Save The World Air, Inc., d/b/a
STWA, a developer of patent-protected industrial equipment designed to deliver
measurable performance improvements to crude oil pipelines, yesterday announced
its financial results for the fiscal year ended December 31, 2014.
“2014 marked a turning point in
our Company’s evolution as we successfully demonstrated the effectiveness of
Applied Oil Technology (“AOT™”), after many years of product development, and
realized our first revenues,” stated Greggory Bigger, STWA’s Chief Executive
Officer and Chairman. “We are now engaged with the largest energy infrastructure
company in North America, conducting additional field tests to measure the
effectiveness of viscosity reduction and believe 2015 will hold great promise
for our Company. Additionally, we made significant progress in the development
of our Joule Heat solution and see opportunities to expand our offering beyond
the pipelines and with other potential industry partners. While we are still
engaged heavily in R&D, this year’s focus is on the continued optimization
of our offerings and commercialization. Following a series of tests with
customers around the world in the first half of this year, we should emerge in
a stronger position operationally, and I would expect, with additional revenue
streams. This has been one of my primary goals since becoming CEO. Every member
of our team remains focused on enhancing shareholder value and while it has
taken us longer than anticipated to get to this stage, I believe we are at the
cusp of unlocking value.”
Notably, STWA achieved
significant improvements in its bottom-line performance because of the revenues
generated and lower expense levels in fiscal 2014. A pre-tax net loss of $4.0
million for the period ended December 31, 2014 was reported, which is a
significant improvement to the $10.7 million recorded in the comparable
year-ago period. Fiscal 2014 includes, among other items, a $3.4 million gain
on the extinguishment of derivative liabilities and there were no similar gains
in fiscal 2014. Net loss and net loss per basic and diluted share were $4.0
million and ($0.02), respectively, for the period ended December 31, 2014 as
compared to a net loss of $10.7 million or a loss per basic and diluted share
of (0.07) for the comparable fiscal 2013 period.
Mr. Bigger further commented, “In
2015, we intend to continue the commercialization of our technologies, while
working with industry and academia to further build out our solutions. Today,
our product portfolio is dedicated to the crude oil production and
transportation marketplace, with a specific-focus on enhancing flow-assurance
parameters of new and existing pipeline gathering and transmission systems.
Through both AOT and Joule Heat, we have solutions that can help reduce
viscosity, increase the number of barrels of oil able to be transported, have a
meaningful impact of reducing emissions, while helping operators become more
efficient and profitable. This year, we intend to continue commercialization
efforts in the midstream market for AOT and bring Joule Heat to market for
upstream and gathering applications. The next few months will be critical in
compiling data and we look forward to providing the market with further updates
on our progress.”
Milestones of Fiscal 2014
– In the second quarter of the
prior year, STWA began generating revenues from its AOT technology for the
first time. The revenues were derived from one of the company’s customers and
relate to an Equipment Lease Agreement, which has subsequently ended in the
fourth quarter of 2014. STWA installed and tested four AOT Midstream vessels
with a cumulative maximum flow capacity of 20,000 gallons per minute. The
company received a report from ATS RheoSystems, an independent third-party,
validating the efficacy of the AOT technology in reducing viscosity of crude
oil in high-flow, high-pressure, turbulent environments. The results of this
test have also been used to improve the solution.
– In the following quarter, STWA
entered into a new Equipment Lease/Option Purchase Agreement with the largest
energy infrastructure company in North America. Equipment provided includes a
single AOT Midstream pressure vessel with a maximum flow capacity of 5,000
gallons per minute. Equipment was delivered to this customer towards the end of
the 2014 fourth quarter and AOT will be used on a primary crude and condensate
pipeline serving the Eagle Ford in South Texas (known as the most active shale
play in the world; currently producing over 870,000 barrels of crude oil and
220,000 barrels of condensate daily). As previously announced, the companies
are scheduled to begin testing the effectiveness of AOT shortly, with updates
anticipated in the second half of 2015.
– Throughout last year, STWA
began commercial development of a suite of products based around the new
electrical heat system which reduces oil viscosity through a process known as
Joule Heat. The company is designing and optimizing this technology for the
upstream oil transportation market, and entered a field deployment agreement
with an upstream operator to test its efficacy. Updates are anticipated in the
next couple months.
– In the final quarter of 2014,
STWA began trading on the OTCQX, the highest-tier marketplace for established
global and growth companies operated by OTC Markets Group Inc.
Liquidity and Capital Resources
STWA had cash on hand of $2.2
million at the end of last year as compared to $2.4 million a year earlier. As
shown by the numbers reported, management has been aggressively moving forward
with initiatives to lower its fixed expenses and R&D costs, and the team
plans on continuing to establish strict cost control measures as STWA moves
from the development stage to commercialization. According to yesterday’s press
release, the company anticipates pursuing some form(s) of strategic
alternatives this year as management aims to improve the STWA’s balance sheet
and generate cash for further investments in its business.
In conclusion, Mr. Bigger stated,
“We’ve invested significant resources over the past several years and believe
these investments will soon result in successful customer deployments, increased
revenues and cash flow for our Company. With that said we are still developing
our portfolio and looking to expand applications beyond the Midstream, while
highlighting the clean tech benefits of our solutions. Additionally, with Joule
Heat, I believe we have something unique in the marketplace with massive
potential. However, additional resources will be needed this year to fund
R&D initiatives and to be opportunistic in the market, whether in the form
of partnerships and/or acquisitions and improving our working capital is one of
our top priorities. I am fully committed to this Company and look forward to
providing our investors with meaningful updates, most of which will be in the
2nd half of the year.”
For further information about
STWA, Inc., visit www.stwa.com
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