is... a buy and hold investor of dividend US and Canadian stocks
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My assumption is that these vessels were composed of components that were welded together by the manufacturer. A stitch weld also does not seem to be the right kind of weld for a vessel holding pressure. I am not a welding expert howvever.
All of these condensers failed after 6 months. If there was a defect it would have likely only affected one of them.
It is much more probable that they were not the right parts to use in the first place. Specifying/ procuring parts is an engineering function. Seems like it is JBIs bad.
hey, what about this contest? I am WINNING!!!
Good post. And I would not be surprised if there is some kind of refinancing or Reverse Split. I don't think they can raise money anymore with the current SP and image/ history. Probably rebranded something to do with Heddle Marine, which is credible..
Bankruptcy? Booted to Greys? SEC Suspension?
They don't have a huge debt. This could go on for a long time yet. They are headed in that direction.... but they don't have a huge debt. You said you would remove that. Maybe you mean they have spent a lot of money... not sure of the term.
JBI made a serious accounting error that was very misleading to investors. There is no point in engaging in ridiculous conjecture and conspiracy theories about plots, threats, boogeymen, etc. It does not matter that the previous owner made the same mistake. A mistake is a mistake. That is similar to saying that, when caught speeding, you were going at "the speed of flow of traffic". JBI got caught, pure and simple.
The fact that JBI settled is a de facto admission of fraud, and everybody knows that.
What brings you here? Tired of JBI? I think this one has several things that JBI does not: a chart that is relatively flat, but responds well to news, real deals and professional management, and a real opportunity to make a difference. I intend to sell on news... when it pops up..
Yes, it is unclear. There is much confusion. I would have to see a typical installation in order to know. I am just taking the various inputs and arriving at what I think is the most logical conclusion. The numbers in the Financial Statements are incontrovertible.
Selling them for a loss would be similar to what goes on in the software industry a lot, but it is a different ballgame entirely. Once the development cost is recouped, it is just a matter of printing another CD or whatever.
I worked for a software company once that used to simply waive license fees in order to collect the consulting fees and Support Money (upgrades and ongoing Support). Interesting way of doing business because there are 3 distinct cash flow streams in software (license fees, consulting, and Support). There is a better name for Support, I just can't think of it.
I don't think that would ever happen in this kind of business. There is too much money invested in every product in the form of labor and material. In order to keep some kind of stability, they have got to recoup all of the labor and charge a markup on it. That is the basis of Consulting firms (Billing Ratios).
Yes I agree it is confusing. I am just trying to put out my best guess and keep it real with what we know. As opposed to cherry-picking the best possible numbers and living in a dream world.
It is not laughable at all for anyone who has been in construction. Totally factually correct.
JBI does not pay for installation. The owner does. The company buying the system. And I am saying that JBI does not get all of that revenue. They get some, not all.
Construction cost = a contract to a construction company.
and btw, "construction" = "installation" in construction. The terms are almost interchangeable.
Engineering, Commissioning, Project Management = Consulting Labor (Markup on Salary).
The number for Gross Profit for selling "processors" Has Been Grossly Overstated.
The main problem is that two things are being confused: the cost of the entire system including Engineering, construction, commissioning, and startup; with the cost of the "processor" which is currently at the fabricator incurring storage cost. The SAIC Summary and most recent Financial Statements for JBI are most useful in looking at the cost of a fully functional system. The last financial statements show a value of over $1 Million for Construction in Process and a total of $7.4 Million invested in Plant & Equipment (3 Units) to-date.
We know that there are several pieces of Equipment (Processors) at a fabricator. The "Processors" at the fabricator are only part of the solution.
Based on my experience the cost breakdown on any job in the process industries are roughly as follows:
- Construction - 20%
- Equipment - 20%
- Engineering - 30%
- Project management - 10%
- Commissioning -20%
The best reference we have for the cost of a full 3-processor installation comes from the SAIC Summary. That document put the Total Cost at $9 Million. The last financial statements support that, showing an Incurred Cost to-date for the 3 machines that JBI has already built is about 7.4 Million. Any estimate produced by SAIC would have used Union labor rates, etc and would be more expensive, with no shortcuts.
The SAIC estimate was estimating the cost to the Owner. The role that JBI would play is that of an Equipment Vendor. Therefore, JBI would receive as Revenue only a portion of the $9 Million SAIC estimate. They do not have the construction, Engineering, Commissioning, or Project Management experience to do 100% of this work. From the percentages above, I would guess that portion to be 3-4 Million for one Unit and 5-6 Million for a 3-unit cluster.
The last financial statements show a value of over $1 Million for Construction in Process. The only thing that makes sense would be this number refers to the status of the fabricated equipment (Processors) alone. We have the comment from Heddle during the last Q&A that "the processors are 75% Complete". Heddle's comment is likely referring to that as well. That is to say, they are 75% complete on the "Equipment - 20%" component.
