CR for a 10% dilution backed by Perennial Value Smaller Companies and Northstar Impact Australian Equities Fund, and two directors. No offer for retail holders. Shows how much I know with predicting no raise this half! Cheap shares.

They need to get a move on with the GO filter certification as CNQ subsidiary NematiQ has secured its first significant sale, valued at AUD 65,000 to a US hemp processor.

Closes $2.2m Placement Ahead of Expected Entry Into New Growth Markets Highlights:

Received commitments for $2.2m at 9 cps. Supporting the execution of contracts and launch of new business such as the company’s new Graphene Oxide enhanced membrane, as well as potential acquisitions

The Issue Price of $0.09 per share represents a 10% discount to the shares’ 5-day VWAP The Placement comprises the issue of approximately 24.4 million New Shares (equivalent to 9.96% of the Company’s current shares outstanding),

Use of Funds The additional capital is intended to fund: the execution of existing contracts, new business opportunities such as the launch of the Company’s new Graphene Oxide enhanced membrane, potential mergers & acquisitions, costs of the Placement, and general working capital. 

From the CNQ announcement

The hemp extraction equipment market is estimated to be US$45.5m in 20221 , with a 12.8% CAGR. Filters in this sector have a faster replacement rate in comparison to many other industries. The majority of the market are not using membrane separations, and as such a shift to membrane separations will increase the value share of the equipment supply market in collaboration with Molecular Forces. Over the past year, NematiQ has transitioned from the development phase to focusing on educating the market and commercial sales. Our Graphene Membranes stand out due to their unique properties, such as high flux, the ability to reject organics without rejecting salts, and the anti-fouling nature of the membrane surface that results in lower fouling compared to conventional polymeric membranes. In other applications such as drinking water treatment, the Graphene Membrane has been very successful in trials for the removal of naturally occurring organic matter (NOM) in drinking water applications. The Graphene Membrane can remove organics without removing the beneficial salts resulting in lower energy use, higher water recovery and more environmentally friendly routes for byproduct disposal. 

The market penetration of NematiQ’s Graphene Membranes is increasing, with sales in the drinking water sector for customers in Australia and Europe, and into the reverse osmosis pre-treatment market with some of the world’s largest manufacturers for testing in their flowsheets. 

Finally NSF certification for the GO membrane comes through after 2 years. As stated before only $300K in new revenue in the first year but should open up opportunities to enter other markets.

Passed all National Sanitation Foundation (“NSF”) test procedures under NSF Standard 53 for its Graphene Oxide enhanced (“GO”) membrane technology. All technical requirements for the certification are fulfilled and De.mem expects to be officially listed on the NSF website within the coming weeks. 

Company expects over $1m revenue over two years for potable water treatment applications in the North American and Australian markets only.

Further revenue upside from entering new geographies.

Other global distribution partnerships being actively pursued. 

De.mem will initially commercialise its new technology through its existing wholesale distribution partnership with Purafy/Grafoid in the North American market.

Purafy is a division of unlisted company Grafoid Inc., a graphene research, development and investment company founded in 2011, that promotes a range of graphene-based products for applications in key commercial markets. 

End of the year should start to give an indication of how sales are progressing. Latest Investor presentation

Held

Despite record quarterly cash receipts of $7M still cash flow -ve $290K. Annual loss of $1.5M

Completion of South 32 project and one other major project now scheduled for early 2024, with project payments of ~900k scheduled for H1 CY 2024. The incoming customer payments will have a positive impact on the operating cash flows in the upcoming March and June Quarters 2024.

Recurring cash receipts >90% of total cash receipts; recurring cash receipts growth approx. 15% vs. prior year (CY 2022)

Total cash receipts in the calendar year are approx. $24.8m.

Cash receipts in the December quarter are up by approx. 8% vs. $6.7m in the prior corresponding period (pcp). De.mem advises that full CY 2023 revenues are expected to grow in the range between 12% and 18% vs. CY 2022

Plugging these numbers into my basic valuation (working on a 15% growth and sustained margin) gives a 2024 SP of 15.5c current Price to Sales of 1x and a current SP of 10.5c

GO filtration certification still ongoing "During the September Quarter 2023, a key milestone had been met, with De.mem’s membrane passing a critical high pressure testing procedure performed by the NSF. The conclusion of the process is expected shortly."

Capic specialty chemicals doing well. "We are particularly excited about the development of our specialty chemicals business division located in Perth, which achieved top-line growth of approx. 80% within just 3 years since acquisition of the business in March 2021."

Worrying part is no new projects mentioned and break even has been dropped just "Positive outlook for continued growth in CY 2024 with strong recurring cash receipts"

Still waiting on NSF certification to provide a potential catalyst but not going to affect cashflow until H2 at the earliest. $2.4M in cash so shouldn't need to raise in the first half.

