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The questions that I raise is what a prudent long term investor would naturally raise. A short term holder or day trader is more consistent on messaging and momentum than fact.
I assume that Frank is monitoring the board and has not conveyed to our leader that there are issues of objective credibility. Do not get me wrong - the vision is correct - its the conveying of verified facts that is missing.
We need to be careful here and not over hype reality.
There are many firms in the waste to energy space. Some incinerate and some convert using pyrolysis or plasma for all manner of MSW to produce power. It is a costly venture to develop from scratch. The economics prefer a larger plant but unless you have high power prices and high tipping fees its very hard to cover the capital cost and its repayment/return.
Converting into a synthetic diesel could likely work in less developed markets as they do not care as much on the quality. From photos that I have seen on pyrolysis oil, it looks dicey. It would still need to be cleaned up and blended despite having no sulphur.
The problem about patents is that you need to disclose the ideal publicly to get the protection. Any small tweak justifies a new patent. I should know, I developed and owned two patents and snow what can be done to get around them.
It would have been better to use a trade secret so the public disclosure is not there. The Coca Cola formula and the KFC recipe are trade secrets and not patents. Patents have a limited life whereas a trade secret can last indefinitely.
The bulk of the plastics in the oceans are sourced from ten rivers four of which are in a country that has no problem in getting around patent rules.
It all comes down to the question if Roselle can deliver the money to purchase the equipment.
I hope the question of the status of new money to build the plants in Ecuador and the Congo is revealed up front today. If the money is en route then we are in the real money! Otherwise, it is hype.
Just a thought...
The GGII pyrolysis system is good enough to process tires, plastics and household garbage then what is the advantage in splitting the environmental solution? Why fragment when a more holistic solution is already proven?
I would be careful in quoting the Ecuadorian "successes".
None of the Mayors have posted the CLNV press releases on their own social media. If is is such a great news story why have they not self promoted? I suspect that they will not do so until the money is real to execute any equipment purchase order.
None of the local Spanish language media has quoted the press releases in the three Ecuadorian cities. Again, if it is a good news story wouldn't the local Mayors have told the media? Wouldn't CLNV have advised the local press as well?
Unless I have missed something, there has not been any follow up statements by our company on the status of the raising of the capital to support any project. Ditto for the Ecuador projects. Hopefully, the conference call will reveal something. If not, then, this should be treated as a warning signal.
Having spent a few years in the investment banking industry, I believe that Roselle is either a broker or an introducer to brokers.
Roselle would not have $ 110 million in the kitty. As evidenced by the types of projects that they wish to fund, it is a summary of what their clients would like to put their money into.
Has anyone seen a listing of successful closings by Roselle noting the recipient of the funds, the amount and so on. Alternatively, has anyone seen any tombstone advertising that shows a deal that has closed.
In the absence of third party data, it would be reasonable to assume that Clean Seas approached Roselle to find the $ 110 million. Perhaps the conference call will enlighten us as to the status of the funding. The value of CLNV depends on Roselle finding the real money.
This is only a listing of the revenue, EBITDA and level of funding criteria by industry type that Roselle would want to raise funds for. Nice, but it does not prove anything.
It is not a listing of completed transactions. Had this been posted then the credibility of Roselle to deliver would be believable.
It you take a look at the bigger publicly listed companies they generally press release financial statements and major news after the close of the market. It is followed by an investor and analyst call the morning after.
This allows for the information to go out to the market regulators, the media and the shareholders via the company website concurrently (without bias). The following day conference call is more for posturing and Q and A than new information.
If our company wants want to be in the big leagues it should adopt this practice.
An LOI is not proof but a statement of laudable intent.
An up listing based on audited results is helpful but does not mean that management can realize on its previous LOI's,
What would be the Ta Da moment is when CLNC can say the money is in the bank. Then it is merely time to construct the plants and use the profits to pay off the project financing.
The problem with many if not most most firms in the cleantech space is that they do not have enough quality technology to produce a top price product in volume.
Low capacity infers a very high fixed cost element to absorb. This includes things like insurance, maintenance personnel, cleaning crews and management. A 500 or better yet a 1000 tonne per day plant makes better sense from a cost per barrel viewpoint.
