RE:RE:RE:Does anyone here even know what it means? Well said Melida and skier59. And this debt to equity conversion has PyroGenesis once again becoming a near 10% equity stakeholder in HPQ Silicon. And these shares/warrants have a 4 month hold, and both PYR/HPQ are very close to the Fumed Silica Reactor (FSR) pilot plant becoming fully operational and with the first offtake agreement in sight. PyroGenesis has a vested interest in HPQ Silicon's success (both with the FSR and QRR). And, PYR chose shares (instead of cash payment) from HPQ, indicating significant increases in HPQ's value. And from the news release: “Clearing these outstanding liabilities, under some highly supportive terms, will not only strengthen our fiscal 2024 balance sheet but also resolve points of contention raised by potential financial partners or future offtake agreement counterparts,” said Bernard Tourillon, President & CEO of HPQ. “This agreement highlights how HPQ and PyroGenesis collaboratively develop solutions as we work to disrupt the fumed silica market by delivering a cost-effective, high-efficiency solution that redefines industry standards.” And from @ordos (from the recent Agoracom HPQ Silicon interview): Shares for debt
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- This debt has been on Pyrogenesis's books since 2022
- End of the fiscal year. A lot of financing decisions are made based on audited financial statements. If we waited to settle the debt after new year when we have fumed silica news, etc, possibly higher share price, we would still have shown negative working capital, negative equity on our financials. That's a negative when you talk to investors. New investors interested in investing money because they really like what you are doing, do not want to put their money to pay off your old debt. It wasn't making sense having this debt on the books for another 12 months
- Pyrogenesis also wanted to clear out their 3 year old account receivable which has had zero value all this time
- It was also a contention point that was already brought up by entities interested in financing HPQ Silicon, it's not something that HPQ Silicon was anticipating ahead of time and went ahead to resolve it
- Peter never wanted to sell the previous HPQ shares Pyrogenesis was holding, but they had to do it. Now with this settlement they are once again a large shareholder of HPQ Silicon, which is very good from strategic point of view
Fumed silica
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- Bernard had a tour of the pilot plant and it's ready to go starting January, 2025. Bernard hoped it would be earlier, but those are the R&D timelines
Melida wrote: Skier is right. Especially in relation to HPQ.
I figure that owing 5 million bucks to Pyr was making HPQ customers hesitant to put cash up front to facilitate HPQ product development as part of a possible off take.
And to address a poster's comment, I agree, off takes are "just" contracts. In this instance the contract effectively would be a financing/purchase agreement. It's the finance angle that made it a priority for the HPQ debt to be paid off by the issuance of equity to Pyrogenesis. No way I would advise a client to off take if supplier (HPQ) owed 5 million to a third party. So, the debt to equity is a big deal, over and above being a cool investment for Pyr.
Time will tell but as I've already said, the rocket is cleared for take off. I'm looking forward to 2025