Monthly Archives: July 2014

Clean Energy – Flux Power Holdings, Inc. OTCQB: FLUX

Flux Power is Bringing State of the Art Lithium Battery Technology to Large Untapped Industrial Markets:

Forklifts, Tug & Tow Vehicles & Portable Power for In-the-Field Use.

While Fuel Cells by PLUG, FCEL, BLDP & HYGS Garner Headlines and Trading Frenzy – Flux LiFT Packs offer a much lower cost, easier to implement forklift solution versus incumbent lead-acid storage.

PCCCC

Flux has created innovative lithium-ion batteries that deliver more storage and longer lifespan at a better price. Flux’s design transcends the traditional lead-acid battery and adapts to the modern era with a safer and more cost effective product.

Flux has scaled battery technology initially developed to power smartphones and tablets up to industrial applications like forklifts and other vehicles. Flux offers a far superior power source that performs much better, lasts far longer and is substantially more cost effective.

Flux-Battery-Model

 

 

 

 

 

 

 

Flux Investment Thesis:

  • Strong industry interest/validation
    • Tested by major dealers such as Toyota Materials Handling, global leader in forklifts
    • Growing base of distributor & dealer interest in 18 states
    • Working to expand approvals to additional top OEMS
  • Substantial interest & sales potential in large markets such as beverage makers, food & grocery chains, etc
  • Partnerships with:
    • HDT Global – portable packs for military/emergency response
    • Wesley International – electric tow vehicles
    • Penguin Automated – large robots for underground mining / civil construction
  • Proven leadership – CEO /acting CFO Ron Dutt  
    • 30-year career senior management/financial executive experienced with growth and leading through transitions at DHL, Ford, Visa, Directed Electronics, Fritz Co.’s, SOLA Int’l
    • Ron Dutt LinkedIn Profile
  • Substantial Market Opportunities

The slide below is from Flux’s investor presentation (6/19/14). It illustrates the scope of some of Flux’s targeted markets.  Provided Flux can develop industry acceptance, it’s ability to scale its business is both open ended and based on already proven and patented technology.

FLUX Market Opportunity

 

 

Initiating Sales Ramp for  New Products

Flux is developing clear sales momentum for its new product lines launched earlier in the year.  We expect that this trend can accelerate as Flux “gets through” the far longer dialogues and testing that are part of entering new markets and developing a reputation and track record.

The first three quarters of FY ‘2014 (ended June 30) were focused on launching and demonstrating Flux’s LiFT Pack forklift solutions, with initial sales really starting in Q4 ’14.  The uptick in sales during Q2 ’14 related to a specialty portable power solution utilizing solar panels and storage for military field applications.

Flux Power Sales Chart

Flux Lithium-Ion Technology Offers  Array of Advantages

  • More power than lead-acid
    • Higher operating power throughout discharge – performance starts high and stays high
    • Lasts 25% longer between recharges
    • Useful life up to 6x longer
  • Light weight – easy to maneuver
  • Advanced technology & design, salable assembly, proven performance
    • Proprietary Flux Battery Management Systems (BMS)
    • Patented, state-of-the-art technology
  • Climatic adaptability – preforms in cold, wet, dry, humid and ever-changing climates & conditions
  • Customization – can be adapted to customers needs
  • Less expensive and easier to deploy than fuel cell technology

More-Up-Timelithium savings

 

lead acid

 

 

 

 

 

 

 

 

 

 

 

 

Targeting Large, Untapped Markets

While there a wide variety of attractive market opportunities for larger lithium-ion storage solutions, Flux is targeting three primary markets, but is focusing the bulk of its efforts on motive power and portable power.

