RE:Update in edgar BUSINESS ACTIVITIES AND OUTLOOK
During the quarter ended June 30, 2020,
the Company did not generate any revenue. The Company expects revenue to be booked and associated cash flow to be generated in staged phases following the execution of definitive agreements for the design, implementation and procurement of its GHU™ systems and/or the licensing of its intellectual property or the sales of Crystal oily water separators.
The Corporation has accumulated deficit of over $88 million to date and is not realizing any cash flow as it has not attained commercial operations in connection with its various patents and technology rights. Genoil has principally been a technology research and development company. Commercialization efforts are underway for GHU™. Genoil is marketing its GHU™ (and related engineering and design services) to refiners and producers of heavy sour crudes around the world and believes that there is strong market potential for this technology. Management estimates that there are approximately 900 billion barrels of heavy oil reserves and current production from those reserves is 9 million barrels per day of high sulphur heavy oil that have the potential to be desulfurized and upgraded to lighter products thereby increasing the yield of high value light distillates and transportation fuels available from each barrel of oil. The continued commercialization of Genoil’s GHU™ and Crystal both for Seaborne applications as well as land based represents the next key phase in the company’s growth.
SUMMARY OF QUARTERLY RESULTS
Genoil has always sought to model its operations on the pre-IBM contract Microsoft. Until it achieves a significant GHU® Upgrading contract the company will focus on reducing costs. Since the September 2008 Lehman and the oil market crash we downsized expenses even more as its goal was to weather the severe economic depression by cutting unnecessary overhead. Despite these reductions the company has expanded its sales coverage to countries in key markets that contain over half the world’s oil reserves. This new marketing and sales effort utilizes contract commission agents or representatives who had to are responsible for their own expenses.
All the present employees of Genoil work on a profit sharing compensation model, through stock or options. Its goal is to motivate Genoil’s personnel and to link their success with Genoil’s. This structure is designed to motivate sales, and to discourage non-performance. The net loss decreased from $537,712 in June 2019 to $422,376 in June 2020 reflects a remarkable achievement by management to develop new strategies and to operate much more efficiently and to close deals on a lower budget which results in less dilution.
The liabilities slightly rose from $8,231,387 as of December 31, 2019 to $8,413,949 at June 30, 2020. About half the liabilities are in Lifschultz Family hands who have historically rolled over their liabilities every year. Most of the other liabilities are in friendly hands.
The company relies on private placements for its funding and with recent deals closed, is more confident that it will continue to be able to fund its obligations at an accelerated pace. From January 2020 through June 30, 2020 the company closed a private placement of $294,970. Genoil’s strategy is to fund the operation through private placements. It intends through smart cost cutting techniques, and a leaner cost sales strategy, to operate on an extremely low cash burn while significantly growing its sales exposure.
It's the LONGS who need to be worried !! It's the same C RAP princess davey has been saying from the beginning and the only wallet getting fatter is his.