The SAIC Summary is accurate from a Cost standpoint and supports this. Their figure was 8.5 Million with an OOM estimate complete (according to the document). An OOM estimate is worth 5% of the total budget. That is an industry standard. That gives a total cost of 9 Million for a 3-processor cluster, with about 400k already spent. The rest of the figures they give, which is a further 2 Million for Engineering, jive with industry standards. A FEL2 estimate is worth 10%, a FEL3 (final detailed) estimate is worth 15% of the budget. That results in the 30% Engineering cost.
The SAIC study was done on Processor #2, and things have been improved. #3 is more modular and has some drawings (Engineering work) associated with it. OK, modularization is worth about 10% cost reduction in Construction. The drawings mean more Engineering has been done.
The SAIC study was for a 3-processor cluster. There would be a lot of common systems that would make a cluster advantageous.
Profit to JBI
The Revenue to JBI would be a part of the Cost to the Owner. I would guess that portion to be 3-4 Million for one Unit and 5-6 Million for a 3-unit cluster. I think the only thing we can assume a 20-30% markup on Labor (Consulting) and Equipment. That would mean they would make anywhere from $500k to $1 Million per processor sale... or 1 Million on a 3-processor cluster. That fits well with the invested capital as reported in JBI Financial Statements.
This is assuming that that kind of money can be justified. I know of no business (ROI) justification for doing this based on profitability, and if it is some other justification (Green? Environmental?) those budgets are hard to find in those amounts.
I find it funny how the guys that leave the company for whatever reason are always to blame. Reminds me of the company I worked at where if someone was not present at a meeting.... they got given work to do as a result of the meeting.. LOL.
Furthermore...The number for Gross Profit for selling "processors" is Grossly Overstated.
"That would result in a gross profit for each processor sold of $6.5 to $7 million"
The main problem is that two things are being confused: the cost of the entire system including Engineering, construction, commissioning, and startup; with the cost of the "processor" which is currently at the fabricator incurring storage cost. The SAIC Summary and most recent Financial Statements for JBI are most useful in looking at the cost of a fully functional system. The last financial statements show a value of over $1 Million for Construction in Process and a total of $7.4 Million invested in Plant & Equipment (3 Units) to-date.
We know that there are several pieces of Equipment (Processors) at a fabricator. The "Processors" at the fabricator are only part of the solution.
Based on my experience the cost breakdown on any job in the process industries are roughly as follows:
- Construction - 20%
- Equipment - 20%
- Engineering - 30%
- Project management - 10%
- Commissioning -20%
The best reference we have for the cost of a full 3-processor installation comes from the SAIC Summary. That document put the Total Cost at $9 Million. The last financial statements support that, showing an Incurred Cost to-date for the 3 machines that JBI has already built is about 7.4 Million. Any estimate produced by SAIC would have used Union labor rates, etc and would be more expensive, with no shortcuts.
The SAIC estimate was estimating the cost to the Owner. The role that JBI would play is that of an Equipment Vendor. Therefore, JBI would receive as Revenue only a portion of the $9 Million SAIC estimate. They do not have the construction, Engineering, Commissioning, or Project Management experience to do 100% of this work. From the percentages above, I would guess that portion to be 3-4 Million for one Unit and 5-6 Million for a 3-unit cluster.
The last financial statements show a value of over $1 Million for Construction in Process. The only thing that makes sense would be this number refers to the status of the fabricated equipment (Processors) alone. We have the comment from Heddle during the last Q&A that "the processors are 75% Complete". Heddle's comment is likely referring to that as well. That is to say, they are 75% complete on the "Equipment - 20%" component.
The SAIC Summary is accurate from a Cost standpoint and supports this. Their figure was 8.5 Million with an OOM estimate complete (according to the document). An OOM estimate is worth 5% of the total budget. That is an industry standard. That gives a total cost of 9 Million for a 3-processor cluster, with about 400k already spent. The rest of the figures they give, which is a further 2 Million for Engineering, jive with industry standards. A FEL2 estimate is worth 10%, a FEL3 (final detailed) estimate is worth 15% of the budget. That results in the 30% Engineering cost.
The SAIC study was done on Processor #2, and things have been improved. #3 is more modular and has some drawings (Engineering work) associated with it. OK, modularization is worth about 10% cost reduction in Construction. The drawings mean more Engineering has been done.
The SAIC study was for a 3-processor cluster. There would be a lot of common systems that would make a cluster advantageous.
Profit to JBI
The Revenue to JBI would be a part of the Cost to the Owner. I would guess that portion to be 3-4 Million for one Unit and 5-6 Million for a 3-unit cluster. I think the only thing we can assume a 20-30% markup on Labor (Consulting) and Equipment. That would mean they would make anywhere from $500k to $1 Million per processor sale... or 1 Million on a 3-processor cluster. That fits well with the invested capital as reported in JBI Financial Statements.
