Bulletin #134

Smallcap Discoveries

Financing Opportunity: 

Aurora Solar





 MINIMUM $5000


Kelly Robinson 



Aurora Solar Technologies Inc


Current Price: $0.125

52 Week Hi/Low: $0.145 / $0.025

Average Daily Volume (3month):  363K

Issued and Outstanding:  88,176,925

Options:  8,080,000

Warrants:  2,256,800

Fully Diluted:  98,513,725

Market Capitalization:  $11M

Insider Ownership:  5% – 4,261,476

TTM Net Loss:  $1M

TTM Revenues:  $2.15M

Last Quarter Net Income:  $326K

Annualized Earnings:  $1.3M

Forward P/E:  8.5x

Debt:  Nil

Cash:  $650K

Raising $1.5M at $0.10 with a full warrant at $0.15 for one year.


  • Recently profitable
  • Transitioning from hardware to software
  • In one of the fastest-growing markets
  • Working with multiple top-tier customers
  • Cheap on a forward-looking basis
  • Environment, Social, Governance theme
  • Undiscovered


Larry Fink, the CEO of BlackRock, the world’s largest asset management firm with $7.4 trillion in assets under management has recently announced that the firm aims to double the number of ESG (Environmental, Social, Governance) exchange-traded funds. It’s given a huge boost to the theme of sustainable investing and is forcing investors to re-think their investment philosophy.

Most developed countries have vowed to go 100% green in the coming decades and solar energy is currently the fastest-growing power generation source.

With the price of solar energy dropping from $6 per watt to less than $1 per watt in the past 8 years, the outlook for solar energy as an alternative to dirty fossil fuels has never looked brighter. Driving this cost reduction is the launch of new, innovative solar cell designs and processes. The new solar cell designs such as Monocrystalline PERC, Bifacial, and Heterojunction technology are leading the way in improving margins and productivity for cell producers.

The growing trend of building green structures in developed countries including the US, Canada, Australia, China, Germany, and France, among others, is expected to favor the growth of the photovoltaic market, an already $80B market that’s anticipated to grow at 26% CAGR from 2019 to 2026.

What is Aurora Solar Technologies Inc?

Aurora Solar Technologies is a Vancouver based cleantech Company that went public in 2011. Aurora has developed proprietary and patented solutions for the photovoltaic industry through measurement, visualization and control of critical processes during solar cell manufacturing. Aurora’s hardware and software solutions measure and map the results of critical cell fabrication processes, providing real-time visualization of material properties, cell parameters, and production tool performance. The Company’s products provide process engineers and production-line operators with the means to rapidly detect, analyze and correct process excursions, limit variations, and optimize processes, thereby increasing yield and profits for solar cell manufacturers. Aurora is creating the quality control standard for the global photovoltaic manufacturing industry.


Could you imagine creating a product that has a complex chemical process where the unique inputs don’t always create the same output? And the variance between a high-quality and low-quality product could be costing the company $10-$20M annually per manufacturing facility. This is exactly the problem Aurora’s products and solutions are trying to solve.

Aurora created the photovoltaic industry’s first-in‐line, real‐time measurement product that performs whole‐wafer mapping of the solid‐state chemistry at the critical doping, diffusion and etching steps in solar cell fabrication. At present, the photovoltaic industry generally, performs off‐line non‐real‐time process optimization and control, which is inconsistent with best practices found in mature high‐throughput industries such as paper coatings, chemical processing, pharmaceutical production and steel making. The Company’s products, including the Decima CI, provide the means for the industry to move to best practices for cost‐effective and high‐quality volume production, thereby increasing manufacturer profitability and contributing to the industry’s drive to achieve “grid parity”.

The Company’s hardware and software products outlined below:


DM™ Instruments

Non-contact measurement of key wafer properties accurately and reliably at full production speeds The DM sensors use safe infrared light to measure key properties of crystalline silicon photovoltaic (PV) wafers. These innovative products are the industry’s most accurate and reliable measurement tools for characterizing PERC and other high-efficiency cell production processes.


