I'm not sure what to make of the company I just interviewed -- New Energy Technologies (OTC BB: NENE.OB). And more broadly, I wonder what thinly traded, small-market-cap, over-the-counter traded stocks can add to the advancement of renewable energy markets.
For context, Investopedia explains Over-The-Counter (OTC) stocks:
In general, the reason for which a stock is traded over-the-counter is usually because the company is small, making it unable to meet exchange listing requirements. Also known as "unlisted stock", these securities are traded by broker-dealers who negotiate directly with one another over computer networks and by phone. OTC stocks are generally unlisted stocks which trade on the Over the Counter Bulletin Board (OTCBB) or on the pink sheets. Be very wary of some OTC stocks, however; the OTCBB stocks are either penny stocks or are offered by companies with bad credit records.
I spoke with the CEO of New Energy Technologies (formerly called Octillion), John Conklin, and he seemed genuine enough. But in reading the SEC document on the firm (linked here), one learns of management issues, financial issues, going concern warnings from auditors, immense technical risks and an immature and unformed business plan and value proposition. The firm has zero revenue and will continue to have zero revenue for the foreseeable future.
The company is essentially a revenueless incubator for two disparate technologies, organic solar cell technology licensed from the University of South Florida and a set of kinetic energy harvesting techniques.
Kinetic energy harvesting from autos and heavy vehicles
The firm looks to harvest kinetic energy of vehicles in three areas: 1) slow-moving vehicles at toll plazas, rest areas, traffic calming areas, drive-thrus, weigh scales, and other roadway points, 2) vehicles moving at highway speed and 3) heavier vehicles.
The systems are intended to be non-disruptive to the driver and are embedded into the driving surface, parallel to the direction of moving traffic. As drivers pass over the deformable surface material, their vehicles’ tires depress the surface, and kinetic energy from the vehicle is captured for conversion to electricity.
The firm refers to the technology as ‘peristaltic action’: these are fluid-driven systems that rely on the flow of pressurized fluids and avoid the use of moving mechanical parts.
The company’s system has undergone durability field-tests at the Four Seasons Hotel in Washington, D.C., a Burger King in Hillside, NJ, and a Holiday Inn Express in Baltimore, MD.
The firm envisions that similar mechanical and fluid-driven peristaltic systems could be designed to generate electricity from the motion of foot traffic, cargo trains, passenger railcars, and aircraft. Here's a link to a video demonstration of one of their applications.
Organic solar cells
The firm's solar technology is from researchers at the University of South Florida and involves coating glass surfaces with "ultra-small, functional solar cells." Applications are targeted at BIPV in residential and commercial windows; the company claims that the cells can harvest natural as well as artificial light. More details can be found in a paper recently published in the Journal of Renewable and Sustainable Energy of the American Institute of Physics (J. Lewis, J. Zhang and X. Jiang, 1, 1301, January 2009).
The SEC document states that "SolarWindow technologies ... enable see-thru windows to generate electricity by ‘spraying’ their glass surfaces with the world’s smallest known solar cells. These solar coatings are less than 1/10th the thickness of ‘thin’ films and make use of the world’s smallest functional solar cells."
But do a little bit of digging, and one learns that the efficiency of the solar cell is 0.42 percent under 1 sun irradiance. Which means, roughly, that coating the entire skyscraper with these OSCs would allow it to charge a few cell phones.
Here's a link to an article on Konarka, another OSC firm, that has already taken more than $150 million in investor funding. Even with $150 million, OSCs are difficult to get to market, since they tend to fail in sunlight.
Other OTC firms in renewable energy
Here are a few other OTC firms active in renewable energy. They seem to share a lack of resources, a lack of revenue, and frequently shifting business plans.
PetroAlgae (OTCBB: PALG) recently submitted paperwork for a proposed $200 million public offering on the NASDAQ. The firm has a $1 billion market cap. PetroAlgae actually no longer grows algae (it grows lemna or duckweed) and has no intention of supplying petroleum, despite their name. The company has a technology licensing business plan, zero dollars in revenue and a management team with a spotty record. Its only operation is a small-scale demo facility in Florida. In a questionable algae biofuels market, PetroAlgae is not the company to inspire confidence in institutional investors. Here's the S-1. Prediction: IPO withdrawn "because of market conditions." (GTM Research has a research report on third and fourth generation biofuels available here).
xSunx (XSNX.OB) is a CIGS photovoltaic development company with little revenue that used to be an amorphous silicon photovoltaic development company with little revenue. The firm purports to be using hard-disk-drive equipment to fabricate their solar cells (like AQT, but AQT is actually building cells). The firm's CTO hails from CIGS vendor Global Solar Energy.
Applied Solar (APSO.OB, formerly Open Energy): A bankrupt BIPV solar roof tile and architectural solar company now owned by the Quercus Trust and 21 Ventures.
Entech (ENSL.OB) now has major investor David Gelbaum of the Quercus Trust as CEO. The firm builds solar skylights and CPV equipment. Total revenues for the six months ended June 30, 2010 amounted to $45,000, compared to $2,113,000 in the same period in 2009. The decline in revenues reflects Entech’s decision to transition from the flat-plate solar installation business to the CPV business.