While this is looking backwards, these are some of the negatives surrounding IEVM. The company has lost two of its sales and marketing guys over the passed two years: Bradley Rockman and Chad Crady; it is insanely difficult for new products to be accepted by O&G companies; Excelyte has been around for 8 years without a successful rollout in any industry, even though Wayne Kinsey (IEVM's largest shareholder) touts it as the greatest biocide ever.
I've been told that Excelyte works well, and there is a Benchmark white paper on Excelyte that shows the product's efficacy, so I don't have issue with the product.
It's great that the company has focused on a direction fairly recently and has been executing and building out infrastructure to support growth. IEVM is not alone in this opportunity, as other water service companies have started pursuing similar opportunities recently. Lux Research has written about this opportunity as well, and the consulting firm states that companies who can weather the oil price storm will be successful.
There seems to have been some consolidation in the water frac space, and I think IEVM will be acquired by a turn-key provider of water services. According to a VIC report, IEVM's management wants to sell to a larger company. If the company can't break even and fund its operations with internally generated cash soon, they will probably end up selling regardless.
How much could IEVM go for in a bearish scenario? HII Technologies sold its water assets for a meager $4 million to ENSERVCO. IEVM has raised around $24 million in capital, so receiving a bid of $4 million seems unlikely, but in a scenario where IEVM cannot break-even, the company would be more of a price-taker IMO.
Maybe IEVM can break-even. Management thinks it's realistic, investor relations thinks it's realistic. Management mentioned that customers are buying the product outright now instead of testing, so that is positive. IEVM needs around 2,000 oil wells to break even, and their listed customers have a lot more than 2,000.
