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  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 5/23/07  Imperium Renewables Inc           S-1                   18:427                                    RR Donnelley/FA

Document/Exhibit                   Description                      Pages   Size 

 1: S-1         Form S-1 Registration Statement                     HTML  1,474K 
 2: EX-3.1      Amended and Restated Articles of Incorporation      HTML     98K 
 3: EX-3.2      Form of Amended and Restated Articles of            HTML     25K 
                          Incorporation                                          
 4: EX-3.3      Amended and Restated Bylaws                         HTML    124K 
 5: EX-3.4      Form of Amended and Restated Bylaws                 HTML     73K 
 6: EX-10.1     Form of Indemnification Agreement                   HTML     56K 
 7: EX-10.2     Key Employee Agreement                              HTML     22K 
 8: EX-10.3     Second Amended and Restated Investor Rights         HTML     96K 
                          Agreement                                              
 9: EX-10.4     2005 Stock Option Plan and Related Agreements       HTML     86K 
10: EX-10.6     2007 Employee Stock Purchase Plan and Related       HTML    126K 
                          Agreements                                             
11: EX-10.7     Construction Agreement                              HTML     98K 
12: EX-10.8     Rental Agreement No. 1014                           HTML     90K 
13: EX-10.9     Lease Agreement                                     HTML    225K 
14: EX-10.10    Lease Agreement                                     HTML     92K 
15: EX-10.11    Methanol Sales Agreement                            HTML     89K 
16: EX-10.12    Contract for the Supply of Rbd Palm Olein           HTML     62K 
17: EX-21.1     Subsidiaries of the Registrant                      HTML      7K 
18: EX-23.1     Consent of Independent Registered Public            HTML      7K 
                          Accounting Firm                                        

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As filed with the Securities and Exchange Commission on May 23, 2007

Registration No. 333-            

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

IMPERIUM RENEWABLES, INC.

(Exact name of registrant as specified in its charter)

1418 Third Avenue, Suite 300

Seattle, Washington 98101

(206) 254-0203

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

MARTIN G. TOBIAS

Chief Executive Officer

Imperium Renewables, Inc.

1418 Third Avenue, Suite 300

Seattle, Washington 98101

(206) 254-0203

(Name, address, including zip code, and telephone number, including area code, of agent for service)

It is respectfully requested that the Securities and Exchange Commission send copies of all notices, orders and communications to:

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box.  ¨

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

CALCULATION OF REGISTRATION FEE

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the Registration Statement shall become effective on such a date as the Commission, acting pursuant to said Section 8(a), may determine.

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The information in this prospectus is not complete and may be changed. Neither we nor the selling shareholders may sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.

PROSPECTUS

(Subject To Completion) Issued May 23, 2007

Shares

COMMON STOCK

Imperium Renewables, Inc. is offering                  shares of its common stock. This is our initial public offering, and no public market currently exists for our shares. We anticipate that the initial public offering price for our shares will be between $             and $             per share.

We have applied to list our common stock on the NASDAQ Global Market under the symbol “IMPR.”

Investing in our common stock involves risks. See “ Risk Factors” beginning on page 9.

PRICE $             A SHARE

We and the selling shareholders have granted the underwriters the right to purchase up to an additional                      shares and                      shares, respectively, to cover over-allotments. We will not receive any proceeds from the sale of shares by the selling shareholders.

The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares to purchasers on                     , 2007.

                    , 2007

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You should rely only on the information contained in this prospectus or in any related free writing prospectus filed with the Securities and Exchange Commission, or the SEC, and used or referred to in an offering to you of these securities. We and the selling shareholders have not, and the underwriters have not, authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We and the selling shareholders are offering to sell and seeking offers to buy shares of our common stock only in jurisdictions where offers or sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, and the information appearing in any free writing prospectus is accurate only as of the date of the free writing prospectus.

No action has been or will be taken in any jurisdiction by us or by any underwriter that would permit a public offering of the common stock or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. In this prospectus references to “dollars” and “$” are to United States dollars.

