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Attis Industries Aiming to Disrupt Fossil Fuel Markets with Groundbreaking Advancements in Bioprocessing


With a prime administration workforce and proprietary expertise harnessing the innate potential of cellulose and lignin, Attis is in search of to convey bio-based alternate options to fossil fuels to market, focusing on multi-billion-dollar alternatives in renewable power, plastics, and carbon fiber


We all know that fossil fuels will sooner or later go the best way of the dodo.  The issues are nicely understood: Finite provide. Rising drilling complexity. Climate change. While there are a long time of fossil gas sources in the bottom, the industrialized world has managed to deplete these fossil fuels – which had been fashioned over a whole bunch of tens of millions of years – in lower than 200 years since we started utilizing them.

Big Oil sees this, and the business’s leaders are readying methods for navigating progress past fossil fuels.  Earlier this yr, BP plc (NYSE: BP) introduced that it could allocate half a billion {dollars} of its $15 billion 2018 capital funding program to clear power, in an effort to cut back carbon emissions.  The firm additionally bought a 43% stake in London-based Lightsource Renewable Energy (non-public), Europe’s largest photo voltaic developer, in December 2017.  Likewise, Royal Dutch Shell plc (NYSE: RDS), the world’s second largest publicly traded oil firm with a market capitalization of $217 billion, has a rising portfolio of renewable property, which embody windfarms and biofuels to produce ethanol.  Shell CEO Ben van Beurden stated the corporate will search for extra acquisitions, telling Reuters “The idea that you can just be a very clever observer and step in when the moment is right, forget about it.”

And then there may be the rising client consciousness of the environmental affect of fossil fuels, inflicting a seismic shift in client shopping for preferences.  It’s this shift that’s accelerating investments in renewable innovation – there’s a cause why Warren Buffet made $1.3 billion on investments in alternative-energy automobile maker BYD Company Ltd. (HKSE: 1211 HK).  There’s a cause Tesla (NASDAQ: TSLA) shipped 83,500 autos through the third quarter.  The cause is demand, and an enormous market now seems prepared for disruption from technological change.

But whereas many prime information headlines gravitate in direction of Elon Musk’s new Model 3 lithium-battery powered automobile, or the query of when yields at photo voltaic power corporations like First Solar (NASDAQ: FSRL) will develop into environment friendly sufficient to seize a significant share of baseload energy, the fossil gas business is an unlimited, multi-trillion greenback business with quite a few business purposes – and there are lots of alternatives for modern, price environment friendly expertise to disrupt it.

Enter Attis Industries (Nasdaq CM: ATIS).  One of the features we like in the small cap area is the chance to uncover comparatively unknown corporations with the potential to trigger disruption in gargantuan industries.  While there are lots of corporations in search of to apply renewable applied sciences to traditionally fossil fuels-based markets, few have a mix of proprietary renewable expertise that improves business economics and a administration workforce with the know-how and expertise required to execute a progress plan.  Attis is in search of to just do this, with modern purposes to exchange conventional fossil gas makes use of in numerous areas together with plastics, carbon fiber manufacturing, and renewable fuels together with ethanol and biodiesel, amongst others.

Attis commercializing disruptive applied sciences in the brand new bio-economy

Attis Industries Inc. (Nasdaq CM: ATIS) is predicated in Milton, GA, a suburb of Atlanta.  Attis is a holding firm centered on advancing companies that creating expertise with the potential to result in transformative change.  The firm is run by CEO Jeff Cosman, a former skilled baseball participant drafted by the New York Mets who has gone on to be a number one government in the waste administration, healthcare, and telecommunications industries.  Cosman has constructed profitable corporations earlier than.  Earlier this yr, in truth, he offered the waste administration companies companies at Attis – a enterprise he grew by way of savvy administration and strategic acquisitions – to non-public fairness firm Warren Equity at an enterprise worth of over $100 million.  Now Cosman is concentrated on creating worth once more – this time by way of bringing to market modern applied sciences with sensible purposes in a number of industries.