This is assuming that that kind of money can be justified. I know of no business (ROI) justification for doing this based on profitability, and if it is some other justification (Green? Environmental?) those budgets are hard to find in those amounts.
Opinion: Yesterday's dump was those in the know about the coming quarterly dumping because it is going to stink. Today's (lack of) volume is those that don't know. When it comes out....
LOOKOUT BELOW!!!
hint.. Installation Cost = (most of the) Construction Cost.. EOM
Your number for Gross Profit for selling "processors" is Grossly Overstated.
"That would result in a gross profit for each processor sold of $6.5 to $7 million"
The main problem is that you are confusing to things: the cost of the entire system including Engineering, construction, commissioning, and startup; with the cost of the "processor" which is currently at the fabricator incurring storage cost. The SAIC Summary and most recent Financial Statements for JBI are most useful in looking at the cost of a fully functional system. The last financial statements show a value of over $1 Million for Construction in Process and a total of $7.4 Million invested in Plant & Equipment (3 Units) to-date.
We know that there are several pieces of Equipment (Processors) at a fabricator. We have the comment from Heddle during the last Q&A that "the processors are 75% Complete".
The "Processors" at the fabricator are only part of the solution.
Based on my experience the cost breakdown on any job in the process industries are roughly as follows:
- Construction - 20%
- Equipment - 20%
- Engineering - 30%
- Project management - 10%
- Commissioning -20%
The best reference we have for the cost of a full 3-processor installation comes from the SAIC Summary. That document put the Total Cost at $9 Million. The last financial statements support that, showing an Incurred Cost to-date for the 3 machines that JBI has already built is about 7.4 Million. Any estimate produced by SAIC would have used Union labor rates, etc and would be more expensive, with no shortcuts.
The SAIC estimate was estimating the cost to the Owner. The role that JBI would play is that of an Equipment Vendor. Therefore, JBI would receive as Revenue only a portion of the $9 Million SAIC estimate. They do not have the construction, Engineering, Commissioning, or Project Management experience to do 100% of this work. From the percentages above, I would guess that portion to be 3-4 Million for one Unit and 5-6 Million for a 3-unit cluster.
The last financial statements show a value of over $1 Million for Construction in Process. The only thing that makes sense would be this number refers to the status of the fabricated equipment (Processors) alone. That is to say, they are 75% complete on the "Equipment - 20%" component. Heddle's comment is likely referring to that as well.
The SAIC Summary is accurate from a Cost standpoint and supports this. Their figure was 8.5 Million with an OOM estimate complete (according to the document). An OOM estimate is worth 5% of the total budget. That is an industry standard. That gives a total cost of 9 Million for a 3-processor cluster, with about 400k already spent. The rest of the figures they give, which is a further 2 Million for Engineering, jive with industry standards. A FEL2 estimate is worth 10%, a FEL3 (final detailed) estimate is worth 15% of the budget. That results in the 30% Engineering cost.
The SAIC study was done on Processor #2, and things have been improved. #3 is more modular and has some drawings (Engineering work) associated with it. OK, modularization is worth about 10% cost reduction in Construction. The drawings mean more Engineering has been done.
The SAIC study was for a 3-processor cluster. There would be a lot of common systems that would make a cluster advantageous.
Profit to JBI
The Revenue to JBI would be a part of the Cost to the Owner. I would guess that portion to be 3-4 Million for one Unit and 5-6 Million for a 3-unit cluster. I think the only thing we can assume a 20-30% markup on Labor (Consulting) and Equipment. That would mean they would make anywhere from $500k to $1 Million per processor sale... or 1 Million on a 3-processor cluster. That fits well with the invested capital as reported in JBI Financial Statements.
This is assuming that that kind of money can be justified. I know of no business (ROI) justification for doing this based on profitability, and if it is some other justification (Green? Environmental?) those budgets are hard to find in those amounts.
Your number for Gross Profit for selling "processors" is Grossly Overstated.
"That would result in a gross profit for each processor sold of $6.5 to $7 million"
The main problem is that you are confusing the cost of the entire system; constructed, commissioned, and started up with the appropriate level of Engineering effort, with the cost of the "processor" which is currently at the fabricator incurring storage cost. The SAIC Summary and cost to-date as recorded in the Financial Statements for JBI are useful in looking at the cost of a fully functional system.
We know that there are several pieces of Equipment at a fabricator. We have the comment from Heddle that the processors are "75% Complete". The last financial statements show a value of over $1 Million for Construction in Process and a total of $7.4 Million invested in Plant & Equipment to-date.
Whatever is at the fabricator is only part of the solution.