  • Industrial Motive Power – Lithium packs for lead-acid replacement & new applications:
    • Lift Equipment (forklifts) starting with Class III Lifts “Walkies” via Flux LiFT packs – once Flux has solidified the Class III opportunity, it plans to scale-up its solutions for larger, higher priced Class 1 & 2 lifts.
    • Tug & pull equipment
    • Robotics for mining & civil construction – initial prototype delivered
  • Portable power – Quiet, clean, reliable power source that replaces generators/fuel for:
    • Military field operations
    • On-location entertainment production
    • Events & other remote applications
  • Stationary Power – Solar and Wind Farm Storage for Utilities
    • Longer-term opportunities
    • Pursuing partnerships with grid integrators

Partner Comments:

q2
weley

 

 

 

toyotatoyota quote

 

 

 

Disclosures: The parent of CG Focus List, Catalyst Global LLC, is an investor relations consultancy based in New York City.  Catalyst Global was formed by an investor relations professional with over 25 years of experience serving micro-, small- and midcap public companies.  Flux Power Holdings, Inc. is a client of Catalyst Global and receives over 75% of its IR retainer compensation in the form of restricted Flux common stock that vests over a one year period. Coverage of Flux Power reflects CG Focus List/Catalyst’s belief that Flux Power offers a very attractive special situation investment opportunity based on the deployment of proprietary lithium-ion storage technologies within industrial markets that have been mired in a century-old technology with myriad flaws. The preparation of this CG Focus List report is outside the IR relationship between Catalyst Global and Flux but is intended to help expand awareness of the Flux story. Neither CG Focus list nor Catalyst Global have received compensation of any kind for the preparation and distribution of this Alert. Flux management was not involved in the preparation or review of this report.

CG Focus List and/or its affiliate Catalyst Global owns approximately 0.8% of Flux’s outstanding common stock (the shares are not registered) pursuant to IR retainer compensation and through our participation in a private placement in March 2014.  CG Focus / Catalyst have a long term investment horizon (1-5 years) for their Flux investment and have no plans to sell any Flux stock for at least the next six months (we do have to pay our bills periodically and they generally request cash!).  Further, the founder of Catalyst Global is the tallest son of Timothy Collins, Sr.,  Chairman of Flux Power Holdings. Tim Collins introduced us to Flux’s CEO last fall and later became Chairman in spring 2014. We are very willing to answer questions on the status of our relationship and ownership for anyone who asks, as we completely understand there may be questions or concerns.  Rest assured that our integrity, ethics and adherence to disclosure standards are the bedrock of who we are and what we do each day, no matter the near term financial consequences.  It’s the way it should be everywhere – but alas it is not.

Authors: Our amazing intern this summer, Kate Keller, along with Catalyst Global staffers Chris Eddy & Eric Lentini

cropped-LOGO-Cropped.pngPuradyn Filter Technologies Incorporated
OTCQB: PFTI


Proven Bypass Oil Filtration Technology – t
hat Reduces Costly Oil
Changes, Downtime and Engine Wear – is Poised for Sales Breakout

pic b

Puradyn produces innovative engine oil filtration systems that drastically reduce costs, maintenance and downtime. Puradyn filters remove oil contaminants and replace additives – keeping oil in “like new” condition, reducing oil changes and increasing engine life.

Having proven the technology with several industry leaders, PFTI is now engaged in sales efforts with several substantial oil field and industrial companies that offer (but by no means guarantee) breakout sales potential. (see “New Business Activity & Outlook”)

PFTI’s CEO is sufficiently confident in Puradyn’s outlook, he has funded working capital deficits totaling $10M over several years. His background and integrity (we met with him) provide us the confidence to introduce you to this nano-cap name.

chart

 

 

 

 

 

 

 

Puradyn Investment Strengths:

  • Patented filter technology delivers >75% decrease in oil use, oil maintenance and related costs.
  • Thousands of installations in operation globally.
  • Razor-razor blade model – delivers solid ongoing revenue streams from replacement filters required to maintain filtration performance.
  • Rapid customer ROI: 100% cash-on-cash return in as little as a few weeks to several months.
  • Compatible with several large engine markets:
                                  • Oil drilling; pipeline compressors
                      • Marine vessels
                      • Mining haul trucks
                      • Hydraulic systems
                      • Heavy duty equipment
  • Solution works on all size engines including CAT, John Deere, MTU, etc.
  • Scalable production facilities support growth.
  • Impressive management team owns 28%.
                                  • CEO Joseph Vittoria was previously CEO of AVIS.
  • Very attractive valuation relative to annual customer savings and global sales potential across all markets.

chart update


“Our
patented bypass oil filtration system saves
one oil industry customer over
$5M per year.”
Joe Vittoria, Puradyn CEO

Yet PFTI’s market cap is roughly 2X this customer’s annual savings – making PFTI worth far more to the customer – than to all of Wall Street.

