Changing World Technologies (CWL), a New York-based biofuel company that converts livestock feed waste into biodiesel and fertilizer, is set to go public this week.
All quotations are from the company’s most recent S-1 filing, with links provided
Business Overview (from prospectus)
We sell renewable diesel fuel oil and organic fertilizers which we currently produce from animal and food processing waste using our proprietary Thermal Conversion Process, or TCP. TCP can convert a broad range of organic wastes, or feedstock, including animal and food processing waste, trap and low-value greases, mixed plastics, rubber and foam, into our products. TCP emulates the earth’s natural geological and geothermal processes that transform organic material into fuels through the application of water, heat and pressure in various stages. Our renewable diesel has a significantly higher net energy balance, which is defined as the ratio of the amount of energy contained in a fuel to the energy required to produce that fuel, than conventional diesel, ethanol or other biofuels. Our renewable diesel does not compete for food crops, uses fewer natural resources than conventional diesel, ethanol or other biofuels, and does not contain alcohol. TCP uses conventional processing equipment, which we believe requires a comparatively small operating footprint and is relatively easy to permit compared to other waste processing technologies.
Offering: 2.8 million shares at $11.00 - $15.00 per share. Net proceeds of approximately $32.75 million will be used repay the promissory notes, including accrued interest, issued to Sterling Acquisitions, the remaining net proceeds of this offering will be used for general corporate and working capital purposes, including the development of construction of new facilities.
Lead Underwriters: WR Hambrecht, ThinkEquity
Financial Highlights:
Revenues. Our revenues are principally derived from sales of our renewable diesel. We sell our renewable diesel on a Btu pricing basis that is competitive with other burner fuels such as diesel oil or natural gas. The average price per gallon of renewable diesel we received in 2005, 2006 and 2007 and the nine months ended September 30, 2008 was $0.48, $0.14, $0.64 and $1.19, respectively.
...we estimate that our cash production cost, including the cost of feedstock, of renewable diesel will ultimately be in the range of $0.85 to $1.60 per gallon for our larger production facilities. We believe that our cost of feedstock conversion, which we define as our cash production cost less the cost of feedstock, will be between $0.30 and $0.80 per gallon of renewable diesel for our larger production facilities. Our cash production cost does not give effect to the $1.00 per gallon renewable diesel mixture tax credit that we receive from the U.S. government for each gallon of renewable diesel produced at our facilities that we sell in the United States.
Competitors:
We believe we compete primarily in two areas. The first involves securing access to an ongoing supply of feedstock for our TCP facilities. In this regard, we compete with large integrated animal and food processors and independent renderers, such as Baker Commodities, Darling International and Griffin Industries, each of which process inedible wastes from meat and poultry processors into animal feed, consumer food and fats for industrial applications. Some of these companies also process fats and greases from restaurants for recycling.
We believe that the value of our end products, when contrasted against those of traditional renderers, provide us with an inherent advantage when competing for the feedstock used in our process. Renderers’ end products are relatively low-margin commodity products with limited applications. In contrast, we believe that the renewable diesel and fertilizers created via TCP can be sold to a broader array of customers at a higher margin.
Additional Resources:
- Online road show
- Press release: 'Waste-To-Oil Technology Selected as Modern Marvel'
- Cleantech Group: 'Changing World Tech heading for IPO'
- Fast Company: 'Innovation Scorecard'