Based on my experience the cost breakdown on any job in the process industries are roughly as follows:
- Construction - 20%
- Equipment - 20%
- Engineering - 30%
- Project management - 10%
- Commissioning -20%
The best reference we have for the cost of a full 3-processor installation comes from the SAIC Summary. That document put the Total Cost at $9 Million. The last financial statements support that, showing an Incurred Cost to-date for the 3 machines that JBI has already built is about 7.4 Million. Any estimate produced by SAIC would have used Union labor rates, etc and would be more expensive, with no shortcuts.
The SAIC estimate was estimating the cost to the Owner. The role that JBI would play is that of an Equipment Vendor. The Revenue to JBI would be a part of the Cost to the Owner in the form of a markup.
They do not have the construction, Engineering, Commissioning, or Project Management experience to do 100% of this work. In this role, JBI is only going to be able to garner a portion of the Total Cost as Revenue.
The only thing that makes sense, given the number on the books of $1 Million for Construction-in-process, would be this number refers to the status of the fabricated equipment alone. That is to say, they are 75% complete on the "Equipment - 20%" component.
The SAIC Summary is accurate from a Cost standpoint and supports this. Their figure was 8.5 Million with an OOM estimate complete (according to the document). An OOM estimate is worth 5% of the total budget. That is an industry standard. That gives a total cost of 9 Million for a 3-processor cluster, with about 400k already spent. The rest of the figures they give, which is a further 2 Million for Engineering, jive with industry standards. A FEL2 estimate is worth 10%, a FEL3 (final detailed) estimate is worth 15% of the budget. That results in the 30% Engineering cost.
The SAIC study was done on Processor #2, and things have been improved. #3 is more modular and has some drawings (Engineering work) associated with it. OK, modularization is worth about 10% cost reduction in Construction. The drawings mean more Engineering has been done.
The SAIC study was for a 3-processor cluster.
We can talk about 2 things; the cost of a 3-processor cluster, or the cost per Unit (based on one processor). Based on all of the above, the cost of an individual unit would have to be between 3-4 Million, and the cost of a 3-processor cluster would be upwards of 6-7 Million. There would be a lot of common systems that would make a cluster advantageous.
JBI's take as Revenue (Cost to the Owner and part of the $9 Million for the SAIC estimate) from this would probably be $2-3 Million per Unit, and maybe $5-6 Million for a Cluster.
Profit to JBI
I think the only thing we can assume a 20-30% markup on Labor (Consulting) and Equipment. That would mean they would make anywhere from $500k to $1 Million per processor sale... or 1 Million on a 3-processor cluster.
This is assuming that that kind of money can be justified. I know of no business (ROI) justification for doing this based on profitability, and if it is some other justification (Green? Environmental?) those budgets are hard to find in those amounts.
"4-20-11: 10K Released. Interesting excerpt found by Steady_T:
"It is possible that industrial partners may wish to provide financing for the construction and other costs associated with building and operating a P2O processor."
"
Of course they do. They have to. Any purchase like this... anything over 6 figures, has to be cost justified on an ROI basis. They have to go to a bank to get the money, with a Cost of capital associated with that.
And your Scientific American link does not work.
What was the root problem? What caused the lawsuits? These pennies are a PITA. I have waited for years for them to do anything, and most of the time they DO have more cash in the bank than Market Cap. Not worth the effort usually, but if you can be patient they are fun...
Looks like a ST Trading opportunity here, based on the chart. The MFI/ RSI, etc has turned around over the last few days, as has the stock price. Can't find a reason for the latest slide over the mid-term... any ideas?
My thought is to buy a bunch, hope it goes the right way, then sell most of it and keep a small position for the LT.
thoughts?
Thoughts??
The kind of position I would take on this is very small and would involve a relatively large commission.. They seem to be in a "wait state" while settling legal matters. It is hard to determine the likely outcome here. THey have cash in the bank, but it is hard tot ell how difficult the legal matters are going to be to solve...
Opinion?
The facts don't fit what you are saying. Anyway, you are entitled to your opinion, as I am mine.. I am sure that the facts brought to bear will allow others to decide for themselves.
Your number for Gross Profit for selling "processors" is Grossly overstated.
"That would result in a gross profit for each processor sold of $6.5 to $7 million"
The main problem is that you are confusing the cost of the entire system; constructed, commissioned, and started up with the appropriate level of Engineering effort. The SAIC Summary and cost to-date for JBI are useful in looking at the cost of a fully functional system.
We know that there are several pieces of Equipment at a fabricator (which is costing JBI storage costs by the way) that are 75% complete. The last financial statements show a value of over $1 Million for Construction in Process, which refers to those pieces. Whatever is at the fabricator is only part of the solution.