The CG Focus List thesis is that PFTI’s valuation hugely understates the global cost savings its patented technology could deliver – and that will ultimately be reflected through share price appreciation or M&A when sales ramp.

 

picture text box 4

Product Strengths:

  • Demonstrated nearly 70% efficiency at removing solid contaminants below 1 micron.
  • Easy-to-change filters; rugged filter canisters built for extreme conditions.
  • Filter replacement ever 250-1,000 hours
                                    • Up to 24 filter replacements per year.
                                    • Saves up to $3K per avoided oil change in large oil field applications.
  • Increases machine efficiency, oil circulation and purity and engine life.
  • Applicable to all diesel, gasoline and gas engines.
  • Approved by John Deere.

Customers/Validation:

U.S. Military

  • Supplying military contractor with 750 small units over 3 years, estimated revenue of $300K.
  • Military Tractors (Freightliner).
  • Armored fighting vehicles (MRAP).

Nabors Industries – Oil Field Services

  • Customer since 2009, ~ 2,000 units.
  • International division saves over $5M per year on 400 systems for large oil drilling rig engines.

South Ferry (Shelter Island, NY)

  • Customer since 2002.
  • Puradyn extends oil drain intervals from 250 hours to 3,000 hours on each vessel.
  • Extended time to engine overhaul by ~300%.

pic 2

 


pura
DYN’s rugged, high efficiency, multi-stage bypass filtering system consists of an external canister that houses a disposable filter element (with time release additives) and a heated chamber to evaporate water, fuel vapors and other gaseous contaminants.

 

 

 

Why Bypass Filtration is Needed

60% of engine wear is caused by particles between 5-20 microns, yet most OEM full flow filters only perform efficiently down to particles between 15-40 microns.

puraDYN bypass oil filtration systems filter particles as small as 1 micron or less, reducing engine wear from particles not trapped by normal full flow filtration. A micron is really small – 1/1,000th of a millimeter or 1/25,400th of an inch.

Emission Regulations are Driving Demand

New engines are designed to meet strict emission regulations, with the unintended consequence of generating greater amounts of soot in the oil.  Increased soot and other solid contaminants, plus fuel and water that cannot be effectively removed by full flow filters, create greater need for bypass filtration.

picture 3

 

 

puraDYN’s simple bag-and-trash filter element disposal.

 

 

 

 

New Business Activity & Outlook

Currently, a number of evaluations are in progress in the U.S., Mexico, Central  and South America, Africa, Indonesia, China, Russia and the Middle-East, and a few are about to begin.

Each customer prospect insists on a product evaluation, given the high value of the engines involved and their requirement for 24/7 service.

Of note, one evaluation is for one of the world’s largest oil & gas companies. Puradyn has already achieved the customer’s initial objective, but one final test is underway in Europe. This final evaluation is within 80% of the customer’s targeted duration and is progressing as planned.

 

Disclosure: The parent of CG Focus List, Catalyst Global LLC, is is an investor relations consultancy.  Puradyn Filter Technologies is not a client of Catalyst Global. Coverage of Puradyn reflects the belief of Catalyst and a fund manager we respect that the company represents a very attractive special situation. Neither CG Focus List nor Catalyst Global have received compensation of any kind for the preparation and distribution of this Alert.

CG Focus List and/or its affiliates do have long positions in Puradyn shares but per our trading policy, we will not effect any transactions in Puradyn shares for five days following the distribution of today’s article.

Authors: Kate Keller & David Collins – CG Focus List

www.cgfocuslist.com   ✪ 212.924.9800   ✪   info@cgfocuslist.com