Jagman: I don't think TR missed it.

This company is a year older than my dad. Founded in 1924.

This company knows about "long."

TR: Some comments regarding your posting of the Phase II Commercial Commitment and Phase III follow-on funding...

Somehow FASC had to come up with a commitment for 20% (to receive full credit) of the funds requested from the DOE for Phase II, and must come up with a commitment of 50% of the Phase II request to get full credit for Phase III. That's a big commitment.

I'm thinking these are the details currently being discussed before the amount of the award is announced.

The question that must be asked is "How can FASC provide that commitment? Where will the money come from?"

Is it good enough for them to say "Hey, we've got all these authorized shares left that we can dump on the market to raise the capital. No problem."?

If they want $750,000 for Phase I, then they need to commit to $525,000. They still have about $1.5 million in authorized shares they can sell. As long as the share price stays above $.04.

Or does anyone think FASC was able to get a commitment from outside the company? What kind of commitment is required? Is a letter of intent sufficient? Does AP's letter of intent to purchase "up to 6 production scale KDS machines" (Dec. 10, 2002) count?

Walking that tightrope still. Still looking for revenues from the current technology to help.

Sure hope the company announces "(3) with regard to the Phase I objectives, the degree to which Phase I has proven feasibility of the concepts." The Phase I research must have produced something of substance suggesting that the efficiencies of the machine can be improved significantly. That information should be shared with the public. It can only help maintain interest in the company's efforts.

TR: I do not know any more than what I stated in my post. He simply said that they are involved with many technologies to supplement their primary hydro power. All you have to do is browse the list of projects they are involved with, along with the rest of their site, to see what they are trying to accomplish.

He did mention Capstone. I do not know if he mentioned that one intentionally - as a potential for synergy with the KDS tech - or not.

And he reiterated their interest in targeting the pulp and paper industry.

In any case, they are waiting for the KDS technology to mature.

Like I said yesterday, if you set your eyes a few years down the road you should not be disappointed. I'm hoping the tech continues to improve along the way, allowing the sales to slowly grow and the rate of dilution to diminish.

Will the technology - in the form of the KDS 6000 - be ready for HQ Capitech commercialization before that? Don't know.

Had a talk today with the gentleman from HQ Capitech who is on the AgES board of directors. He does not want his name posted on the boards. He does not want calls from FASC investors.

The message was simply this: HQ Capitech is still very interested in the technology. Things are taking longer than expected. That is partly due to the improvements to the machine have been needed and partly due to getting a pulp and paper company to commit many dollars to a new technology.

Once the technology is perfected, HQ Capitech will be there to help with the commercialization. They are not assisting with technology improvements - FASC/Thermix have the expertise for that.

They are being patient and continue to expect the technology to mature.

This is not new information, but does confirm HQ Capitech's continued involvement with AgES.

The existing KDS is capable for a number of applications and should bring in some revenue while we wait for the KDS 6000.

But the KDS 6000 is supposed to be more than just a bigger machine. It is supposed to address moisture removal and improve on throughput in ways that go beyond just its size. Not to mention the addition of environmental components.

So I am very much looking forward to the KDS 6000. Hopefully the STTR Phase I research added more to the design than what the AgES research uncovered. I suspect we have not heard from AgES because they have been waiting for the additional results from that research and the funds to incorporate all the knowledge from both efforts.

I'm thinking that the KDS 6000 will allow some AgES sales, as well as some FASC sales, to close. The DOE research from Phase II and the USDA research will, hopefully, get us to the Holy Grail - the ability to process high-moisture/large quantity feedstocks economically. Municipal waste and short-rotation crops.

That research will take place over 1-3 years. Let's hope that we get some revenues rolling with the existing and first generation production-size KDS to see us through to the vision that has been stated in the grant abstracts.

This is a great start and it has been fun to watch this company begin to mature. But I have reconciled myself to a 3-5 year time horizon (from now) for the really big payoff.

Of course I wouldn't mind being surprised.

Jagman: Can't blame you for wanting to see the dilution end. AgES has obviously learned that it takes a certain level of operation to make the types of sales it is trying to make. Hoping they get a chance to build a machine that meets the requirements of its customers.