Based on my experience the cost breakdown on any job in the process industries are roughly as follows:
- Construction - 20%
- Equipment - 20%
- Engineering - 30%
- Project management - 10%
- Commissioning -20%
The best reference we have for the cost of a full 3-processor installation comes from the SAIC Summary. That document put the Total Cost at $9 Million. The last financial statements support that, showing an Incurred Cost to-date for the 3 machines that JBI has already built is about 7.4 Million. Any estimate produced by SAIC would have used Union labor rates, etc and would be more expensive, with no shortcuts.
The SAIC estimate was estimating the cost to the Owner. The role that JBI would play is that of an Equipment Vendor. The Revenue to JBI would be a part of the Cost to the Owner in the form of a markup.
They do not have the construction, Engineering, Commissioning, or Project Management experience to do 100% of this work. In this role, JBI is only going to be able to garner a portion of the Total Cost as Revenue.
We have the comment from Heddle that the processors are "75% Complete". The only thing that makes sense, given the number on the books for Construction-in-process, would be that he is talking about the status of the fabricated equipment alone. That is to say, they are 75% complete on the "Equipment - 20%" component.
The SAIC Summary is accurate from a Cost standpoint and supports this. Their figure was 8.5 Million with an OOM estimate complete (according to the document). An OOM estimate is worth 5% of the total budget. That is an industry standard. That gives a total cost of 9 Million for a 3-processor cluster, with about 400k already spent. The rest of the figures they give, which is a further 2 Million for Engineering, jive with industry standards. A FEL2 estimate is worth 10%, a FEL3 (final detailed) estimate is worth 15% of the budget. That results in the 30% Engineering cost.
The SAIC study was done on Processor #2, and things have been improved. #3 is more modular and has some drawings (Engineering work) associated with it. OK, modularization is worth about 10% cost reduction in Construction. The drawings mean more Engineering has been done.
The SAIC study was for a 3-processor cluster.
We can talk about 2 things; the cost of a 3-processor cluster, or the cost per Unit (based on one processor). Based on all of the above, the cost of an individual unit would have to be between 3-4 Million, and the cost of a 3-processor cluster would be upwards of 6-7 Million. There would be a lot of common systems that would make a cluster advantageous.
JBI's take as Revenue (Cost to the Owner and part of the $9 Million for the SAIC estimate) from this would probably be 2-3 Million per Unit, and maybe 5-6 Million for a Cluster.
Profit to JBI
I think the only thing we can assume a 20-30% markup on Labor (Consulting) and Equipment. That would mean they would make anywhere from $500k to $1 Million per processor sale... or 1 Million on a 3-processor cluster.
This is assuming that that kind of money can be justified. I know of no business (ROI) justification for doing this based on profitability, and if it is some other justification (Green? Environmental?) those budgets are hard to find in those amounts.
Good Get, but if you look a little more closely, you will see that the true incurred cost has been $7.477 Million with Depreciation to-date of just over 2 Million. That is how you get your Book Value number. Of this, the office equipment portion is miniscule, it is almost all Plant.
Good input. That means for Units #1, #2, and #2 the Incurred Cost is in the ball park with the SAIC Summary number of 9 Million for a 3-unit cluster.
JBI would not have incurred as much cost as the SAIC estimate, because the SAIC estimate would have been fully loaded with Union labor rates and norms, and all of the true costs to build the plant. JBI took a lot of shortcuts, used their own labor and machine shop, etc.
So you are supporting what I am saying.
The cost to the Owner will be similar to the SAIC study number of 9 Million max. JBI provides key equipment (processors..) and associated engineering , Project management, and Commissioning Support. They are not a Construction company, nor are they an Engineering house. So they would receive maybe 4-5 Million of the 9 Million on a 3-unit cluster (to use that configuration as an example).
Of that, I am guessing their Profit Margins would be 1 - 1.5 Million, based on a 20 or 30% markup.
Thanks Rawnoc!!!
Your number for Gross Profit for selling "processors" is Grossly overstated.
"That would result in a gross profit for each processor sold of $7 million"
I don't know where you got that $1 Million cost from, perhaps what is on the books now for "Construction-in-process". That would represent the incurred cost on the equipment currently at a fabricator.
Cost..
Whatever is at the fabricator is only part of the solution. Whatever they sell, it has to be customized for the client site and that means Engineering and Construction work. Based on my experience the cost breakdown on any job in the process industries are roughly as follows:
- Construction - 20%
- Equipment - 20%
- Engineering - 30%
- Project management - 10%
- Commissioning -20%
Of that, JBI is only going to be able to do a portion of it. They are not a Construction company, so can't do that. They are most likely an equipment supplier. In the last financial statement it was revealed that they have a set of drawings to support installation of their equipment. They would not do Commissioning, but would probably provide consulting. They would also provide Project management and Engineering.
We have the comment from Heddle that the processors are "75% Complete". The only thing that makes sense, given the number on the books for Construction-in-process, would be that he is talking about the status of the fabricated equipment alone. That is to say, they are 75% complete on the "Equipment - 20%" component.
