Re:<Put it in this format....not BTU's, or %....please>
I would first like first like to point out that this is something the company should be communicating to the investment community in clear, unambiguous terms.
That often used reference to the 'connect the dots pictures' where kids connect the dots to see what the picture is supposed to be really comes into play here. The company spits out very sparse and ambiguous information knowing that investors are extremely optimistic and will connect the dots, read between the lines and fill in the blanks with the most optimistic scenario. The company throws out three dots and investors connect those dots to see a pot of gold.
The company makes apples to oranges comparisons like "We can make five gallons of superior liquid biofuel from a bushel of soybeans where the competition can only produce 1.5 gallons of biodiesel." Statements like that aren't helpful but investors immediately think, "Wow, they can produce five gallons of biodiesel from a bushel of soybeans!!"
For the math, the best way to go through the math is to try to work through their process as they appear to have stated it....
They start with a bushel of soybeans ($7.71). The energy content of a bushel of soybeans is about 534,000 BTU.
The company uses 10% of that energy in the process (assuming they eventually switch away from using electric heaters and more efficiencly use the heat produced from the soybeans.)
That leaves 481,000 BTU.
We know they claim ash of about 250,000 BTU as well as biofuel but lets just assume the most optimistic case where 100% of the 481,000 BTU is efficienty converted to a high quality fuel that can be burned at 54% efficiency to produce work...
481,000 BTU * 0.54 / 3413 BTU/kWh = 76 kWh
Selling that to the grid at $0.045 + $0.02 or $0.065/kWh gives:
$4.94 worth of power. They lose $2.77 for every bushel of soybeans they process just paying for the soybeans.
Given that very, very optimistic scenario and ignoring all other expenses, the Rivera Process reduces $7.71 worth of soybeans to $4.94 worth of electrical power. They can't even pay for the soybeans in that optimistic scenario.
From there you can go and start doing the pro forma math on the income statement. Now, assuming they have no other expenses and only lose $2.77 for every bushel of soybeans they process, how many bushels of soybeans would they have to process to be profitable?
AI