Grants alone do not make sales. But they do validate the potential of the technology. Referring to those that continue to believe that the potential can be realized as "blind believers" was without cause.

Some FASC-relevant quotes from the grant synopsis...

The proposed work involves an equipment
manufacturer to identify functional, commercial, and performance targets for integrating size reduction
and separation. The company develops a business plan from the start, and continues to update it based on
their increasing role and stake in the project outcome. The company identifies the end-use format of
commercial process control factors, such as mass flow rate, operating settings, and other equipment
parameters needed for commercialization.

...

Expected outcomes are innovative, integrated technology to reduce size and separate crop
residues and dedicated biomass crops in on-the-go harvesters and stationary units. The systematic
approach with university/government research infrastructure and an equipment manufacturer is expected
to rapidly lead to a commercialized system and useful understandings for other biomass processing
efforts. Expected benefits of an integrated system by 2010 are $1 billion/y savings in physical processing
energy and improved wet conversion processes with targeted feedstock streams. Environmental benefits
include recycling of non-target plant parts on soil. The project is a critical link between biomass
producers and users.

Still wondering if the fact that project F5-15 is listed first is significant.

http://www.bioproducts-bioenergy.gov/pdfs/Joint%20SolicitationTotalSelectedProposals.pdf

Dr. Womac...

http://www.agriculture.utk.edu/personnel/personnel/default.asp?vn=UTIA_AgBioEg&rn=149035

Alvin R Womac, Professor
Divisions - Experiment Station, College of Agricultural Sciences and Natural Resources


Department - Biosystems Engineering and Environmental Science
Specialty - Mechanical and Spray Applications

Office Address :
308 Agricultural Engineering
Knoxville, TN 379964531

Phone : (865) 974-7104
Email : awomac@utk.edu

Jagman: The share price has not made winners out of FASC shareholders. But that does not mean that there is not evidence of significant progress being made. If you are one of those who continue to deny that progress, there is not much to discuss with you.

OT: BIPH is now under $1.00. I do not think it will stay there for long. If you haven't looked at it before, now is the time.

http://www.biophan.com
http://www.biophan.com/2004.php

http://ragingbull.lycos.com/mboard/boards.cgi?board=BIPH&read=17325

This is the best under a dollar play I know of, IMNSHO. Do your own DD before you invest.

I was at the shareholders meeting recently. The CEO indicated to those at the meeting through carefully chosen words that there should be deals done by the end of the year. Including a move to a major exchange. This is a great team with a ton of intellectual property. I wish I had the funds to pick up a lot more at these prices. Of course, FASC prices are looking pretty good here. But diversification is good.

Short-term (less than a year) target: $2-$4

2003 awards granted by the DOE and USDA were announced in September. Will it take that long for the announcement that includes what we have already found?

http://www.usda.gov/news/releases/2003/09/0306.htm

In August, 1999, Bill Clinton issued executive order 13134 calling for the development and promotion of biobased products and bioenergy. This is the impetus behing all the research that FASC is a beneficiary of. This is a report issued in 2000 in response to that order:

http://www.bioproducts-bioenergy.gov/existsite/pdfs/presidentsreport.pdf

Could this be where the grant to the U. of Tennessee via the USDA originated?

http://www.bioproducts-bioenergy.gov/pdfs/FY04Solicitation.pdf

Hongcouver and all: Here's a very interesting presentation, from Lynn Wright who had worked with Dr. Sokhansanj at Oak Ridge (she is now an independent consultant) and was familiar with the KDS research, describing the future of energy crops.

http://gcep.stanford.edu/pdfs/energy_workshops_04_04/biomass_l_wright.pdf


From the presentation:

Billion ton feedstock vision
• 5% of nation’s power, 20% of transport fuels, and 25% of chemicals by 2030
• Combined target is 30% of current petroleum consumption

• Biopower - Biomass consumption in the industrial sector will increase at an annual rate of 2 percent through 2030, increasing from 2.7 quads in 2001 to 3.2 quads in 2010, 3.9 quads in 2020 and 4.8 quads in 2030. Moreover, biomass use in electric utilities will double every ten years through 2030. Biopower will meet 4 percent of total industrial and electric generator energy demand in 2010 and 5 percent in 2020.

