Solar Wind Energy Tower, Inc. (OTCMKTS:SWET) Runs Higher on News
Yesterday’s session saw Solar Wind Energy Tower, Inc. (OTCMKTS:SWET) continue its news-driven surge up the charts, closing 51% up, at $0.04 per share. The ticker was in double-zero territory just two weeks ago but a spree of press announcements sent it up in leaps and bounds.
Last Monday the company announced that the City Council of San Luis, a small town in Arizona, approved a development agreement, giving SWET the ‘necessary local entitlements’ to develop its first solar wind downdraft tower. This alone sent the price up dramatically. The news was followed by an 8-K filing detailing the execution of an option agreement, giving SWET exclusive option to acquire the land until mid-December 2014 with possible extensions. The purchase price of $46.5 thousand per acre would peg the cost of the whole 640-acre undertaking at nearly $30 million.
SWET followed through with a Monday release, informing that the company is negotiating a financing agreement with National Standard Finance LLC. While a definitive agreement has not yet been stamped, the plan is to have National Standard pay for all equipment and development costs until the project is operational, then lease it to SWET for a 20-year period.
SWET certainly needs the full scope of the financing suggested, as the company does not exactly have the financial resources to build a facility twice the height of the Empire State Building. Here is what SWET had as of December 31, 2013, in its annual report:
- $61 thousand in cash
- $2.5 million in current liabilities
- ZERO in revenues since inception in 2010
- $2.4 million in annual net loss for 2013
The company issued 80 million new shares in the first quarter of 2014 to clear around $250 thousand in convertible debt. This makes the average conversion price a diminutive $0.003 per share – a significant discount even before SWET‘s recent climb.
We have looked at the company in the past, back when it was named Clean Wind Energy Tower, Inc., was trading under the CWET ticker and was once again run by current CEO Ronald Pickett. The 2012 article examines the pump jobs that targeted the company back then, as well as the toxic convertibles CWET was issuing at the time to notorious financiers such as Asher Enterprises and JMJ Financial.
While the news of a financing deal being ironed out will certainly give an extra boost to SWET‘s share price, enthusiastic traders may want to consider the risks involved in such a huge undertaking. The company will be hosting a conference call tomorrow to address the numerous questions that have come up in relation to recent news. Before more details about the financing are out and considering the price has gone from double zeroes to $0.04 in a matter of seven trading sessions, investors may want to tread with care and do their own due diligence.
