The Energy Report - Acro Energy Technologies TSX.V:ART

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Acro Energy Technologies

TICKER: TSX.V:ART

DESCRIPTION: Acro Energy Technologies Corp. is focused on the consolidation and growth of renewable energy companies, initially in the U.S. solar market. Acro Energy has initiated its acquisition campaign in the solar integrator market through its recent addition of Acro Electric, Inc. Also, it has closed an asset purchase agreement with Light Energy Systems in California. The company continues to actively evaluate suitable acquisition candidates across North America and Canada. Acro has recently announced that it has entered into a letter of intent to purchase a third company, Energy Efficient Solar, in the Los Angeles area. Energy Efficient Solar's revenues were $4.2 million in 2008. This acquisition will move Acro up from the 7th largest installer in California to the 5th largest. To complete the financing for this acquisition, Acro also recently announced that it has engaged Jesup & Lamont as its bankers on the acquisition.

Acro featured on Green Chip Stocks (3/2/10).

Acro featured in Solar Today magazine (Jan./Feb. 2010 issue)

WEBSITE: http://www.AcroEnergy.com/

The information below is based on the most recent information we have received from analysts and the companies participating in The Gold Report. We encourage you to visit the company's web site for updates.

TER: I'd like to move onto rare earths in a minute, but have another question about solar. Any companies in that arena that you think are well-positioned?

VG: Yes, Acro Energy Technologies is one. In the solar space the part that isn't really talked about very much is installation. After all, they have to put these things in and it's not exactly like trying to change oil in a car; there's a lot more to it.

The process is quite complicated in the sense that you've got the panels, you've got your generator station, you've got your capacitors, you've got all these things and you need a group that can do this to scale. Acro has really been trying to become that "go-to" installer and become more of a consolidator to get that scale. It's really one-stop shopping for the potential end user.

So I think Acro is going to be quite impressive. Exactly when, I don't know, but it's something I'm watching at the moment.
- The Energy Report Interview with Victor Goncalves (02/04/10)

"I talked with Marty Spake, the CFO of Acro Energy Technologies Corp. on Friday, December 18, 2009. Marty gave me an overview of the company and its prospects going forward, and they are indeed very bright. . .

. . .the real breakthrough for this business has come from funding provided by a company named Sun Run. This is a private electric utility company. Sun Run funds the solar installation, and, in exchange, homeowners buy their electricity from Sun Run. The economics of Sun Run are enhanced by tax breaks given to partnership investors similar to those enjoyed in the oil and gas exploration business.

Based on what we can see at the moment, Acro appears to be a very undervalued stock. . .To the extent it can increase per-share earnings and cash flows through acquisition, the upside would appear to be even greater.

What is the upside for this company? Currently with the stock selling at C$0.26, and with 27.5 million shares outstanding, it has a market cap of approximately US$6.75 million. Its projected EBITDA of C$6.6 million, or about US$6.2 million, means the stock is currently selling at slightly over 1 times projected cash flow for 2011, from organic growth alone.

We think a modest multiple of 5 times could very easily be in order, which would take the stock upward to $1.25 per share. A much more aggressive multiple and per-share price could be assigned by the market, depending on how rapidly the company grows and depending on how much dilution.

We believe the management of this company is capable of executing its organic business plan and very possibly much more than that, given likely acquisitions. The bottom line is this. At least given the present scenario, homeowners have nothing to lose by signing up with Sun Run, because they reduce their electricity costs into the future without having to lay out any funding up front. In California, the average homeowner saves about 10%, or $15, on his monthly bill of about $150. When times are tough and a large number of folks in California are having a tough time making their mortgage payments, any additional cash flow will be greatly coveted. An aggressive marketing program should help Acro make its goals for 2010, and if that happens, we would expect this company's shares should rise significantly next year."
- J.Taylor's Gold, Energy & Tech Stocks (12/23/09)

TER: To follow up on your green bubble comment, what's your thinking about the solar energy segment?

MK: When you talk about solar, you have to look at the type of solar, whether you're investing in the patent technologies' or the installers' or the manufacturers' level. So it's a little bit different; a much more defined sector. In the short term, I think it's thumbs up for installers in North America because the rebates are making solar installations much, much cheaper. Whereas a residential unit just 18 months ago in the U.S. would cost over US$45,000, that same unit today with the subsidies and the grants costs about $15,000. Solar panels, which were trading above $4, are expected to get down to about $1 by 2010, so you're looking at these same units going to about $8,000 to $10,000 by 2010, which were costing the home owners US$45,000 18 months ago.

That's a 75% decrease in the cost of installing these in residential U.S. homes because of the government subsidies. One we've seen significant gains in was called Lone Star and has now changed its name to Acro Energy Technologies Corp. (TSX.V:ART). We like the people and the business plan, it's definitely one solar installer to learn more about.
- Marin Katusa, Casey Energy Report (06/11/09)

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