Good afternoon, ladies and gentlemen and welcome to the SulphCo quarterly investor conference call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Please note that this conference is being recorded.
I'll now turn the call over to Mr. Stanley Farmer, Chief Financial Officer. Mr. Farmer, you may begin.
Thank you Monica. Good afternoon and thanks to everyone for joining us on the call today. With me on the call today is Dr. Larry Ryan, SulphCo's Chief Executive Officer; and Dr. Florian Schattenmann, SulphCo's Chief Technology Officer.
Before we get into the call today, I'd like to offer the following disclaimer. Please note that some of the information you will hear today may consist of forward-looking statements regarding revenue, memorandum of understanding, test results, margins, operating expenses and future goals.
Actual results or trends could differ materially from our forecast. For more information, please refer to the risk factors discussed in our Forms 10-K and 10-Q on file with the SEC. SulphCo assumes no obligation to update any forward-looking statements or information as of their respective dates.
Today's call is being recorded and an audio replay will be available on SulphCo's website for approximately three months after the completion of the call. [Ultimately] when everybody know that we foot the presentation, that we're going to be following today up on our website as well as we filed it with the SEC on Form 8-K. If anyone has any difficult at all accessing the presentation on the website please go to the SEC database and access it via that route.
With that, I'll turn it over to Dr. Ryan for opening remarks and we will continue from their. Larry?
Thanks Dan. We'll start off today with the page entitled the current operational highlights. So, during the fourth quarter and the beginning of this year, we've continued our execution of our program with the Laguna Development Corp. which has to do with the [transit] application of which we'll talk about and while we detail thereon. As you know, we signed a letter of (inaudible) Laguna back in September 2009. We developed the technical solution for them. The LIBOR continues the system optimization and a lot these try to (inaudible) very overtime. We discussed last week with the donor and we finalized the commercial terms of an agreement. We structured this agreement. It has to go through Laguna's Board of Directors for approval.
On another program, on a development and executional or condensate application are moving further as well. During the (inaudible) the requirements of the application requirements were changed by the customer. We then quickly responded in a technical and economic goals where maximum of the requirements are right in the process of addressing some technical questions related to the SulphCo process implementation.
With OMV, the initial economic analysis performed by OMV are confirmed SulphCo technology benefits. OMV agreed to move forward, look for the technical and economic evaluation and right now are in the process of them of evaluating a range of products to the determine the optimal benefits from SulphCo's technology.
Also during the fourth quarter and beyond here, we've added couple of opportunities for refining applications including one US based company here in the States as well as two South American oil companies where they are evaluating the SulphCo technology as an alternative to (inaudible). So with that, let me turn it over to Stan for an update on the finances and then IRPR front.
Thanks Larry. As of December 31, 2009 we had approximately $1.7 million of cash on hand. Taken together with the proceeds from the recently completed equity financing transactions, the company anticipates that the current cash reserves of approximately $7.1 million at January 31, 2010 should be a sufficient to fund our requirements into the first quarter of 2011. The company will however continue to validate financing options going forward into the year.
On the media IR front, Dr. Florian Schattenmann will be making a presentation on March 23 on ultrasound assisted oxidative desulfurization at the National Petrochemical and Refiners Association of 2010 Annual Meeting in Phoenix, Arizona. We look forward to having Dr. Schattenmann present at this and believe that it will give us additional opportunities to expose SulphCo's technology to a wider audience.
With that I'd like to turn it over to Florian for the technology update. Florian?
Stan thank you very much. Let me take this opportunity to walk you through the highlights from the technology side in the fourth quarter. One of the main focus areas was on the adoption part which is part of the sulfur removal in, diesel finishing and trans-mix applications.
One of the main focus areas was a lower capital investment adoption system that is actually important for trans-mix applications where the total investment is a big part of the overall economics. So we were able to eliminate a big part of the regeneration cycle and therefore lower the total capital investment costs of these absorption system.
