Aduro Clean Technologies: Collaboration with TotalEnergies
Video: Aduro just signed an agreement with major O&G firm Total.
Transcript
Aduro Clean Technologies is a developer of a novel recycling technology for plastics and other petroleum-based products. Thanks to the announcement of several great news items this week, the company's market cap is currently around $100 million, up around 60% this month.
In this video, we’ll review how the stock is applying to uplist on the New York Stock Exchange American, and the news from today about a new collaboration agreement with TotalEnergies.
Jumping into the news from today, Aduro announced they have signed a collaboration agreement with TotalEnergies.
Yes, this is the French oil and gas giant, with a market cap of $155 billion.
So, we now have confirmation that Total was one of the six multi-billion dollar companies testing Aduro’s technology in their customer engagement program. This is the second company that we know out of the six testing with Aduro, the other being Shell.
After preliminary testing by Total, they are entering a collaboration to further stress test Aduro’s process. This includes more concentrations of contaminants and hard-to-recycle types of plastic waste.
That collaboration includes both financial and technical support in advancing the recycling technology toward commercialization. Relatively similar to what the Shell GameChanger program was designed to do for Aduro as well.
Through a cursory glance at Total’s existing activity in the plastic space, they produce around 2 million tons of virgin plastic per year. Total has a goal of producing 1 million tons of circular plastic per year by 2030, meaning they recycle plastic waste into oils, and then back into new plastic.
Aduro has the potential to play a significant role in this effort, since from what I’ve seen so far, Total only has partnerships with 2-3 other recycling plant operators. They have a deal with New Hope Energy to create 150,000 tons of new plastic per year, and they have a few different projects with Plastic Energy and Honeywell for around 100,000 tons of plastic in total.
They might have more, but that’s all I’ve seen so far. It’s worth noting that all of these technologies are some form of recycling using pyrolysis. That is the same technology that has been used for many decades, that simply doesn’t work for most of the plastic feedstock out there. This leaves a lot of room for Aduro to help Total hit that 1 million mark by 2030.
It’s important to emphasize, that even more crucial than any monetary support is the support from researchers at these large companies. Aduro now has agreements with Shell, Total, and Brightlands Chemelot (a prestigious research institute) to provide their expertise in the petrochemical field. These firms can help Aduro better scale and commercialize the recycling technology.
One of Aduro’s primary goals is moving clients up the customer engagement program, or CEP. The first stage is the technology evaluation, which is where most of the multi-billion dollar companies are at right now. Testing Aduros’ technology to see if they like it.
Total has just entered the collaboration stage after that. This stage includes further, more complex testing and additional funding for Aduro.
The overall timeline and funding allotments in these stages can vary per client, but Aduro provides a general timeline based on which they think they can commercialize facilities for simpler feedstock streams by 2026.
We can see what type of funding Aduro is going to receive from Total in later financial statements, but I believe they have previously mentioned it could start to get into the millions of dollars in a collaboration agreement. That’s in comparison to just tens of thousands in the technology evaluation stage. So Aduro might start to generate some decent revenues that will help them cover costs for commercializing the tech.
Commercialization is the last stage, during which Aduro will build larger-scale facilities that recycle 25 tons of plastic waste per day or more. The company now refers to a multi-ton recycling reactor as its next-generation process instead of calling it R3. I don’t know why they felt the need to change the name, but that’s what it’s called now.
Moving on, we know Total is a collaborator now, but we’re still waiting on the results of Shell GameChanger. It was supposed to be a 12-month, six-stage program, but it has taken longer than originally estimated.
Aduro joined Shell GameChanger in November 2022 to help commercialize and test its technology. We got an update that Aduro passed stage 3 in September 2023, so that took around 10 months.
If it takes them 2-3 months per step, then it would stand to reason that we would see results from the GameChanger program soon. 3 months per step would’ve put us at June 2024. Aduro could be close to completing the program, or they might be in negotiations that prevent them from discussing what is going on. We just don’t know yet. So we’ll have to see what happens there.
In other news, Aduro has also filed their F-1 to begin the uplisting and IPO process on the New York Stock Exchange American. This should help bring additional liquidity to the stock, and allow for more institutional investors to buy in. When the company is listed on the OTC markets and the CSE, most institutions can’t or won’t touch stocks trading in these areas.
Aduro brought in EF Hutton LLC as the manager for their IPO, which has ranked #1 in IPO issuances by deal count since 2022, so they know what they’re doing.
Aduro meets several of the uplisting requirements except for the minimum share price. So, unless the stock continues to rise and surpass that $3 range in the US, Aduro will likely need to perform a reverse split.
After an S-1 is filed, it typically takes a company at least 4-5 months to go public, depending on SEC timelines and other factors. So, there’s still a good amount of time before Aduro will be hitting a more established exchange, but the process has begun.
At this point, the remaining catalysts for the year include potential additional collaboration agreement announcements, development milestones for developing the next-generation process reactor that will be built next year, and other news events like results from Shell GameChanger or patent expansion.
So, we’ll see what happens in the coming months.
I am a shareholder of the company, and I’m not being paid by Aduro to make this video, so keep that in mind.