PyroGenesis Inc T.PYR

FSR will be very lucrative for PyroGenesis and HPQ

[Thinkbigsti69]

@JetsFanYEG We talk a lot about someone buying out HPQ Polvere a lot because it makes sense for the buyer and us since it is a quick value jump almost instantly, however another scenario that isn’t getting as much attention is a royalty license deal, let’s say $PYR and $HPQ decide to license the FSR tech instead of sell it. For the Evonik example ($500M of annual FS revenue) let’s speculate a $100M licensing fee plus 10% of revenue. This would mean in the first year (assuming Evonik replaced all their facilities with FSR reactors) they would pay Polvere $100M one time fee plus 10% of the $500M revenue ($50M per year) which would get split equally between PYR and HPQ. This would be $150M in the first year and then $50M per year in perpetuity, which using discounted cash flow would be massive for both HPQ and PYR. Originally at a 20% margin Evonik was making $100M profit off the $500M sales, now with 80% margin they would make $400M off the same $500M in sales and after paying Polvere $50M still take home $350M in profit compared to the current $100M. You can see it is a no brainer for both sides and in fact even if you increase the license fee to more than $100M and you increase the royalty percentage to 20% or 30% it still makes sense.