AFS BioOil Co. (Private)

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August 23, 2012 Issue

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With Systems of the Future that Cultivate Microalgae and Produce Fuel for Local Use, AFS BioOil Co. is Well Positioned for Future Growth as Current Projects Show the Ability to Produce Biofuels Below $2 a Gallon and Waste Heat Electricity Below $0.06 per Kilowatt Hour

Vadim Krifuks
Chief Executive Officer

Serial entrepreneur concentrated on development and commercialization of next generation biofuels and waste heat power generation. Focused on industrial technologies that at commercial scale require no government support.

Company Profile:

AFS BioOil was formed in 2010 as a spin out of Algae Floating Systems, Inc. (AFS) The company is focused to use AFS algae cultivation and processing technologies to produce traditional biodiesel at points of high demand. FAME biodiesel is produced by processing algae oil through a chemical process known as transesterification. The fuel can be used in its pure form as a diesel substitute or added to diesel to produce a biodiesel blend, such as B-5 or B-20. The strategic goal of the company is to become a major algae biodiesel supplier.


AFS BioOil Co.
395 Oyster Point Blvd., Suite 308
South San Francisco, CA 94080
Phone: 650-745-8390


Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published August 27, 2012

CEOCFO: Mr. Krifuks, what is the grand vision at AFS?

Mr. Krifuks: The grand vision is to become a company that supplies low cost and locally grown based biodiesel. We cultivate microalgae and produce fuel for local use. Instead of shipping oil from overseas, we would be producing it onsite at every location where the fuel is required. This is a vision for AFS BioOil.


That said, we can do it in two ways as a stand alone system building facilities that produce only algae biodiesel or as part of an integrated project where our system is just one of the technologies on site. We think that the market will like the later projects better because such projects will be able to withstand any market volatility. In addition to fuels you will also produce electricity, and therefore at times when markets are not stable and prices are volatile instead of being in the red you have more flexibility to keep the entire operation profitable. Such projects would co-locate algae production, microbe production and electricity production on the same site sharing the same footprint and driving down the cost of the infrastructure.

CEOCFO: How are you putting all this together?

Mr. Krifuks: The most difficult was to form the vision and bring on board the best partners, employees and investors. We have been lucky with the quality of people that have come on board. There have been quite a few challenges weve encountered and because of the quality of our investors, partners and employees weve been able to resolve every single one of them. Our algae effort started back in 2006 from another company Algae Floating Systems. AFS BioOil licensed AFS technologies to actually use it for the biodiesel world. The first project for us was to deploy a commercial module that proves that our biodiesel can be produced at a competitive cost in a commercial system. The module is operational in Fairfield, California. It proves the economics of the process and feasibility of the system.

CEOCFO: Are you going to be able to produce this at $2 a gallon?

Mr. Krifuks: Correct!

CEOCFO: Where do we go from here? How do we go from concept and sample to utilization?

Mr. Krifuks: The next project for us is the system that will produce biodiesel commercially. We are doing basic engineering of the project. It is going to be a 5MWe/3million gallon per year project where we demonstrate the waste heat to electricity technology and at the same time produce algae and microbe based biodiesel. We think this is the project size that is required to make the big players pay attention and want to come on board.


The ultimate commercial systems will be deployed on 500 acres, will produce 1,000MWe of electricity at 6 cents per kWh and 300 million gallons of biofuels below $2 per gallon. Waste heat will be the primary source for power generation, CO2 and sunlight are the main feedstocks for algae biodiesel and hydrogen and CO2 are the main feedstocks for microbial fuels.

CEOCFO: What was the biggest challenge in putting together the different technologies and what have you figured out that other people are not doing or have not thought of doing?

Mr. Krifuks: People tend to think about each technology separately; we think that integration of technologies provided, of course, that each one of them works is the key to putting together truly sustainable projects. The projects must be technically feasible and must make economic sense! The other challenge was to partner with the right investors. From beginning to commercial production, it takes years for industrial technologies to develop, and we very much appreciate all the help we have received from the financial and non-financial partners that have joined the effort and are patient enough with us as we go through integration cycles that we have to go through as a technology company.

CEOCFO: Is the public paying attention?

Mr. Krifuks: There is definitely public interest. We thought that the issues surrounding Solyndra would negatively affect our industry but it really did not do as much harm as weve anticipated. We hope that there will be loan guarantee program for biofuels and renewable energy soon. We think a great program cannot be spoiled because of one bad apple. We feel we have the technology and that it will be much in demand. We have to make one more step and do this five megawatt/three million gallon a year facility and then from that point on, we will not need that much help from the public as the projects will be fully sustainable on their own.

CEOCFO: How do you protect the ideas that you have developed?

Mr. Krifuks: By absolutely having a strong intellectual property strategy which means a combination of patents and trade secrets! This is how we protect ourselves and our investors who come onboard. The intellectual property on the algae side is mainly the trade secrets/know-how and a few patents. On the waste heat electricity side, patents are the way to go.

CEOCFO: Does AFS BioOil have the funding to complete the upcoming project or is that still in the works?

Mr. Krifuks: We have a few avenues and are currently selecting the most beneficial path for the company.

CEOCFO: How do you reach potential investors?

Mr. Krifuks: The customers and the owners of the future systems are the primary targets, so it is strategic partnerships, private individuals, and institutional funds. People who are interested in developing next generation fuels and electricity projects usually speak about their plans. We find these people, contact them, and get them into the conversation.

CEOCFO: Are there any challenges that you are on the lookout for as you start to develop the project?

Mr. Krifuks: Absolutely! It is not the technology per se; one of the challenges is getting the permits to get the projects completed. We hear about solar projects such as in the Mohave Desert in California, and it takes developers a few years to get the permits... If you cannot get a permit during the time that you do the detailed engineering in say six months, any longer time can kill the project altogether and that is one of the major concerns that we have.


CEOCFO: Why should investors pay attention to AFS BioOil?

Mr. Krifuks: People should pay attention because our projects will produce biofuels below $2 a gallon and waste heat electricity below $0.06 per kilowatt hour. These are the systems of the future. It is really the integration of those two systems, which makes it work. From an economic standpoint, instead of developing separate projects you put them together on the same footprint, minimizing the cost of infrastructure and making the integrated project more flexible to withstand market volatility. We use CO2 from a power plant, water from a wastewater treatment plant to produce fuels and waste heat from the same power plant to produce electricity. Our projects create local jobs, improve economy and help our great country to become more energy independent from foreign oil. Everybody should pay attention!


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People should pay attention because our projects will produce biofuels below $2 a gallon and waste heat electricity below $0.06 per kilowatt hour. These are the systems of the future. - Vadim Krifuks does not purchase or make
recommendation on stocks based on the interviews published.