EcoloClean Industries (ECCI)

[stervc]

ECCI Mobile Unit Valuation Consideration…

The earlier valuation I posted was derived from considering the rates of water treated to be 100 gallons per minute for the mobile unit and 1,000 gallons per minute for the stationary unit at a price of .02 per gallon:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=28970733

From their 15 May 08 PR, ECCI stated that their mobile units will generate 500 gallons per minute per mobile unit and 5,000 gallons per minute per stationary unit:
http://biz.yahoo.com/pz/080515/142803.html

With the thoughts below, I will primarily focus on the ”ECCI potential” derived from their mobile units.

The earlier ECCI valuation consideration was derived in effort to try to determine a fair valuation for ECCI from some of the variables mentioned in the posts below courtesy of Tkcomputer9999 and the PR above considering if any of the contracts expected are awarded:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=29287902
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=28927851

Before we can list the variables to consider, we must first derive the ECCI per minute amount of Income to be generated from each unit through logical deduction. I say Income because from my understanding and research, the money generated from the units will be pure profit. The Expenses have already been taken into account as evident from the units being purchased. Since ECCI have not been previously generating any Revenues, taxes and other Expenses will not be considered for keeping these derivations simple. Please further consider the thoughts below, but I highly recommend reading all of the attached links above to fully understand the following thoughts:

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Mobile Unit Rate of Water Treated
500 = gallons per minute for mobile units
.02 = cost per gallon

500 x .02 = $10.00 per gallon per minute
$10.00 x 60 minutes = $600.00 per hour
$600 x 24 hours = $14,400 per day

In summary, each ECCI mobile unit will provide water treatment at a rate of 500 gallons per minute at the cost of .02 per gallon which equates to Income of $10.00 per gallon per minute which equates to $600.00 per hour which equates to ECCI generating Income of $14,400 per day.

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ECCI Presumed Variables to Consider:
** 1 mobile unit running per day
** ECCI $14,400 Net Income per day per mobile unit as derived above
** Worse case scenario Outstanding Shares (OS) amount of 350,000,000 shares

Revenues – Expenses (Net) = Net Income.
Net Income ÷ Outstanding Shares (OS) = Earnings Per Share (EPS)

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$14,400 = 1 mobile unit x $14,400 Net Income per day per 1 mobile unit

$14,400 x 30 days = Net Income per month per 1 mobile unit
$430,000 = Net Income per month per 1 mobile unit

$430,000 x 12 months = Net Income per year per 1 mobile unit
$5,184,000 = Net Income per year per 1 mobile unit

It is expected that they will have 5 mobile units per operation as a minimum. So, that would multiply the total amount above by 5 to equate below:

$5,184,000 x 5 = Net Income per year per 5 mobile units
$25,920,000 = Net Income per year per 5 mobile units

From my understanding, the money generated from the units will be considered pure profit since Expenses would have already had been captured as evident from the existence of the units and from the thoughts I explained earlier above. Now let’s derive an Earnings Per Share (EPS).

Net Income ÷ OS = EPS

$25,920,000 ÷ 350,000,000 (OS) = EPS
.074 = EPS

Since we are not quite sure just yet what Sector or Industry ECCI would trade under, it is a little difficult to determine a finite PE Ratio to use as its growth multiple to multiply with the EPS to determine its fair trading price. Because of this, it is generally accepted to use 12 as a conservative PE Ratio. The share price below would give us the ECCI trading price of where ECCI could ”potentially” be trading if given a contract as what many of us are expecting to be announced any day now:

12 Conservative PE Ratio x .074 EPS = .89 per share

This means that given if the above variables that were mentioned as a consideration comes to fruition to be true as expected, ECCI would logically, fundamentally, and conservatively be worth somewhere in the area of .89 per share.

This also means that the .89 per share represents per increments of 5 units. So…

.89 x 2 units of 5 (10 total units) = $1.78 per share

.89 x 3 units of 5 (15 total units) = $2.67 per share

Let’s add that it’s no secret that Devon Energy is the largest and primary company that is highly interested in using the ECCI technology which is why all of them are there at the Barnett Shale. Devon Energy trades on the NYSE at $116.00+ per share under the ticker of DVN. Is doesn’t get much better than that for establishing a customer/partner for utilizing your patented technology. I have also confirmed that there are a few other NYSE stocks/companies that are interested in utilizing the ECCI technology.

I also have sound reason to know that the price of .02 per gallon that I used with my thoughts above is not even half the price that the major market companies are willing to pay for contracting with ECCI for them utilizing their patented technology. However, I used the .02 per gallon price to also remain conservative. Here’s another reason why DVN logically wants to use ECCI versus what they are doing now courtesy of Waverider110 which further adds to the .02 per gallon being conservative:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=29690208

Please understand that the above thoughts are not the gospel. These thoughts should only be used to gage what could be considered as ”potential” ECCI valuation if they consummate a contract with a major company as from what they had PR-ed as part of their plans. Again, this is considering that the variables that were used to derive the calculations for these figures are first officially released then we can use the thoughts above to use as a gage to measure the ”actual” ECCI valuation. So far, a good piece have been ”officially” released which allowed me to be able to calculate the above ”potential” ECCI valuation.

Now here’s the trick with determining the valuation for the use of the ”stationary” units. If the mobile units generate 500 gallons per minute and the stationary units generate 5,000 gallons per minute per gallon, then simply take those share price amounts above I derived and multiply them by 10 to get the ”potential” ECCI valuation if 5 stationary units were used instead of 5 mobile units which is what we think will be primarily used. I hope people see the magnitude and the ”potential” that resides here with ECCI. I think it’s worth taking the risk, especially at these levels.

v/r
Sterling