Investor sought for water-heating system

Fri, 17 Oct 2014 09:43

The principal of Devrog, a South African-registered company, owns the intellectual property for a unique liquid-petroleum-gas-fired hot-water generator. These water heaters are ideal for use in residential, commercial, industrial and institutional settings and can be operated independently of the electricity grid.

The system has been designed and developed over a period of five years and a fully functional prototype has been manufactured and is available for potential financiers to view (by appointment).

Due to personal circumstances, the principal is unable to proceed with the last regulatory tasks and steps necessary in order to take the product to market. For this reason, a minimum shareholding of 15% in Devrog has been made available at a cost of R5-million – with a shareholding of up to 49% available at a cost of only R10-million. An attractive offer of loan financing would also be considered. Augmentis (which is marketing this offer on behalf of Devrog) now welcomes enquiries from potential investors or direct funders.

Product detail and benefits

The system uses two novel design concepts that are patentable and boasts further unique features, the designs of which could be registered for protection of the intellectual property it utilises.

One of the key advantages over conventional gas-fired heat generators is that hot water is supplied at constant pressure and temperature is guaranteed (the heat can be regulated without affecting flow rate).

As the unit is electricity-grid independent, it can supply hot water on demand during electricity outages and in rural areas where no electricity is available. Furthermore, it does not require municipal water pressure (ie it is self-pressurising and can be supplied with collected rainwater from a reservoir or dam). The heating system comes in a permanent built-in option or mobile option and should be immune from the common phenomenon of geyser ruptures or bursts.

Requirements for responders

Only parties with a serious interest and intent to purchase equity or to provide loan funding need respond to the opportunity. In the case of loan funding, responses should be from direct funders rather than from financial intermediaries or investment consultants.

Devrog will allow a limited period of time during which demonstrations of the operation of the product will be conducted and certain general and selected documentation will be provided in order to allow the interested party an opportunity to assess his/her/their risk in pursuing an option to purchase. Accordingly, an option to purchase the shares in Devrog will be granted at a cost of R30 000 per month or part thereof allowing only serious parties to conduct a due diligence on the business and the patentable product. The option fee is not refundable.

Every assistance and support possible will be afforded to the interested party in order to facilitate a due diligence exercise. The party to whom an option is granted will first be required to enter into a non-disclosure and non-circumvention agreement. This agreement will also be required to be entered into between Devrog and a loan finance party, should the interest exclude equity.

The maximum period for which an option will be granted is three months. If the option is not exercised within the three month period, it lapses. If and when the option is properly exercised, the relevant share transfers from Devrog to the purchasing party will take place upon payment of the consideration to Devrog’s current shareholders.