In addition especially with trans-mix applications, the stream can show quite some variability in terms of the bulk of content and the competition of sulfur compounds. In order to be prepared for that and have a robust catalyst systems, we developed a toolbox of catalyst that can tackle the different productivities of different sulfur compounds.
On the condensate side as Larry mentioned, the picture had changed sometime in the fall from the customer side. He responded quickly to develop and optimize that low-cost catalyst system that efficiently removes mercaptan, but in addition to that it also allows to control the total sulfur level and that's important because the existing technologies that are out there, can only take the mercaptan out but do not effect total sulfur level.
In this particular applications and quite a few others that we suspect that have similar programs where the total sulfur should be removed too. In terms of the next steps, we're primarily preparing for field installation of the SulphCo process into trans-mix facilities in all available details and the mini-steps that have to be done in that regard and of course also implement the optimized absorption system that I mentioned before.
In terms of the condensate, similar story, reporting we are in the middle as Larry mentioned, the package to get it that allows us to be ready for the potential field installation and with that, I would like to turn it back to Larry for the commercial update.
Thank Florian, so if we start here on the commercial strategy page, really there is two areas of focus. One is on the short-term, as we talked before, it's really the tactical focus on niche applications for such things that's trans-mix, the condensate, natural gasoline and other sort of one-off applications that come to our door literally every week. Most importantly in the short term, we're focused on establishing a commercial field operation. This is really important for new technology like ours because getting one of these applications out there and operational where future customers can come and see it operate, understand how it operates, in a (inaudible) of the performance is really going to help us accelerate the growth of the company going forward.
In terms of long term project focus, our current state of our technology addresses a pretty big market in diesel fuel and we're really focused on the diesel finishing applications as we have discussed before, because there is a really good cost benefit trade off here in terms of hydrogen usage carbon footprint etc. And as part of that is, it's all about establishing the relationships with technology champions within those strategic customers and really focusing on specific applications and execution.
The next page here if you look at the different types of applications, this is really a repeat from the previous presentation, but really want to reinforce the idea that these applications fall in two main areas. You have your shorter term niche applications that generally can be characterized by being smaller in application size so 1,000 to 5,000 barrels a day, moderate to higher levels of net benefit for the customer. So a couple of dollars or more per barrel and generally speaking, short of the implement you know six to 18 months or so depending on the type of application.
On the other side you have your larger applications, these are typically going to be with larger refiners, the opportunities there is necessarily much larger so you're talking 15,000 to 50,000 barrels a day, net benefits on the dollar per barrel or so range and that will vary a lot depending on the type of refinery and the constraints. But clearly these are long implemented items, so they are the18 to 30 months plus type of implementation.
And one thing to take home for these applications that the technical solution of the economics really are unique to each project. The general chemistries and the general approach will be the same, but there's always a certain amount of fine tuning that's necessarily to get the technical solution of the economics to match these projects.
Now on the next couple of pages I wanted to take a little bit of timing, go through this trans-mix market and the application so that folks understand what the issue is and why our process fits pretty well in the segment. So the trans-mix market, these are smaller volume operators following the 5000 barrels a day and what they do is they collect the transition materials that occurs between the fuel rates that are sent down the pipeline. So somebody who owns the pipeline will send gasoline, followed by kerosene, followed by diesel and at the interface between those different fuels we have a little bit of materials that will be out of stock. That material is collected by these trans-mix folks and then reprocessed and distilled to be sold out for local market elements.
The typical market that these guys sell to include retail fuel sale, non-road application which would be agricultural, the marine, locomotive, and home heating fuel. It's really the intermixing of jet fuel that causes the sulfur contamination of diesel fraction and that makes these resulting diesels have sulfur values ranging up to about 500 parts per million. This has not been an issue in the past as the trans-mix players have been exempted from the ultra-low sulfur diesel regulations. However starting this year the exemptions have start to expire, and its really beginning with the on-road diesel fuel, so this is requiring now that the diesel fuel produced from trans-mix needs to meet the less than 15 parts per million sulfur requirement here in the US, and as you go forward, the rest of these applications start to phase also there by about 2014. All of the applications described above need to be less than 15 parts per million sulfur.
