JBI raises $4 million toward development of Jacksonville Plastic2Oil plant
JBI Inc. announced Monday in a Securities and Exchange Commission filing that it raised $4 million between Dec. 27 and Dec. 31 in a private placement of stock, indicating it is a step closer to developing a Plastic2Oil plant in North Jacksonville.
"This financing, combined with our efforts to grow revenues and reduce costs, are important as we continue the momentum to execute our business plan," said JBI CEO Kevin Rauber in the Form 8-K filing, which is a form used by public companies to report major events.
Public companies also file annual Form 10-K and quarterly Form 10-Q reports.
"With this financing, we will continue to move forward towards our stated goals and continue with development of our planned Plastic2Oil site on the RockTenn Company property in Jacksonville, Florida," he said in the statement in the filing. JBI is based in Niagara Falls, N.Y.
JBI CFO Matthew Ingham also commented in the filing.
"We are excited about this financing, as we believe that it provides us with the necessary capital and flexibility to expand our production capabilities as we continue to work towards maximizing shareholder value," he said in the SEC filing.
The Daily Record reported in August plans were under review for a Plastic2Oil production plant to convert waste plastic into fuel oil. It is shown as a 5-acre project on part of the site of the RockTenn Corp. Seminole containerboard mill, formerly known as Smurfit-Stone Container Corp. RockTenn is at 9469 Eastport Road, off Heckscher Drive.
Preliminary site plans show a 9,360-square-foot module production pad with adjacent space for truck unloading; a 1,170-square-foot storage tank concrete area; a 900-square-foot fuel truck loading area; a cooling tower; and a 720-square-foot quality control testing laboratory trailer.
The plans show conveyors, "premelts," reactors and towers and condensers.
Technical Associates is listed as the civil, structural and mechanical engineer, while Janet Whitmill is named as the landscape architect.
JBI formerly listed its headquarters as Thorold, Ontario, in news releases. In a Nov. 8 release, it used the dateline of Niagara Falls, N.Y., and referred to its new executive team, headed by Rauber as president and CEO. The Form 8-K also used Niagara Falls as the headquarters.
It said JBI raised $4,012,554 in a private placement of 1,146,444 shares of the company's Series B convertible preferred stock, referred to as the "Series B Shares."
The Series B Shares were sold at a price of $3.50 per share and each is convertible into seven shares of the company's common stock and has a mandatory conversion date of June 30, 2014, according to the filing.
The Series B Shares entitle the holders to a preference upon liquidation equal to the purchase price of the Series B Shares. The terms of the company's private placement allow the company to hold additional closings for the sale of additional Series B Shares up to the maximum offering amount of 2 million shares and gross proceeds of up to $7 million before the offering termination Jan. 31, the filing said.
JBI describes itself as a leading clean energy company that recycles waste plastic into liquid fuels. JBI says its proprietary Plastic2Oil technology can deliver economic and environmental benefits by replacing refined fuels and diverting waste plastic from landfills. Its website is plastic2oil.com.
JBI's Niagara Falls facility currently has two operational Plastic2Oil processors and a third is being assembled and is expected to come online during the first quarter this year.
In late October, the Daily Record reported there had been little reported movement in the proposed Plastic2Oil plant by JBI to convert waste plastic into fuel oil at RockTenn Corp.'s Seminole containerboard mill in North Jacksonville.
The City began reviewing construction plans in April and has approved some of the several required elements of the project.
RockTenn Corporate Communications Director Robin Keegan said in an email in October that RockTenn had no comment and referred questions to JBI.
Chris Irons of JBI investor relations said then the company had no comment.
In a news release posted Oct. 12 on the plastic2oil.com website, JBI, then listing its headquarters as Thorold, Ontario, commented "on improper release of SAIC Evaluation Report" regarding its technology.
The Daily Record obtained what appears to be the executive summary of the SAIC report, which contained processing data from reviewing JBI's facility in Niagara Falls. It addressed the "proposed commercial facility" in Jacksonville and estimated capital costs and earnings.
JBI would not comment about the information.
JBI "has become aware of the improper release of a confidential executive summary prepared by SAIC Energy, Environment & Infrastructure LLC relating to SAIC's May 2012 evaluation report on JBI's Plastic2Oil technology," it said. SAIC is a private consultant for scientific, engineering, systems integration and technical services.
JBI announced May 15 that SAIC was commissioned for an independent review of its technology, process and business model. "However, neither the SAIC report nor the executive summary should be relied on as management's analysis or opinion regarding JBI's current strategic plan or its business or financial prospects," it said.
"Furthermore, the conclusions drawn by SAIC were based upon a number of assumptions made at the time of the report that may be outdated or incorrect or that may prove to be incorrect in the future. Management's current assumptions may differ and additional events, risks and uncertainties may cause JBI's actual results and performance to differ from SAIC conclusions or projections," it said.
"JBI encourages investors and potential investors to look to the statements and information contained in JBI's press releases and in its periodic reports filed with the Securities and Exchange Commission when making any investment decisions about JBI's securities," it said.
The plastic2oil.com website describes JBI as "an innovative North American fuel company that transforms unsorted, unwashed waste plastic into ultra-clean, ultra-low sulphur fuel without the need for refinement."
According to the website, JBI and Smurfit-Stone Container Corp., which RockTenn acquired in 2011, entered into an agreement in April 2011 and the company made its first fuel sale.
In July 2011, JBI reported it entered into a 10-year referral and revenue-sharing agreement with RockTenn to convert product waste into fuel using the P2O technology.
The JBI website reports that JBI's patent-pending process "is a commercially viable, proprietary process designed to provide immediate economic benefit for industry, communities and government organizations with waste plastic recycling challenges."
The website reports that Rauber previously was vice president and general manager of RockTenn, which is based in Norcross, Ga., and operates more than 240 facilities in the United States, Canada, Mexico, Argentina, China and Chile.
In May, JBI announced a $10 million investment in equity capital, a successful review of its technology by SAIC, former CEO John Bordynuik's transition to become chief of technology and Rauber's decision to join as CEO and president.
JBI said the equity capital was from an investment group of private equity investors, venture capitalists, investment bankers and corporate executives.
"The timeliness of this financing is ideal," Ingham said in the May announcement.
"We now have the capital resources to accelerate the commercial roll-out of our P2O processers at our Niagara Falls plant and the initial RockTenn sites, endeavoring to achieve our near-term goal of becoming cash-flow positive," he said in a statement then.