A low quality liquid fuels output has substantially less revenue per barrel than a finished refinished product. Even if it is a low sulphur product it will not mean anything unless you upgrade it offsite or sell it to a blender at which point you are giving away potential profits. Selling the output as power depends on the market. In the second and third world it makes sense. the US power prices are too low. Tipping fees to receive the plastics are often too low to cover the full production costs.
Please keep in mind that CLNV and through its subsidiaries and partners had not yet delivered the capital to purchase the equipment to generate the cash flow to service the debt.
Also, not all pyrolysis systems are the same. The one photo reported in African media for the proposed Congolese plant was not a GGII system. A deep drill down shows that the plant was in Mexico using from what I can see is a Chinese device.
We need to keep in the back of our minds what will the plastics to oil system produce? Is it a crude quality suitable for marine uses or a much lighter refined product for ground or air transport? Is it an LCFS rated product? From what I hear, GGII has not produced an LCFS fuel yet.
I am not being negative here but I am looking for substantiated facts that can support adding onto my CLNV investment.
According to the 2020 annual report for P2O, the plastics to oil facility at Buffalo, was closed. They are no longer in the business of acquiring plastics and making a syncrude. Further, the annual report says that they are no longer self manufacturing pyrolysis equipment.
There is a disconnect between the photos of the output that they used which suggest lower grade fuels and what the market wants in a refined ultra low sulphur product. In fact, there is a shift towards LCFS graded fuels.
I respectfully suggest that using the P2O reference is not helpful to the dialogue especially when GGII has something better.
Please keep in mind that the press releases need to be converted into life giving contracts otherwise the press releases are worthless.
Clean Seas has farmed out the raising of the capital to purchase the equipment. I suspect that they were working on this before the press releases ad if so there is under four months left in a typical private placement before the deal likely goes south.
Even after two weeks after each of the Ecuadorian press releases were issued, there was no Spanish language coverage of the "good news" provided in the press releases. Why?
In fact, each of the three city Mayors has not posted on their social media accounts the "good news". Why?
I suspect that there will no local public announcement until CLNV can show proof of funds otherwise the Mayors would have egg on their respective faces.
My understanding of GGII is that they have sold systems in a few Asian countries and are working on projects in Australia and New Zealand. These pending projects are being developed for Bioplant Limited which is a public held controlled subsidiary. GGII does the engineering and project management for the plants but they are not the fabricators of the pyrolysis plants.
I understand that other GGI systems are being planned for various sites in the US which are fully outside of GGII.
Until the PR's are replaced with funding contracts which drives the purchase orders for the equipment the pricing estimates are speculative at best.
While the company did the right thing by timely disclosure as all public companies should do, it is the very question if the story can be validated by others quoted in the press release.
There is no independent evidence in Ecuador that the named Mayors are aware or support the content of the press release.
If the Mayors through their social media accounts or local media published an interview surrounding the press release there would be no issue. This would collaborate the account of the press release.
This would not breach any NDA in disclosing any terms of any pending agreement. Merely acknowledging what the company released allows the other party to comment.
Although not ideal, if the local media merely reprinted the press releases at least the locals would be aware of the story.
In both cases, everyone in Ecuador is silent.
Politicians like to get their names in the press. They also toot their own horns on their own social media.
Evidently, based on the behaviour of the elected officials, they are not putting much faith in the press release or the LOI's until money is delivered.
The clock is ticking to deliver the funds. About four months is typical for raising funds from non-bank sources. It could go a little longer if government agencies, guarantees or insurance wraps are needed. Once you go to six months from the date of the press release then the emotional and the investment value of the LOI's is nil. It takes a lot to recover from a delay.
The bottom line is credibility. The clock is ticking.
Precisely.
The company is saying the four LOI's are big news. The paid for industry press says that it big news. Some investors think it is big news.
However, the politicians allegedly quoted in the press releases announcing the LOI's have not mentioned anything of it in their hoe countries or communities. No local (in country) press has picked up on it either.
Until the funder can deliver cash to the project, the LOI's are long on intent but short on merit.
