Well, I had another look, then I looked through th
Post# of 43064
Well, I had another look, then I looked through the last Financial Report. The only statement in the con call regarding machines 4 and 5 is this one by RH:
"
Additionally, we continue to be in talks with potential buyers for machines four and five. We have received many questions regarding the business model of such a deal, and while we work out the specifics on a case-by-case basis, a potential deal would involve an up-front licensing fee with continual royalties on fuel production, as well as machine maintenance, software maintenance, and our proprietary catalyst.
"
And we have this in the last Q:
"
The kilns for the fourth and fifth processors have been completed, tested and prepared for shipment. In addition, the towers for these two processors continue to near completion, with certain internal components remaining to be installed.
"
The above statement indicates that they have paid maybe 60% for the kilns and less for the towers. That makes them 20-30% complete tops. These are pieces of major equipment. Not 75%.
Let me make an observation. Looking at the last financials... we have this statement:
Property, Plant & Equipment (see note 5) $8.6 Million.
Let's look at Note 5:
Sept 13, 2013
Construction in Process $1.2 Million
(I can't insert the whole table, it won't work).
Now, if you are saying that they are 75% complete processors 4 and 5, that should represent 75% of the Cost. Construction is very simple that way. Outside of a 5% or maybe 10% Cost Variance, Incurred Cost at a Point in time = Physical % Complete X the budget, plus any changes.
That gives us a Total Cost of what every they are working on of ... $1.6 Million.
Units 4 and 5 should cost roughly the same as Unit 3, if they are copies of the flagship. Then something is wrong with the math here. If that were true, that number for Construction in Process should be 75% of 8 Million = 6 Million or so. That fits with the numbers in the SAIC Summary as well.
Since JBI can ask whatever price it wants, realistic or not, and that does not necessarily represent the Cost (presumably it would be Cost plus some Gross Margin), we can't say that the Cost is 8 or 9 Million just because they are asking for it. But, the markup is going to be maybe 30% or so? So the Cost would be 5 or 6 Million?
So, there is no way they can be 75% complete. Maybe 20 to 30%.
The only other possibility is that the true Cost is more like 2 Million or so. Then they will not get 8 or 9 Million for something that only cost 2 million.
Anyway, something is wrong with the numbers here... At the time of the last financials they were only 20% or so complete. The Cost figures for construction in Progress indicate a Processor costing something in the 2 or 3 Million dollar range, consistent with the SAIC Summary. There is no way they could get much more than a 30% markup on that. Not 8 or 9 Million. That would be absurd.
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