investor presentation

Risks

There are several risks that need to be taken into consideration when investing in a nano cap company like Solarvest Bioenergy. Below is a summary of the most obvious ones although there may of course be other risks not covered:

Share price volatility risk
The average trading volume in Solarvest BioEnergy currently amounts to 86 000 CAD per day. The trading volume is of course occasionally higher especially during days of news releases however investors need to be aware of the risk of extreme volatility both upwards and downwards due to the liquidity of the stock. This can cause sharp spikes upwards but also sometimes unexplainable downward spikes when someone wants to unload a large amount of shares in a trading day.

Financing/lack of sales risk
Solarvest Bioenergy is currently not profitable , management expects revenues for 2021 to amount to between 2-4 MCAD and this number is expected to ramp up considerably in 2022. The company recently took in 2,25 MCAD in a private placement so for the time being the financing is not an issue. The proceeds from this private placement are to be used for the market launch of the new algae based organic omega 3 product series. If revenues take longer to materialize from sales than management counts on this could poise a financing risk for the company

Competitors and litigation risks
Solarvest Bioenergy is a small actor in the pharmaceutical and omega 3 industry and it cannot be ruled out that other actors may, although unlikely, be able to work around the companys patents or infringe the patents causing a situation where Solarvest Bioenergy has to engage into litigation against larger and more well financed actors.



Potential and Conclusion
Solarvest Bioenergy definately has the true potential to become a billion dollar company and 10X bagger or more with its many patents, unique product offering and experienced management. The company has an impressive patent portfolio for its small market cap with many exciting prospects with each and single one of them possesing a billion dollar revenue potential. The path to becoming a billion dollar is of course neither easy nor straight but the bottom line is I believe that Solarvest Bioenergy has all the right foundation to get there. It’s now up to management to execute and prove the expansion strategy they’ve planned and since they seem very keen on keeping their shareholders updated in transparent way I’m sure we can expect alot of news shortly!

Upside potential and near term evaluation
My personal bull case estimates has the company turning a revenue of 2,5-3 MCAD in 2021 and with revenues increasing to 8-12 MCAD for 2022. Revenues beyond this is harder to calculate but seeing as the company will likely be selling at bulk quantities in 2023 there is nothing that says revenues cannot hit upwards of 20-30 MCAD in 2023.
It’s hard to estimate when the company will reach profitability but I would not be surprised if it could happen already in 2022 since I expect gross margins to land around 50-80 % based on comparison with other plant based food companies.
Comparing evaluation to another peer is Else nutrition which is projected to have a turnover of 9 MCAD in 2021 giving it a 33X sales multiple at current share price. In 2022 Else nutrition is expected to have a turnover of 57 MCAD giving it a 5X sales multiple IF the share price stays on the same level as of the publication date (3 CAD).

10X sales estimate

The market cap for Solarvest Bioenergy as of the publication date of this article is 15 MCAD. If we put a 10X sales multiple for my Solarvest estimate it equals a market cap between 25-30 MCAD on 2021 sales. For 2022 the estimate with a 10 X sales multiple equals 80-120 MCAD market cap.
This projection gives the company a possible 100 % upside potential for 2021 and a possible 782 % upside for 2022 IF the company delivers according to the estimation and IF the market thinks a 10X sales multiple is a fair value, this evaluation multiple could be both bigger (upwards of 20-30 X sales) and smaller (2-5 X sales). This estimate does not put any value into consideration for all the other patents which Solarvest Bioenergy has ownership of out of which the hydrogen and CBD products are the most exciting prospects!

 I own shares in this company personally and this is not to be considered financial advice, always do your own research!

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Investigating the EWS drop of March 23rd

Company: Environmental waste international
Listings :TSXV , US OTC
Ticker: $EWS $YEWTF 
Market cap at time of publication: $85 MCD
Stock price at time of publication: 0.34 CAD
Business: Tyre and waste recycling through reverse polymerization
TAM Market size: 158 billion $
Comparable peer : Scandinavian Enviro systems $SES
Website: https://www.ewi.ca/

The share price of Environmental Waste International dropped sharply ,and at first glance unexplainably, on 23/3 2021 despite great news on 22/3 2021 about a Joint Venture which would enable the company to gain its first commercial facility in Ontario by way of a 10 million CAD investment by Joint Venture partner Torreco. With 3 additional plants commited by Torreco, the commercial plant being finalized in Sault Ste Marie, Ontario and the Nyborg plant about to be built by Windspace in Denmark EWS as of now has 5 facilities planned.

I’ve since been looking for an explanation for this drop and I think i’ve found it. There was a very inbalanced article written in a local newspaper about EWI on 23/3 .

I’ve read this article several times, and found that it is seriously imbalanced and selectively chooses information to report on. I verified some information which I would like to report:

-The article talks about the emissions from the factory and fails to report that the total Carbon Dioxide emission equivalent from the factory is the same as the CO2e generated from two typical households.