Until                     , 2007 (25 days after the date of this prospectus), all dealers that buy, sell or trade our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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 INDUSTRY AND MARKET DATA

We obtained the industry, market and competitive position data used throughout this prospectus from industry journals and publications, data on websites maintained by private and public entities, including independent industry associations, general publications and other publicly available information. We believe that all of these sources are reliable, but we have not independently verified any of this information and cannot guaranty its accuracy or completeness. In particular, we have based much of our discussion of the biodiesel industry, including government regulation relevant to the industry and forecasted growth in demand, on information published by the National Biodiesel Board, or NBB, the national trade association for the U.S. biodiesel industry, and by the Energy Information Administration, which provides the official energy statistics for the U.S. government. Independent industry publications and surveys generally state that they have obtained information from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. Further, because the NBB is a trade organization for the biodiesel industry, they may present information in a manner that is more favorable to that industry than would be presented by an independent source. Forecasts are particularly likely to be inaccurate, especially over long periods of time. Unless the context requires otherwise, references to “diesel” in the U.S. are to distillate fuel oil, which includes numbers 1, 2 and 4 distillates, and references to “diesel” in Europe are to gas diesel oil, which includes diesel used for compression ignition, light heating oil for industrial and commercial uses, and other heavy gas oils.

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 PROSPECTUS SUMMARY

This summary highlights information included elsewhere in this prospectus. This summary is not complete and does not contain all the information that may be important to you. You should carefully read the entire prospectus, especially the risks set forth under the heading “Risk Factors” and our financial statements and related notes included elsewhere in this prospectus, before making an investment decision. Unless the context requires otherwise, references in this prospectus to “Imperium,” “we,” “us,” and “our” refer to Imperium Renewables, Inc. and its subsidiaries and, as of dates and for periods on or prior to May 17, 2005, to our business while it was a part of Seattle Biodiesel LLC. When used in this prospectus, the term “nameplate capacity” means the annual production capacity of a biodiesel production facility for which it is designed and as certified by an independent design engineer.

IMPERIUM RENEWABLES, INC.

Overview

We expect to be the largest “pure-play” biodiesel producer in the U.S. in 2007 based on nameplate capacity, according to the NBB. We design, develop, build, own and operate biodiesel production facilities that will be capable of consistently producing industrial scale quantities of biodiesel from multiple feedstocks that exceed industry quality standards. We are building the first facility in the U.S. with a 100 million gallon per year, or MGY, nameplate capacity, and we are developing three additional production facilities that will expand our aggregate nameplate capacity to approximately 405 MGY by the end of 2008. We believe that we will be among the lowest-cost providers, if not the lowest-cost provider, of biodiesel in the U.S. due to the strategic locations of our production facilities, our proprietary process and technological innovations, our ability to utilize multiple feedstocks, and our internal project engineering expertise. Since 2005, we have been selling biodiesel directly and through distributors to a variety of users, including industrial users, fleet and marine operators, utilities, fuel distributors and blenders, and federal, state and local governments. We also have a contractual commitment from a large industrial fuel user to purchase, at a minimum, approximately 18 million gallons of biodiesel annually for approximately five years with an option for a three-year extension. We believe this is the single largest long-term biodiesel sales contract to an end user in the U.S.

Biodiesel is a biodegradable, nontoxic alternative fuel produced from multiple types of vegetable oil and other feedstocks. Biodiesel performs comparably to petroleum diesel, or diesel, in vehicle, marine, power generation and home heating oil applications. Biodiesel can be used as a direct replacement for diesel and can also be blended with diesel. Many industrial biodiesel consumers use B99, which is a blend containing 99% biodiesel and 1% diesel. In comparison to ethanol, which is used primarily as an oxygenate that typically replaces up to 10% of gasoline, biodiesel can be used as a direct replacement for diesel at levels up to 100%, which increases the potential penetration of biodiesel in the diesel market relative to the potential penetration of ethanol in the gasoline market. To use ethanol as a replacement fuel or in blends higher than 10% generally requires significant engine modification. Biodiesel represents less than 0.4% of the overall U.S. diesel market, based on 2006 figures. In the U.S., biodiesel consumption has grown from approximately 500,000 gallons in 1999 to more than an estimated 250 million gallons in 2006.

