The company I'm about to describe has piqued my curiosity on a number of fronts. The most vexing attribute of this tightly held little company is I can't own it.

With only 5,065,994 shares issued and outstanding, you can't buy any stock to speak of out of the market. On Friday, for example, level 2 market depth shows 100 shares offered at $6.84, 500 shares offered at $8.04, then a total of12,500 shares between $8.10 and $8.50, and that's it. It trades two or three times a week, and a heavy day is 11,000 shares in volume.

The company makes an unsubstantial income form minority holdings in near-depleted oil and gas assets in Western Canada, but its primary focus has become the generation of hydrogen using a technology developed at the Virginia Polytechnic Institute and State University.

The company has no web site, however, so the details surrounding this new technology, that separates hydrogen from water using light in the presence of chemical and metallic catalysts are here derived from the patent and the press releases.

And that's not saying much. The language of the patent is both vague and technical.

The patent describes "A method of converting radiant energy to chemical energy in the form of hydrogen (H2) from water, comprising the steps of exposing said water to i) a supramolecular complex comprising at least one metal to ligand charge transfer (MLCT) light absorbing metal, at least one bridging p-acceptor ligand, at least one electron acceptor metal, and at least one terminal ligand; and ii) a source of radiant energy; and producing chemical energy in the form of hydrogen (H2) from said water during said step of exposing."

Having researched hydrogen generation technology intensively for almost a year now, I have concluded that among the various processes and sources of hydrogen out there (it doesn't occur freely in nature.at least, not on Earth), it will be a prerequisite of mass hydrogen generating technologies that the process of originating or isolating it use an absolute minimum of energy in the process.

That's because hydrogen, at atmospheric pressure, has a very low energy density. It takes a space measuring 6 feet by 6 feet by 10 feet filled with hydrogen (at atmospheric pressure) to equal the energy contained in a gallon of gas. The energy density can be reduced to approximately one third that of gasoline through liquefaction or compression.

So lots of energy is going to go into storage and transportation, and with such low energy density, a very efficient process must be employed to ensure the laws of thermodynamics don't render the exercise uneconomic.

Hydrogen derived from water with either wind or solar as the energy source is about the only way to accomplish this.

There are quite a number of evolving technologies patented that generate hydrogen this efficiently. The issue that will ultimately determine which of these are adopted by industry is capital and operating costs relative to output. And that question can't easily be answered by examining the patent. For example, one of the components of Phoenix's patent describes, "The method of claim 1(referenced above), wherein said electron acceptor metal is rhodium.

Rhodium has gone from US$300 an ounce in 2003 to today's price of $9,335 per ounce. So the question is, how much rhodium does the process require for each kilogram of hydrogen generated? We can't tell from the patent, and until the process is built out on a pilot plant scale, I suspect even the process inventors are employing a predictive model.

When I spoke to company CEO Donald Moore in Toronto on Friday, he told me about a relationship that will soon be announced, and which I can't now here reveal, with a major global industrial conglomerate, to acquire the rights to the technology for substantially all of Asia, if not the world.

When you see the name, it will become clear that a company with this one's stature doesn't enter negotiations with a near dormant tiny public company in Canada unless the process holds promise.

This company's highly integrated industries encompass vast manufacturing enterprises, which are all energy intensive. Given the soaring cost of traditional energy sources, any company betting its future on energy intensive industry is going to be seeking a long term solution to that problem.

So keep your eyes on Phoenix, for in the weeks ahead, if an announcement is made regarding the onset of negotiations with Phoenix and another company that is a household word throughout the world, you might just be able to pick up a few shares before the stock goes supernova.

Disclosure: I own no shares in Phoenix.but I may pick up a few after subscribers have had a chance to get what they can.