-The article mentions the noise pollution and fails to highlight that the factory is located in an industrial area that is close to Algoma Steel factory.

-The article bundles the EWS technology with thermal treatment of tires (including pyrolysis), which is not fair. As shown in a very good article from Seekingalpha , the technology here is far more environmentally friendly compared to other “thermal treatment of tires”.

-The article does not address the problems associated with not recycling the tires; an article about tire recycling that does not address these problems, IMHO, is not a balanced one.

-The article mentions the storage of the tires, and fails to confirm that the tires will be stored in shredded format, which is far more environmentally friendly than the traditional storage of tires.

-The article also fails to report that the emissions from producing the raw material from tires using the EWS technology is 70% less that the emissions of producing the same material in virgin form.

As a result of this I decided to add to my position after this drop. I believe EWS has a very very bright future with many announcements to come shortly as I also explained in my recent article on this company.

 I own shares in this company personally and this is not to be considered financial advise, always do your own research!

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Nuvve corp – Undervalued and under the radar!

Company: Nuvve Corp
Listing : Nasdaq
Ticker: NVVE (formerly NBAC)
Market cap at time of publication: $241 MUSD
Stock price at time of publication: $12.95 USD
Business: Global leader in vehicle-to-grid (V2G) technology offering high-powered charging and grid services that optimize unused and renewable energy.
Comparable peers: Chargepoint Market cap $ 7,4 Billion USD, Blink Charging Market cap $1,7 Billion USD
Website: https://nuvve.com/

Nuvve Corp is currently the only electric charge station company in the ESGFIREAT40 portfolio. The reasons for this choice is quite simple and obvious. Nuvve is THE leading company in what is known as vehicle-to-grid (V2G) technology and have many patents protecting their technology. The company is well funded since they received close to 75 million USD in the recent SPAC merger including PIPE investors. The company is also very attractively valued compared to its peers as of 4/1 2021 ( see summary below):


EV/Sales comparison based on 2021 projections :

Blink charging – 170
Chargepoint – 37
Nuvve Corp – 7,5

EV/Sales peer comparison based on 2022 projections:

Blink charging- 68
Chargepoint – 21
Nuvve corp – 2,6

Background

Nuvve corp is a post SPAC (Special Purpose Acquisition Company) that merged with Newborn Acquisition Corp at the end of 2020 and started trading as Nuvve Corp (NVVE) on 23/3 of 2021. ESGFIREAT40 has been holding and adding to the position in Nuvve Corp even before the SPAC deal was announced and the company has continously been mentioned by ESGFIREAT40 on Twitter as an interesting EV charge station company.

Nuvve ,the leader in vehicle-to-grid (V2G) technology, has been shown very little love by the stock market despite the fact that the company solves a real and pressing issue : How will the power grids globally be able to bear the burden of the power surge when ,in a not too distant future, several million electrical vehicles worldwide will need to charge their batteries at the same time ? Nuvve’s proprietary vehicle-to-grid (V2G) technology enables the linking of multiple electric vehicle (EV) batteries through EV charging stations into a virtual power plant (VPP) providing bi-directional services to the electrical grid in a qualified and secure manner thereby stabilizing the power grid!

The original idea for vehicle-to-grid (V2G) technology was developed by Professor Kempton (a co founder of Nuvve) in 1996 and in 2010 Nuvve incorporated and acquired V2G international tech license. In 2017 Nuvve bought the entire IP rights to the V2G technology. Nuvve has offices in Denmark, France, The United Kingdom and in several locations in the United States.



Picture above explains the issue Nuvve Corp solves, Large numbers of EVs cars can
increase strain on the power grid if the grid is mostly supplied by renewable energy which is difficult to store

Total Adressable Market (TAM)


The TAM for Nuvve’s services is enormous. Independent reports are said to estimate that Vehicle to grid ( V2G) technology will become a $17 billion market by 2027. Nuvve themselves as stated by the picture below think the total adressable market is closer to 296 billion USD. Nuvve is well positioned to grab a leading share of the V2G market. A big indication that Nuvve’s technology can be successful is the fact that it’s been operating in a 4 year trial in Denmark.


Business model


Nuvve’s aggregation platform allows it’s user to offset their electricity bills by optimizing charging times. With compatible V2G vehicles linked to Nuvve’s GIVeTM platform electricity from the EV battery may be sold to earn revenue in energy markets. In other words the company generates revenues for its customers from bidding onto energy markets and at the same time creates energy savings / power grid stabilization . Nuvve’s technology and ecosystem has proven to successfully lower the cost of electric vehicle ownership, while supporting the integration of renewable energy for a scalable and sustainable green society. This makes it possible for any vehicles operating with Nuvve’s charging system to make money while standing still by offering excess power to the power grid when the vehicle is not in use. As you can see in the picture below, Nuvve was able to generate revenue of nearly $3.2 k per year per car during their trial in Denmark. Each school bus and regular bus on the other hand uses a lot more energy than a car and hence provides proportionally a lot more revenue to Nuvve at around $10-20k instead of $1-2k for a car(management estimates). There are also very high upfront revenues for Nuvve because of the installation of the Nuvve solution. School buses are estimated to contribute about $20mil of the $30 MUSD revenue guidance. The rest coming from grid services that is already underway and from partnerships.

