No share dilution:
Peter stated clearly there will be no need of any capital raises currently and for the foreseeable future. Having a investment banking finance background he will also know how to best structure any large torch contract that will be best suited for Pyrogenesis...large cash deposit just *for starters.
Margins:
It was publicly stated that PYR wants to target 35-45% profit margins as a base minimum. However, deductive reasoning and examing previous sale contract demonstrates that the margins are much higher.
Looking at the recent Rise Energy of Sweden 900kw PYR plasma torch sale last year which sold for little over $1M for the same industry and purpose - replacing fossil fuel burners in the iron ore pelletization process w PYR torches w roughly the same spec. It was a competive bid process in which PYR bid their price w profit built in NOT for charity!
So let's say it was low margin of 10-20% based on a $1M contract order/torch. Even IF added costs to custom spec out for Client A and the second Client B were increased by 10-20%...deductive reasoning can conclude that $3M torch sale carries approx 67% net profit margin at base minimum. Don't forget Peter stated could be even $4M per torch and possibly in USD as well. So...no not less than $3M. So 10-30% fcf yield would be grossly inaccurate assumption.
It was commented by Pete in an interview that the torches for iron ore induration furnaces for Client A , B etc are the exact same/similiar torches as the Rise Sweden ones. Even IF a client required 2Mw(which they do not)...it would be cheaper/more cost efficient on $/w cost basis to produce...PYR would in turn charge more for the torch - but as stated the torches for Client A for example would be around 900kw and would require 50 for each plant. Even swapping out 10 plants x 50 torches at $3-4M for each torch is a staggering $1.5Billion +. Mind you entire swap out would most likely be in stages.
Btw this is just referring to Torch division...wait till everyone gets excited about 3D powders,Purevap, Tunneling, Waste Destruction and Drosite etc ...amongst other applications.
Pyrogenesis is that it is very diverse across many industries that are not inter connected to a strong degree. Because they have proprietary tech with full lock on patents....very derisked imho. Also as the world is growing green...Pyrogenesis will be in very high demand.
Stars are truly aligning for PYR. Pyrogenesis is truly that investment unicorn that's about to be discovered by the world :) Qrewpt wrote:
I'm new to this company, this post was a great resource. At the moment, it sounds like the largest source of value for PYR are the potential contracts with 3 new clients which are looking to replace more than 600 burners with torches at $3m a pop, potentially adding $1.5b to the backlog. Assuming a 10 to 30% fcf yield that would provide $150 to 450m in cash. At an $800m market cap, it sounds like most investors think these are done deals. What is the likelyhood the scope of the contracts come in lower than the implied 600 torches, or the revenue per torch is less than the $3m being discussed in the news releases? The summary from the post suggests that PYR won't need further capital raises, but Does the company really have the operating leverage required to service the more than 10X increase in incremental revenue implied by the potential torch contracts...this isn't a software company. How much capex will they need to invest in their production capabilities to deliver on these contracts...and how do they intend to raise the capital needed for the capex and working capital? ...they already have 150m shares outstanding...so Im afraid I may already know the answer to that one. Are they looking at monetizing the spin offs of other divisions? Seems like an interesting company, just trying to wrap my head around the $800m market cap. Any good info would be appreciated.