RE:RE:RE:RE:RE:RE:Clarification Thanks wealthbuilder. I sure do appreciate all you guys taking your time to educate us other shareholders. It's valuable information and I enjoy reading posts like this!
when you aren't sure which company to buy, buy into both. That's what I did.
Uncleron is always right and I'm always right here watching, reading, listening, learning
WealthBuilder99 wrote: Yes. Both companies own 50% of HPQ Nano. So assuming all options and warrants are exercised for both companies: PyroGenesis has about 174.8 million shares outstanding, while HPQ has 344.9 million. So 1 Pyro share is roughly equivalent to 2 shares of HPQ (1.97 to be precise, as far as exposure to HPQ Nano is concerned). In other words, HPQ has roughly twice the total amount of shares outstanding.
This is before accounting for, in addition to Pyro's 50% stake in HPQ Nano, its 15% stake in HPQ Silicon plus 10% royalty stream of gross sales.
For those who want to see the math, as Develop pointed out: (Pyro owns 25m shares + 27.4m warrants assuming exercised = 52.4m shares / 344.9m shares outstanding = 15.16% ownership of HPQ)
The profits from subsidiaries (ie HPQ Nano), flows up to the parent entity (HPQ Silicon), therefore the 10% royalty stream of gross sales that flows to Pyro will include HPQ Nano revenue (Assuming my understanding of accounting is correct - hoping someone can confirm this). So in effect, if HPQ has say $100m in revenue (regardless of where it comes from), $10m should flow to Pyro.
Lastly, any changes in the share price (or market value) of HPQ will be reflected in Pyro's State of Comprehensive Income) note: we saw this in Pyro's most recent Q3 earnings. Peter further explained this in his latest interview.
Hope this helps.
TITANIUMJOE wrote: Not suggesting your numbers are wrong, more looking for further breakdown or explanation on the percentages. Are you saying if I had one share of each company that that PYRO share earns more than the HPQ share based on HPQ Nano business?
developbc wrote: Hi titaniumjoe not sure which numbers you like to confirm but mine was from page 10 from the Q3 2020 Financials...good to double check as facts are what's of the highest importance. The other posters numbers seem right off the top of my head :)
https://www.sedar.com/CheckCode.do TITANIUMJOE wrote: Oh Midtown guy? would you mind adding to this and confirming this sounds right. He's likely the only other person on here that can confirm to this depth of mathematics and knowledge besides you. You two are the big brains on here But Uncleron is always right and I'm always right here listening
developbc wrote: From Q3 Financials PYR owns:
Shares in HPQ Silicon: 25,074,200
Warrants in HPQ: 27,344,600
WealthBuilder99 wrote: For everyone's understanding (including my own, and to make sure I have this straight) note: please correct me if I am wrong on my interpretation.
PyroGenesis owns approx 15% of HPQ Silicon (assuming exercise of warrants) + a 10% royalty stream on gross sales, and separately a 10% royalty stream of HPQ Nano which can be converted into a 50% of equity stake of HPQ Nano whenever Pyro sees fit. Note: HPQ Nano is a subsidiary of HPQ Silicon.
I believe as far as accounting goes, upon conversion, 50% of profits/loss associated with HPQ Nano will be reflected on Pyro's income statement, while only changes in market value of HPQ Silicon will show up in Pyro's statement of 'Comprehensive Income'
So the Purevap QRR would fall under HPQ Silicon(?) and provide feedstock (metallurgical grade silicon) to the Purevap SiNR, which falls under HPQ Nano.
The Purevap QRR is the Gen3 machine spoke of coming online a few months back, and the Purevap SiNR is the new gen1 machine being commissioned this month, correct?
So if I have this straight Pyro will control about 15% of HPQ Silicon, plus receive a 10% royalty on gross sales, and separately own 50% of HPQ Nano and all associated profits (which would come from only product derived from the Purevap Si Nano reactor)
Assuming the above is correct, one effectively gets more exposure to HPQ Nano through owning Pyro (because it is also a large shareholder of HPQ Silicon, and receives royalties), and in addition, for roughly 3x the price, gets exposure to all of Pyros business lines as well.
Note: 1 share of Pyro = 2 shares of HPQ Silicon on a % ownership basis (HPQ has roughly 2x the total number of shares outstanding fully diluted)
I welcome people to point out any errors in interpretation or analysis. Thanks in advance.