Simplify experimentation, maximize yield and increase average cell performance in high-volume cell manufacturing lines Designed for use in PERC and other high-efficiency cell production lines, Insight directly addresses the growing challenges facing cell manufacturers in characterizing and controlling production variation. These variations cause yield limitations and profit loss, and can introduce excess warranty liabilities, due to poor electrical performance and other variances in finished cells.


Real-time visualization of critical cell fabrication processes Visualize enables the optimization and control of critical processes by providing operators and process engineers with real-time 3D visualization of intra-furnace dynamics, both spatially and by batch. By combining DM measurement data with wafer tracking information, Visualize can provide comprehensive historical trending and analysis of key process output parameters along with statistical process analysis.

What’s changed, why now? 

In Aurora Solar’s most recent quarter they announced record revenues and net income. Both revenues and net income were the highest in the Company’s history with roughly $1.5M in revenues and $330K net profits.

Historically, the Company has only shown one-quarter of net profit which dates to Q2, 2017. However, we believe there’s a new trend and the most recent quarterly results are likely to continue.

Throughout 2019, Aurora Solar announced a record level of business activity with new or repeat sales orders. There’s a delay in the delivery of the orders and when they are reflected in the income statement. Which is why we believe the latest quarter is indicative of where the Company is headed. In addition, 2020 has started off strong with two announcements for new orders.

Below are the headlines from Aurora Solar’s disclosure starting in 2019 which we’ve highlighted all the new or repeat orders which tells a depictive story:

  • 2019 – Aurora Solar Technologies Announces Board of Directors and Management Changes
  • 2019 – Aurora Solar Technologies Receives Volume Order and Announces New Market Partner for China
  • 2019 – Aurora Solar Technologies Receives Order from Top-Tier Solar Cell Manufacturer
  • 2019 – Aurora Solar Technologies Receives Repeat Order from Top-Tier Solar Cell Manufacturer
  • 2019 – Aurora Receives Third Repeat Order from Solar Module Super League Customer
  • 2019 – Aurora Solar Technologies Receives Order from Another Top-Tier Solar Cell Manufacturer
  • 2019 – Aurora Solar Technologies Receives Order from Major China-based Automation Provider
  • 2019 – Aurora Receives Order from Second Major China based Automation Provider and Announces Appointment of Investor Relations Services Firm
  • 2019 – Aurora Receives Order from China-based Turnkey Production Line Provider
  • 2019 – Aurora Solar Technologies announces record setting order and provides corporate update
  • 2019 – Aurora Solar Technologies increases Intellectual Property portfolio and announces key R&D grant
  • 2019 – Aurora Solar Technologies announces Susan Pan as Chief Financial Officer and Controller
  • 2019 – Aurora Solar Technologies announces repeat volume orders
  • 2020 – Aurora Solar Technologies announces volume order from the world’s largest solar cell manufacturer
  • 2020 – Aurora Announces Completion of Key Milestones and Second Beta Site for its Novel InsightTM Software Product
  • 2020 – Aurora Solar Technologies announces new volume order from China-based manufacturer

While we are excited by the announcement of multiple new orders, which will ultimately impact the financial statements in the coming quarters, it’s not what gets us the most excited about this Company. In fact, long-term we believe the hardware and measurement products, which are currently driving sales, will become less of a focus for the company.

Aurora has spent two years and a considerable amount of R&D dollars, developing software that addresses the growing challenges facing cell manufacturers in characterizing and controlling production variation.

Insight, Aurora’s novel “data science” product that, using solar cell production line measurements, provides manufacturers with previously unattainable information for increasing yield and efficiency. Insight is a new software as a service product and is now being beta-tested by multiple clients.

Aurora anticipates if all goes accordingly, the global launch of its enterprise SAAS solution in the second half of 2020. We still don’t have firm pricing details but recognize that if they are saving these large manufacturers’ money and create a competitive edge against their competitors, Aurora will be in a strong position to charge a premium. Management believes this software could save their clients $10-$30 million annually per manufacturing facility of which there are approximately 150 worldwide and growing by roughly 25% per year.

Solar cell manufacturing is an industry where the company that creates the highest quality product at the cheapest price becomes a market leader. Moreover, it’s a margin compressing business as new technologies improve the solar cell manufacturing companies’ output, quality, and costs. With Aurora’s new SAAS solution the product will be inherently sticky and likely create an opportunity where a larger cell manufacturer tries to outright purchase the technology to keep a competitive advantage over their competitors.