De.mem Receives Milestone Order from Australian Energy Sector

New contract

The new ~$550,000 contract is an important milestone because it continues De.mem’s growing momentum in the Australian power generation sector. In September 2020, De.mem announced a $400,000 contract from a customer from the Australian power generation sector (see ASX announcement “De.mem - $400,000 Ultrapure Water Treatment System Order”, dated 29 September 2020).

The customer for the new contract is AGL Energy (ASX: AGL), an Australian listed public company involved in both the generation and retailing of electricity and gas for residential and commercial use. AGL Energy generates energy from power stations that use thermal power, natural gas, wind power, hydroelectricity, solar energy, gas storage and coal seam gas sources.

DISC: I have small holding

De.mem announces strategic Acqisition in WA

Key Highlights

•  Capic provides high-value added, speciality chemicals for blue-chip, West Australian-based mining clients.
•  The proposed acquisition provides De.mem with increased scale; geographic diversification into the key strategic market of Western Australia; a complementary product range; a complementary blue-chip, institutional customer base and potential revenue cross-sell synergies.
•  De.mem has a strong acquisition value-add track record, with strong growth in recent acquisitions, Pumptech and Geutec.

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02353985-6A1024793?access_token=83ff96335c2d45a094df02a206a39ff4

17/3/21

De.mem completes Capital Raising; announces Share Purchase Plan

Highlights:

•  Accepted commitments for ~$9m from leading strategic and institutional investors through a placement of ordinary equity at $0.28 per share in an oversubscribed capital raising.
•  Welcomes follow-on investment from existing institutional shareholders and new investment from several leading institutions, including impact investment funds and specialist ESG funds.
•  Share Purchase Plan (“SPP”) available for Eligible Shareholders.
•  The additional capital is primarily intended to fund the previously announced acquisition of Capic and expansion of the Company’s Build, Own, Operate and services segment.
•  De.mem’s indicative post-capital raising position including Placement proceeds, assuming the target SPP of ~$1.2m, after acquisition payment and transaction costs, is ~$11.5m cash and term deposits.

DISC: I hold & will participate in SPP

Highlights:

•  Preliminary adjusted 1Q21 cash receipts +12% above prior corresponding quarter 1Q20
•  Strong second quarter 2Q21 with recurring and contracted (as of today) cash receipts of $4.5 – 5m expected, projecting growth of +33-47% vs. prior corresponding quarter 2Q20 (excluding any additional impact from recent Capic acquisition)
•  Continued growth in recurring cash receipts, to ~67% total
•  Continued growth of subsidiary De.mem-Geutec with 1Q21 cash receipts of ~$1.05m, approx. ~90% above 1Q20 (Geutec)
•  Continued growth of subsidiary De.mem-Pumptech, with 1Q21 cash receipts of ~$0.75m, approx. ~10% above 1Q20 (Pumptech)
•  Continued expansion in Food, Beverages, and Sustainable Agriculture segment.

DISC: I Hold

DEM's Share Purchase Plan closes on Mon 12/4/21...I have topped up

Should provide a bit of a moat over other water treatment companies in the short term. Folded graphene in research development but this seems closer to market.

De.mem launches new, proprietary graphene oxide?enhanced membrane technology

The new technology provides significant customer benefits including increased throughput and therefore, reduced operating cost, and superior filtration performance

Internal testing demonstrates:

20?40% increased water flux (throughput, or volumes of clean water produced) over standard polymer membranes, reducing the operating cost per liter of filtered water produced.

Ultra?high water flux for certain variations of the technology.

Increased rejection (rejection of contaminants, or filtration performance) over standard polymer membranes.

The Company is currently commencing industrial scale pilot projects.

Nematiq a subsidiary of Clean Tech Water (CNQ) promoting a graphene oxide water filtration membrane. DEM still waiting on approval to sell its domestic graphene oxide filter into North American market.

New director with experience in kidney dialysis. Plenty of clean water needed with some regional areas not having dialysis due to poor water quality requiring significant travel. Water treatment and the use of membranes have a key importance for dialysis.

Mr. De Wit is a senior corporate executive who has worked in several locations across the globe. He has been the CEO of Asia Pacific for Fresenius Medical Care since 2016. In this role, he is also responsible for the company’s operations in Australia & New Zealand.The company operates more than 4,100 dialysis clinics and 42 production sites for dialysis products globally. In Australia alone, the group has 23 dialysis clinics and more than 350 staff.

"Investing in Indigenous health & education to close the gap"

• $45 million for 30 four-chair dialysis units to provide better renal services across Australia.

"Water quality and availability concerns in drought for dialysis patients"

Dialysis is a vital treatment, requiring approximately four billion litres of top quality water in Australia every year to keep people with acute kidney conditions alive.

Every dialysis patient uses 3,000 to 4,000 litres of water a week for treatment to remove waste from their blood.