Alkemy Files to List on TSX Venture

Posted on March 30, 2021 by Mathieu Litalien

One of the smallest companies we've seen file to list on the TSX Venture in some time, K.B. Recycling which will begin operating under the name Alkemy is seeking to raise $1.2M at a price of $0.29 per subscription Unit. 

Each Unit is comprised of one ordinary share of the Company (and one-half of one warrant to purchase an Ordinary Share. Each Warrant will entitle the holder to acquire one Ordinary Share at a price of C$0.51 per Ordinary Share for a 24 months following closing. 

Alkemy has developed a unique plastic recycling process to recycle plastic bags and sheets traditionally not considered economically viable for recycling and as such have become one of the largest plastic pollutants in the world. Alkemy employs a dynamic one-step process that does not require separate recycling and production plants. Alkemy’s process includes both recycling and finished product manufacturing in a single process called “waste-to-product”, allowing Alkemy to reduce the cost of the recycled plastic as raw materials, and increase the profit margin per metric ton.

In effect, they are trying to solve the problem in which most plastics end up in landfills:

While many other companies are looking at plastic replacements, Alkemy is focused on finding better ways to recycle exiting plastics and make it more economically viable. 

This is a microcap company which generated only 1.5M in sales in 2019, down from 1.578M in 2018. Through the first nine months of the year, revenue decreased again from 1.18M in 2019 to 710K in 2020. It is also operating at a pretty big loss and is burning through cash. 

From an operating perspective, there isn't much to like here. Declining revenue and significant cash burn will mean the company will have to continuously tap the markets to keep up operations. This all changes if it can generate more revenue, but at this point - that is investing on hope. Nothing too interesting from our perspective. 

Given this, we don't expect much in terms of demand. 

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NEWS RELEASE

K.B. Recycling Industries Ltd. files preliminary prospectus for initial public offering of ordinary shares

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

Toronto, Ontario and Beit Shean, Israel, March, 25, 2021 – K.B. Recycling Industries Ltd. (“K.B. Recycling” or “Alkemy” or, the “Company”) today announced that it has filed, and obtained a receipt for, a preliminary prospectus with the securities regulatory authorities in each of the provinces and territories of Canada, except the province of Québec, for a proposed initial public offering of ordinary shares (the “Offering”). Copies of the preliminary prospectus are available on SEDAR at www.sedar.com.

The Offering is being co-led by INFOR Financial Inc. and Cormark Securities Inc. as joint bookrunners.

The preliminary prospectus contains important information relating to the Offering and the Company and has not yet become final for purposes of a distribution of securities to the public. No securities regulatory authority has either approved or disapproved the contents of this news release. This news release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale or any acceptance of an offer to buy these securities in any province or territory of Canada prior to the time of receipt for the final prospectus or other authorization is obtained from the securities regulatory authority in such province or territory. This news release does not provide full disclosure of all material facts relating to the securities offered. Investors should read the preliminary prospectus, final prospectus and any amendment, for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision. The ordinary shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws. Accordingly, the ordinary shares may not be offered or sold within the United States except pursuant to exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws.

About K.B. Recycling

K.B. Recycling is an environmental technology company based in Israel, and carries on business under the name “Alkemy”. Alkemy has developed a unique plastic recycling process to recycle plastic bags and sheets traditionally not considered economically viable for recycling and as such have become one of the largest plastic pollutants in the world. Alkemy employs a dynamic one-step process that does not require separate recycling and production plants. Alkemy’s process includes both recycling and finished product manufacturing in a single process called “waste-to-product”, allowing Alkemy to reduce the cost of the recycled plastic as raw materials, and increase the profit margin per metric ton.

For further information, please contact: Shmuel Porre Chief Executive Officer K.B. Recycling Industries Ltd. Tel: +972526016888 Email: shmulik@kb-recycling.com

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Mathieu Litalien

About the author

Mathieu is an individual investor and has been investing part-time for the better part of the past 20 years. He is primarily interested in fundamental analysis, focusing on the long-term and his portfolio is composed primarily of dividend-paying equities. Mathieu has a moderate risk profile and also looks for growth and value. His passion for finance and the markets have led him to his MBA and writing for Seeking Alpha and Stocktrades. Mathieu also focuses primarily on stock research and content production for Stocktrades.ca Premium and the Stocktrades blog.