Converted Organics Inc. (COIN) – Bankruptcy looming.

Converted Organics Inc. (COIN); Creating Innovative Clean Technologies

By Peter Cleveland
Published: October 21, 2011 5:18:03 PM PDT


Converted Organics Inc. (OTC: COIN) seeks to promote, develop and operate profitable innovative clean technologies that improve the environment. COIN has three business lines Organic Fertilizer, Vertical Farming and Industrial Wastewater. 

via Converted Organics Inc. (COIN); Creating Innovative Clean Technologies : Micro Caps in Play.


Organic Fertilizer Business



Converted Organics operates a processing facility in Gonzales, California that utilizes food and agricultural waste to manufacture all natural fertilizer and soil amendment products for sale in the agribusiness market. 



In the first quarter of 2011, COIN contracted a third party manufacturer and packager to produce an 8-1-4 dry fertilizer product. 



COIN’s facility in Gonzales services a strong West Coast agribusiness customer base. The company has established distribution channel in the West Coast. 



Converted Organics plans to substantially increase the production capacity of the Gonzales plant and also modify it to allow production of liquid and solid fertilizers. 



Industrial Wastewater Treatment Business



Converted Organics started to operate an Industrial Wastewater Resources business in March 2010 to leverage its exclusive license of the LM-HT® Concentrator technology for the treatment of industrial wastewater. 



COIN’s Industrial Wastewater Resources unit currently operates an industrial wastewater concentrator on Glenwood Springs Landfill Enterprise’s South Canyon Landfill in Glenwood Springs, Colorado. The Colorado facility has the capacity to treat 15,000 gallons of aqueous waste per day by the combustion of biomass diverted from disposal in the landfill. 



COIN plans to increase business by seeking out to municipal and industrial locations to locate its owned evaporator units and to charge a per gallon fee to treat industrial wastewater. 



Vertical Farming Business



In May 2010, Converted Organics created a wholly-owned subsidiary, TerraSphere Inc., to acquire the membership interests of TerraSphere Systems LLC.  



TerraSphere offers proprietary vertical farming technology solutions that use minimal land, water and energy resources to produce fresh, pesticide free produce regardless of climate or location, year-round. 



Financial Performance



Converted Organics’ revenue for the nine-month period ended September 30, 2011 totaled $2.85 million, compared with revenue of $2.51 million for the nine-month period ended in September 30, 2010. 



COIN’s Industrial Wastewater business has made solid contribution to sales, however, the company’s Organic Fertilizer sales have been below expectations. 



Cash Position a Worry



According to a SEC filing made by Converted Organics, the company had an accumulated deficit of $101.1 million at the end of June 30, 2011. 



At the end of June 30, 2011, the company had limited liquidity. COIN also said in the SEC filing that its net cash outflows per month is approximately $350,000. Based on the cash on hand at the end of June quarter, the company can operate only until 2011. COIN also needs additional cash to fund its capital projects. 



Recently, the company’s Industrial Wastewater secured financing for the Colorado project. However, COIN will need additional financing to sustain operations in 2012 and beyond.