So really the next page here again, one thing about these markets, they are a bit smaller. This market is fragmented and is spread geographically across the US; it really follows along the different pipelines and terminals. We estimate that the size of the market is about 50,000 to 75,000 barrels a day of diesel fuel made from trans-mix, and really our process can provide a cost effective method for reducing the sulfur content down to the legal limits. The issue that the trans-mix sites have is that they typically don't have the scale to support the traditional sulfur removal techniques such as hydrotreating. So really given the good balance between the CapEx and operating expense to be able to get down to the legal limit.
One thing we see is that the opportunities in these markets should increase as regulations continue to phase them over the next few years. So add these (inaudible) today like marine and agricultural, locomotive, heating fuel start to go away will be more and more needed to make sure that these guys can be down to less than 15 parts per million limit. And the good thing from our process is that it can be scaled to fit the required process flows associated with these trans-mix opportunities in a pretty robust manner.
So because the next process, and again this is a repeat page just to give you an idea of the pieces of the process that we need to follow as we go through and implement our process on a commercial scale. So, you need a bunch of whole new items that need to be checked off.
I mean if you go to the next page, this is a page you have seen before, that's now updated for this call to give you an idea of the movement of the different programs that we've had over the past quarter or so. So, if you look at OMV really as we've described before, we are (inaudible) with OMV where we're looking at a variety of different diesel fuel that come from different crew slates so that we can best optimize our process performance with their needs within the refinery. So it's a little bit of an interim process but only is committed to getting those materials as we go forward in their process and ultimately get into their investment cycle to implement our process on a full scale.
On the condensate application which is number two here on this list, as we've described we had a good technical intercom solution for them. An issue came up where they had a different requirement for the process, we responded very quickly, developed a cost effective solution to that piece as well and now we are in the process of going forward with them as they do an evaluation on our process in terms of the technical questions for implementation.
With Laguna, as I have described a bit earlier, we've developed a technical and economic solution for Laguna. We currently negotiated the commercial terms of a contract with them and those commercial terms and the contract now needs to go forward to their Board of Directors for approval. But that's moving along fairly long successfully for us.
Golden Gate petroleum is another trans-mix player that we've signed an MOI with during last fall. We've now developed a good technical solution to their trans-mix, the sulfur level in their trans-mix and as we move forward now we expect them to move very quickly into the commercial evaluation phase as they evaluate the economics associated with that.
And for the last one, on the page here, I was just in South America a couple of weeks ago with Florian. We met with a couple of companies down there and they were pretty successful, there are going to be longer term opportunities, but we expect now that we'll get into the stream specific evaluation phase with them much like what we're doing with OMV now. So really filling that longer term pipeline of these larger refining applications. So all-in-all the movement of the projects forward here. We expect that as we go forward into the second half of this year that as long as Laguna and the other major company that we spoke off going forward, then we'll to start to see these commercial applications in the revenue phase going forward.
So some more details on the next page regarding Laguna. So the application here is Laguna, who wants to sell the diesel to the local markets, the retail market, so they have to get down to the legal limit which is less than 15 parts per million sulfur. What we've done is we got several samples from these guys, we've done a lot of lab work with them, the catalyst has been packaged and has been established to meet the technical and economic goals. There's still some optimization going on because the streams can be a little bit variable. As I said, we finalized the commercial terms of these guys. The structure of the deal includes an upfront payment and a recurring licensing fee and really the next step suffered here is that Laguna management is going to present the contract to Board of Directors for approval and then pending that approval, they're really going to begin the engineering, procurement, and construction phase of that project because the regulation really takes effect in June. So we need to make sure that we respond to them quickly and get our process up and running as soon as possible.
