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Re: Steve1978 post# 14745

Friday, 12/23/2022 2:29:07 PM

Friday, December 23, 2022 2:29:07 PM

Post# of 27620
Do people recall the July 2021 press release announcing the retention of Roselle to fund plants?

Do people recall the December 2021 story about HSA Investments funding our plants?

Any serious investor will want to know if the feedstock is secure. This does not mean that the market size is large enough but rather means that the supply is under contract. Without feedstock, it does not matter about the quality or scale of the plant or the terms of an offtake agreement.

The next aspect that an investor will look at is the ability to sell the output. Just saying that the market is there does not cut it with family offices, banks, PE or VC firms nor will it cut it with green funds. There needs to be evidence of a sales agreement. Ideally a floor price and minimum volumes would suffice.

As for the technology, it needs to be proven. Pyrolysis is proven but to take the output to quality diesel or hydrogen is very new. A credible investor should demand an insurance wrap and a third party review of the technology.

Assuming all of these attributes pass muster there is a question of how much cash or other valuable consideration like land to the table. If none or nominal, the fund raising process takes much longer. Think of going into a bank for a loan to buy your first house with no money down. It is a hard stretch. It will even take longer is the dollar amounts are very low or too high. With higher prime rates now, it becomes a challenge for an issuer without a financial history. Do not be surprised if you are looking at a 10 percent coupon rate and owning at least a third of the plant at a minimum.
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