Increased use of biodiesel not only reduces dependence on petroleum oil but also combats the environmental impact of petroleum-based fuels. Biodiesel emits fewer exhaust materials that cause smog, particulate pollution and global warming than diesel. According to the U.S. Environmental Protection Agency, or EPA, pure biodiesel, or B100, emits 78% less carbon dioxide, 67% fewer unburned hydrocarbons, 48% less carbon monoxide, and 47% fewer particulates, than diesel. Given these benefits, federal and state governments are mandating or encouraging the use of biodiesel. The federal government provides distributors and blenders with an excise tax credit of $0.01 per percentage point of biodiesel blended with diesel, up to $1.00 per gallon. The

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2005 Energy Policy Act includes national targets for renewable fuel as a percentage of the overall fuel supply. Various states and local governments have also enacted renewable fuel standards mandating the use of biodiesel as a blend with diesel. The production of biodiesel may also generate emissions credits, which can be traded on exchanges pursuant to the Kyoto Protocol and other efforts.

We believe our biodiesel production process and technological innovations will enable us to produce biodiesel that exceeds industry quality standards with relatively lower capital expenditures and operating expenses than certain of our competitors. Although the process of making biodiesel is relatively simple, we believe we will be the first in the U.S. to efficiently and consistently produce high quality biodiesel on an industrial scale that can be transported long distances. We have optimized our biodiesel production process to incorporate new, internally-developed proprietary technology, and our production facilities are being designed and built to process biodiesel from multiple feedstocks simultaneously. This flexibility will allow us to shift into and out of feedstocks based on customer demand and market cost dynamics without hindering production or increasing our operating costs. In addition, our process recaptures methanol and does not create waste water, which reduces costs and environmental permitting requirements.

We employ in-house engineering, design and project management personnel in the construction process, which we believe enables us to decrease our time to market and reduce our construction costs. For example, we expect to construct our Grays Harbor production facility in 11 months at a total cost of approximately $73 million, or $0.73 per gallon of nameplate capacity, including facility construction, all transportation infrastructure and on-site storage facilities costs. Excluding the transportation infrastructure and on-site storage facilities, the total cost to construct our Grays Harbor production facility is expected to be approximately $34 million, or $0.34 per gallon of nameplate capacity.

We commenced operation of our first commercial biodiesel production facility in April 2005. We expect to complete construction of our second commercial production facility, located at Grays Harbor, Washington, in July 2007, the designs for which are certified at 100 MGY nameplate capacity. We are also developing three additional 100 MGY nameplate capacity facilities that are scheduled to be constructed by the end of 2008: two in the U.S. and one in Argentina. The U.S. production facilities will produce biodiesel primarily for the U.S. East and West Coast markets. The Argentina production facility will produce biodiesel primarily for export to Europe. Each of these production facilities will be based on the same technology, engineering and design that we are using at our Grays Harbor production facility. We expect to finance the construction of these three new facilities with the net proceeds we receive from this offering. We are also evaluating several sites for additional new production facilities, both overseas and in the U.S., that we may develop after 2008.

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The table below provides an overview, as of the date of this prospectus, of our biodiesel production facilities that are in operation or under development and expected to be constructed by the end of 2008.

Competitive Strengths

Our competitive strengths include:

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Business Strategy

Our objective is to grow our leading market position in the U.S. biodiesel industry and become the biodiesel provider of choice. Key elements of our strategy include:

Certain Risk Factors

Our business involves various risks, including the volatility and uncertainty of the prices of feedstocks, methanol, crude oil, diesel and biodiesel; our near-term dependence on a single production facility; our ability to secure new sites for, and build, new production facilities in furtherance of our growth strategy; problems with product quality or product performance; our ability to implement our expansion strategy as planned or at all; operational disruptions at our facilities; adverse public perception concerning the biodiesel market or our supply of feedstock; our limited operating history; our level of indebtedness and limitations and restrictions on our business activities imposed by any debt financing agreements; development of infrastructure related to the sale and distribution of biodiesel; our ability to compete effectively in our industry; our ability to implement a distribution network for our biodiesel; changes in or elimination of governmental laws, tariffs, trade or other controls or enforcement practices; environmental, health and safety laws, regulations and liabilities; the results of our hedging transactions and other risk mitigation strategies; our reliance on key management personnel; future technological advances; and our ability to raise additional capital and secure additional financing. See “Risk Factors” beginning on page 9.

