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Blue Sun Biodiesel Goes Public Via Reverse Merger

29 January 2007

SunFuels, Inc., and its operating subsidiary Blue Sun Biodiesel LLC, are executing a reverse merger transaction with M-Wave, a publicly-traded printed circuit board supplier. When the transaction is complete, SunFuels execs will assume control of M-Wave, which will change its name to Blue Sun Holdings, Inc. The operating subsidiary will be renamed Blue Sun Biodiesel, Inc. The resulting company will continue to be publicly traded.

In addition to the merger transaction, SunFuels completed a $10.125 million private placement of its Series A Convertible Preferred Stock.

In connection with the issuance of the Series A Convertible Preferred Stock, SunFuels also issued warrants to purchase additional shares of SunFuels Common Stock to the investors in this round of financing. M.A.G. Capital, LLC, a Los Angeles-based private investment firm, was the lead investor in the Series A financing, which included one other institutional investor. In addition, M.A.G. Capital committed to purchase $10.125 million in additional Series A Convertible Preferred Stock upon the closing of the merger transaction.

We believe that now is an ideal time to be positioned as a public company in the biodiesel fuel business. With this transaction and our investors, Blue Sun is fully prepared to expand its business strategy and to meet the growing demand for high-quality biodiesel fuels.

As a leading vertically integrated biodiesel company, the $20.25 million equity investment provides the company with the capital necessary to complete construction of biodiesel refinery assets aggregating 45 million gallons of biodiesel per year. We intend to begin construction of our first biodiesel refinery site at Clovis, New Mexico immediately and to continue to build out our vertically integrated business model, including the construction of oilseed crushing facilities and advanced biodiesel blending terminals. With the combination of this merger transaction and the infusion of equity capital, we believe we will be well positioned to compete in the burgeoning biodiesel market in the United States.

—Jeff Probst, President and CEO of SunFuels and Blue Sun

The merger transaction is subject to the approval by the stockholders of M-Wave and SunFuels and the members of Blue Sun, receipt of all required consents, receipt of all regulatory approvals, and other customary closing conditions.

Blue Sun Fusion, Blue Sun’s flagship B20 product, is currently distributed in 10 states including Colorado, New Mexico, Nebraska, Wyoming, Idaho, and Montana, and in Ontario, Canada. Blue Sun is seeking to expand its distribution network with 12 new authorized distributors that will expand distribution in new markets, including Arizona, California, Kansas, Texas, Nevada, Oregon, Washington, North Dakota, South Dakota, Oklahoma, and States east of the Mississippi river.

Blue Sun’s customers include Denver Public Schools, City and County of Denver, City of Colorado Springs, City of Fort Collins, City of Santa Fe, Durango Mountain Resort, Aspen Ski Company, New Belgium Brewing Company, Odell Brewing Company and PNM, a large public utility in New Mexico, among others.

For the year ended December 31, 2005, SunFuels generated consolidated revenues of $4.5 million and a consolidated net loss of $0.7 million (audited). For the 12 months ended September 30, 2006, SunFuels generated consolidated revenues of $6.9 million and a consolidated net loss of $0.2 million (unaudited).

January 29, 2007 in Biodiesel | Permalink | Comments (0) | TrackBack (0)

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