Latest 4C still tracking my forecast of around $28M sales for FY24. Probably not quite going to make a profitable year but it will be close. No detail on North America water filtration sales. Still no new projects announced which is my main concern.

Highest quarterly cash receipts ever recorded of approximately $7.44 million.

Continued double digit organic growth. 22 successive quarters of cash receipts growth versus prior corresponding period (pcp).

Positive quarterly operating cash flows of $82,000.

Two recent acquisitions successfully integrated, now contributing to cash receipts and margins.

On track for record full-year results. 

Still moving in the right direction. Holds with my valuation of 15.5c

Record June Quarter cash receipts of approximately $7 million.

Record cash receipts growth of 20% vs. pcp, entirely organic.

Continued and stable growth momentum, 21 successive quarters of cash receipts growth versus prior period.

Operating cash flows approximately break-even. (-43K)

Two acquisitions integrated, set to contribute to cash receipts and margins in H2.

On track for record full-year results. 

We are looking forward to a record second half of the Calendar Year 2024, with high recurring cash receipts, ongoing commercialisation of our Graphene Oxide enhanced membranes into the USA and other markets, and revenue and margin contributions from the recent Border Pumpworks and Auswater Systems acquisitions”. 

Livewire podcast with FNArena's Rudi. When asked for a microcap on his radar mentions DEM at 44 mins. Not recommending a buy at this point but sees a potential for a re-rate if they continue to execute.

Sales still growing in recurring revenue and bump next quarter from South 32 project completion. My worry is that we have not seen any new project announcements for a while and now we have the statement "Visible path to operating cash positive " which is more vague than before. New purchase to continue roll up strategy.

Small acquisition of the Border Pumpworks business, based in Wodonga in regional Victoria, strengthening the Company’s position in regional markets and further expanding its industrial customer base.

Accretive acquisition: $400,000 consideration, paid fully in cash, valued at approximately 0.4x revenue and 4x normalized EBITDA.

Contributing towards move to EBITDA and operating cash flow break-even: adding approximately $100,000 in normalized annual EBITDA (before synergies) to the Company, and approximately $1.1 million in annual revenues.

Operational synergies: significant operational synergies with Company subsidiary De.mem-Stevco (Melbourne/Victoria), facilitating a seamless integration process and driving cost efficiencies.

Recurring revenue focus: high recurring revenues from service & maintenance work add to De.mem’s high recurring revenue base.

Enhanced regional presence: strengthens De.mem's position in regional Victoria and New South Wales, continuing geographic diversification.

Strategic rationale: well established customer base; high recurring revenues; significant cross-sell opportunities; revenue and cost synergies; seamless integration opportunity; continued regional diversification in Victoria and New South Wales. 

De.mem is delighted to report record March Quarter 2024 cash receipts of approx. $6.6m, a 14% increase compared to prior corresponding period 

Record March Quarter cash receipts of approximately $6.6 million.

Continued Growth Momentum, 20 successive quarters of cash receipts growth versus pcp.

Visible path to operating cash positive

On track for record full-year results underpinned by March quarter results, record June quarter cash receipts expected, ~90% recurring cash receipts, and domestic water filtration market entry. 

Adjusted operating cashflow positive Reported March Quarter 2024 net operating cash outflow is -$521k, as per the Appendix 4C attached to this release. Adjusted for approximately $1.1m in customer payments related to two major projects outstanding as of 31 March 2024, adjusted March Quarter 2024 operating cash flows are positive with approximately $500k.

From the $1.1m in outstanding customer payments, approximately $800k have been received in the month of April 2024 with the remaining balance expected to be paid during the remainder of the June Quarter 2024. Corresponding project costs have almost entirely been incurred and paid for prior to the end of the March Quarter 2024. See section “Strong operational performance” for further details. 

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

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.

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.

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

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

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