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7 September 2006


BluGlass closes IPO fully oversubscribed; lodges supplementary prospectus

GaN-on-glass specialist BluGlass Ltd, which was spun off from the III-nitride department of Macquarie University in Sydney, Australia last October, has closed its initial public offer on the Australian Stock Exchange (ASX) fully oversubscribed, raising the maximum subscriptions of
AUS$9m (US$6.9m) under its prospectus lodged with the Australian Securities and Investments Commission (ASIC) on 27 July. The company has lodged a supplementary prospectus with ASIC to accept up to a further 5m shares, at AUS$0.20 per share, to raise up to a further AUS$1m (US$1.3m) from investors.

The closing of the IPO had already been extended by a week from 25 August to 1 September to accommodate further demand from overseas investors exceeding
the minimum AUS$6m (US$4.6m) in subscriptions targeted in the original prospectus and to ensure that the full amount of AUS$3m (US$2.3m) in oversubscriptions could be accepted. At the same time, the date for allocation of shares and dispatch of holding statements was rescheduled to 8 September, and the expected date of listing on the ASX was rescheduled to 15 September.

BluGlass claims its technology has the potential to significantly reduce the cost of manufacturing gallium nitride for applications including high-brightness LEDs used in the backlighting of mobile phones and PDAs, and in longer-life, lower-energy commercial and domestic lighting. Compared to typical current commercial MOCVD-based techniques for
fabricating GaN materials and devices on sapphire or SiC wafers at temperatures above 950 degrees C, BluGlass' technology does not use highly toxic ammonia gas and uses process temperatures of 500­700 degrees C, making
it compatible with glass, silicon and other lower-cost substrates, the company claims.

In its original prospectus, BluGlass said that funds raised will be applied to further develop the technology and fully demonstrate its potential, including building a pilot manufacturing plant to demonstrate the technology. Possible revenue sources include making and selling the
remote-plasma CVD GaN deposition equipment; licencing the fabrication process; selling GaN epiwafers; and selling unpackaged GaN devices such as LEDs and lasers, the prospectus added.

In facilities at Macquarie University, BluGlass has already demonstrated its technology on 2" substrates by fabricating a GaN LED at temperatures below 700 degrees C. Researchers are now optimizing the process to improve device performance and scaling up the process to accommodate 4" and larger wafers to demonstrate the scalability. The characteristics of the process and research results suggest that it is scalable to larger wafer sizes (8" or greater), beyond current limits for GaN on sapphire and SiC, the company says, enabling substantial improvement in production efficiencies. The growth process is also compatible with GaN alloys, as well as InN and AlN materials, it is claimed.

The total proceeds of up to AUS$10m (US$13m) will ensure a strong cash position for BluGlass to execute its strategy, says chief executive officer David Jordan. When the original prospectus was issued, BluGlass had existing cash reserves of about AUS$5.9m.

"The key focus for BluGlass over the first 12 months is to prove that our Australian-developed technology can significantly reduce the cost of manufacturing gallium nitride and, following this offer, we will be in a very secure financial position to achieve that."

Jordan said the lodging of the supplementary prospectus means a rescheduling by a further week of the dates for allocation of shares and dispatch of holding statements to 15 September, and for listing on the ASX to 22 September.

The GaN market has grown from $US25m in 1994 to $US3.2bn in 2004, and is expected to grow to as much as $US6bn by 2009. A more efficient method of manufacture is expected to broaden the potential markets for GaN significantly.

See related items:

Australian GaN-on-glass spin-off plans IPO to raise $4.6m

BluGlass extends IPO to accommodate international demand for oversubscriptions

Visit: http://www.bluglass.com.au