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September 4, 2004
Volume V, Issue 84
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To OTC Journal Members:

Scorching Short Term Ideas

I tried to spice up the Dog Days of August with a couple of exciting short term ideas. Track Record: 1 for 2. Perfisans Holdings (OTC BB: PFNH) was a scorching win. The company was featured in the August 6th edition. The stock closed at $.99 that day. On Friday, PFNH closed at $1.64, and traded as high as $2.04 on August 31st. Net return: 65% over three weeks.

My other August idea, Torrent Energy (OTC BB: TREN) on August 3rd, was featured at $.96. Friday the stock closed at $.71, for a net loss of 26%. Had you put $5,000 in each stock, based on Friday's closing bids, your $10,000 investment would have been worth $11,980 for a 20% return. On an annualized basis, this equates to a 240% annual return on invested capital.

Exciting ideas come across my desk nearly every day. I reject most of them. However, a few pass muster and are worthy of presentation, especially during a slow time when we are waiting for some of the longer term ideas to mature.

Today's idea has revolutionary technology in the Solar Power arena. With energy costs skyrocketing, alternative energy companies are back in investors' cross hairs. Today's company is way ahead of the competition. Invest a few minutes of your time to review their technology and learn about their recent dramatic surge in revenues. 

World Water (OTC BB: WWAT) Revolutionizing Solar Power Delivery

World Water is committed to using Solar Power to solve water related problems. The engineering feat they have achieved was born in the barn on the New Jersey farm of CEO Quentin Kelly in 1984.

Fast forward twenty years. The company has developed and is now marketing the only solar system that can deliver the power required for true industrial applications.

To date, solar power has been used primarily in small applications. Solar Panels can be used to drive 5 horsepower motors. They have been relegated to tasks like powering remote highway signs, auxiliary pool heaters, and supplementing power to individual homes.

World Water has patented technology which allows Solar Panels to generate 600 horsepower, more than 100 times the standard of 5 horsepower. This additional power generation opens up the possibilities far beyond the scope of current solar technology.

WWAT's unique patented technology blends AC with DC power. Traditional solar systems generate DC power. The utility company provides us with AC power. Through the two patented components you see highlighted in red in the schematic, WWAT has the only technology in world today that can seamlessly blend AC and DC power, which can be used to turn a standard industry drive for any kind of high powered pump. Their patented variable frequency circuit board automatically adjusts to demands.

This unique blending technology allows solar panels to drive 600 horsepower motors. This is an accomplishment previously unheard of in solar, and WWAT is the only company in the world that can achieve these kinds of results.

WWAT's business is expanding rapidly in California where the sun shines. Alternative energy tax incentives were adopted after the energy crunch several years ago, and companies are taking advantage.

Here are some key accomplishments:

  • The company is working in conjunction with BP (British Petroleum), Shell Oil, and Kyocera.
  • There have been three major installations in California to date; 2 agricultural and the largest community college campus in the US.
  • International projects in development include Iraq, Libya, the Phillipines, and Sri Lanka
  • The installation at Cerro Coso Community College in California is the largest solar installation in the United States. The system delivers 60% of the college's energy needs.
  • WWAT achieved $3.3 million in revenues in the June quarter vs $50,000 in the same quarter in the previous year (650% increase). Through the first six months of 2004, WWAT delivered $4.1 million in revs, up from $1.1 million the previous year (262% increase)
  • WWAT has numerous projects currently in development. The California Wine industry has a great deal of interest in future use.
  • WWAT has delivered the world's largest solar powered commercial refrigeration system for a 350 horsepower hydracooler at a food processing facility in Edison, CA.
  • For more complete information, visit their web site at

Friday, just after the market closed, WWAT announced a new $2 million contract for an installation at a large California based citrus farm. The patented AquaMax(TM) system will drive a high powered 200 horsepower pumping system at the facility, establishing the most powerful solar powered irrigation system in the world.

This contract is just the tip of the iceberg for the company. Through it's major installations this year, WWAT has proven the technology can provide a return on investment on the largest scale ever delivered by solar power. The combination of a strong ROI and tax incentives is proving irresistible to new customers in Sun belt businesses where water and power are required.

As of the end of June there were 65 million shares issued and outstanding. Based on Friday's closing price of $.34, the entire value of the company is $22 million. Since they have proven and patented technology which revolutionizes the entire solar industry, it is reasonable to assume the company could garner a market value considerably higher than $22 million in the future.

If they can simply maintain the June sales levels, they will be on track to generate about $13.5 million in annual revenues. I believe the company will eclipse those numbers by a great margin as the demand for their technology picks up.

On the negative side, their gross margins for the projects they delivered this year were minimal. The company viewed these projects as an opportunity to prove they could deliver for large scale power requirements, and they priced aggressively.

WWAT's long term goal is to deliver 40% gross margins to shareholders. They don't manufacture the components. They only provide patented technology and expertise. Therefore, I believe a 40% gross margin is achievable. However, they need to prove they have pricing power now that the technology has proved out.

The chart presented shows a formation known as an "Ascending Triangle". As the triangle closes in on the apex, the stock becomes more likely to break hard one way or the other. There is good support at $.26. The overhead resistance stands at about $.38. Therefore, if the stock breaks solidly above $.38, will have broken the downtrend line, suggesting higher levels in the future. 

