WTT.V - Discounted.


Water Ways Technologies (WWT.V) is the parent company of Irri-Al-Tal Ltd. ("IAT"), an Israeli based agriculture technology company that specializes in providing water irrigation solutions to agricultural producers.


IAT competes in the global irrigation water systems market with a focus on developing solutions with commercial applications in the micro and precision irrigation segments of the overall market.


IAT's revenue streams are from the following business units: (i) Projects Business Unit; and (ii) Component and Equipment Sales Unit. IAT was founded in 2003 by Mr. Ohad Haber with a view of capitalizing on the opportunities presented by micro and smart irrigation, while also making a positive mark on society by making these technologies more widely available, especially in developing markets such as Africa and Latin America. IAT's past projects include vineyards, water reservoirs, fish farms, fresh produce cooling rooms and more, in over 15 countries.


Addressable Market

According to Markets and Markets, The smart irrigation market was valued at USD 696.2 million in 2017 and is projected to reach USD 1,755.1 million by 2023, at a CAGR of 16.30% during the forecast period.


The report claims: "Smart irrigation system automatically adjusts the watering schedule based on various parameters, such as plant water content, soil moisture content, wind speed, wind direction, and local weather data. It offers several benefits, such as environmental sustainability, reduced labor cost, and less water usage". Also cited: "Soil sensor-based smart irrigation controllers have gained popularity in recent years owing to their increasing adoption in the agriculture segment. Soil sensor-based controllers are capable of reading precise data from various sensors, such as soil moisture, rain, temperature, and humidity, installed on the field. Sensor-based controllers are better than weather-based controllers as they do not depend on weather forecasts or on data from weather station".


Key catalyst for growth are Adoption Trends, Emerging Markets, Environmental Benefits, and Government support.



Listed below is the activity of WWT.V to date.


Mar. 18 - Commence Trading on the TSX-V Under the Symbol "WWT"


Mar. 18- Engages Hybrid Financial for Investor Relations Services.

Mar. 19 - Enters into LOI to acquire a Canadian irrigation distributor and expects to launch a sales and marketing subsidiary serving the Canadian irrigation market. The Distributor was established in 2004 and finished the year ended October 2018 with sales of approximately CAD $3.74 million. Water Ways will acquire assets of the Distributor which include its customer base, inventory, certain equipment and goodwill for total consideration of CAD $0.5M.


Apr. 17 - Provides Business Update. Emerging countries: "Bread and butter" and benefit most from gaining access to clean water and improving the agricultural outputs. Also aggressively expand in the global legal cannabis sector, which has already been advanced from a concept to tangible projects in multiple countries.


China: reached an understanding with one of its many agents in China. WWT.V intends to acquire certain assets of the agent, including a network of subagents, and it is expected that the agent will become the CEO of the new entity. Sales in the past 3 years, for this agent in China, ranged between $3 to $6.5 million. WWT.V intends to focus its marketing of irrigation equipment for growing vegetables in greenhouses and on irrigation solutions for apple plantations.


Uzbekistan: Initial value of the project is approximately $0.5 million and is expected to be delivered in Q2 2019. The Company expects to deliver other projects in Central Asia in 2019.


Mexico: Negotiating with a number of irrigation and agricultural equipment distributors with a view of forming a Mexican-based subsidiary to focus irrigation products and equipment as well as turnkey irrigation projects.


May 2 -Reports Fiscal Year 2018 Financial Results.


May 29 - Engages Lakeshore Securities as Market Maker. An initial term of three months, at a fee of up to $5,000 per month. No stock options are being granted in connection with the engagement.


May 31 - Q1 2019 Financial Results.


Jun. 17 - Closes the Asset Acquisition of a Canadian Irrigation Distributor and Launches a Distribution Subsidiary for the Canadian Irrigation and Cannabis Cultivation Market. Acquisition of certain assets of Heartnut Grove Inc. (“Heartnut”), a Canadian distributor of irrigation and agriculture components, based in Mount Brydges, Ontario.


Heartnut, established in 2004, had, for the year ended October 2018, sales of CAD$3.76 Million and gross profits of CAD$692 Thousand. Upon closing, Heartnut ceased its commercial operations and its sole shareholder and managing director John Pol (the "Shareholder") became an employee and manager of Opco and entered into an employment agreement with Opco. The Company also retained the current Heartnut sales force.


Jun. 21 - Reports the Granting of Options. Granted 3,723,527 stock options of the Company (“Participant Options”) to directors, employees and consultants pursuant to the terms of the Company’s stock option plan at $0.25 cents.