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Our Corporate Information

Our corporate offices are located at 1418 Third Avenue, Suite 300, Seattle, Washington 98101. We were incorporated in Washington in May 2005. Until May 17, 2005, our business was part of Seattle Biodiesel LLC, at which time we merged Seattle Biodiesel LLC into a wholly-owned subsidiary, pursuant to which Seattle Biodiesel LLC became our subsidiary. Our website address is http://www.imperiumrenewables.com and our telephone number is (206) 254-0203. Information on our website is not incorporated into this prospectus and should not be relied upon in determining whether to make an investment in our common stock. Any logos or other trademarks mentioned in this prospectus are the property of their respective owners.

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THE OFFERING

The number of shares of common stock that will be outstanding after this offering is based on 33,824,875 shares outstanding at March 31, 2007, which assumes the issuance of 2,385,069 shares of common stock issuable upon exercise of all of our outstanding warrants and an option issued outside of our 2005 Stock Option Plan that terminate immediately prior to the effectiveness of this offering if not exercised, but excludes as of March 31, 2007:

Except as otherwise indicated, all information in this prospectus assumes:

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SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA

The following table presents summary consolidated financial and operating data as of the dates and for the periods indicated. The summary consolidated statement of operations data for the period from our inception on March 5, 2004 to December 31, 2004 and for the years ended December 31, 2005 and 2006 have been derived from the audited consolidated financial statements included elsewhere in this prospectus. The summary consolidated statement of operations data for the three months ended March 31, 2006 and 2007, and the balance sheet data as of March 31, 2007, have been derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal and recurring adjustments, necessary to state fairly our results of operations as of and for the periods presented. You should read the information contained in this table in conjunction with the “Selected Consolidated Financial and Operating Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and accompanying notes included elsewhere in this prospectus. Historical results of operations and financial position are not necessarily indicative of the results that may be expected for future periods.

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 RISK FACTORS

An investment in our common stock involves risks. You should carefully consider the risks described below as well as the other information contained in this prospectus before investing in our common stock. The risks and uncertainties described below are not the only ones we may face. The following risks, together with additional risks and uncertainties not currently known to us or that we may deem immaterial, could impair our business, financial condition and results of operations. The market price of our common stock could decline if one or more of these risks and uncertainties develop into actual events, and you may lose all or part of your investment.

Risks Relating to Our Business

Our financial condition and results of operations are highly dependent on vegetable oil prices, which are subject to significant volatility and uncertainty, so our financial results could fluctuate substantially.

Our financial results are substantially dependant on commodity prices, in particular the prices of soybean, canola and palm oils, which we refer to as vegetable oils or feedstock. Vegetable oil is currently the single largest cost in our production of a gallon of biodiesel. Vegetable oil costs for the year ended December 31, 2006 and for the quarter ended March 31, 2007 constituted approximately 56% and 60%, respectively, of our total cost of sales. At certain levels, the prices of vegetable oils may make biodiesel uneconomical when compared to the price of diesel. Because the prices for these items are volatile, our financial results may fluctuate substantially and we may experience periods of lower gross margins, which could result in operating losses. Although we may attempt to offset a portion of the effects of fluctuations in prices by entering into forward contracts to supply our feedstock, or by engaging in transactions that involve exchange-traded futures contracts, the amount and duration of these hedging and other risk mitigation activities may vary substantially over time and these activities also involve substantial risks. See “—We engage in hedging transactions and other risk mitigation strategies that could harm our financial results.”

