Interesting take Midtownguy. I also agree that behind the negotiations all these months is far more than just discussions about a 1 torch initial order, and it’s likely both companies have together worked out many of the details that needed to be understood before any potential large future torch rollouts.

Pyro didn’t physically test a torch for the purpose of selling to Client A, so the torch sold won’t be a used one. The reason for the 1 torch deal is as Peter stated: “This was our preferred rollout strategy, as it now enables us to better quantify all outstanding aspects of replacing fossil fuel burners with plasma torches, and thus be better positioned to price any additional benefits into future orders”.

It’s part of the strategy to maximize long-term revenue generation for the company. Peter even mentioned in an Agoracom interview several months ago that if he was the Client he would be looking to lock up the maximum amount of torches at the smallest price possible, whereas Pyrogenesis’ goal for the initial rollout is start as small as they can (which explains the 1-torch order from Client A and quote for 4-torches from Client B), and get things right, unlocking the greatest possible value for their torches in the long run. Slow is smooth, smooth is fast. Prove to the Client with a live plasma torch in their facility that it provides amazing benefits & show how valuable the transition from burners to torches will be. Like Peter said, this also allows them to unlock value through any additional benefits that aren’t currently priced in.

In terms of both design & installation, the experience with this initial order gives them the opportunity to make tweaks for easier installation in the client’s facility (they are now “behind the fence”, giving them access to Client feedback on the site), and to optimize the design potentially reducing the production cost of a torch.

Similar to the way the contract for initial DROSRITE unit sales were for $800k and eventually ballooned to north of $3M per unit, look for the next, larger volume contract for Torch sales to Client A (all signs point to Vale) to be near $3M (perhaps even USD?) per torch + addtional ongoing service and support fees. Alternatively the Client could choose the leasing option, both of which are great for Pyro.

I expect that in the upcoming interview on Agoracom, Peter is going to make all these points clear and emphasize how much better Pyro and by extension investors will be in the long-run with this rollout strategy.