If you look at Golden Gate, very similar in terms of the application, it was like to get their trans-mix diesel down to the required legal limits of 15 parts per million sulfur or less. We have received samples of the diesel. The lab work is continuing there. The initial catalyst and additive package has been established to meet the technical goals and what we're doing with the next step for Golden Gate is optimizing the catalyst and additive package and establishing and verifying the value proposition for them. Once we do that then we can move forward to the commercialization phase and that can move fairly quickly in this marketplace as we've said before.
On the next page in terms of this condensate program, just going through with what we've done to date. We have done a lot of lab work through the middle part of last year. We've actually done some site visits up to their facilities through the beginning of the fall and then some of the requirements changed that are on default. Again we've responded very quickly to meet those technical requirements by the end of the year.
So now the customer is evaluating their investment and process options and if our sulfur process is approved, we'd expect to move fairly quickly into the placement and validation agreement format.
With OMV, we've discussed this several times and really what's been going on with OMV since May of last year, we signed a technology agreement. We've done a lot of technical work with OMV. They then did their initial economic analysis on the technology and the benefits. We then met with them in last fall at the World Refining Summit in Vienna. We discussed the economic results. We traded some information on the absorption piece of the process. They then just agreed that they want to move forward, with further technical and economic evaluations to really determine the best application for OMV to utilize our process. So that work is underway.
They are collecting different diesel fuels to do some different crude slate, so they can get an idea of the best opportunities for them and the conditions that they can really derive the most benefit from our process. And then once we get through that, we'll be into sort of the detailed pieces of the program with the investment analysis and integration into OMV's investment cycles.
Now in terms of additional refining diesel finishing applications, late last summer into the fall we received a request for process information for an economic evaluation of a diesel finishing application for a company here in the US. We provided that information package by the end of the September. The customer has gone into a series of evaluations of several different options for their refinery and we're really awaiting feedback from that process, so we can understand what the next steps are with them.
Couple of South American oil companies re-presenting their technical data package. The customers have responded very favorably, they moved forward with economic analysis. We just met with them last month to review the current economic evaluations, then the few other steps that they need to take in healthy models as well as their (inaudible) models of their refining systems and that will further clarify where the best location in application for our process are and we are awaiting for the feedback from them to determine the right fast forward here.
So in summary, we've finalized the commercial terms with Laguna, that's now at a point where Laguna is going is going to move forward to their Board of Directors for approval. We've developed a technical and economic solution to the condensate application. We are awaiting customer decision on implementation. OMV has agreed to move forward with further technical and economic evaluation to determine the optimum applications. And we are filling this backend of the pipeline growth for the larger refining applications particularly with customers in South America where the sulfur regulations are now starting to appear on the horizon to be implemented over next few years. So it's a good opportunity for us down there in old applications.
So with that, I'd like to thank you for your attendance and I thank you for your time and I'll open up the line for some questions.
Thank you. We'll now begin the question-and-answer session. (Operator Instructions). Our first question comes from Josh Silverstein of FIG Partners. Please go ahead.
Josh Silverstein - FIG Partners
Just a clarification on the trans-mix contract, did these guys whether its Laguna or Golden Gate or any other producer they just have to have a plan to have some sort of implementation process in by June 1st or does the equipment have to be on board by June 1st, I wasn't sure about that.
No for Laguna in particular and others that sell to the retail markets they have to be operational producing less than 15 parts of million diesel by June. So there really is a tight timeline for them in terms of implementation to be up and running and in meeting that requirement.
Josh Silverstein - FIG Partners
And how quickly can you get one of your units go to the purpose or for these kinds of 1000 barrels or 2000 barrels
Let me in fact, it's really not our equipment, its the investment in the absorption piece take a little bit of time, but we're trying to work with them in parallel to get all of these going at once because of the typical processes, you have to have the engineering done, and then you need to go and do the construction agreement that's actually build the pieces of equipment. But there is several steps that given that we've simplified the overall absorption scheme that we're trying to crunch together so that we can get this thing up and operational within three months or so.
