Plastic2Oil Inc (PTOI)

[PaperProphet]

Typically you should look for what's called a "proof of concept."

I've worked with both entrepreneurs and startup companies that were trying to get a product to market. It sometimes takes a little experience to figure out what that proof of concept should be but it's generally the weakest link.

If you examine JBII, you can look at the aspects which are true and fairly obvious. For example there is little doubt that diesel can be sold at spot prices--there is a ready and willing market for that. There's also little doubt that JBII can get garbage for free--I'll give them mine if they want it. From a little math, it's fairly obvious to me that pyrolysis oil can be made cheaply--many others have done it in the past and heating up material really isn't expensive.

Where the chasm occurs is creating pyrolysis oil from worthless feestock and selling it for the price of crude oil or diesel. Evidence that it can be done would be the proof of concept for JBII. He doesn't provide any such evidence.

From the entrepreneurs and startups with whom I've worked, they always bend over backwards to provide the proof of concept--that proves it to those who would finance, to buyers, to others who can help them, and, most importantly, proves it to themselves. There's only one reason why a startup company wouldn't make any attempt to provide any proof of concept--quite simply they know that there's no chance that their claims are true. They're faking.

I wouldn't even hold it against Mr. Bordynuik if he was honest and said he was working on pyrolysis oil and hoped that it could someday be sold for the price of crude oil. He could then explain to shareholders why he thinks his fantasies might hold water and then those who subscribe could invest. However he was clear in saying that he could make it for less than $10/bbl and sell it for the price of crude or better.

You also have to look at past press releases to see how sleazy he has been. For example the conference call seemed to make it obvious that production and sales haven't started yet...so what exactly did he mean when he said, "commences commercial operations?" It seemed to be nothing more than a mental demarkation--stragetically placed to complement his July statement that production would begin immediately after the permit and mislead investors. And as you saw from the spike, it worked.

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