Many investors are looking at potential stock plays through the lens of environmental, social, and governance (ESG) criteria these days. Reasons can vary, but a lot of people are looking for opportunities with companies that are advocates for social justice, or are active in contributing to global warming and environmental solutions, or perhaps provide equal advancement opportunities to employees of all stripes.
Today we’ll take a look at one such opportunity, broken down by the Canadian digital media company Jayconomics. Jayconomics creates an array of videos designed to inform and educate potential investors with the goal of demystifying and democratizing the financial landscape for viewers. In the video discussed here, Jayconomics discusses in-depth the opportunity with Aduro Clean Technologies (CSE: ACT) (OTCQB: ACTHF) (FSE: 9D50). Aduro has developed a patented, hyper-efficient, low cost, water-based system for recycling plastics called Hydrochemolytic™ Technology (HCT). The full video can be found here, but we’ll break it down into parts for you as well.
In this first clip, Jayconomics discusses the overarching problem – plastic waste has gotten out of control, plastic production is growing, and current recycling technologies are not able to adequately meet the challenge due to financial and technical constraints.
Here the host discusses Aduro’s technology and its advantages, both financially and technologically. The HCT platform is highly scalable with relatively low capital requirements, is able to recycle almost any kind of plastic waste (compared to the 20% of all plastics currently considered recyclable), and results in an 85-90% efficiency rate compared to 50-60% from current methods.
In this segment Jayconomics covers Aduro’s timeline to full commercialization, along with the risks inherent in this stage of corporate development. He focuses on the many steps the company has taken to de-risk the investment, including third-party validation of the HCT platform and its capabilities, as well as the current construction of pilot projects designed to prove the system at larger scales.
Jayconomics discusses Aduro’s balance sheet and their upcoming funding needs prior to commercialization of HCT technology. He notes an approximately $3 million is needed to complete the pilot projects, which the company plans to cover with warrants, government grants, and other non-dilutive financing methods. Aduro anticipates generating revenues almost immediately upon completion of the pilot projects.
In this section, the focus is on Aduro’s approach to building its business. Rather than promoting the stock and engaging in successive rounds of financing supposedly designed to fund overly aggressive and unrealistic expansion plans and promises, Aduro is sticking to a much more incremental approach. Develop and prove the technology, partner wisely, underpromise and over deliver.
Here the many unique properties of HCT technology are discussed. The platform requires a very small capital investment to set up and can be operated on anywhere from a hyperlocal small scale to a large regional scale. HCT operates at a much lower temperature than existing systems, and is capable of dealing with impurities and a broad array of plastic feedstock types – two issues that greatly limit current recycling capabilities. The technology is proven at smaller scales, has been third party verified, and is in the process of being proven at much larger scales.
In conclusion, Jayconomics summarizes the case for Aduro Clean Technologies as a fairly derisked, environmentally positive, emergent technology in an area of great need. There is a significant amount of insider ownership, and the company incentivizes executives with performance-based pay to ensure the team is completely aligned with shareholder interests. With a market cap in the $33 million neighbourhood and the technology alone worth up to $50 million even in an emergency fire sale, there is a huge amount of upside with less risk than many microcap growth stocks.
Interested parties are encouraged to contact the company directly.
Ofer Vicus, CEO
Abe Dyck, Investor Relations