Josh Silverstein - FIG Partners
Got you, and also I mean I'm sure there is different blends of mix in the pipelines, but is there one technology application that you can just have a cookie cut design for most of the trans-mix producers or their different designs that you need, once different for the Laguna versus Golden Gate?
Let's separate just lets call, talked about the process really in two steps, one is the reaction to get the sulfur compound modified and the other would be the absorption. The general framework of the absorption stays the same no matter what the only difference there would be how often you would generate the absorption based on the parts for [million] sulfur, so obviously, if you want to remove a couple of 100 parts a million sulfur versus a 50, the frequency or regenerating the absorption that would be a little bit higher.
In terms of the front end, that's where some of the optimization has to come into play because the streams are a little bit different and that's why Florian was talking about the different sort of catalyst tool box that we have to address that variability. So those really in terms of equipment, I would call it pretty much cookie cutter in terms of the chemistry upfront, there is some optimization that needs to be done given the variability of those streams.
(Operators Instructions). As a reminder please limit yourself to one question and one follow-up question. Our next question comes from David Firshein of Cascade Capital Corporation.
David Firshein - Cascade Capital Corporation
Good job Larry and company. My questions are focused on confirming the economic viability of the solution. It sounds like you're definitely on track to install at Laguna and similar, so is it fair to say that people could put through to rest concern they might have that it is an economically viable solution to reducing the trans-mix sulfur stream down to 15 parts per million from whatever it is, whether it's a 50 parts per million or 200 parts per million or even, you've even got near 500 parts per million, but is it safe to say at this point? Reading this at material which seems to indicate that it's economically viable; can you say that at this point?
We can certainly say that for the Laguna and the Golden Gate opportunities. The thing that's important Dave is to remember that the economic situation of the customer is also unique in these circumstances. So, for the applications that we've laid out here, the chemistry is such that the application should support those economics, so we feel very strongly that we have a good economic process again for those applications. As we go into each individual application going forward, it's a fairly quick assessment to be able to determine where we are in terms of cost to support the benefit.
So I guess the right way to think about it is that each application, each customers has its own set of economics. We're very confident about Laguna and Golden Gate where we stand today. We're also confident about the condensate application and obviously if you're confident in those three, it's a reasonable thing that others are also are going to be economically viable as we go forward.
David Firshein - Cascade Capital Corporation
That would, your answer would suggest that it's exactly what you put at no reason to doubt it, but obviously shareholders are always asking and last time, they asked me and I keep telling them that you're basically saying what you said up here in the presentation that if you've got $2 to $3 a barrel and that's net excluding the SulphCo's profit, then you guys are standing by that. Is that fair to say?
Remember those benefits are what the customers will see net benefits.
David Firshein - Cascade Capital Corporation
Right, those benefits up in this presentation of the customer's net benefit and then SulphCo gets its fee as a separate part of that, that's what this presentation is saying.
David Firshein - Cascade Capital Corporation
I hope you guys broadcast that in neon signs in all over Madison Avenue. I hope people heard that.
Next question come from Keith (inaudible) a Private Investor.
In your last conference call, you mentioned that with the initial success of OMV that you had communication with 14 to 16 other companies throughout Europe including maybe a couple majors really didn't touch on any of those findings in terms of what the lap maybe two quarters have been in progress which maybe telling those guys that you had initially touch base with, is there any things to tell us in any terms of new customers that are looking at this technology?
Sure. Yes. What I can tell you is that we put on the page sort of the major ones that we've been tracking overtime and try to give you a flavor of a couple in the trans-mix phase as well as some of the longer-term ones, but I can tell you is that particularly in South America we've over the last couple of months really, gotten just in new customers as well as gotten some older customers if you will or people that have been familiar with SulphCo for a while.