10-Z: The connection between the $717K award and the paper that Ptrey found is crystal clear. What is not clear is whether or not te $717K award is the same as the STTR award.

It is sounding like there are two separate awards - the DOE's STTR award with FASC as the awardee and ORNL as project partner, and the USDA's $717K award with the U. of Tennessee as the awardee with FASC and ORNL as project partners. The DOE award would be applied to improving the KDS. The USDA award would be applied to optimizing the feedstock.

That is the conjecture.

Which would mean we do not know how much the STTR award is for. But we do know that $750K was applied for the Phase II grant.

The reason I initially believed the project abstract described the STTR project is because of both the amount of the project (just under the $750K applied for) and the participants (U. of Tennessee, ORNL, FASC).

I'm still not absolutely positive that there are two projects, but the STTR project does seem to be a DOE project while the abstract is for a USDA project.

And as TR pointed out, the STTR project is assigned directly to FASC while the USDA project is assigned to the U. of Tennessee.

It just doesn't get any better than that. I think Dr. Sokhansanj must really like the potential of the KDS to move his research into energy crops forward.

I am still pondering this statement:

Statistical correlations establish the relations between size
reduction and separation equipment variables, biomass input variables, and processed biomass output conditions.


Does this refer to the input and output of the new shearing equipment to be developed? Or does it refer to input variables related to feedstock for the KDS and processed biomass output from the KDS?

I'm thinking it's the latter.

Well it certainly interesting to contemplate FASC being involved in two separate (but related?) projects both receiving monies in the 3/4 of a million dollar range. Can't wait to have this mystery cleared up.

It probably does make sense that they are two separate projects. Question then becomes: How was FASC chosen to participate in this USDA project which seems to not be directly related to the KDS?

This is what the abstract says about "the company's (FASC)" involvement:

The proposed work involves an equipment
manufacturer to identify functional, commercial, and performance targets for integrating size reduction
and separation. The company develops a business plan from the start, and continues to update it based on
their increasing role and stake in the project outcome. The company identifies the end-use format of
commercial process control factors, such as mass flow rate, operating settings, and other equipment
parameters needed for commercialization. Statistical correlations establish the relations between size
reduction and separation equipment variables, biomass input variables, and processed biomass output conditions.

FASC's stake in the project outcome must be related to the KDS. I continue to believe that this project has to do with preparing optimized feedstock that will feed a KDS.

Which could leave the STTR project specifically for improving the operation of the KDS itself.

If this is true, that FASC stands to benefit from two separate projects aimed at optimizing both the feedstock and the KDS, the outlook for the future has gotten even better.

Come on FASC, clue us in.

Let's do some hypothoprognoticatin' with some of the statments in the Phase II description.

http://www.bioproducts-bioenergy.gov/pdfs/Joint%20SolicitationTotalSelectedProposals.pdf

A former federal biomass program manager leads the identification of biomass feedstock for
all project testing. High opportunity feedstock like switchgrass, corn stover, forest residues, and at least a
tough straw from rice or flax will be prioritized. Demonstrations of the developed system will target
biomass processors, converters, and exhibits to maximize the acceptance and tonnage of high opportunity
feedstock.

I am pretty sure the "former federal biomass program manager" refers to "Dr. Shahab Sokhansani, PhD, P. Eng, a
world renowned and published expert in Bio-energy systems. Dr. Sokhansani also
holds professorships at the University of BC and the University of Tennessee,
Knoxville." (from the FASC news release last year)

Not sure why he is a "former federal biomass program manager." But the important thing is that he is still associated with this research.

The reason I think it is Dr. Sokhansani is because of the feedstock it refers to. From the Phase I abstract:

http://www.science.doe.gov/sbir/awards_abstracts/sbirsttr/cycle21/phase1/095.htm

In Phase II, an optimized machine will be field tested, especially with respect to the grinding and drying of crop residue and grasses.

Based on this statement, there is a clean transition from Phase I to Phase II. The focus remains on fast rotation crops as a feedstock.

