This report has been commissioned by the Client and is provided for informational purposes only. The contents should not be interpreted, in any respect, as offering investment advice nor be viewed as a substitute for readers’ own due diligence. Hardman & Co has not been retained to assess or comment upon the company’s current valuation or future potential value.
Due to COVID-19, the author has relied extensively on ‘virtual’ communications with management, their verbal assurances and documentation provided by the company. The company has confirmed that, to the best of its knowledge, this report contains factually correct information at the time of publication. Potential investors should seek updated information prior to any financial commitment, and acknowledge that future outcomes may differ materially from current expectations.
Investing in early stage growth companies is a high risk activity. Access to liquidity may be totally or highly restricted. Investors should seek appropriate professional advice before deciding whether to make a financial commitment.
For further information related to the company’s activities, please contact the corporate officers named at the front of this report.
Your attention is drawn to all disclaimers at the end of this report.
The unquoted Water Enhancement Technology (WET) Group has developed formidable expertise in the specialised water treatment market, which has grown sharply, especially in the US. Having invested over £10m in undertaking this research and in developing a range of products for the market over a six-year period, WET – a Knowledge Intensive Company (KIC) – now seeks to monetise its IP. While COVID-19 has delayed its planned rollout, WET’s Natralysis Process (NP) will be central in generating future revenues. Currently, WET is best known for its Pure Ionic Water (PIW) elite brand that is supplied to leading Premier League football clubs, including Manchester City and Chelsea.
WET’s focus is on the enhanced water market and, as a B2B supplier, it seeks to provide its specialised water services, especially to major soft drinks beverage manufacturers. Aside from the UK, the US is WET’s prime target market; it also has some involvement in the Far East.
Central to WET’s technology ‒ through which it holds many patents ‒ are the advances it has made in developing its filtration systems, which are adaptable across various sectors; albeit the beverage industry offers the best short-term prospects. Looking forward, the strong political momentum to reduce the sugar content of soft drinks also presents WET with a one-off opportunity.
While NP is undoubtedly WET’s prime product, its PIW offering is attracting real interest among leading UK sporting clubs – and especially in the Premier League football sector. WET has also developed the Guidance Enhanced Membrane (GEM) that decontaminates water – it has real prospects in the UK agricultural sector.
To finance its route to commercial viability, WET is seeking to raise ca.£1.5m of new capital, based on a £39m Directors’ valuation. Its previous fund-raise provided £1m, which was underpinned by a £25m valuation. This fund-raise and the product rollout have been delayed by COVID-19; in the interim, various furlough payments were received.
In seeking to monetise its R&D successes in water enhancement technology, WET’s focus on generating core revenues from NP and PIW will be paramount – and is something that any potential investor should monitor closely. Clearly, investment in WET comes with numerous risks – a feature that applies to many aspiring companies seeking to move away from R&D to commercial viability.