The SAIC Study supports this. Their figure was 8.5 Million with an OOM estimate complete (according to the document). An OOM estimate is worth 5% of the total budget. That is an industry standard. That gives a total cost of 9 Million for a 3-processor cluster, with about 400k already spent. The rest of the figures they give, which is a further 2 Million for Engineering, jive with industry standards. A FEL2 estimate is worth 10%, a FEL3 (final detailed) estimate is worth 15% of the budget. That results in the 30% Engineering cost.
Now the SAIC study was done on Processor #2, and things have been improved. #3 is more modular and has some drawings (Engineering work) associated with it. OK, modularization is worth about 10% cost reduction in Construction. The drawings mean more Engineering has been done.
The SAIC study was for a 3-processor cluster.
So, based on that, the cost of an individual unit would have to be between 3-4 Million. The incurred cost to-date makes sense then.
Furthermore, if JBI is only an Equipment Supplier with their hand in other pots, I would further reduce that to 2-3 Million per processor. That fits with the over 1 Million they have on the books now.
Your 1 Million figure is completely unrealistic.
Revenue...
8 or 9 Million per processor? I am not even going to argue against it... there is no business justification for that kind of number...
Profit...
JBI make be able to make a $500k - Million or so, if the price you are quoting is cut in half. I don't even think that a processor is worth that much , based on what potential profitability there is. The above is based on a 20-30% markup, which is reasonable.
"Feasibility Study" is a commonly used term for a FEL 2 estimate.
FEL - Front End Loading, which is a methodology deployed in Mining and other industries that describes a series of engineering phases with GO/ NO GO stage gates at the end of each. Each stage results in a more and more refined estimate.
A Feasibility Study would have an accuracy of maybe +30/-15%. Specifics can be found on the AACE (American Association of Cost Engineering) website.
A Pre-Feasibility Study is the same thing as an Order of Magnitude estimate, which is referred to in the SAIC report. It has an accuracy of (guessing) +60/ -40%.
My thoughts upon reading the report:
- not professionally written. Problems with capitalization on the front page.
- the English could use some work. Clearly the work of a student, where English may be the second language.
- Table of Contents looks like it is all there. He is going for an ROI.
- he was spoonfed information from JBI. "Information related to machinery, machine´s efficiency, and diesel quality has acquired through email communication with John X, the founder of the company and some other sources of the company."
- you are talking about the number for "Machinery" in Table 31. I see it. His Construction Cost of 54k (Building and other Civil work) looks a little low... and there is no Commissioning cost. I would attribute that to a lack of real-world experience. Then again, it is a third world country, labor is inexpensive. Like wise Project Managemnet, Engineering.
- I like the escalation (Key Assumptions), but I don't think he took into account Time Value of Money (discount rate) when he did the ROI. He has the right idea.
- Not sure why he has multiplied the initial investment by 5. That is not necessary.... it is a one-time thing. oh... he means productions costs.. OK> :)
- not sure where he gets 132 and 6 zeroes from... but he comes up with a good ROI number. Bravo!!
I like it. I would compare the 1.073 Million number to what I am saying about Cost and Profit from machine sales. I think it is similar. What JBI is proposing here is a piece of Equipment. Forgetting about the 8-9 million price tag being thrown around, it fits well with what I am saying JBI can sell as part of the kind of installation discussed in the SAIC Summary document.
In the SAIC document... the 8-9 million price tag wold be the price to the Owner of the overall system. JBI fits in as an Equipment vendor. Numbers as per my previous posts.
If that is the case, then the 1 M figure given here is not unreasonable. All it is is the shipping of a processor similar to what they have ready to go at the fabricator now.
The issue seems to be one of terminology about what exactly a "processor" is.
Your number for Gross Profit for selling "processors" is Grossly overstated.
"That would result in a gross profit for each processor sold of $7 million"
I don't know where you got that $1 Million cost from, perhaps what is on the books now for "Construction-in-process". That would represent the incurred cost on the equipment currently at a fabricator.
Cost..
Whatever is at the fabricator is only part of the solution. Whatever they sell, it has to be customized for the client site and that means Engineering and Construction work. Based on my experience the cost breakdown on any job in the process industries are roughly as follows:
- Construction - 20%
- Equipment - 20%
- Engineering - 30%
- Project management - 10%
- Commissioning -20%
Of that, JBI is only going to be able to do a portion of it. They are not a Construction company, so can't do that. They are most likely an equipment supplier. In the last financial statement it was revealed that they have a set of drawings to support installation of their equipment. They would not do Commissioning, but would probably provide consulting. They would also provide Project management and Engineering.
We have the comment from Heddle that the processors are "75% Complete". The only thing that makes sense, given the number on the books for Construction-in-process, would be that he is talking about the status of the fabricated equipment alone. That is to say, they are 75% complete on the "Equipment - 20%" component.