We engaged in the process to understand now exactly what we were targeting with respect to the technology and the use of finishing applications, and they will move forward in varying degrees of speed and depth in this process as we go forward. So in general, what I can tell us is that the longer-term pipeline projects are growing and becoming more numerous again particularly in South America. And on the mix side of things, which should be trans-mix in the condensate to natural gasoline, quite frankly, there are tens and those of type applications out there.
The key on the smallest scale applications is to make sure that the balance between the technology and the commercial implementation is sort of better than, let's phase up the headaches to long-term, but we want to make sure that we run the first couple of this trans-mix opportunities very well and rather than chase 10 and do none well if that makes sense to you. But the interest in the technology clearly is there in a lot of ways particularly in both the trans-mix applications as well as the long-term applications.
And then just one more follow-up if you don't mind. How did in terms up, it seems like you guys are out there enough name wise, but it maybe still that people don't know the if the technology that you're trying to get through and how did the conference go that you guys presented at. Did you see any type of greater inertest World Refining Technology Summit that you maybe didn't expect or was it better than what you expected going in and out of that?
Unidentified Company Representative
I wouldn't say that's directly from the Summit itself. The feedback that we get from the market place is actually pretty simple. There is a lot of folks that are interested in the technology; I'm talking specifically about larger refining types of applications. There are lots of folks are interested in the technology, they understand where the potential benefits are for them. They really fall into a couple of different classes.
There are folks that are technology-based type of companies that embrace new technologies and tend to be the type of people that would be the first adopters. And then you have sort of the second segment which are large refiners who love to be your second customer if you know what I mean. They want to see the process out there in running before they commit to the installation.
What I can tell you is that across the board, what's very important for us is to get one and more of these applications out in operational even in the trans-mix space where the smaller volume application just having a full scale operation out there where these guys can come and visit and watch the process and get a comper counter level will invaluable to us.
Our next question comes from the line of Mark [Simberg] of Dawson James Securities.
I have a question for you with regards to the Laguna contract. You say that the terms are finalized, but it's with the Board of Directors for approval. Have you any idea how long it should be before you hear anything as far as acceptance of the contract?
We don't know exactly. We've impressed upon Laguna that the faster that they move, the faster we're able to get going to meet their timeline, but they have not committed to an exact date for us and as soon as we know it's out there and done, will let you guys know.
And with regards to OMV and Golden Gate, is there any kind of contract negotiation going on now? You mentioned things like we're moving forward with evaluations and benefits and things like that, but it has pen been put to paper and either one of those situations.
Those be with OMV as you know we have the technology agreement which obviously is been put to paper. In terms of commercial contracts know not yet with OMV, it was Golden Gate. We're in the process now discussing with them the economic set of things. So that may move fairly quickly after that but we're not at that point with Golden Gate.
Our next question comes from [Lee Hollander], Private Investor.
The trans-mix area basically, the retail and where they are obligated by June to reduce their sulfur, how many trans-mix companies are there of that type, and what are their alternatives if they don't go with SulphCo. Is there anything else out there that they could do to meet the government regulations. So in another words why aren't they just hammering and trying to get in to the door and trying to get your, the technology implemented because they have a timeline factor at which is going to put them out of business.
Unidentified Company Representative
The short answer for that is that different trans-mix folks have different outlets for their materials. The guys that are in the particular time crunch of the ones that only fell to the retail market. There is a number of trans-mix players out there. Unfortunately, it is not like a trans-mix union, that you can go, find them all. Again it's a fragmented market, but what I would say is we're getting a lot of interest from folks that sell into the retail market, but a lot of those guys also have outlets into the Marina Locomotive, so there is sort of time constraint isn't quite what Laguna is. I don't know how many trans-mix part are just like Laguna, but there is a couple of others that were working with as well very closely that that we haven't mentioned here that are under similar time constraint.
