RE:Understanding the torch contract newsFantastic post MidtownGuy, thanks for this.
Folks, read over today’s NR carefully, this NR only refers to the initial torch order. Peter Pascali, PyroGenesis’ President and CEO, knows what he is doing. Keep in mind today’s NR with how he structured the DROSRITE sale/deal to Saudi Arabia. Also remember that Peter has been with PyroGenesis since 1992 and owns approximately 50% of the outstanding shares.
Exciting times!
Long and Strong in PyroGenesis!
MidtownGuy wrote: So, having fun yet?
Here's how it looks like this will work:
The NR today said the client bought one torch. There's no way -- NO WAY -- that all these months of negotiation were about that one sale.
So why did they buy one torch?
1/ Not for modelling. They've already spent money on that. If the client just wanted to test it live, I'm sure PYR would have loaned them one, or at least leased it to them. Buying is permanent.
2/ It's perhaps likely that that torch was so highly customized/modified/specific for that client, they had to agreed to buy that one outright. I don't think it's a test sale. It's just they messed around with that one torch so much they agreed to buy it outright.
Then why announce just one torch sale? Is that it?
The NR of the sale was done so Peter could show the general price of a torch to the market. Given that the client is still under NDA for this sale news, it makes sense. He can show sale price to the market without associating client to their overall contract, because it's just one torch. He was announcing to the world the general price of a torch for a big company.
And this is likely the only torch they will buy.
Why?
Because the actual big contract is for leasing.
Remember the leasign strategy news of a couple weeks back? Peter would not have even mentioned the recent leasing strategy if that wasn't about to occur. There would be no point to mention it. It would be like buying a dog leash, telling people you did, yet with no immediate plans to buy a dog.
So today's release was "Hey market, lookee here, a mega client approves our tech and has bought this for X$. If you're interested, that's kinda the starting price point AND big mega company has done the DD and bought one, so now can you."
Next?
The sale price of one torch has nothing to do with the lease price. The next release is likely for the actualy big leasing contract plus service and support, which can be shown in the aggregate AND with by naming the client.
So next stop on the train is a very large leasing contract plus after sales, that reveals total $ amount and client name, but perhaps no specific torch numbers so a to protect client's per torch deal discount.