The SAIC Study supports this. Their figure was 8.5 Million with an OOM estimate complete (according to the document). An OOM estimate is worth 5% of the total budget. That is an industry standard. That gives a total cost of 9 Million for a 3-processor cluster, with about 400k already spent. The rest of the figures they give, which is a further 2 Million for Engineering, jive with industry standards. A FEL2 estimate is worth 10%, a FEL3 (final detailed) estimate is worth 15% of the budget. That results in the 30% Engineering cost.
Now the SAIC study was done on Processor #2, and things have been improved. #3 is more modular and has some drawings (Engineering work) associated with it. OK, modularization is worth about 10% cost reduction in Construction. The drawings mean more Engineering has been done.
The SAIC study was for a 3-processor cluster.
So, based on that, the cost of an individual unit would have to be between 3-4 Million. The incurred cost to-date makes sense then.
Furthermore, if JBI is only an Equipment Supplier with their hand in other pots, I would further reduce that to 2-3 Million per processor. That fits with the over 1 Million they have on the books now.
Your 1 Million figure is completely unrealistic.
Revenue...
8 or 9 Million per processor? I am not even going to argue against it... there is no business justification for that kind of number...
Profit...
JBI make be able to make a $500k - Million or so, if the price you are quoting is cut in half. I don't even think that a processor is worth that much , based on what potential profitability there is. The above is based on a 20-30% markup, which is reasonable.
Hey, what is this board about???
Not nonsense. Of course the SAIC Summary is referring to the cost of the whole site, except for the land of course. That is the only thing that is of any use. It is the cost to fully construct, commission, and startup the systems. JBI does not have the expertise to do all parts of the job, so they can never get the full amount in the SAIC estimate. All they can do is supply the major pieces of equipment and lend a hand in Project Management and Engineering.
My numbers are accurate and fit with the SAIC document as I have explained. The figures they give are industry standard.
They already have over 1 Million on the books as construction in progress, so the cost an only go up from there. Exactly as my analysis shows.
So the Cost can only go up and they can only get a fraction of the Revenue.
I think we are saying almost the same thing. Thanks Rawnoc!!!
Your number for Gross Profit for selling "processors" is Grossly overstated.
"That would result in a gross profit for each processor sold of $7 million"
I don't know where you got that $1 Million cost from, perhaps what is on the books now for "Construction-in-process". That would represent the incurred cost on the equipment currently at a fabricator.
Cost..
Whatever is at the fabricator is only part of the solution. Whatever they sell, it has to be customized for the client site and that means Engineering and Construction work. Based on my experience the cost breakdown on any job in the process industries are roughly as follows:
- Construction - 20%
- Equipment - 20%
- Engineering - 30%
- Project management - 10%
- Commissioning -20%
Of that, JBI is only going to be able to do a portion of it. They are not a Construction company, so can't do that. They are most likely an equipment supplier. In the last financial statement it was revealed that they have a set of drawings to support installation of their equipment. They would not do Commissioning, but would probably provide consulting. They would also provide Project management and Engineering.
We have the comment from Heddle that the processors are "75% Complete". The only thing that makes sense, given the number on the books for Construction-in-process, would be that he is talking about the status of the fabricated equipment alone. That is to say, they are 75% complete on the "Equipment - 20%" component.
The SAIC Study supports this. Their figure was 8.5 Million with an OOM estimate complete (according to the document). An OOM estimate is worth 5% of the total budget. That is an industry standard. That gives a total cost of 9 Million for a 3-processor cluster, with about 400k already spent. The rest of the figures they give, which is a further 2 Million for Engineering, jive with industry standards. A FEL2 estimate is worth 10%, a FEL3 (final detailed) estimate is worth 15% of the budget. That results in the 30% Engineering cost.
Now the SAIC study was done on Processor #2, and things have been improved. #3 is more modular and has some drawings (Engineering work) associated with it. OK, modularization is worth about 10% cost reduction in Construction. The drawings mean more Engineering has been done.
The SAIC study was for a 3-processor cluster.
So, based on that, the cost of an individual unit would have to be between 3-4 Million. The incurred cost to-date makes sense then.
Furthermore, if JBI is only an Equipment Supplier with their hand in other pots, I would further reduce that to 2-3 Million per processor. That fits with the over 1 Million they have on the books now.
Your 1 Million figure is completely unrealistic.
Revenue...
8 or 9 Million per processor? I am not even going to argue against it... there is no business justification for that kind of number...
Profit...
JBI make be able to make a $500k - Million or so, if the price you are quoting is cut in half. I don't even think that a processor is worth that much , based on what potential profitability there is. The above is based on a 20-30% markup, which is reasonable.
I think wave energy is great... less environmental impact than solar, I think.