To date, we have received four press releases regarding waste to energy systems going into four cities (in two countries). Even though there is an LOI for each site, these statements remain only wishful pink sheet dreams until such time as the funder delivers cash to the project.
I have still yet to see any evidence in the local Ecuadorian or Congolese media about the story. Does this seem to be rather strange?
None of the three city mayors in Ecuador have put the so called "good news" story on their own Facebook page. Politicians tend to put every good news event into social media at the earliest opportunity. We need to ask ourselves why they have have not yet done so. Do they think it is premature for any acknowledgment of the project as no proven cash has arrived?
The last line is the most important.
The company needs firm funding contracts which will allow the equipment purchase orders to be issued.
LOI's do not create permanent value. They hype the stock but in the long run do nothing until they are converted to commercial contracts.
It should take about 4 to 6 months to raise the necessary loans to fund the four WTE projects. It it goes beyond then some questions need to be asked.
Patents are a good thing, except
that the application shows all of the details of the design so that protection can be granted. A small tweak to the model would allow for a nw patent to be issued to a third party.
Commercially, unless governments want traceability for plastics, my hunch it that they (government) would less plastic products and more reuse of plastics before incineration, pyrolysis or plasma to make fuel or power.
Aren't we getting ahead of ourselves?
We have not yet arranged the funding for three waste to energy plants in Ecuador and fourth plant in the Congo.
While governments and people are talking hydrogen, there is a shift in thinking towards battery powered cars and trucks rather than hydrogen.
From what I see, the price of hydrogen needs to come down to make it competitive with LNG or diesel. Also, where is the local distribution? We could be ten years out before hydrogen is really in use.
We need to put things into context.
All that the references to the South Korean plants proves is that the technology has been commercialized. None of this involved CLNV.
The Australian and New Zealand locations being developed will be owned and operated by the publicly company, Bioplant Limited. The sale of the equipment contracted by GGII and the financing of the project are not being done by CLNV or its subsidiaries.
While their are LOI's for Ecuador and the Congo these still need to be reduced to firm funding agreements and the like before the project owners will provide GGII a bona fide purchase order.
According to a story from WeForum in January 2021, 90% of the visible plastics in the ocean are sourced from 10 major rivers, 8 is Asia and 2 in Africa. In total, only five countries are involved; Nigeria, Egypt, India, Vietnam and China.
In light of the company's focus on plastics in the ocean, What is the strategy of getting systems into those countries? These are not easy countries to conduct business. If we can't easily get up and running in those countries then why the big PR push on solving the ocean pollution problem. Even if we got plants in nearly 200 other countries for the 10% which is left, it is a small dent in the problem.
Quoting big numbers of plastic generation with the state is relevant from informing the public and our fellow shareholders of the scope of the problem. This is meaningful.
However, there are a number of competing solutions to processing plastics. Grade 1 and Grade 2 plastic scrap can readily be repurposed as a recycled feedstock it if is clean and sorted.
It is the other four grade plus the mixed Class 7 that pose a challenge. In doing some reading, I can find two other NA equipment providers that can do all grades of plastics into a tank ready fuel or power. Well funded Agilyx, for example, can take a small amount of undesirable grades any make something from it. There are other systems out of Europe than can use plastics and other wastes that can transform them into useful energy.
All of these system providers can do so with emissions less than world, national or local limits.
Perhaps we should be asking what can our Company do to get some of the potential contracts? There is ample waste and a growing number of proven and commercialized providers. What do we do that is materially ahead of the competition? Once the four LOI's are converted from an LOI to funded contracts where equipment can produce environmental and economic benefits, we have some standing in a growing market with more solutions.
Joining the local Chamber of Commerce...
does not constitute major investor news. It is neither a proven sale or a LOI for as yet to be funded sale; the release of audited financials, change in directors or officers nor anything material.
A Chamber of Commerce is a venue for businesses to share concerns on taxes, regulation and to drive business to one another. On the social side, they have very nice dinners. At best, they may be able to lend a lukewarm support for a local business. They have started to lose some of their leverage with local or county governments.
This is not to say that the news is not a good thing but it is not overly relevant to the raising of funds for the firm and its clients.
