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EDE 7.1¢

Given that we are in a... 21/04/2017, 24190782

  1. Maxpowerz

    38 Posts.

    Given that we are in a waiting game and have nothing better to do, for the benefit of any uninformed shareholders I will share the following.

    I got in to Eden during 2007 excited by the prospect of Hydrogen enriched fuel to reduce pollution in India. I ended up selling out in 2009 at a substantial loss only to buy back in during 2011 for more than I sold out for. I have accumulated since and had my faith tested regularly. My history only goes back that far though.

    The company started out with the goal of mixing hydrogen with natural gas (Hythane) to create a low emission fuel that could assist with reducing pollution in India. The Indian government had indicated its desire to switch to a Hydrogen economy and Hythane seemed to be a perfect candidate for a transitioning fuel. Unfortunately the cost of Hydrogen was the stumbling block, which to this day has still not been resolved.

    The production of hydrogen, was both expense and not environmentally friendly (produced a lot of CO2), so Eden partnered with Queensland University to develop a method of producing Hydrogen from Natural gas, but instead of the by-product being CO2, they sought to produce solid Carbon. The pyrolysis process was developed that produced Hydrogen and either multi walled carbon nanotubes or carbon nanofibers. From my very limited understanding of all things small, single walled CNT’s are very valuable with multi walled CNT’s being less valuable.

    To reduce the cost of the Hydrogen further the company sought to develop a market for the by-product carbon. The problem however was that the market for CNT’s was small and large quantities would be produced to get sufficient Hydrogen
    for Hythane.

    Research began on implementing CNT’s to rubber (without much success) and then concrete and plastics. As I understand it, other companies have spent very large sums of money (many many millions) trying to incorporate CNT’s into concrete without success due to the Van der Waals effect resulting in the clumping of the CNT’s and not dispersing through the mix evenly. Expensive and impracticable solutions were developed but nothing that could be adopted by the market.

    Eden with a grant from the Australian Research Council (Aus Govt) grant worth a couple hundred thousand partnered with Monash University to solve this problem. They developed the product we know as Edencrete which is a liquid admixture that can be easily added to concrete when mixing. Monash hold the patent and own the Intellectual Property. In 2013 Eden signed an agreement with Monash for a perpetual worldwide exclusive agreement to sell Edencrete. If commercial sales within 5 years were not achieved the exclusive part of the arrangement would be dropped. While I don’t recall seeing an announcement confirming the exclusivity, Eden has achieved commercial sales, so in my opinion is the only company able to sell Edencrete. Monash receives a small royalty for all Edencrete sold.

    Eden chose the American Concrete market as the best market to approach first. It started slow with some difficulty getting a foot in the door. A great deal of testing is required prior to any form of acceptance by the market. Eden, somewhat quietly partner with Intelligent Concrete who seemed to have provided very good guidance on what to do and when in order to break into the market. Colorado being the home base of Edens American operation was the first place for trials to be undertaken, however Georgia showed significantly more interest and the focus quickly turned that way. The Georgia Department of Transport (GDOT) began trialling and testing the product. The Georgia government offered a very significant incentive package to base operations in Georgia, which we a working towards. An expansion of the Colorado Facility is almost complete (expected any day now) taking it from a pilot plant (108k gallons per year) to a small scale commercial operation (2.4M gallons). The first stage of the Georgia operation is still at least 24 months away where maximum production will start at 12.5M gallons and expand to 50M gallons and on. Sufficient space is available at Georgia for production of 500M gallons in time.

    Eden has completed the ASTM 12 month testing program with consistent and successful results. Field trials to date have all demonstrated the effectiveness of the product and many risks to the company have been nullified. The big question now is can they sell all they produce? To date sales have been slow. The Colorado upgrade is about to come on line and the sales are still not enough to utilise the pilot plant production, let alone a commercial level plant. There are lots of irons in the fire though. The recent contract with the Texas precast concrete company is hopefully the beginning of the sales boom. From the announcement it seems like there is reasonable cause for optimism that this contract can grow in size and spread to other companies. Without having anything concrete (pardon the pun), I get the impression that management are optimistic that the sales will grow rapidly. Stage three Colorado expansion was flagged recently as a possibility due to the expectation that 2.4M gallons per year will not be a sufficient quantity for the next two years. While we are waiting for confirmation of sales and by no means has the third stage been given the green light, the purchase of the adjoining property in Colorado to make room for it is a positive sign.

    Eden is at a cross roads. If they can achieve sales then the sky really is the limit. If they struggle to move sufficient quantities to meet costs, then there is trouble ahead. Cashflow reports are still coming back with losses each quarter which is appropriate for the stage of development Eden is at, however this time is coming to an end and positive cashflows are anticipated soon. We don’t know the cost of production, so it is difficult to estimate how profitable this product could be. The time of speculation is drawing to a conclusion however and soon the SP will be reliant on actual profit instead of potential profit. The potential to grow will still be a variable though.

    A lot of this is off the top of my head, so happy to be corrected where I am wrong. There is lots more to talk about with this company such as Edenplast, Optiblend, European sales and so on, but currently Edencrete in the USA is the main game. You never know Hythane may even get a gig one day as well.

    I have been holding for some time and I know I have been lucky, the reason I bought is not the reason my investment is doing well, but I will take it.
    My dire cash flow circumstances may dictate that I sell a small parcel in the short term, but the bulk of my investment is securely tucked away in the bottom draw not going anywhere.

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