Plastic2Oil Inc (PTOI)

[buenokite]

Actually the situation is not that simple at all. JBI produces 3 different types of fuels from their process if you are prone to believing their SEC filings. And each of those fuels has the same cost per barrel but a different price point. So selling fuel consistently at $100 per barrel is problematic when you consider that:

1) according to the latest 10q the company actually loses over $30 per barrel for every barrel sold of naptha. In other words they sell it for $42 per barrel and it costs them $72.66 per barrel to produce. They produced 23,723 gallons of naptha out of a total of 76,060 gallons of total fuel produced. Does processor #3 fix this crippling ratio?

2) according to the same 10q the company makes $5.88 per barrel on fuel oil #6 in gross margin per barrel. They sell this fuel for $78.54 per barrel and it costs $72.66 per barrel to produce. Fuel oil #6 was 60% of their production in Q1

3) according to the same 10q, diesel which comprised 9% of Q1 production again costs them $72.66 per barrel and they sold it for $104.16 per barrel.

So in summary:

JB Claim: price $100 per barrel with cost: less than $10 per barrel
Naptha Actuals: 31% of production; price: $42 per barrel with cost: $72.66
Diesel Actuals: 9% of production; price: $104.16 per barrel with cost: $72.66
Fuel Oil #6 Actuals: 60% of production; price: $78.54 per barrel with cost: $72.66

End result: Gross profit of $1009 against operating expenses of $2,755,074. That is the fundamental problem with this company.