Sauer Energy Inc (OTCMKTS:SENY) is all Charged Up and Ready to Go
At first glance, Sauer Energy Inc (OTCMKTS:SENY) looks like an interesting investment option. Unlike a vast portion of the OTC companies out there, SENY aren’t using a virtual office as the location of their headquarters and they’ve even managed to find the money to put the company logo on the facade of the building they’re occupying.
On July 16, they said that they’re getting really close to commercializing their WindCutter vertical axis wind turbine and the stock has been moving up since then. It was a bit shaky at first, but at the beginning of the week, the pumpers received some money and they gave it a helping hand. As a result, the ticker managed to surge past the $0.06 per share mark for the first time in months and by the looks of things, it is preparing itself to go even higher. Yesterday, after an 11% jump, it stopped at $0.067.
So, a decent performing stock that is fueled by some genuinely good news. Sounds like the proverbial walkover. The people who have been with the company for long enough, however, will tell you a different story.
They’ll tell you that the stock has been through several promotional campaigns over the years. The biggest one involved hard mailers and took place in 2011 when retail investors were paying north of $1 per share for SENY.
They’ll also tell you that they’ve heard the story about the WindCutter finally appearing on the market before. In December 2014, SENY‘s management team proudly announced that all the tests have been completed and that it’s all ready to go. Seven months later, they are telling us that they have yet to commence an early adopter program which will probably take some time.
In the interest of fairness, we should probably note that we’re not that surprised by the delay. After all, launching a product with $27 thousand in the bank is no easy task. And on May 31, SENY had exactly $27 thousand in the bank. They also had:
- NO other current assets
- current liabilities: $786,182
- NO revenue since inception
- quarterly net loss: $602,479
Still, it must be said that they do have an equity purchase agreement in place which means that they should have access to up to $3 million. If they utilize the money well and if the wind turbines finally hit the market, things could become quite interesting for the stock.
Until then, however, you mustn’t forget that the aforementioned equity purchase agreement gives Beaufort Capital partners LLC (the entity providing the money) the opportunity to buy shares at a 28% discount to the market price. Some convertible notes are also outstanding and they can be turned into stock an an even more scary 40% discount.
Make sure you’re keeping this in mind while contemplating your options.