Jul. 4 - Announces Change of Auditors


Jul. 11 -Announces the Launch of Its New Cannabis IOT Precise Irrigation and Fertilization System; Cannaways Its. purpose is to increase the yield and consistency as well as reducing energy, water, and fertilization costs. It entails 1) A hydroponic system of flooding benches, 2) A fertilizing system composed of the following main components: raw fertilizer tanks and dosing pumps. 3)Drainage, filtration, and water recycling systems. And 4) An IOT Control gateway.


Jul 29 -Announces the Completion of its First Irrigation Project in Central Asia and the Signing of two New Irrigation Projects in Ethiopia. The project is approximately CAD $0.48M of which CAD$0.43M have already been received.


Ethiopia: The first project consists of the installation of advanced irrigation technology assembled at a 3,000 hectare sugar cane field. The value of this project is approximately CAD$600,000 and WWT expects it to be delivered and installed in the next several months. The second project consists of the upgrade of an existing 25-hectare herb greenhouse, valued at approximately CAD$200,000. Both Project are anticipated in Q4 2019.

Aug. 22 - Receives a $1,5M Purchase Order for High Tech Water Treatment Solutions From One of South America's Leading Flower Growers. To deliver more than 30 high tech water treatment solutions. First systems are to be delivered in Q4 and the balance over a course of a few months. The water treatment systems are comprised of high tech filtration systems based on self-cleaning filters and physical separation technologies to eliminate the existence of unique worms (Plant Parasite Nematodes) in irrigation water that originates from rivers.


Aug. 30 - Reports Q2 2019 Financial Results.

Sep. 18 - Announces the Launch of a Distribution Subsidiary for the Huge Chinese Irrigation Market. WWT will together with the Agent and the Additional Holder form a new Chinese subsidiary (“Subco”) in which WWT will indirectly hold 51% of the equity interest and the Agent and the Additional Holders will together hold 49%.


Final agreement is expected to be signed before the end of 2019.


Oct. 11 -Engages Questrade as Market Maker. A fee of up to $4,500 per month for a period of one year.


Oct. 11 - Successfully Participates in MJBizDaily's LatAm Symposium and Exhibition.


Oct. 17 - Signs a Memorandum of Understanding to Provide a 10.6 Acre Medical Cannabis Greenhouse Grow in Colombia With Design and Technical Support. The MOU is subject to certain conditions including: obtaining the licenses and permits required for the development of the Project; obtaining the required financing to complete the project and entering into a definitive agreement confirming the economic terms of the Project.


WWT.V expects the definitive agreement to be signed by the parties by the end of Q2 of 2020.


Oct. 24 -Announce the second commercial CAD$352,000 order for its new cannabis IOT precise irrigation and fertilizer system "The Cannaways". The CAD$352,000 order isfrom an Israeli Licensed Producer who is currently building a 27,000 Square meters (approximately 290,000 Sqft) Medical Cannabis Cultivation facility near Haifa, Israel.


Oct. 31 - Annual and Special General Meeting.


Nov. 29 - Reports Q3 2019 Financial Results.


Dec. 10 -Completes Installation of the First Cannaways Irrigation and Fertilization System at the Cronos Facility in Israel. The Cannaways system is also available for greenhouse, outdoor food production and fish farm operations.


Summary

The market has not been kind to WWT.V. On March 19 2019, an IPO at $0.25 cents, last Friday it closed at $0.06 cents.


Despite the initial signing of Hybrid Financial (an investment relation firm), successfully setting up a subsidiary in Canada and China, announcing potential new initiatives in Columbia and South America, launching a new product (Cannaways), reporting completion of project in Central Asia, Ethiopia, and Israel, valuation has been declining.











While the earnings decline from FY 2018 to Q1 2019 (May 31) is notable, WWT.V's valuation did not improve after the issuance of Q2 2019 (August 30, $.11 cents) and Q3 earnings (November 29, $0.06 cents). Other than tax loss season, the decline in the stock price is not reflective of the numbers in the filings for both periods.


This in part explains, WWT.V's hiring of two different market makers; Lakeshore Securities (May 29) and Questrade (October 11) as well as, a new investment relations firm (Boardmarker). Unfortunately, it did not reverse the trend.


In their last MD&A, WWT.V outlined that it "expects to generate a sufficient amount of cash and cash equivalents from operations to maintain the Company's current capacity to generate cash flow and be able to achieve modest financial targets through organic growth. In order to assist with meeting short-term financial needs to fund operations, as of September 30, 2019, Water Ways Technologies has access to the following sources of financing: credit lines and with a major Israeli bank totaling NIS 2,800,000 approximately. Water Ways Technologies has access to a supplier credit of 180 days with several key suppliers amounting to over $3,500 (three million five hundred thousands)." In other words, financing is not likely.


Hence, WWT.V's may not be currently on par to outperform FY 2018. but it appears to be significantly discounted.



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