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Monday, 11/24/2014 3:20:10 PM

Monday, November 24, 2014 3:20:10 PM

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Biomagnetic (BMGP) Ends Quiet Period – To Spin off Chinese Bio-Fuels Operation into New Public Company – Current BMGP Shareholders to Benefit
by Joe on November 8, 2010

Biomagnetic (BMGP) Ends Quiet Period – To Spin off Chinese Bio-Fuels Operation into New Public Company – Current BMGP Shareholders to Benefit

This morning Biomagnetics (BMGP) is announcing it will be spinning off its Chinese bio-fuel operation into a separate public company. It appears discussions relative to this spinoff are in the advanced stages with several Chinese investment banks in the running to manage the process, including one of the largest Taiwanese-based merchant banks. Earlier this year, the Company acquired the assets of Zhuhai Oil Energy Sciences and Technology, located in Guangdong Province, China. This acquisition included certain production assets and all of the intellectual property for a unique formulation of low carbon emission bio-fuels.

It appears the spinoff will be in the form of a reverse merger where the bankers will acquire a publicly traded operation that will purchase the assets of Zhuhai. The result will be a fully reporting, OTCBB company traded in the United States. While the exact details have not yet been announced, the current shareholders of Biomagnetic will receive shares in the new company upon completion of the reverse merger.

We believe this transaction makes a lot of sense as it will allow the management team to concentrate on other areas that are less capital intensive, such as the Integrated Optical Biosensor product being developed in conjunction with Los Alamos National Laboratory and the Chinese PVA plastic film operation.

Many of BMGP’s investors were very confused relative to the Company’s purchase of these Chinese assets. We do not believe these asset purchases were in any way part of Biomagnetic’s in long-term business plan. Instead, we believe these were simply opportunistic. Nevertheless, we believe both the bio-fuels operation and the PVA plastic film business will likely add meaningfully to overall shareholder value.

While the Company plans to spinoff the bio-fuels operation, it appears they plan to actually operate the PVA plastics business. We believe there are two reasons for this decision. The first reason is that operation of the PPA film business is not nearly as capital intensive as is bio-fuel production. A separate facility to house the PVA film production equipment has already been acquired and as soon as the equipment is moved to this new facility PVA film production can begin. The second reason we believe Biomagnetic will choose to operate the PVA plastics business is that the Chinese management already has a large agricultural contract in hand that will allow near-term revenue production.

We expect additional details to be released the by the Company over the coming weeks that will outline how much of the new publicly traded company will be owned by current Biomagnetics shareholders.

With the audits now complete and a plan in place relative to disposition of the biofuels assets, we believe a clear plan for shareholder maximization is now in place. Over the coming weeks we would expect the Company to release additional details about the spinoff transaction and to begin providing information about the plan to begin PVA film production. We also think there are several announcements likely pending relative to Los Alamos as deadlines outlined in the recent collaborative research agreement are quickly approaching. The most important announcement we are expecting from Los Alamos relates to the identification of a second tuberculosis biomarker. We believe this will be big news that will show the medical diagnostics community that the integrated optical biosensor product holds the potential to revolutionize tuberculosis testing throughout the world.

Joe Noel

(this is one of Noel's whoppers) Never happened and Clayton tap-danced away from it. There's volumes of claims made by the SEC's busted Joseph Noel on BMGP. The dog and pony show that started it was IMO the worst and cost honest people the most.

Everything I write is my opinion based on what I read from the companies I post about. Decide for yourself because it's your money.