I looked at that EGHT. They seem to have had a recent problem. I did not take the time to see what it was... I don't tend to invest in these things, I tend to operate on a simple value-based formula.. low P/E, decent dividend in case the sky falls down, Godzilla attacks, or something along those lines, and earnings growth. I used to try to pick high-tech winners on earnings growth alone, but I found it a fruitless exercise, and I don't eat enough fruit as it is...
My thing is energy now. Resources and energy. go OPTT...!!!
Not sure how much gas EGHT has left in the tank... lots of high tech companies have cash in the bank. some more than they know what to do with.. I think the management is sometimes too stuck up to simply sell the company off when it is spent.
The 2010 AGM works. Here is a 4-part video set.
I can't believe that a shareholder lied to would use such fancy words to legitimize being lied to. Not everyone on Wall Street does that, only the ones that lie.
JB is no better than the Kramer character on Seinfeld...
Kramer Promises Sick Kid Two Paul O'Neill Home Runs
"The Wink," Season 7, Episode 4, Oct. 12, 1995
No it won't. The only third party validation that has anything to do with profitability is the SAIC Summary, which is only party useful. I suspect it is a doctored document. The part dealing with profitability, besides that fact that the company itself says it cannot be relied upon, is clearly not true. If it were true, the company would be making money hand over fist and making fuel.
And absolutely none of the third party validation has anything to do with selling processors. No one has done an NPV or ROI analysis, not even SAIC.
NYDEC does not care about profitability only that they don't pollute.
SO there is really no validation that needs to come true for selling processors.
Because JBI now is not what JB or JBI said it would be 5 years ago.
No, John lied. This happens far too often, especially on the OTC. At that level, C-level, he is supposed to know what he is talking about. I hate it when the complexion of a financial statements change in 1 quarter. It goes from being cautiously optimistic to total doom and gloom, immediately prior to a bankruptcy announcement.
This kind of thing is total bullshit.
That is assuming they have paid all of their outstanding debts and A/P. Last time I looked it was pretty gruesome.
Does not matter. It is not profitable. EOM.
Your number for Gross Profit for selling "processors" is Grossly overstated.
"That would result in a gross profit for each processor sold of $7 million"
I don't know where you got that $1 Million cost from, perhaps what is on the books now for "Construction-in-process". That would represent the incurred cost on the equipment currently at a fabricator.
Cost..
Whatever is at the fabricator is only part of the solution. Whatever they sell, it has to be customized for the client site and that means Engineering and Construction work. Based on my experience the cost breakdown on any job in the process industries are roughly as follows:
- Construction - 20%
- Equipment - 20%
- Engineering - 30%
- Project management - 10%
- Commissioning -20%
Of that, JBI is only going to be able to do a portion of it. They are not a Construction company, so can't do that. They are most likely an equipment supplier. In the last financial statement it was revealed that they have a set of drawings to support installation of their equipment. They would not do Commissioning, but would probably provide consulting. They would also provide Project management and Engineering.
We have the comment from Heddle that the processors are "75% Complete". The only thing that makes sense, given the number on the books for Construction-in-process, would be that he is talking about the status of the fabricated equipment alone. That is to say, they are 75% complete on the "Equipment - 20%" component.
The SAIC Study supports this. Their figure was 8.5 Million with an OOM estimate complete (according to the document). An OOM estimate is worth 5% of the total budget. That is an industry standard. That gives a total cost of 9 Million for a 3-processor cluster, with about 400k already spent. The rest of the figures they give, which is a further 2 Million for Engineering, jive with industry standards. A FEL2 estimate is worth 10%, a FEL3 (final detailed) estimate is worth 15% of the budget. That results in the 30% Engineering cost.
Now the SAIC study was done on Processor #2, and things have been improved. #3 is more modular and has some drawings (Engineering work) associated with it. OK, modularization is worth about 10% cost reduction in Construction. The drawings mean more Engineering has been done.
The SAIC study was for a 3-processor cluster.
So, based on that, the cost of an individual unit would have to be between 3-4 Million. The incurred cost to-date makes sense then.
Furthermore, if JBI is only an Equipment Supplier with their hand in other pots, I would further reduce that to 2-3 Million per processor. That fits with the over 1 Million they have on the books now.
Your 1 Million figure is completely unrealistic.
Revenue...
8 or 9 Million per processor? I am not even going to argue against it... there is no business justification for that kind of number...
Profit...
JBI make be able to make a $500k - Million or so, if the price you are quoting is cut in half. I don't even think that a processor is worth that much , based on what potential profitability there is. The above is based on a 20-30% markup, which is reasonable.
So what do you think is oversold in High Tech? If this is OT, let me know and we can PM. Why don't I rephrase... what do you think is Oversold relative to OPTT.. LOL... Go OPTT!!!