It begs the question of why there is an over exuberance of hype on such a release. If I join the gym it does not necessarily follow that I provide the society pages with that "news".
I can use your help.
I went to do some DD on the Kinshasa press release.
I could not find any local media releases that were locally created. I did find some African word for word repeats of the press release although not many.
One release in Africa Inc Magazine copied the company press release. They also had a photo of a pyrolysis machine. When you checked the source of the machine it was a photo of a pyrolysis device in Mexico! As far as I am aware, GGII has never put a system into Mexico.
You would have thought that the company would have been granted permission to share photos of GGII systems for distribution to the media.
I also tried to get any information on the Hamden Group and its managing director. I can't seem to find anything in the Kinshasa press. The government website for business registration is also hard to locate.
So this is where I need your help.
I am trying to verify the other side of the press releases and I do not seem to be getting anywhere in the DRC. Ecuador was also a goose egg. CLNV can say what they want but it is the other side objectively verified that is the key.
The only place where I see some "validation" of the press release is on the GGI Energy website when they also mention the two year deal.
I have been investing in the Cleantech sector for about 25 years.
During that period of time, I was a punter in an OTC stock that had great promise The principals ran up the number of o/s shares from 80 million to about 400 million and used the proceeds to fund travel and PR campaigns. The management issued press releases left right and center. It all looked great. When they could not find the actual cash to fund their subsidiaries and projects things began to unravel. It took about two years for the bloom to come off the rose.
There are some emerging parallels with CLNV.
I have done my DD and I like the GGII story. I have done some reading on the tech and it makes sense. However, if GGII is merely a supplier then it all boils down to the ability for Clean Seas to deliver the cash to buy the systems.
I still cannot find local (third party) verification of the announcements. It is odd that the local Spanish media haven't interviewed the Mayors involved. Better yet, the PR sounds so good that I do not understand why the same politicos have not touted the story.
I am not saying the CLNV is a fraud or a stock promotion. My Spidey sense says something is not quite as solid as we believe. I do hold some shares in CLNV.
Just an interesting observation...
On July 13th, the company announced an LOI for a WTE plant at Naranjal, Ecuador. The LOI was signed by its mayor, Ab Luigi Rivera Gutierrez.
Exactly a week later, on July 20th, the company announced a similar LOI for a WTE plant at Milagro, Ecuador. The LOI was signed by its mayor, Francisco Asan Wonsang.
Again, exactly a week later, on July 27th, the company announced a similar LOI for a WTE plant at Santa Elana, Ecuador. The LOI was signed by its mayor, Otto Vera Palacios.
In each one of these announcements, these press releases were distributed by other OTC portals as well. A number of other domestic outlets picked up the story for their online business news.
It is a coincidence that the 7 day interval was use to support the distribution of tens of millions of new shares. I get that. It is a tried and tested method to float stock.
Has anyone done any internet searches to see if the local media in the three Ecuadorian cities picked up on the story? I could not find any?
I also did a deep dive on the Mayors to see if they made any statement about the LOI's or a good WTE solution for their communities on their personal social media accounts or government media.
There is nothing on their personal social media at all. This does strike me odd as every politician that I know would want to self promote a good news story on their Facebook account.
I could not find anything either on any local government website. If someone can find a local Spanish source I would appreciate knowing about it.
It just seems odd to me that nothing is being said about the company or the LOI in the local media.
An LOI is not binding unless it expressly states that it is. This is a matter of standard business law.
Alternatively, if the contract was binding on all parties don't you think that the management of CLNV would have clearly stated that it was binding in the press release?
Now, based on the press releases (3 announcing the South American plants and 1 announcing the two year sales agency agreement with GGII), only the GGII transaction used the word binding. However, the same press release also stated the Clean Seas must find the project, get the permits and raise the funds so that the project can buy the equipment from GGII. So if Clean Seas cannot find the cash then while the agreement between Clean Seas and GGII is "binding", binding nothing is still nothing.
GGII does have relationships with others wo are also selling and installing systems in Asia and elsewhere.
From what I can recall, this is the only press release that mentions a binding MOU.
When you read the press release, it is the responsibility for CLNV's subsidiary to find projects, get them permitted and raise all of the funds necessary for the project.
