March 9, 2015
Dear BioNitrogen Shareholder:
In the light of the recent drop in our stock price, we thought it would be a good idea to provide you with an update on activities in the company and to reassure you that there is no cause for concern.
As previously announced, BioNitrogen continues to work with its engineering firms and contractors to advance to a Firm Fixed Price EPC contract in the first half of 2015. The completion of the contract is an essential step in moving the entire process forward that will enable the company to build the initial plants.
As you know, we have been awarded a $300 million private activity bond value cap allocation to issue tax-exempt bonds for the acquisition, development and construction of the plant in Taylor County and Hendry County Florida. The EPC contract is essential before we can issue the bonds.
We have been assured that the issuance of the bonds should be a smooth process as there is a ready market for bonds of this nature.
It is important to note that BioNitrogen has contracted with only world class vendors and engineering consultants to ensure the integrity of the engineering and construction of its plants. Although these negotiations have taken additional time, management is confident that this is a good long term investment. All too often, companies cut corners in the early stages of a project, only to regret it later. Furthermore, this process has already resulted in approximately $50 - $75 million in cost savings per plant.
Disbursements under the $5 million loan from the Taylor County Development Council with a cash collateral guarantee from the City of Perry, continue to fund site work and engineering for the plant. Our best estimate is that construction on the Taylor plant will commence in the second half of 2015.
At the same time, BioNitrogen is exploring additional plant sites in other parts of the country that will provide opportunities for the company to expand its footprint.
We recognize that this process has taken longer than expected but management continues to adhere to its strategy of building environmentally-friendly plants utilizing patented technologies that will revolutionize the fertilizer industry.
Yours truly,
Carlos A. Contreras, Sr.
Chairman & CEO