Attis has two core enterprise models:  Attis Innovations and Attis Healthcare.  While each have vital progress potential – Cosman expects the Healthcare enterprise to attain a $10 million income run fee by the top of 2019 – it’s the Innovations unit that has piqued our curiosity and captured our creativeness.  At Attis Innovations, Cosman has acquired a extremely differentiated strategy to biomass processing that’s centered round cost-efficiently harnessing the potential of cellulose and lignin for the creation of excessive worth bio-based merchandise.  Cosman sees the method as having the potential for disrupting many purposes of fossil fuels, from substitution in the creation of plastics to price environment friendly manufacturing of ethanol and different renewable fuels, and whilst a renewable enter for carbon fiber manufacturing.   We are notably excited to see how these purposes come to market, particularly in mild of administration commentary that technologists at Attis have invented and commercialized applied sciences which might be presently producing greater than $500 million per yr in worth by way of the restoration of supplies from in any other case low worth industrial byproduct streams.

 

Attis Innovations’ differentiated processing expertise relevant to practically any type of biomass

The Attis Innovations unit leverages proprietary, patented and patent-pending applied sciences that may convert practically any type of biomass into a large number of low-cost, excessive worth bio-based merchandise that may be commercialized as alternate options to generally used fossil fuel-based merchandise.  The firm has established a analysis and improvement facility in Wausau, WI, staffed with a workforce boasting over 30 years of biomass processing and laboratory expertise.  What’s extra, Attis is presently engaged on a $3 million grant from the USDA to commercialize the Department of Energy’s patented lignin-based plastic: acrylonitrile butadiene lignin (ABL), and its proprietary Organosolv biomass separation expertise has been working at pilot scale for over 5 years with a number of Fortune 500 corporations.

While many corporations have reported funding in biomass processing for business use, Attis stands aside as a result of the corporate’s proprietary expertise is ready to obtain increased efficiencies – and therefore income per ton.  Indeed, Attis believes it could generate $225 of income per ton of biomass versus roughly $125 -$150 per ton utilizing conventional processing strategies.  That represents a distinction of $75 to $100 per ton – representing fairly a chance contemplating there is a chance for greater than a billion tons of biomass in the United States per yr.

Attis separates itself from the pack by harnessing the innate worth of lignin

Attis is ready to obtain a excessive financial yield on biomass as a result of its proprietary natural solvents enable for the environment friendly separation and valorization of all constituents of the biomass.  The firm then repurposes these parts into excessive worth supplies for monetization.  At the guts of the corporate’s effectivity good points is its capability to maximize the business potential of lignin, which is a fancy natural polymer discovered in the cell partitions of most crops, making them inflexible and woody.  Lignin is the second most prevalent plentiful pure polymer in the world, surpassed solely by cellulose, and is normally a waste output in conventional biomass processing crops.  Indeed, pulp mills produce about 50 million metric tons of lignin yearly, however solely 2% of lignin is used for business functions.

For Attis, nevertheless, soften flowable lignin will likely be processed to be used in numerous plastics purposes, together with bioplastics, carbon fiber, adhesives, and renewable fuels. Management estimates vital potential to affect these markets, with Attis’ expertise providing the potential to exchange up to 25% of fossil gas content material used in the manufacture of some polyethylene and polypropylene plastics purposes with out compromising tensile strength.  The alternative in the carbon fiber market could also be even bigger.  Carbon fiber is historically made out of fossil gas -derived polyacrylonitrile (PAN), which prices roughly $2 per pound, making it price prohibitive for a lot of mass market purposes.  Iowa State has produced carbon fiber samples utilizing 100% Attis lignin.  The samples had been produced with lower than 25% yield loss through the de-oxygenation / carbonization step, and considerably lowered prices to $0.50 per pound, in accordance to the corporate, which may enable entry into the car market.   But the biggest alternative for Attis could be the usage of its bioprocessing expertise for renewable fuels.  Attis is utilizing typical processing strategies to convert biomass and its excessive purity lignin into drop in fuels comparable to gasoline and diesel, with greater than a 60% discount in greenhouse gasoline emissions.

