Plastic2Oil Inc (PTOI)

[korogi]

Rebuttal:

1) Machine performance and IP Protection - Buyers will want to see reliable and safe extended runs with some reasonable throughput if they are going to give meaningful consideration for a processor. The process does not have to be perfectly profitable but it does have to perform reasonably.

We have been told that two extended runs of machine #3 (30 and 40 days each) were completed late last year. Is it reasonable to assume that metrics from those runs are being used to negotiate processor sales with third parties? "Perfectly profitable" to me means subtracting transport and pre-processing costs, which is exactly why processors should be placed at MRFs, and why companies with plastic waste streams would be interested.

My understanding is that JBI patents are still pending, and the usual "back and forth" between patent office and company patent attorneys is ongoing. Do you have different information?

2) Financial Situation - ... A properly capitalized company will be a key diligence item by any buyer.

I agree, but the degree of "proper capitalization" need not be high, given the extent of third party validation, current metrics and NYSDEC permitting. No doubt, prospective buyers will send their engineers to the factory to observe and verify the metrics stated before a purchase. Just one of the reasons this is a long process.

3) Track Record - The company has delivered ZERO processors in all of these deals. A buyer will notice and want explanation.

Prospective buyers will also notice that this is JBI's third iteration, processor number 3, which was developed over a 4 year period to solve technical hurdles that arose as commercial scaling increased. They will also notice significant third party validation of the technology, as described in Bordynuik's detailed ASME paper.

4) Corporate Governance - Any buyer will evaluate the seller's executive management and BOD for obvious reasons.

Correct. Will Mr. Heddle putting 3 million into the company last Fall be noticed? Will his lack of public company experience be an issue? Will JBI's new CFO, who appears quite accomplished, be a positive factor? Is it possible that there are independent board members waiting to be seated? What ever happened to the letter agreement between investors and Bordynuik? Last I heard it had been amended and/or extended. All these questions would be on the table for any third party purchasers.

5) Litigation and Securities Violations - I guarantee any buyer will absolutely care about the litigation and securities violations in JBI's past and present.

Not necessarily, imo. Companies looking to purchase a processor are not as concerned about "settlement agreements" with regulatory agencies as they would be about criminal charges, of which there have been none. Lawsuits by individuals are part of the playing field with start-ups that show promise, and JBI is no exception.