SHARC International Systems (SHRC:CSE)
leləm̓ Village Tour Summary and Key Executive Appointment
SHARC International Systems Inc. (“SHARC Energy”) is the world leader in wastewater energy transfer. SHARC Energy’s systems recycle and reject thermal energy from wastewater, generating one of the most energy-efficient and economical systems for heating, cooling, and hot water production for commercial, residential, and industrial buildings. SHARC has been making great strides in its business development and revenue ramp, including recent agreements with Salas O’Brien and a strategic partnership with SubTerra Renewable.
SHARC’s share price has stalled over recent quarters, despite positive traction in terms of increasing applications of the company’s waste heat recovery systems. However, we feel SHARC has a significant opportunity to build shareholder value over the next few quarters. We see the potential for the company to add market share and drive revenue through strategic partnerships, distribution agreements and strategic management and board additions. Key to the story will be the ability to hit EBITDA breakeven, which is a key hurdle for many investment managers.
We have been encouraged to see management changes happening at SHARC Energy recently, particularly with the addition of Michael Albertson as President. A seasoned veteran who most recently held the position of Senior Vice President for Sales & Marketing at WaterFurnace International, Inc, he will be heavily relied upon to help drive the sales strategy and execution at SHARC. Having left a well-established firm for a growth company like SHARC, where compensation is tied to share price, is significant endorsement. We prefer to see situations where shareholders and management are aligned as they are in this situation.
Albertson's four-decade career in the industry spanned several companies that lend themselves towards growing the future of SHARC Energy. In the recent release (found here) SHARC has entered a strategic partnership with Subterra Renewables, a leading full-service geothermal drilling provider with a proprietary Energy-as-a-Service (“EaaS”) model known as Aura™. The primary strategy is to combine SHARC Energy’s WET technology with Subterra’s geothermal exchange systems. Mr. Albertson’s experience as Chairman of the Board of the International Ground Source Heat Pump Association (IGSHPA) and as a board member of the GeoExchange Organization (GEO) uniquely positions him and the company to take advantage of the five-year agreement to co-develop up to $200M of qualified projects. Mr. Albertson’s experience in geothermal HVAC systems will facilitate growing SHARC’s revenues in late 2023 and beyond.
In addition to the addition of Mr. Albertson the company has also moved to streamline operations by promoting Hanspaul Pannu to Chief Operating Officer. This strategic move reflects the company's commitment to expanding its services and solidifying its position as a leading provider of sustainable energy solutions.
What we will be looking for in the coming months is strategic changes to the Board of Directors to align the composition of the board to meet the addition of these strategic management changes.
leləm̓ Village Tour Summary – Jun 22nd, 2023
We attended the SHARC Energy tour of the impressive leləm̓ village project on the UBC endowment lands. For context, the leləm̓ village is a 21-acre planned community owned by Musqueam Capital Corporation, an Indigenously owned business that will be home to over 2,500 residents in 1,250 homes with 30,000 sq ft. of retail space once completed.
The village is using a passive energy loop (PEL) that utilizes a SHARC WET system to provide all the heating and cooling needs for the entire community. The PEL approach coupled with SHARC maximizes energy efficiency by capturing and utilizing the energy already present in the wastewater stream significantly minimizing the need for additional external energy inputs. It helps reduce the reliance on conventional energy sources, such as gas boilers and AC units, which results in significant carbon savings, energy efficiency and freshwater savings compared to current standards.
Click the link Here for a virtual tour of the project.
The leləm̓ village project was one of the largest built to date by SHARC and represents revenue of over $2mm. This tour provided an opportunity for SHARC to show potential clients how their technology can be implemented for both residential/commercial buildings up to municipalities. This event had over 200 attendees ranging from large developers, government officials and representative from BC Hydro, FortisBC, and several engineering firms.
This project helps highlight how SHARC Energy’s systems are key in helping buildings and municipalities reach net zero and sustainability goals. In an independent article written by the SmithGroup, it highlights how the SHARC system is key to achieving the coveted LEED Platinum certification. Click their logo for the article.
With regulation and public sentiment pushing for more sustainable and greener buildings, we anticipate the number of developers and municipalities opting for a SHARC solution will continue to grow.
SHARC Energy is publicly traded in Canada (CSE: SHRC), the United States (OTCQB: INTWF) and Germany (Frankfurt: IWIA) or find out more on SEDAR.
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