Aurora currently has a market capitalization of roughly $11M with 88,176,925 issued and outstanding.

Post financing, assuming the $1.5M of total capital is raised, the Company will have 103,176,925 issued and outstanding and 128,513,725 fully diluted with a market capitalization of roughly $13M.

The Company at that time will have, $2.15M in cash, no debt and an enterprise value of roughly $10.7M. On those metrics, Aurora would be trading at a price-to-sales of 5x, which is expensive for a hardware Company.

Given that Aurora has historically been unprofitable and is now becoming profitable, in addition to transitioning from a hardware to software Company, we believe the Company is undervalued. We anticipate the Company becoming more discovered as a growing profitable entity and believe that upon successfully launching the enterprise SAAS solution the Company’s multiples will change.

We believe last quarter’s profitability is sustainable and will continue. Therefore, annualizing the last quarter the Company is trading at an EV/Earnings of 8.2x which we consider relatively cheap by looking one year ahead.

If the enterprise SAAS solution is proven to be effective and can gain traction, it’s not uncommon for SAAS companies to trade around an 8-10x multiple on sales. Therefore, we think the key to the long-term valuation of this Company, is the opportunity to purchase an arguably cheap, growing hardware company, that has the potential to become a software company. If this scenario were to prove true, Aurora has an opportunity to be valued as a much bigger company.

What to look out for?

The issued and outstanding is high. We typically like to own companies with fewer shares outstanding and recognize there may be future challenges around the structure. In addition, we recognize that the insider holdings are quite low. The co-founder and CEO is the largest shareholder with 2,341,770 shares and the total insider ownership is less than 5%.  Note: Pathfinder Asset Management Limited has just filed that they own 16.93% of the shares outstanding. They will be participating in the recently announced private placement.

We recognize that Aurora’s sales are driven by their hardware products, which currently have good margins. However, we do note that over time, the margins from the hardware business are likely to deteriorate. Therefore, it’s of critical importance that software product is set for global launch as quickly as possible. The use of proceeds from the announced private placement will be used to expedite the launch.

Aurora has not had two-quarters of back-back profitability. While the Company has shown two-quarters of profitability, they are yet to show a clear trend and a full year of profits. However, as noted earlier, given the number of product orders, we anticipate Aurora maintaining profitability.

Most of Aurora’s sales and business partners are overseas in Asian countries. Given the cultural barriers, the Company must rely on outside sales groups based in these Asian countries, to develop new relationships.

Lastly, Aurora is an early stage and undiscovered Company. We will be evaluating the Company on a year-to-year basis and management’s ability to meet milestones and project timelines.

Final Thoughts

With the rapid adoption of high-efficiency solar energy products, solar cell manufacturers must now simultaneously increase product performance, lower costs and achieve higher production yields to be profitable. Aurora’s unique differentiation in this dynamic market is that its products provide customers with real-time data and insights to meet growing global demand.

Aurora has now established volume business with several of the top-ten solar cell manufacturers and is proving to be a critical solution for their clients’ cell manufacturing operations. The Company is well-positioned to maintain its growth amidst increasing global demand for solar products.

The hardware business is the driver for recent revenue growth and profitability, and while we expect this trend to continue, the big upside is in the enterprise SAAS offerings. Now that Aurora’s SAAS solution is beta-testing in multiple client’s production facilities, the Company is close to validating the technology in preparation for a global launch.

While we anticipate the enterprise SAAS solution to drive high-margin sales and profits, we believe it positions the Company as a targeted buyout candidate. If Aurora’s solutions can save its customers money and provide an edge in an ultra-competitive industry, it becomes a must-have product for all solar cell-manufacturers.

We view this as an early-stage company, that is cheap enough to warrant our participation. We will be participating in the private placement and are intrigued by the long-term prospects of the software solutions. The Company has just recently become profitable, is growing and has a record-level of sales.

We are buyers of the $0.10 private placement and believe it’s a strong buy up to $0.15.

To your wealth,

Paul, Trevor & Brandon

Disclosure: Paul, Trevor, and Brandon are long ACU.V