The Purifloh Ltd (ASX: PO3) share price is surging today, up 22.7% at the time of writing to $1.86 a share. Purifloh (the company styles its name as PuriflOH) shares closed at $1.52 last Friday, but opened at $1.70 this morning and have climbed even higher to their current level.
Today's move is good news coming out of bad news for Purifloh shareholders. The company's shares are still down a depressing 54.1% so far this year, and down 53.7% since 5 June. Even so, today's move means they are also up ~46.8% since 28 September.
So who is Purifloh? And why are this company's shares going ballistic today?
Who is Purifloh?
Purifloh is a company that makes filtration and purification technology for air, water and surfaces. It does so through ownership of exclusive rights to free radical generation (FRG) technology. The company trades on the ASX, but Purifloh shares are also available through over-the-counter (OTC) markets in the US as of last year. The company pursued this additional avenue for greater availability of capital.
Purifloh's FRG technology works by creating a 'streamer plasma' (sometimes called 'cold plasma'). This plasma, in turn, creates powerful radicals, electrons and UV light that eliminates biological and chemical pollutants. This process delivers only water and ozone as by-products, making it very environmentally friendly.
It is worth noting that, although Purifloh owns the rights to many aspects of this 'streamer plasma' technology, it does not own them in absolute terms. The FRG technology is actually owned and was developed by Somnio Global Holdings – a non-listed, US-based company. Somnio still owns the rights to FRG, but licenses them to Purifloh for the sole purpose of "treatment of all water and fluids, air purification ad disinfection, and biofilm disinfection and facility sterilisation." No use outside these parameters is permitted under the agreement. However, Purifloh does note that it has rights to complementary technology that may be developed by Somnio that may assist in the above uses.
It was only 6 weeks ago that Purifloh was rocked by news of its chair's sudden resignation. That move pulled Purifloh shares to a 2-year low at the time.
Why are Purifloh shares rocketing today?
We can (in my view anyway) put today's moves in the Purifloh share price down to a quarterly update (for the quarter ending 30 September 2020) the company released this morning before market open.
In this update, Purifloh reported that the company has "received an offer" of a finance facility from major shareholder Dilato Holdings Pty Ltd to the tune of $1 million. The company stated that "the facility is available to draw down on an as-needed basis, with a flat interest rate of 10% to be paid on outstanding balances". Purifloh also notes that Dilato has previously provided similar services, including a $2 million facility provided in 2014.
This is a much-needed shot in the arm for Purifloh. The quarterly update also tells us that Purifloh has a current cash balance of $1.013 million in the bank, as of 30 September. This stood at $2.356 million at the end of the prior quarter. The company also tells us that it has just $800,000 of 'estimated cash available for future operating activities' (as of 30 September) as well. That's not a lot of money for a company with a market capitalisation of $58.8 million on current pricing.
Purifloh also told investors that it has finalised the engagement of Dr. Alex Sava to the company. Dr. Sava previously worked at ASX healthcare star Nanosonics Ltd (ASX: NAN).
Finally, Prifloh also told the market that the company is working on a prototype air cleaning system with the ability to destroy COVID-19 viruses:
The Company also plans to utilise the prototypes to test its efficacy to destroy Covid-19 at a suitable and independent Good Practice Laboratory in Australia… it will approach these tests with confidence.
What's next?
Who knows which of these factors got investors' blood boiling today with Purifloh shares, but one or more of them has evidently made the market very excited.
Even so, this is an interesting company to watch. It will be exciting to see if the early indications of an effective prototype in the COVID space bear real fruit over the next months and years.