Source: Nuvve website

Competitive advantage


As previously stated Nuvve owns the key patents to vehicle-to-grid (V2G) technology and has first mover advantage with 10 years experience of market participation and stake-holder interaction including with car OEMs. It will be very difficult for competitors to execute V2G
functions without violating Nuvve`s intellectual property. Nuvve has over the years accumulated a massive amount of data which provides both safety and reliability when it comes to performance of electric vehicles. Nuvve is already qualified by multiple TSOs(Transmission system operators) which makes it easier to expand in other areas. Its a long and time consuming path to become quailified by TSO (usually 12-36 months).

Source: Nuvve website

Strong partners

Nuvve corp have two strong partners/shareholders in EDF and Toyota Tsusho. EDF is a $40 billion dollar French Utility company and Toyota is one of the largest automakers in the world. Their backing of Nuvve really gives credibility to Nuvve corps technology and also gives Nuvve the huge opportunity to partner with these big corporations rolling out V2G technology in both Europe and Asia. Both EDF and Toyota have representation in the board of Nuvve Corp showing their commitment to the company.

Source: Nuvve website

Strategy moving forward

Nuvve is currently partnering with EDF in a joint venture by the name of  Dreev to launch V2G technology in parts of France. Dreev has already installed V2G terminals in Hotravail, France, and is working to install terminals in the Civaux Nuclear Site.

Nuvve’s current strategy is to enter the electric school bus market in the US. School buses are ideal choices for Nuvve since they stay idle for many days during the summer season and for many hours during both night and day time in between school rides. Nuvve has also partnered with Lion Electric and BlueBird, of which both are among the leading school bus companies in the United States. It’s also not unlikely that the company will look to expand into the refuse truck and transit bus market.


Risks

The company expects its revenues for 2021 to increase by 550% increase compared to 2020. This very aggressive revenue projection depends on the deployment of the company’s solutions across soon to be electrified school bus fleets in the United States, a very likely scenario with the new Biden administration. Nuvve has a very high gross profit margin according to their own numbes. The gross profit of $3.5 million expected to be generated in 2020 is at a wooping 70% margin to revenue during the same fiscal year. 

Another risk that needs to be taken into consideration is if car manufacturers such as for example Tesla configure their cars so that car owners are only able to use vehicle-to-grid (V2G) technology provided by Tesla.

The company is counting on the fast adoption of electric vehicles to support its rollout and its strong leadership and competitive advantage in bi-directional charging solutions that hopefully will provide a strong advantage to maintain its revenue growth and gross margins.

However the company is still unprofitable and it does not foresee generating any sort of net income until earliest in i its fiscal year of 2021. This is something to be taken into consideration . There is also a risk , although unlikely, that competitors could work around Nuvve’s patents and create an equal product. Finally , there is also a big risk with basing an investments on company projections.

Spac merger lockup terms

Existing Nuvve stockholders have agreed to a one-year lock-up from merger close, subject to a partial release if after the 6 month anniversary of the merger close the VWAP of the Nuvve Holding shares is at or above $12.50 for 20 out of any 30 consecutive trading days. Existing Nuvve stockholders will also be entitled to receive an earnout of 4 million newly issued Nuvve Holding shares if Nuvve’s 2021 revenue exceeds $30 million as reported in its 2021 audited financial statements.

Conclusion

The company is well funded with approximately 70-75 million USD in the bank post SPAC merger to be put into relation with the market cap at 241 MUSD . With the latest infrastructure bill from President Biden that includes expanding the total current EV charging station network by 100% from the 2021 numbers in the United States every year for 10 years straight and the end goal to build 500 000 ev charging stations this is a BIG bull sign for the EV charging market. The bill also intends to upgrade the power grid and to replace at least 100 000 school buses to electric ones. Nuvve benefits from all of these actions.

Last but not least the infrastructure bill suggests a simplified rebate system where a buyer of an EV vehicle would immediately get a $7500 USD rebate instead of waiting until the following tax year. Nuvve recently (23/3 2021) delivered its first charging station in North America in cooperation with one of the United States leading EV bus producers Blue Bird Corp ( also mentioned by ESGFIREAT40 in previous blog posts).

Nuvve has not seen the anywhere near type of hype that some of the other companies in the EV space have experienced. The company does not have any high-resolution images of CGI scenes with cars/buses yet to be built or any unrealistic revenue projections . I believe Nuvve offers a very good risk to reward profile in the EV charge sector. The future prospects certainly looks bright for Nuvve Corp!

 I own shares in this company personally and this is not to be considered financial advice, always do your own research!

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