A break above $.38 could bring $.50 into sight, especially if the company delivers more news of contract signings. If Friday's $2 million contract proves a harbinger of things to come, higher levels are likely in the near future.

Here is the complete text of Friday's news release for your review:

Press Release Source: WorldWater Corporation 

WorldWater Corp. Executes $2 Million Contract for World's Largest Solar-Powered Irrigation System

Friday September 3, 4:11 pm ET 

Contract Further Validates Company's Proprietary Solar Technology and Strategic Vision with Its Cutting-Edge AquaMax(TM) System

PENNINGTON, N.J.--(BUSINESS WIRE)--Sept. 3, 2004-- WorldWater Corporation (OTCBB: WWAT - News), the world's sole provider of cutting edge patented high-volume solar powered technology with diverse commercial applications in a broad range of industries, announced today that it has executed a $2 million contract for its proprietary AquaMax(TM) pumping system at a California citrus ranch. The announcement was made by Quentin T. Kelly, WorldWater chairman and CEO. 

WorldWater's proprietary and patented AquaMax(TM) system will drive a high powered 200 horsepower pumping system at the facility, establishing the most powerful solar powered irrigation system in the world. The project represents a quantum leap forward in the deployment of large-scale solar power pumping technology and demonstrates the viability of solar power for broad applications in virtually all industries anywhere in the world. 

"While many of the world's finite energy sources are being depleted at a disquieting rate, as evidenced by the current global oil crisis. WorldWater's ability to harness the unlimited power of the sun with our proprietary AquaMax systems represents breakthrough technology," said Mr. Kelly. "Our patented technology can deliver up to 600 horsepower - more than 100 times as powerful as the nearest competitors - making ours the only products available anywhere in the world that can deliver the water-pumping horsepower required for large scale commercial applications. Installations such as the one at this California agricultural facility clearly demonstrate how WorldWater has enabled solar power to achieve an unparalleled level of practicality and cost-effectiveness for a broad spectrum of commercial mainstream uses." 

"California is one of the leading states in the development of solar and renewable energy, and is the proving ground of many of the world's most advanced solar power systems," continued Mr. Kelly. "This new ranch irrigation system is just the latest in a series of major projects in development for WorldWater in California." 

Among WorldWater's recent milestones powered by its AquaMax(TM) solar power technology in California are: 

Supply of a powerful one megawatt solar system for Cerro Coso Community College in Ridgecrest, projected to furnish an unprecedented 60% of the institution's electricity requirements;
Design and installation of the world's largest solar-powered commercial refrigeration system, for a 350 horsepower hydracooler for a food processing facility in Edison;
Development of a 50 horsepower solar pumping system for an agricultural facility in Firebaugh. 
About WorldWater 

WorldWater Corp., a full-service, international solar engineering and water management company with unique, high-powered and patented solar technology, provides solutions to a broad spectrum of the world's water supply and energy problems. The Company's recently patented AquaMax(TM) solar pumping systems, capable of driving motors up to an unprecedented 600 horsepower, make WorldWater the first solar company in the world with the power to deliver mainstream motor-drive and pumping capability. The Company is also a pioneering provider of solar powered water systems in the Philippines and developing nations in Africa and Asia. 

WorldWater seeks to achieve significant revenue growth and earnings leverage by marketing its proprietary solar technology through multiple channels to a broad spectrum of institutional and private parties anywhere in the world. Prior to the development of the AquaMax technology, solar powered motors were limited in output to only 5 horsepower, and thus incapable of pumping the volume of water required for large scale systems. WorldWater's proprietary AquaMax systems can drive motors up to a revolutionary 600 horsepower, generating significant commercial opportunities for exploitation by WorldWater and vastly expanding the range of applications for clean, renewable solar power in commercial, municipal and institutional mainstream applications. Each day, more solar energy bathes Earth than its 5.9 billion inhabitants consume in equivalent electric power in 27 years, according to the U.S. Department of Energy's National Renewable Energy Laboratory in Golden, Colorado. With many international and domestic governmental agencies increasingly concerned about clean air and water conservation, WorldWater is well positioned to implement its patented AquaMax(TM) systems for the supply of all power needed for the largest irrigation and cooling systems in the world - with no pollution and no excess pumping to foul the air or excessively drain the natural water resource. 

It is the opinion of WorldWater's management and board of directors that no other company is better positioned to capitalize on the worldwide demand for next-generation solar technology, as represented by the Company's patented technology. The energy generated by WorldWater is pollution-free, fully renewable, reliable, highly scalable and requires lower operating costs. WorldWater's early-mover advantage, and its next generation solar technology, will enable the Company to exploit a broad range of high revenue and high profit opportunities in both the public and private sectors in multiple worldwide markets, facilitating additional contracts to increase revenues while concurrently lowering costs and increasing margins. For more information about WorldWater and its next-generation proprietary technology, visit the website at, or for investor-specific information at 

     For the Company:
     WorldWater Corp.
     Debra J. Grady, 609-818-0700, ext. 14
     [email protected]
     Investor Relations:
     Paul Karon, 800-342-1467
     [email protected]

Source: WorldWater Corporation


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