PFIE page 1

I’m not trying to do a Thomas E with my “page 1”, it is just that this is going to take more than one post to cover the PFIE research. So far, I have visited the web sites of Profire and its three named competitors; read the instruction manuals for the burner management systems of all four companies; read the initial 10-Q and all of the 10k’s for Profire; researched the companies which previously employed Profire’s CEO and COO; checked the history of Profire and predecessor companies; reviewed the backgrounds of Profire’s directors; looked at the Profire investor’s presentation; and looked at Profire’s other business, the chemical metering products obtained through recent acquisition.
Conclusion is still that I would not invest in this COMPANY, but I am still undecided whether there would be an opportunity to invest in the STOCK sometime in the next year or so.
So first, as Sundance said to Butch (or vice-versa), “Who are those guys?” After all, from the beginning of these enterprises, the management owned 80% or so of the company. And even after the recent equity issuance, the management still owns an unusually large share of the company. We should be very interested in the background and accomplishments of the management/ownership. Brenton Hatch is a founder and CEO of Profire Energy, Inc. He has a degree in Education from the University of Alberta, circa 1974. From a 10-K we learn that from 1989 to 2000, Mr. Hatch was President and CEO of Keaton International, and educational services company. In that role he managed all the executive functions and particularly focused on the management and development of the company’s educational services. Moreover, he led the “corporate networking” and marketing campaigns, worldwide. In other words, he was the CEO of an international educational services company of some sort. Just what sort it was in not clear as a Google search came up pretty empty. Keaton International, Inc. was a part of Keaton International Holdings, Inc. I did find that Holdings trademarked a logo which was cancelled, and on January 2, 2002, Keaton International’s corporate status in Alberta was cancelled. By then, Mr. Hatch had moved on to a position as management consultant and general manager of a Titan Technologies. The Profire 10-k’s describe Titan Technologies as an oil field service and distribution company. My Google search found one or two “Titan Technology” entities but nothing in the oil field services arena. If anyone knows of this company, give us a shout. In any case, Mr. Hatch performed in-depth analysis of the operations and management of all the divisions of Titan Technologies, and armed with this information he proceeded to implement company-wide operational changes to improve company performance. All this occurred “between 2001 and 2002” which could be two days or two years. The effectiveness of his efforts are unknown to me as I cannot find a trace of this company so any help will be appreciated. I still have one contact in the Alberta energy business and I will try to find out something, though it may take some time.
Perhaps the more important event of his Titan Technologies experience, at least as far as this review is concerned, is that the current Firepro Energy COO, Mr. Harold Albert, was Associate Manager of Titan Technologies’ burner division. Mr. Albert had come to Titan from NATCO Canada in 1996. NATCO (National Tank Company at one time) made what the Profire literature calls “vessels”, i.e., those cylindrical things lined with tubes through which flow, usually, hydrocarbon fluids to be heated by a burner flame which is hopefully confined to the volume along the centerline of the cylinder. Mr. Albert was a commissioning (startup) engineer for these things in Canada and Russia. It is probable that he started up the large “steam flood” units that used our burners up in the tar sand fields of Alberta. Both Messers Albert and Hatch departed Titan in 2002.
Mr. Hatch (and I think—but not certain—Mr. Albert) next appear as the founders of Flooring Zone, a retail floor covering business. This business did not prosper and the business was “discontinued” in the 4th quarter of 2007. Flooring Zone, FZON, was…argh, my notes, a publicly traded company incorporated in Nevada. In 2008, FZON acquired 100% of Profire Combustion of Alberta and the symbol changed from FZON to PFIE and traded on the OTCBB. So, if you have hung in here to this point, we are almost “there”. On September 20, 2008, Profire Energy issued 35 million shares to the “3 shareholders” of Profire Combustion in exchange for all shares of Profire Combustion. My interpretation is that there were 45 million shares outstanding of Profire Energy and as the 35 million were restricted shares, the float would have been 10 million shares or less, and these total 45 million shares have been on the 10k’s up to 2013 when somewhere around $6,000,000 new equity was issued…, I’ll get back to that in another post to confirm number of shares and capital raised.
As far as “who are those guys?” is concerned, we can conclude it with a look at the board of directors which includes Mr. Hatch and Mr. Albert and the CFO, Mr. Andrew Limpert. and four independent directors. Mr. Limpert has some sort of blemish from when he was with Belsen Getty LLC, a firm providing wealth management advice to several investment banks. It is not clear whether he was personally involved in whatever it may have been, or just “in the line of fire”. He joined The Flooring Zone in 2007. What is interesting, to me, about the makeup of the four independent directors is that three are investment bankers and one the ex-CEO of John Zink LLC. For the uninitiated, John Zink LLC is part of Koch Industries and the major manufacturer of burners for refinery heaters, flares and other oil and gas industry applications. So, to round out the board, Profire selected three investment bankers and one executive from the oil and gas combustion industry. I feel a Wall Street emphasis here, a focus on shares as opposed to the business operations, say, supply chain management, energy business issues, government regulation, marketing, etc.
Next post I will get into the business, the market opportunity, the products and look at the moat, or lack thereof.


Wow the stories that come up when people start digging are so interesting. People seem to meander from one thing to the other that have nothing to do with each other.

Great Sleuthing! Very interesting to read


Great investigation on PFIE so far 0forfive. Thanks for all that hard work.

I have never been interested in this company, but I got to hand it to you with regard to the depth of research you’ve presented here. Great job.

My first rule of investing is investigate the competence and integrity of management. This is often very difficult to do and therefore I frequently violate my first rule. So I move on to the easier stuff, like what does the business do and how do they do it. And (with the help of this board) I have begun to take greater interest in a limited set of numbers related to the business.

From the information presented in your “page 1” PFIE post, you have completely reinforced my disinterest in investing in this company. You never know, they may perform very well some time in the future, but in my opinion, that would be in spite of management rather than because of it. I think there’s a host of more promising investment opportunities available.