Plastic2Oil Inc (PTOI)

[fourkids_9pets]

NIAGARA FALLS, NY, May 5, 2015 (GLOBENEWSWIRE)

To our valued Plastic2Oil, Inc. (PTOI) stockholders:

I am pleased to provide you with this update regarding the business of Plastic2Oil, Inc. (P2O). As you know, on January 2, 2015, we announced that we had contracted to sell up to six
processors to EcoNavigation LLC upon the completion of a pilot study.
__________________________________________________________________

This contract is for six processors for $15 million, plus an ongoing five percent royalty on fuel sales, fees for maintenance and catalysts supplied. The sale price of $2.5 million per processor results in a gross profit. A reasonable estimate of gross profit is more than $1 million per processor based on past public documentation. A reasonable estimate of subsequent royalties, etc. for six operational processors is between $1 million and $2 million annually.
__________________________________________________________________

Shortly afterward, EcoNavigation presented P2O with several promising opportunities and currently P2O and EcoNavigation are involved in multiple, complex negotiations for the potential sale and implementation of P2O processors with several end-users and organizations.

P2O and EcoNavigation began discussions with a firm in the southern U.S. regarding a development project that has the potential for the deployment of more than 30 processors over the proposed project development period. This project has required significant attention from the P2O, EcoNavigation, and O’Brien & Gere project opportunity team. Assuming P2O consummates the deal, the anticipated testing requirements will be a three to five day run of the firm’s specific feedstock. If testing is successful, we are expecting an initial purchase order for 12 processors for phase one of the project.

In light of this new opportunity presented by EcoNavigation and the expanded scope of our relationship, we have agreed to extend our agreement with EcoNavigation for an additional ninety days under our current terms.
__________________________________________________________________

This project is initially for twelve processors. Since this is a larger customer than the previously announced six processor contract, there may be a price concession involved. The initial 12 processor purchase estimate might be $25 million, plus a royalty on fuel sales, fees for maintenance and catalysts supplied as above. The ballpark sale price of $2 million per processor yields a smaller gross profit per processor but still likely more than $1 million per processor based on past public documentation, so more than $12 million.

A reasonable estimate of subsequent royalties, etc. for the initial operational processors is between $2 million and $4 million annually. Eventually more than 30 processor sales would result in revenue of more than $60 million in sales, gross profit of more $30 million and annual royalties of at least $5 million to $10 million.
__________________________________________________________________

In addition to the above, a third opportunity for a three processor site, located in the northern states, is being worked on by the above mentioned project opportunity team, and is very close to completion. EcoNavigation continues final negotiations and work on structuring and financing.
__________________________________________________________________

Madison County is a strong possibility. Terms would likely be similar to the original EcoNavigation contract. There is public information available that PTOI and Madison County officials met recently.
__________________________________________________________________
Although there can be no assurance that our current negotiations will result in definitive agreements or successful sales, I am personally optimistic and so I wanted to share this information with you. I encourage all investors to review P2O’s periodic filings made with the Securities and Exchange Commission in order to keep apprised of any further developments.

Lastly, I am also pleased to inform you that P2O intends to engage O’Brien & Gere (www.OBG.com), one of the leading EPC consulting firms, for these upcoming opportunities. O’Brien & Gere’s Advanced Manufacturing business should provide us the
capability to scale-up our technology and integrate it into a fully operational manufacturing facility. In addition, its full-service engineering capabilities, project management and control system integration round out our capabilities to deliver efficient and cost-effective solutions to our customers.
__________________________________________________________________

O'Brien & Gere must have approved this verbiage and disclosure. Very positive.
__________________________________________________________________

I want to offer my personal thanks for the regular and extremely valuable contributions made by our employees, management, Board of Directors and investors. I also look forward to seeing you and sharing with you further developments at our 2015 annual stockholders meeting, which is being planned for late this summer. Formal notice and other details of the meeting will be
presented in our proxy statement that will be made available to our stockholders and filed with the Securities and Exchange Commission.
__________________________________________________________________

The 90 day extension should end the end of July. Several purchase orders could be closed by then resulting in payments in the range of $20 million under the terms of the agreement outlined in the recently file document with the SEC. A strong ongoing cash flow will follow. Anticipate a full Board of Directors to be voted in around Labor Day.
_________________________________________________________________
Sincerely,

Richard Heddle, President and CEO
__________________________________________________________________

Thank you Rick!

and also thanks to former CEO and former Chief of Technology, John Bordynuik.



=========

worth the *read* again :)

thx 4x .. here's to what P2O files next ..

4kids
all jmo