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Rainmaker Worldwide (OTC: RAKR): Exploring Recent Fluctuations & Strategic Acquisition

Rainmaker Worldwide (OTC: RAKR) has experienced significant fluctuations in recent months, with occasional increases of over 400% within days. From trading around $0.0007 per share in late September, RAKR recently reached peaks of $0.0035, hitting its highest point since February last year. Today, we’ll dive into a significant event that unfolded and explore the reasons behind the high expectations. We’ll start with their generic background to better understand the company and what’s in store for 2024.

Background:

RAKR, based in Peterborough, ON, Canada, stands as a global leader in the Water Technology sector. The company specializes in delivering its cutting-edge Technology through a Water-as-a-Service model, directly supplying its products to clients and distributors worldwide. A significant portion of Rainmaker’s operations lies in its 12% ownership of Rainmaker Holland B.V., an innovative manufacturing centre situated in Rotterdam, Netherlands.

They deploy two energy-efficient technologies aimed at providing fresh water to communities and corporations in need. The first, Air-to-Water technology, extracts fresh water from atmospheric humidity and heat. The second, Water-to-Water technology, converts seawater or contaminated water into safe drinking water or commercial-grade input water. These technologies are powered by renewable energy sources like wind, solar, and electric grid, leaving negligible carbon footprints.

Rainmaker’s solutions are highly versatile, scalable, and environmentally conscious. Their Air-to-Water units start at a rated capacity of 5,000L of drinking water and can be expanded based on requirements, with actual output contingent on deployed climatic conditions. Similarly, Water-to-Water units come in various configurations, ranging from 37,500L to 150,000L.

Their story and mission is simple, create safe drinking water in areas where access to such resources is limited or absent.

8-K Filing (Significant Update):

On December 19th, 2023, RAKR extended their agreement to buy Miranda Water Treatment Systems, (MWTS) an internationally recognized leader in biological water, wastewater treatment and water reuse systems.

MWTS, based in Ankara, Turkey, represents a substantial addition to RAKR, enabling the utilization of wastewater treatment systems distributed and supported by a worldwide network of dealers, installers, and distributors.

According to the release, “MWTS delivers a complementary suite of products and services to RAKR’s Air-to-Water (“AW”) and Water-to-Water technologies (“WW”), with an installed base spanning 31 countries that are harmonious with RAKR’s footprint. Its state-of-the-art technology focuses on wastewater treatment systems for communities of up to 30,000 people as well as post-treatment systems and alternative techniques to manage septic tank needs for communities, hospitals, hotels, and more.”

The initial MOU was signed in 2022, but the extension allows them more time to plan a trip to Turkey for the final signing on January 22, 2024. Yes, you read that correctly – January 22, 2024. It’s only a matter of weeks away until the documents are signed in person to complete the share transfer.

Agreement details:

The Company will buy Miranda for $5 million, divided into three payments.

  • Payments of US$2M and US$1M will be made through issuing 40,000,000 RAKR shares valued at $0.05 per share
  • A second payment of US$1M will happen 18 months after the first payment.
  • A third payment of US$1M will be made 24 months after the first payment.
  • Both the second and third payments will have 12% interest each year.
  • RAKR has an option to pay these amounts either partially or in full prior, to the closing dates

Here’s where it gets more interesting….

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So What:

RAKR definitely had an interesting 8-K filing, but for those who aren’t familiar with why this matters in the first place, let’s break it down:

  • Investor Confidence: Issuing shares at a higher value per share might signal confidence in the future prospects of RAKR. The acquisition values RAKR at $0.05 per share, that’s over a 1500% gain from today’s closing of $0.003 per share. This could also be seen as a strategic move to secure an acquisition while projecting positive growth expectations.
  • Facilitating Acquisition: The issuance of shares valued at $0.05 per share allows the Company to acquire Miranda for an aggregate consideration of $5 million. Their method involved favourable terms and facilitates an acquisition without using excessive cash reserves, thus conserving liquidity for other operations or investments.
  • Strategic Acquisition: Acquiring Miranda brings in significant value or strategic advantage to RAKR. The addition of Miranda’s technology, resources, or market access could potentially bolster RAKR’s business offerings or market position, justifying the premium attached to the share issuance.
  • Flexible Payment Structure: The structured payment plan with multiple closings allows the Company to stagger the payments over time. This flexibility might provide financial relief and help manage cash flows more effectively.
  • Interest Accrual and Prepayment Option: While the deferred payments accrue interest at an annual rate of 12%, the Company retains the discretion to prepay these amounts before the scheduled closing dates, mitigating the overall interest costs associated with the acquisition.

Conclusion:

This is far from an exhaustive due diligence, but we believe RAKR’s 8-K filing alone adds a layer of intrigue to the company. It highlights a potential near-term catalyst that could swiftly alter the company’s trajectory. As the company gears up for the signing on January 22, 2024, there’s potential for increased investor interest in light of the current valuation. This interest could be driven by the fact that the raise was valued at over a 1500% premium. We’ll be sure to keep you informed as events unfold, but we strongly recommending you keep RAKR on your radar.

We will update you on RAKR when more details emerge, subscribe to Microcapdaily to follow along!

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