Somehow Phase II is concentrating on separation and size reduction of feedstock. Separation is necessary to improve the quality of the feedstock. Size reduction, via shearing, is necessary to improve the characteristics of the feedstock that will be subject to tensile stresses. At least that's how I'm reading it.

In layman's terms - it's easier to cut it up real small first than to try to blow feedstock of varying sizes into smithereens. The KDS will obviously work best when the feedstock is of uniform characteristics - both size (via shearing) and material (via prior separation).

Conclusion: The easiest way to make a new and improved KDS as efficient as possible is to make the feedstock as uniform as possible.

But I'm still trying to figure out this one:
Tasks include categorized listing of grinding units based on functional analyses, power, and grinding performance

I find it difficult to believe the KDS, with its combined grinding/drying properties, is being abandoned. They wouldn't need FASC involved with the project if that was the case. Perhaps grinding in this context refers to the initial size reduction of the feedstock.

Anyone think the FASC announcement, when it happens, will make it any clearer?

Jagman: I think the total amount is for research associated with FASC. But the equipment described sure does require some explaining.

I think one reason there is not much excitement reflected in the pps is because, if Phase I is any indication, the money will not be made available until (if my memory is correct) the beginning of next year.

Also, the award is spread out over two years.

And there is this:

http://www.bioproducts-bioenergy.gov/pdfs/Joint%20SolicitationTotalSelectedProposals.pdf

Expected benefits of an integrated system by 2010 are $1 billion/y savings in physical processing
energy and improved wet conversion processes with targeted feedstock streams.

"An integrated system by 2010" can be interepreted in two ways. The first would be that it will take that long to come up with an integrated system. I don't think that is the correct interpretation. I think it means that it will take until 2010 to ramp up to the $1 billion/y in savings.

Why? Because the sentence immediately preceeding states:
The systematic
approach with university/government research infrastructure and an equipment manufacturer is expected
to rapidly lead to a commercialized system and useful understandings for other biomass processing
efforts.

Pictures on the website have been updated...

Link to the pictures on the Atlas Mining web site of the building being build around the KDS:

http://www.atlasmining.com/gallery.html

Link to the pictures on the Atlas Mining web site of the building being build around the KDS:

http://www.atlasmining.com/gallery.html

There should not be any confusion about the $717,399 grant award being connected to the article that was found by Ptrey this morning.

http://www.bioproducts-bioenergy.gov/pdfs/Joint%20SolicitationTotalSelectedProposals.pdf


