Plastic2Oil Inc (PTOI)

[Toxic Avenger]

Please allow me to recap the financials for the first 9 months of 2011, a period during with processor 1 was first running "full time" and being tweaked and processor 2 had only started development.

Losses directly attributable to p2o were $5.3 million
Losses attributable to corporate (presumably almost all related to p2o as the company's main LOB) were $4.8 million.
Javaco provided almost 90% of the company's revenues but only 4% of its net loss.
Of the $5.3 million in p2o losses and $10 million in combined corporate/p2o losses, $900k is attributed to R&D.

So you've got 2 issues to consider. Given that the 2nd processor is only now completed, and RKT hasn't even been permitted yet, how much can revenues rise (and have risen) since 9/30/11? Secondly, with the cost of building the second processor, the legal costs of the various lawsuits the company is facing, the continued "tweaking" of processor 1 and the RKT startup costs, can expenses have decreased much since 9/30/11?

On 9/30, the company had about $2.4 million in cash on hand. In the previous 9 months, they used $5 million in cash for the p20, Javaco and corporate LOBs and another $1.3 million in PP&E additions. On top of that $6.3 million, another $4.5 million was stock issued for services.

In early January, $2.8 million was raised in another discounted PIPE. How long the $5.2 million in cash (9/30 balance plus Jan raise) will last is anyone's guess, but I would suggest it may not be much longer, based on the above.

Meanwhile, the "litres produced" figure apparently given out on the conf call suggest to me about $50k/month in revenues, just a little above Q3's pace.

I believe the company is facing a "perfect storm" of slowly growing revenues, large and not-significantly-declining costs, and a voracious, and increasingly expensive, need for cash. I suspect that storm will not only not dissipate in 2012, but will intensify as the year progresses. And there are a series of potential intensifiers that can turn it from a cat 2 hurricane, to a tornado.