Attis Innovations initiating commercialization with sturdy progress plans

Importantly, Attis is not only an organization researching alternate options to fossil fuels.  CEO Jeff Cosman is actively bringing the corporate’s proprietary course of to market.  Cosman has outlined a number of business milestones in months to come.  On July 16, 2018,  Attis introduced that it had signed a letter of intent to buy a 32-acre website in Barnesville, GA, which would be the firm’s first commercial-scale biorefinery.  The website is situated strategically situated in Georgia, offering ample feedstock provide and positioned to profit from current logistics and infrastructure.

Attis has potential to scale, with a number of deliberate biorefinery websites after proving mannequin in Barnesville

While Attis may use the power to produce 30,000 tons per yr of pulp on the market into typical pulp and paper markets and as a feedstock for renewable gas manufacturing. In addition, Attis will manufacture 20,000 tons per yr of a singular, soften flowable type of lignin, which is predicted to generate about 50% extra income per ton of biomass produced than typical strategies.  The result’s that the Barnesville website is predicted to generate $35 million in annualized income by its second full yr of operations.  Assuming profitable execution in Barnesville, Attis plans to search a mix of debt and fairness financing, in addition to strategic business partnerships to develop the variety of processing services to 20 over the following few years.  The aim will not be outlandish, notably if Attis good points traction in renewable fuels, because the ethanol business grew to roughly 200 facilites in eight years.  Attis has outlined a replicable course of, which ought to enable for a predictable, extremely engaging scale-up of income and EBITDA because the enterprise expands and new processing facilities are deployed. It’s additionally value noting that Attis goals to assist create rural jobs, as every biorefinery facility is predicted to contribute 40 direct inexperienced collar jobs. 

Attis Innovations to be supported by money circulation from Healthcare unit

While Attis Innovations presents alternatives for sturdy long-term progress if administration is ready to execute its plan, it will be significant to know the place gross sales will come from in the brief run, too.  As a holding firm with a number of subsidiaries driving progress potential, Attis expects to develop gross sales in the close to time period at its Attis Healthcare unit, which leverages the advantages of Cosman’s former time spent as an government in the medical machine business.

Attis Healthcare guarantees the advantages of a revenue-generating enterprise with engaging margins and regular progress prospects.  The healthcare division presents a set of laboratory testing and therapeutic options offered to greater than 200 pharmacies, clinics, hospitals, and healthcare suppliers throughout the United States.  Core Attis Healthcare choices embody superior genetic testing like Pharmacogenetics (PGx), which identifies genetic variations amongst people to assist customized medication, and Polymerase Chain Reaction (PCR) for pathogen identification, which analyzes the genetic make-up of pathogens for to assist quick, exact detection and therapy of infectious ailments.

The firm additionally presents most cancers genetic testing, which makes use of superior genetic sequencing to detect particular genetic abnormalities that relate to the expansion of a number of most cancers varieties, offering perception as to a person’s threat of hereditary cancers.  Attis is working to increase its associate base in this space, with a aim of reaching $10 million in annualized revenues by the top of 2019.  We word that the phase has a protracted potential runway for progress, as the corporate targets a number of progress areas of the healthcare market, and administration just lately engaged a brand new nationwide consultant group, which expanded the corporate’s potential community to 4,749 hospitals and 45,000 long run care services in the United States.