FY04 Joint Biomass Research and Development Initiative
Projects Selected for Funding by USDA
Project F5-15
Integrated Size Reduction and Separation to Pre-Fractionate
Biomass
Applicant: The University of Tennessee (UT)
Participants: Oak Ridge National Laboratory (ORNL)
First American Scientific Co. (FASC)
Technical Summary (1 page)
Innovative size reduction of biomass reduces energy use, increases ease of bulk handling,
increases density, reduces transportation costs, and facilitates efficient separation. One project aim is to
develop new shear-dominant size reduction systems, with emphasis on non-rotating machinery with few
moving components and large throats to reduce plugging. UT studies indicate shear stresses were onefifth
tensile stresses to fail individual stems of switchgrass. Tensile failure stress increased two-fold as
elapsed time increased from 2 to 386 h. Shear failure was insensitive to elapsed time after harvest. Size
reduction metrics include energy per unit mass and particle size, shape, and density. Tasks include
categorized listing of grinding units based on functional analyses, power, and grinding performance;
systematic measures of biomass shear/tensile properties and failure characteristics; development of two to
three innovative concepts as table-top proof-of-concept devices; and development of a new demonstration
size reduction unit that most nearly meets performance criteria established early in the project.
Improved physical separation of biomass concentrates higher value components, returns unused
plant components to soil, decreases bulk for wet separation processes, decreases drying energy, and
improves transportation and use of a voluminous, chemically diverse feedstock. Another project aim is to
develop new low-input separation technologies, with emphasis on understanding separating as it relates to
particle size, shape, and density. A UT survey showed similar concepts cutting across a range of
separating actions. Pneumatic, gravity, and imaging exhibit the greatest potential. Separation metrics
include purities of target components and efficiency at defined mass flow rate. Tasks include categorized
listing of separating units based on functional relations with separation efficiency, material properties, and
equipment factors; implementation of chemical analysis protocols to determine constituents of separated
plant parts; advancing biological plant part imaging to identify particle sizes, shapes, and features for
correlation with separation effectiveness; developing three to four table-top proof-of-concept devices; and
developing a new demonstration separation unit that most nearly meets performance criteria established
early in the project.
Integration of size reduction and separation is accomplished through concurrent tasks timed to
identify connective functions and biomass properties. The proposed work involves an equipment
manufacturer to identify functional, commercial, and performance targets for integrating size reduction
and separation. The company develops a business plan from the start, and continues to update it based on
their increasing role and stake in the project outcome. The company identifies the end-use format of
commercial process control factors, such as mass flow rate, operating settings, and other equipment
parameters needed for commercialization. Statistical correlations establish the relations between size
reduction and separation equipment variables, biomass input variables, and processed biomass output
4
conditions. A former federal biomass program manager leads the identification of biomass feedstock for
all project testing. High opportunity feedstock like switchgrass, corn stover, forest residues, and at least a
tough straw from rice or flax will be prioritized. Demonstrations of the developed system will target
biomass processors, converters, and exhibits to maximize the acceptance and tonnage of high opportunity
feedstock.
Expected outcomes are innovative, integrated technology to reduce size and separate crop
residues and dedicated biomass crops in on-the-go harvesters and stationary units. The systematic
approach with university/government research infrastructure and an equipment manufacturer is expected
to rapidly lead to a commercialized system and useful understandings for other biomass processing
efforts. Expected benefits of an integrated system by 2010 are $1 billion/y savings in physical processing
energy and improved wet conversion processes with targeted feedstock streams. Environmental benefits
include recycling of non-target plant parts on soil. The project is a critical link between biomass
producers and users.




Now the award link and a quote from it:

http://www.energy.gov/engine/content.do?PUBLIC_ID=16189&BT_CODE=PR_PRESSRELEASES&TT_CODE=PRE...

Department of Agriculture projects

University of Tennessee (Knoxville, Tenn.) – Integrated Size Reduction and Separation to Pre-Fractionate Biomass - $717,399


The titles in the two quotes are the same. The link is undeniable.



Hope that makes the connection crystal clear.

The U. of Tennessee is where Dr. Sokhansanj is a professor:

http://www.esd.ornl.gov/people/sokhansanj/

He is leading the ORNL project for the DOE grant. I do not think these are separate awards.

But that takes nothing away from this accomplishment.

Juggsy: I have the same questions about that first paragraph. What does it mean? New product, or equipment that will be used to feed the new KDS with optimized feedstock?

Any chance that F5-15 stands for FASC pps going from .05 to .15?

Maybe I'm reading to much into that. LOL

And did everyone note that project F5-15 is the first project listed? I wonder if they are prioritized?

Will: Excellent find! But here's the rest of the article that you posted ...

conditions. A former federal biomass program manager leads the identification of biomass feedstock for
all project testing. High opportunity feedstock like switchgrass, corn stover, forest residues, and at least a
tough straw from rice or flax will be prioritized. Demonstrations of the developed system will target
biomass processors, converters, and exhibits to maximize the acceptance and tonnage of high opportunity
feedstock.
Expected outcomes are innovative, integrated technology to reduce size and separate crop
residues and dedicated biomass crops in on-the-go harvesters and stationary units. The systematic
approach with university/government research infrastructure and an equipment manufacturer is expected
to rapidly lead to a commercialized system and useful understandings for other biomass processing
efforts. Expected benefits of an integrated system by 2010 are $1 billion/y savings in physical processing
energy and improved wet conversion processes with targeted feedstock streams. Environmental benefits
include recycling of non-target plant parts on soil. The project is a critical link between biomass
producers and users.

Hongcouver: You are right. I read too fast. This is the blurb that goes with the FASC project:

Plant matter and animal manures, collectively called biomass, can be used as fuel or fertilizer, after being ground into a powder and dried. This project will combine grinding and drying in one operation, and use the waste heat generated during grinding to dry the biomass, thereby reducing energy consumption, and enhancing cost savings and environmental benefits.

