Let me start by talking about our progress in research and development. I’m excited to announce the development of our new next-generation catalyst platform. For some background, KiOR's two step biomass to fuels technology starts with non-fuel biomass that is fed into a biomass fluid catalytic cracking or BFCC.

Our BFCC is based on fluid catalytic cracking technology from the refining industry, which implies a continuous flow of catalyst in a loop. The catalyst is heated at the beginning of each cycle and is then fed into our reactor at the same time we feed our biomass. The reaction occurs literally in seconds, the catalyst and produced hydrocarbons are separated, and the catalyst is regenerated and reheated to start the next cycle.

The composition of these hydrocarbons is very important in maximizing the efficiency of our process. Without getting into too much detail there are three kinds of hydrocarbons that come out of our reactor, coke or carbon, gasses and a liquid fraction.

Since the liquid fraction is what we upgrade to our cellulosic gasoline and diesel, we want to maximize the volume of our liquid fraction. At the same time though, our facilities do require a minimum level of coke to be able to maintain in overall heat balance.

Our research and development team knows there is an ideal balance between coke, gasses and liquid fraction. They have been working tirelessly on both catalyst design and reactor design to achieve that balance.

As they do, we believe we will see improvements in overall yield increasing the number of gallons of our cellulosic fuels for a ton of biomass, as well as enhancements to our capital efficiency, thereby reducing the capital costs per gallon of cellulosic fuel. That’s what makes the development of our new next-generation catalyst platform so important. This catalyst is a culmination of the tremendous amount of effort by our R&D team and represents a major step toward achieving that balance of hydrocarbons that we discussed.

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