So we expect that once we get Laguna signed in and going that will hear a lot more noise for that their similar problems very quickly. Now in terms of alternatives that these guys have for the most part, they don't really have a good sulfur removal alternative because the traditional techniques would be too expensive on the scale to be able to remove the sulfur economically, and I think the real issue facing a lot of these guys is whether or not they make a lot of business in the future, and the interest in dynamic in the market place is that lot of times, the refiners don't want to take the trans-mix back to the refineries, so it will be an interesting back and forth as we go forward, and that's while we see a good opportunity for us.
And basically, the timeline for or the pressure for those who are not retail, what are the (inaudible) regulations there? When do they have to be committed to a lower PPI?
Unidentified Company Representative
It's like a piece of markets. It's I think one of our presentation is on the website. It's like piece of the market tends to get phased out every year, so next year I think it's either Marina Locomotive or agriculture, one of those phases and then year after it's another piece of the market, and then year after it's another one, and by the end of it all by 2014 all of those applications are now all phased and then will have to be left in 15 parts a million.
Also are there any governmental subsidies for your company for us SulphCo because of the important work that's been done similar to the alternative energy area whereby you could get some funding from the government, is that been looked into to try to help, move along the technology and its development?
Yes. We've actually, we're obviously aggressive about looking for funding from a lot of different locations, and we've looked into the availability of government funds and we're sort of in the middle of the swing space where the government funding especially if you look at the Department of Energy, they tend to fund smaller amounts for companies that are just starting out, and larger amounts for companies that have a product and need the money to expand their capacity for growth, and since we're sort of right on the cost of being commercial, hopefully as we go forward and commercialize our product will start got get it for the latter group and be eligible for that separate funding, but up until now, we've sort of been out of the R&D start up type of phase and not quite at the commercial expansion phase, so that's really where we've been and we expect to get there in the future.
There is time for one more question. Our last question will come from Mark Ritter of Exterior Designs.
Mark Ritter - Exterior Designs
There seems to be kind of disconnect in the sales process between SulphCo the clients actual buying intentions and timing. You seem not to understand where the client stands in the purchasing process and your perception seems to be a little bit different than your client. How do we get by that?
Unidentified Company Representative
I'm not really sure I understand the question.
Mark Ritter - Exterior Designs
Like last quarter, we were supposed to get a year [NA] from several different companies; I'm now looking at kind of the diagram here. We're now looking at some of these programs coming through not till the third and fourth quarter of 2010, my understand some of these were supposed to be going into 2009 in the fourth quarter, so what happens in the process that this could get moving back?
One of the big steps in any new technology is really getting the first one out there, and I think for especially the longer-term, larger applications like OMV and other diesel finishing applications quite frankly is that process from sort of the specific evaluation space to ultimate commercial evaluation execution as we've described, as we've gone into over [OMV] that's a lot longer for the large scale refiners. I think on the other projects, we've actually moved fairly quickly with the trans-mix players and another niche applications and I don't think there is a disconnect there just on the larger applications where the refiners are very conservative. It necessarily takes a bit longer than everyone anticipates.
Mark Ritter - Exterior Designs
And then one last question, do you guys offer a lot of lab and test work for your clients and you're charging no fees for that process, correct?
To date, no.
Mark Ritter - Exterior Designs
What is the likelihood of some of these companies are engaging in your services and they really don't have any skin in the game and use your process, use your technology, use your information and may or may not have any intention of purchasing it?
I guess it's always a possibility. I think the folks that we've given the discussions we've had and the folks that we're dealing with especially at the larger companies where you have, where you're dealing with chief technologist, it's really not how they behave. I can understand that, but really there is no indication to that.
Okay with that I'd like to thank you all for being on the phone today. We appreciate the opportunity to provide you some updates here, and we look forward to speaking again with you in the future.
Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may all disconnect.
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