Face is red. I will now wait quietly for the announcement of the award details. Still hoping for the $750,000 that was applied for. And some details about the Phase I results.

Link to Phase I abstract (for completeness)...

http://www.science.doe.gov/sbir/awards_abstracts/sbirsttr/cycle21/phase1/095.htm

(looks better on RB)

James: Oops - guess I needed to do this...

 
               ______ 
                /o  /   ! 
    __          /:`_/---'-. 
   /__/______.-.'_'.-----./ 
  (o)(o)------''._.'     (O) 
 ------------------------------- 
  
 Traction! 
  
 

I want to hear more than confirmation that the Phase II grant has been made. I want to hear the results of Phase I!

This was the abstract from Phase I...

Many kinds of biomass can be used as fuel or fertilizer after being dried and ground. Combining drying with grinding in one operation would provide simplicity and offer better drying efficiencies. This project will use centrifugal force for grinding, and energy from the grinding process will be used for drying, thereby obviating the need for an external heat source and resulting in higher energy efficiencies than any other process. Phase I will determine the optimum design parameters for the combined machine and predict its performance. In particular, Phase I will: (1) study the effect of additional external heat input into the machine, (2) quantify the aerodynamic drag of the blades, (3) determine the rate of recirculation of the drying air, (4) quantify the extent of drying in different parts of the machine, and (5) perform modeling and analysis. In Phase II, an optimized machine will be field tested, especially with respect to the grinding and drying of crop residue and grasses.

Commercial Applications and Other Benefits as described by awardee: Both the agricultural sector and the paper industry should benefit from this process. At present, animal manures are applied directly to the land as fertilizer, causing E. coli contamination, greenhouse gas emissions, and eutrophication. The energy-efficient process should make the drying and grinding of animal manures into fertilizer cost-competitive, while also eliminating pathogens and avoiding the problems caused by direct land application. When applied to paper sludge, it should reduce landfill volumes.

Sure would like to know more about the "optimized machine [that will be] field tested."

FASC applied for $750,000 as part of the Phase II grant. Now we wait to see how much of that was granted.

Anyone know if that amount is in line with past Phase II grants? I suspect it is.

"The equipment could displace more than $1B/yr of natural gas/propane, increase profits for farmers and foresters, and provide jobs in urban and rural areas."

That's what we're talking about!

Are you guys nuts?!?!?!

Been very busy so just finding out about TR's find today. Hats off to you TR for staying on top of that page.

This is a done deal. They didn't put up that page as an April Fools joke. It's July.

And let's not forget about this from the 10QSB:

Last year, we were awarded a research grant by the US Department of Energy, the "Small Business Technology Transfer (STTR) -
Phase I Award" The agreed funding amount of $84,000 was used to further our work improving the drying and grinding
efficiencies of our KDS equipment. The work is now complete and we have applied for an additional Phase II grant for
$750,000 USD in concert with Oak Ridge National Laboratories.

Just a tad bit more moolah associated with the Phase II award. And prestige.

And validation that there is something to this machine and what it can potentially do. They would not be proceeding if they did not believe they could address this domain...

Natural gas and propane for drying are expensive, polluting, and non-renewable. This project will demonstrate biomass-fueled drying equipment. The equipment could displace more than $1B/yr of natural gas/propane, increase profits for farmers and foresters, and provide jobs in urban and rural areas.

I haven't been this excited about FASC since Thermix came on and AgES was first formed with the backing of HQ Capitech.

This has been a very good year for FASC.

Traction.

_______
/o / !
__ /:`_/---'-.
/__/______.-.'_'.-----./
(o)(o)------''._.' (O)

(Maybe it's pulling a rocket and all we can see is the top)

hockeydoc: Does FASC contract you to pour all the pads for the KDS to sit on? No wonder things take so long!

Ohayo Gozaimasu,Ed-san. I have no doubt that Dungate was behind the recent Japanese news. But where did that Malaysian connection come from? Dungate? Narayan? Independently?