This would naturally include the money needed to pay GGII for their designed equipment. Effectively, the MOU can be reduced to a sales agency agreement between GGII and Clean Seas.
If CLNV's subsidiary does not fulfill its part of the deal namely raising the funds to pay for the equipment, GGII does not build the equipment. No harm to GGII if Clean Seas does not deliver. No harm other than reputation to Clean Seas and by extension CLNV if they cannot raise the financing.
To me, it would be better reported as a partially exclusive (by territory) term limited (2 years) best efforts sales agency agreement.
Yes, it may be a binding agreement but there does not appear to be any teeth to it should nothing happen.
In the body of the the first press release for Naranjal, the document states:
We look forward to starting the detailed negotiation process for establishing a public-private partnership with the Clean Seas JV for the 30-year MSW feedstock agreement and bringing this vital technology to Naranjal, for remediating the MSW in the region to reduce its environmental impact and avoid the imminent saturation of local landfills such as Las Iguanas."
So it is clear that it is only the intent to negotiate. An actual deal still needs to be papered.
Do your due diligence.
In reading the press release for the second site, I see the words letter of intent. No where do they use the work binding which would make it a contract. Please remember that Safe Harbor Disclaimer which transfers the onus of proving the facts from the company to the investor.
In my reading of the press release for Saint Elana, they use the wording letter of intent which comes back to it being non-binding unless it can be proven otherwise.
I agree. You need a starting point.
However, an LOI needs to be replaced with a funding agreement, permits, equipment purchase contracts and the like before we can start claiming revenue. Until their are agreements that could withstand scrutiny, we should not be getting off half cocked.
Unless there is a specific provision within a letter of intent declaring that the document is binding on all parties, legal convention says that it is merely an intent and not an enforceable contract.
CLNV has reported that LOI's have been issued. Unless we see the actual agreements we need to rely on the basis construct of the law that the "agreements" are not binding.
Further, has anyone seen any tombstone notice or the actual name of the funding parties for the three SA sites? Some DD is needed to say that the money is there otherwise there are no equipment purchases and no revenues.
Do your due diligence
These Ecuador deals sound great for making project revenue.
When you do a little digging, the power prices may be okay at about 10 US cents per kwh. How much the project will earn has not been disclosed to investors. Tipping fees are very, very low at about $ 6 USD per ton. Ouch. Wikipedia says Ecuador does not yet have a carbon market or goals. So, what does this mean? The revenue will be low but so are the staffing costs.
My guess is that the $ 13.5 million in revenue for the two small projects could gross about $ 4 million before taxes and financing? So, how much to CLNV?
Announcing an MOU or LOI does not mean anything unless their is a real funder.
When will management disclose who is bringing the money to the table.
So, if it is a partnership, any indirect return to CLNV will be much farther down the line - after commissioning - after debt service cost is paid. It's good but not as good as we would like.
Black Rock is a well known aggregator and manager of funds. How does this relate to CLNV's management and partner firms proven track record to raise funds?
I agree that there is ample capital available to meet financially worthy Cleantech projects.
However, only a small percentage of green projects are truly viable on their own merits. The vast majority need government or NGO support on the capital or operating side just to cover their costs.
Large funders tend to focus on established tech and established funders on a scale that they make work for them. Generally speaking, a large funder (banks, PE firms, hedge funds and the like) will not do projects under $ 100 million and generally prefer projects over $ 250 million.
What is common on OTCBB and the like stocks, the insiders tend to over promise and under deliver. I am not saying one way or another that this is the case.
However, a press release is not proof until the client affirms that something is happening. Even then, I have seen elaborate press releases, open media event and politicians at ground breaking events and nothing happens.
Has anyone done any due diligence on GGII to see how fast they can deliver systems for their own projects, projects that they are committed to or under consideration prior to signing up for two years with CLNV?
I am not an engineer but I have a gut feel for how long a 100 ton per day system should take to fabricate. I have no idea on the time for permits or a building or connections to the grid or pipelines.
If we said that it would take 18 months from the front end to the back end for a 100 ton per day plant they would need to increase their capacity to build a few billion dollars worth of systems. Just saying.