Investors FAQ
What is BioCat Fuels? What’s its history?
BioCat Fuels was formed in 2008 in collaboration with the inventors of
the breakthrough Mcgyan process. Its goal is to build biodiesel plants
using this new technology. Plans call for the first plant to be constructed
in early 2010. Clayton McNeff, primary inventor of the Mcgyan process,
is chair of the BioCat Fuels Board of Directors.
How will BioCat be managed?
BioCat will have a small staff led by Ric Larson, CEO, and Ben Harris,
COO. Staff will include an executive assistant/controller and an experienced
process engineer to oversee construction and management of the plants.
Experts from Ever Cat Fuels, the Mcgyan demonstration plant, will train
BioCat plant personnel, including the plant manager.
How much is BioCat trying to raise? How
will the money be used?
BioCat is raising $7 million to build a new biodiesel plant at a site
it has identified in Illinois. It is possible that BioCat will have the
opportunity to purchase and retrofit an existing biodiesel facility for
less than the cost of a new facility.
Why would investors choose BioCat? What’s
in it for them?
Our goal is simple: We will support America’s energy independence
by helping produce a green alternative to fossil fuels. The process uses
non-food waste oils that can be purchased cheaply and that make superior
fuel, allowing for attractive profitability. This has the potential
to result in attractive returns for investors.
How long will the investment opportunity be available?
The opportunity will be available until funds have been raised to complete
either the Illinois or the retrofit option.
Why is BioCat building or retrofitting small plants and not
building a large 30mg plant like those in existence today.
The economic reality is that no capital exists today to build a large
plant. We are focused on smaller plants because small plants can access
low-cost waste oil feedstocks and small plants can be more profitable
because of the lower cost of the waste oil.
What happens if you don’t raise the
money?
If less funding is available, BioCat will reduce the planned size of
the project and build a smaller plant. Good returns are still available
at the reduced size, and future expansion is possible.
What’s so special about the Mcgyan
technology?
The Mygyan process is a continuous process that can convert non-food
waste oils that other processes are unable to convert. Even more
importantly, the process uses no water, has no hazardous waste stream
and uses oils not suitable for human or animal consumption.
What are examples of the types of waste oils you would use?
We would buy rancid oils, oils with contaminants, off-spec oils from
food processing plants and traditional biodiesel plants, off-spec biodiesel
from traditional plants and oils that could be used only for animal
feed or export.
What financial advantage do you have over tradition biodiesel
plants?
These waste oils are typically priced lower than traditional feedstocks
(like restaurant oil). This difference would be sufficient to give BioCat
a $.37+ per gallon advantage over traditional biodiesel plants in today’s
market. It also appears that the biodiesel produced by this process is
at a quality level that may command a premium in the market.
What is BioCat’s relationship with Ever Cat Fuels, and
what is BioCat’s relationship with the owners of the technology,
McNeff Research Consultants?
EverCat is a separate company owned by the principals who developed the
Mcgyan process. They built the new demonstration plant in Isanti, MN,
that opened in September. McNeff Research Consultants holds the patents
for the Mcgyan process. BioCat is partnering with these entities to build
plants that will use the new technology. BioCat has granted McNeff Research
Consultants a 15 percent profit interest in BioCat in exchange for a
reduced licensing fee and a limited non-compete clause in the license.
How is Ever Cat Fuels doing? Is it
fully operational?
Ever Cat Fuels began producing top grade biodiesel from waste oils on
September 11, 2009. The Mcgyan process equipment is working more efficiently
than expected with lower than expected energy costs. The plant is currently
undergoing a planned staging process where capacity is being increased. The
plant is running at 70 percent capacity with plans to move to 100 percent
capacity in the coming weeks. Full testing has been done on the equipment,
and it has been verified that the equipment can operate at 100 percent
capacity.
Is the technology fully ready to be replicated in other plants?
The proprietary equipment that will be used in BioCat plants is identical
to the equipment at Ever Cat. We would use more of the same size reactors
to accommodate larger production. All other equipment is off-the-shelf
and easily accessed. Experts from Ever Cat will advise BioCat and help
oversee the engineering, equipment acquisition, construction and start-up
of our new plant.
How long will it take to complete the new
facility? When
can investors expect to receive their first dividend?
Construction time for a new plant is approximately 18 months, plus a
six-month planned staging to increase capacity. That means it will be
approximately 24 months before dividends would be available. If
BioCat is able to purchase an existing facility, the time to dividends
would likely be cut in half.
What’s BioCat’s vision for the
next five years? Will it be building/retrofitting other plants?
A combination of improved capital markets and successful operation of
our first plant will allow BioCat Fuelds to construct as many as five
Mcgyan biodiesel facilities during the next few years.
Will there be future opportunity for additional investment?
Investors in the first BioCat Fuels plant will be given the first opportunity
to invest in future BioCat biodiesel projects.
Who are your attorneys and accountants?
We work with Stoel Rives, a law firm that specializes in alternative
energy. Christianson and Associates, Willmar, MN, is the accounting
firm that completed our forecasts. They are the accountants for most
of the nation’s ethanol plants and a large number of biodiesel
plants. They did the projections for over thirty bioenergy entitites
during the past year.
Where may I get more information about BioCat and the PPM?
Visit the BioCat Fuels website at www.biocatfuels.com
Visit the Ever Cat Fuels website at www.evercatfuels.com
Email Ric Larson, CEO, riclarson@biocatfuels.com
Email Ben Harris, COO, benharris@biocatfuels.com
Call 763-331-0958
Write to us at BioCat Fuels, 16300 Valley Drive, Andover, MN 55304
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