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Kreido Biofuels Provides Business Update
Camarillo, Calif., March 20, 2008 – Kreido
Biofuels, Inc. (OTC BB: KRBF), which has pioneered a break-through system
for the production of biodiesel and for other chemical processing, today
provided a business update.
Chief Executive Officer Ben Binninger reported, “We
have accomplished a great deal since our financing in 2007, and we are
continuing to address the significant market and financing challenges
affecting our industry and our company. We remain confident that our
advanced technology will enable us to achieve both better raw material
utilization and lower operating costs than conventional biodiesel plants.
We believe these factors, coupled with our favorable plant location and
our feedstock flexibility, position us to succeed.” We are pleased
to report on our progress during the last few months, including:
- Built
two additional STT® reactors, each with approximately13 mgy capacity,
for our next plant at our expanded laboratory and reactor manufacturing
facility within our Camarillo headquarters
- Completing the durability
and mechanical testing of our commercial-scale STT® reactor system
in Kreido’s manufacturing facility
- Finalizing the fabrication
of the production modules at Certified Technical Services L.P. in Houston
Texas, which await shipment to the Wilmington site
- Obtained
Federal and State regulatory approvals for 100M gallons of annual capacity
for our Wilmington, North Carolina plant, although a limited number
of local and county approvals still remain
- Successfully conducting
additional laboratory test runs with the STT® reactor using soy,
canola/rapeseed, jatropha, karanja, pork and chicken fats
- Hosted
distinguished biofuels scientists Dr. Naveen Kumar from Delhi College
of Engineering in India and Dr. Lincoln Cambraia Teixeria from CETEC
in Brazil, to facilitate prospects for commercializing Kreido technology
in their countries
- Vigorously pursuing numerous sources for
funding, including: debt, convertible debt, Port of Wilmington bonds,
equipment and working capital lines of credit as well as partnering
or other equity-type financing
“Although these are all important milestones
toward our goal of commencing biodiesel production in 2008, our efforts
have been materially and adversely affected by unprecedented increases
in the cost of vegetable oils, downward pricing pressure on biodiesel,
and the severe contraction in the capital markets in general and in the
alternative fuels sector in particular. The tightening of potential margins
in the alternative fuel sector is affecting the ability of biodiesel
companies to attract needed capital,” stated Binninger.
“We
expected by now to have raised the additional funds necessary to commence
construction at Wilmington. Due to delays in funding, obtaining final
governmental approvals and in light of current adverse biodiesel market
conditions, we have pushed back our target commercial production date
to the fourth quarter which would still allow us to benefit from the
government mandate for the use of 500 million gallons of biodiesel that
becomes effective on January 1, 2009 through the Energy and Security
Independence Act of 2007.
“The initial Wilmington plant will have
annual capacity of 33-50 million gallons. We must raise approximately
$25 million for working capital and to complete this plant, which we
now estimate will cost between $30 million and $32 million. This cost
estimate includes approximately $4 million to prepare the site for the
second modular unit that would bring capacity up to 66-100mgy. The increase
in construction cost is due to the delay in completing the plant, process
changes and improvements as well as additional requirements related to
permitting and government approvals.
“As of December 31, 2007,
Kreido’s cash balance was $6 million. We believe we have sufficient
cash to continue to operate the Company’s Camarillo headquarters,
laboratory and manufacturing facility while we continue to seek the necessary
financing to commence construction. We have scaled back our spending
in light of our current financial resources and will continue to manage
our spending accordingly. We believe that by distinguishing Kreido from
other alternative fuels companies, we will be able to attract the needed
financing when capital market conditions stabilize and financing sources
seek opportunities in our sector. We recognize that further delays in
arranging financing and remaining approvals will adversely impact our
Wilmington plant cost and construction schedule.
“The Kreido technology
we will be installing will accelerate the rates of chemical reactions,
increase conversions and yields and lower operating costs using less
equipment than conventional processes. We remain as confident as ever
that with adequate financial resources, we have the ability to deliver
a more efficient biodiesel production facility. We expect to file our
annual report on Form 10-KSB on March 31, 2008, which will contain additional
information,” concluded Binninger.
About Kreido’s Wilmington
Plant
Operation of Kreido’s Wilmington, North Carolina biodiesel
facility is presently expected to commence in the fourth quarter of calendar
2008, subject to securing the necessary financing. Kreido’s state-of-the-art
plant will be equipped with in-line monitoring and fully integrated control
systems, and will be situated on a deep water port further enhancing
its attractiveness by providing access to U.S. East Coast and European
market as well as for sourcing of imported feedstocks. The Wilmington
plant will operate initially using vegetable oils as the feedstock and
it is expected to provide employment for up to 20 local employees. Kreido
also expects the Wilmington facility to serve as a showcase for carrying
out the company’s licensing strategy on a global scale.
About Kreido
Biofuels
Based in Camarillo, California, Kreido Biofuels seeks to produce
renewable energy through its proprietary process intensification technology – the
STT® system, a cutting edge technology that improves the manufacturing
of biofuels. The company’s senior management and Board have more
than 50 years experience in chemicals & energy including designing,
constructing, managing and operating facilities. Kreido Biofuels has
established collaborations with university and government laboratories,
including the U.S. Environmental Protection Agency. STT® is a registered
USPTO trademark of Kreido Biofuels, all rights reserved.
For more information
about Kreido Biofuels, visit www.kreido.com.
Forward-Looking Statements
This press release contains ‘forward–looking statements’ within
the meaning of Section 27A of the Securities Act of 1933, including without
limitation those statements regarding the Company’s ability to
exploit biodiesel development and production opportunities. These statements
are expressed in good faith and based upon a reasonable basis when made,
but there can be no assurance that these expectations will be achieved
or accomplished. The forward-looking statements are inherently subject
to known and unknown risks and uncertainties that may cause actual results
to be materially different from those discussed in these forward-looking
statements including, but not limited to, our inability to generate sufficient
operating cash flow to construct and operate our production facilities,
commodity pricing, environmental risks and general economic conditions.
Readers are urged to carefully review and consider the various disclosures
made by us in our reports filed with the Securities and Exchange Commission
including the risks set forth in the Company’s Quarterly Report
on Form 10-QSB for the quarter ended September 30, 2007 and in the Annual
Report on Form 10-KSB to be filed on March 31, 2008. If one or more of
risks or uncertainties materialize, or if the underlying assumptions
prove incorrect, our actual results may vary materially from those expected
or projected. Readers are urged not to place undue reliance on these
forward-looking statements, which speak only as of the date of this release.
We assume no obligation to update any forward-looking statements in order
to reflect any event or circumstance that may arise after the date of
this release.
# # #
Investor Relations Contact:
Ina McGuinness
ICR, Inc.
Office: (310) 954-1100
Public Relations Contact:
Denica Gordon
DGPR Consulting
Office: (323) 253-9337
dgordon@dgprconsulting.com
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