Re: 650M SSTP In USSE Treasury
with 650 million sstp shares in the treasury is not USSE's benefit two fold?
1. SSTP gets a contract, share prices go up USSE gains in that perspective.
2. SSTP i doubt that will be getting the fuel from USSE for free, any contract SSTP gets a substantial portion of that would go to buying the fuel from USSE?
Uggh! I was hoping someone with more knowledge of this than me would answer. I will take a stab at it, in hopes of starting an intelligent discussion of this topic.
You are totally correct about #1. SSTP closed Friday at .09, so that added a value of about $58M to USSE (645M X .09). I am not a CPA, but it seems like that could be included in USSE Balance Sheet as an Asset (sure not a Liability). The shares are Restricted stock, so probably a Long Term Asset.
As far as #2, we do not really have enough info to know exactly. When SSTP/USSE soon have SEC Approved Audited Financials, we will know a lot more.
My vision of a typical USSE/SSTP Trasaction might be:
USSE sells Fuel to SSTP for $2.60 a Gallon, SSTP sells Fuel to Customer $2.80 a Gallon.
So then each Companies Profit Equations might look like:
USSE
((Sales Price of Fuel to SSTP) - (Total Costs) + Sales of Carbon Ash Byproduct + Sales of BioGas Byproduct.
SSTP
(Sales Price of Fuel to Customer - Buy Price from USSE) + Any Green Credits and Green Certificates qualified for.
There is also the matter of any Fuels Subsidy (State & Federal) the Fuels might qualify for. The WSR Report mentions a Subsidy of $1.20 per Gallon. I am not sure who is entitled to this money.
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