Experienced administration a key attribute for Attis

A key cause why Attis may succeed the place others have failed is its administration workforce. Management high quality is a key issue in whether or not small capitalization corporations succeed or fail.  Attis is led by CEO Jeff Cosman, who’s a confirmed government who has acquired, constructed and offered companies at vital valuations.  Cosman is a former skilled baseball pitcher drafted by the New York Mets who has held management roles in the medical machine, communications expertise and waste industries.  Cosman is a serial entrepreneur and a confirmed chief with expertise constructing progress companies augmented by acquisitions.  After turning into CEO of Attis in 2014, for instance, Cosman constructed a vertically-integrated stable waste companies firm with over $55 million in annual revenues and $12 million in EBITDA by way of the acquisition and integration of six companies.  The strikes resulted in the sale of the models to non-public fairness firm Warren Equity at an enterprise worth of $103 million in early 2018.

Cosman is now in search of to replicate this success as he pursues new alternatives leveraging expertise in the choice power and healthcare sectors.   The firm notes that Attis technologists have invented and commercialized applied sciences which might be producing over $500 million per yr in worth by way of the restoration supplies from in any other case low worth industrial byproducts – that is solely a small fraction of the worth Attis is in search of to do with lignin.

Attractive valuation in mild of alternative, administration’s monitor report and progress potential

We discover Attis attractively valued in mild of administration’s confirmed capability to construct and exit progress companies, the clear prospects forward of the corporate in Attis Healthcare, and the numerous potential for upside if Attis Innovations is ready to execute its progress plans for biomass processing.  Indeed, with 25 million shares excellent, on the current value of $0.20 per share, Attis has a market capitalization of simply $5.0 million and internet debt of $12.5 million, reflecting an enterprise worth of $17.5 million. This compares to rising annualized revenues in Attis Healthcare that are anticipated to attain $10 million by the top of 2019, and plans in place to full its Barnesville biomass processing facility thereafter with capability anticipated to assist annualized revenues of $35 million by the top of its second yr in operations.  If Attis is profitable in displaying worth in its Barnesville operation, the corporate has a protracted runway forward, with plans to increase to not less than 20 world bioprocessing crops with comparable capabilities in the close to future with to increase to a number of thousand thereafter.

While Attis would require funding in order to full building of the Barnesville facility and observe on processing services, Cosman expects to profit from favorable authorities debt applications designed to facilitate funding in rural manufacturing and various power, to complement fairness issuances and decrease dilution.  Moreover, we word that the corporate has a e-book worth of $0.45 per share, supported largely by property and mental property associated to its biomass enterprise, which gives a further valuation backstop.

Looking forward, we see a number of potential catalysts on the horizon for Attis.  The firm ought to start to report rising revenues from its Healthcare unit, and administration has key planning and operational milestones approaching rapidly for the institution of the Barnesville biomass processing plant operation.  It’s value noting, moreover, that Cosman constructed the waste administration by way of a sequence of acquisitions, and administration has indicated that strategic strikes will doubtless play a job in the constructing of its Innovations unit.

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Except for the historic data introduced herein, issues mentioned in this text comprise forward-looking statements which might be topic to sure dangers and uncertainties that would trigger precise outcomes to differ materially from any future outcomes, efficiency or achievements expressed or implied by such statements. Salesparq, LLC which owns SmallcapsDaily.com will not be registered with any monetary or securities regulatory authority and doesn’t present nor claims to present funding recommendation or suggestions to readers of this launch.

Salesparq, LLC, which owns SmallcapsDaily.com, could also be compensated for its companies in the type of cash-based compensation for the businesses it writes about. For making particular funding choices, readers ought to search their very own recommendation.

Pursuant to an settlement between TraDigital IR and Salesparq, LLC, which owns SmallcapsDaily.com, we had been employed for a interval from 1/3/2019 – 2/1/2019 to publicly disseminate details about Attis Industries Inc., together with on the Website, electronic mail and different media together with Facebook and Twitter. We have been paid $35,000 (CASH) for & have been paid “0” shares of restricted frequent shares. We own zero shares of Attis Industries, Inc. We don’t intend to purchase shares of Attis Industries, Inc. in the open market at any time. Please see our full disclaimer here: https://smallcapsdaily.com/disclaimer/

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