Water Out Of Thin Air

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It is an irony that surrounded by the flood waters of Hurricanes Harvey and Irma, a drink of fresh, clean water may be hard to come by.  Of course, the all three levels of government make plans for stockpiling and deploying emergency bottled water well ahead of natural disasters.  Yet in the hours and days following the worst of both the recent storms, the media was filled with stories of people who lacked water.

What if water could be made manufactured?  If such a technology existed, what a boon it might be to thirsty storm victims.

Ambient Water Corporation (AWGI:  OTC/PK) has been trying to make water from thin air with a patented technology management describes as ‘atmospheric water generation.’  Actually, the technology simple extracts and concentrates water vapors from the air.  The moisture is chilled to the ‘dew point’ and then condensed in stainless steel coils that channel the water droplets to a filtering chamber.  The system can work even in localities and weather conditions where humidity is as low as 30%.  Ambient’s current system requires connection to an electric grid, but future models are expected to be compatible with wind or solar power sources.

It is a bit ironic that Ambient’s first commercial demonstration of its 400 and 800 Models is in Houston, Texas.  The units were installed at the Applied Cryo Technologies plant, where the water will be used by the company for everyday use.  The first demonstration using the Model 400 began in January 2015, and then a second demonstration was started in September 2016 with the specialized Model 800 intended for use in water scares regions.

Ambient Water has yet to generate significant revenue and is for all practical purposes a developmental stage company.  With little coming in the door, management is careful with its cash resources.  Cash used to support operations was just $66,979 in the first six months of the current fiscal year.  This level of frugality is vital given that the Company had only $1,400 in cash on its balance sheet at the end of June 2017.  Management has kept the lights on by issuing common stock to pay for services in kind and to bring just enough cash to pay current bills.  That strategy had bloated shares outstanding to over 1.9 billion by the end of June 2017.

With “going concern” stamped in bold across its corporate forehead most investors would shrink at the prospect of putting money into a long position of a sub-penny stock like AWGI.  However, with water concerns as acute as they are around the world, every technology is worth watching that has had even the smallest success in generating potable water.  Water from thin air?  Yes, Ambient Water is on my list of companies to watch!

Debra Fiakas is the Managing Director of Crystal Equity Research, an alternative research resource on small capitalization companies in selected industries.

Neither the author, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.

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