The price of vegetable oil is influenced by various global factors including weather conditions and other factors affecting crop yields, farmer planting decisions, the output and proximity of crush facilities that convert the crops to oil, and general economic, market and regulatory factors. These factors include government policies and subsidies with respect to agriculture and international trade, global and local demand and supply and political and social factors that may cause fewer acres of oilseed crops to be planted, or used for biodiesel production. The significance and relative effect of these factors on the price of vegetable oils is difficult to predict. Any event that tends to negatively affect the supply of vegetable oil, such as adverse weather or crop disease, could increase vegetable oil prices and potentially harm our business. In addition, we may also have difficulty, from time to time, in sourcing vegetable or other oils on economical terms due to supply shortages. A shortage of any particular feedstock may require us to source other types of feedstock at less favorable prices, which may have a material adverse effect on our business and financial condition.

Our financial condition and results of operations are highly dependent on the price of crude oil, diesel and biodiesel, which are subject to significant volatility and uncertainty. Fluctuations in the selling price and production cost of crude oil and diesel may reduce our gross margins.

Biodiesel prices are influenced by the supply and demand for crude oil and diesel. Historically, the price of biodiesel has correlated closely to the price of crude oil and diesel. The prices of crude oil and diesel fluctuate substantially and are difficult to forecast due to factors such as war, political unrest, worldwide economic conditions, seasonal weather conditions, changes in refining capacity, fluctuations in exchange rates and natural disasters. A perceived reduction of such threats could result in a significant reduction in crude oil prices.

Our gross margin depends principally on the spread between biodiesel and vegetable oil prices. The spread between biodiesel and vegetable oil prices can vary significantly. Because biodiesel is marketed both as a pure and blended substitute for diesel, a decrease in crude oil and diesel prices may reduce the price at which we can sell our biodiesel and materially and adversely affect our financial condition and results of operations.

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Our business is subject to seasonal fluctuations, which could adversely affect our financial results.

Our operating results could be influenced by seasonal fluctuations in the price of vegetable oils and the price of crude oil and diesel. The spot prices of vegetable oils tend to rise during the spring planting season in May and June and tend to decrease during the fall harvest in October and November. In addition, our biodiesel prices are substantially correlated with the price of crude oil and diesel. The price of crude oil and diesel tends to rise both in summer, due to the summer driving season, and in winter, due to home heating needs. Given our limited history, we do not know yet how these seasonal fluctuations will affect our financial results over time.

We will for the near future substantially depend on one new production facility, and any operational disruption could result in a reduction of our sales volumes and could cause us to incur substantial losses.

Nearly all of our anticipated revenue for at least the next 12 months will be derived from the sale of biodiesel that we plan to produce at our new 100 million gallon per year, or MGY, nameplate capacity facility in Grays Harbor, Washington that is scheduled to begin production in July 2007. Our operations would be subject to significant interruption if this production facility were to experience an accident or were damaged by severe weather or other natural disaster. In addition, our operations may be subject to labor disruptions and unscheduled downtime, or other operational hazards inherent in chemical manufacturing industries, such as equipment failures, fires, explosions, abnormal pressures, blowouts, pipeline ruptures and transportation accidents. Some of these operational hazards may cause personal injury or loss of life, severe damage to or destruction of property and equipment or environmental damage, and may result in suspension or termination of operations and the imposition of civil or criminal penalties. In addition, our insurance may not be adequate to fully cover the potential operational hazards described above, and we can provide no assurance that we will be able to renew our insurance on commercially reasonable terms or at all.

Operations at our new Grays Harbor production facility, or at our additional planned production facilities, may not achieve our expected results.

We expect to begin biodiesel production at our new Grays Harbor production facility in July 2007. Our Grays Harbor production facility will employ technology on a significantly larger scale than our much smaller Seattle production facility, and our technology has not been tested or proven on this scale. We have not yet demonstrated the production capacity of our Grays Harbor production facility and do not expect to achieve 100 MGY capacity until the first quarter of 2008, at the earliest. If the Grays Harbor production facility does not operate as planned, we may need to incur additional expense, and spend additional time, to commence or increase production at that facility, either of which would reduce our production capacity and increase our production costs. Any failure of our Grays Harbor production facility to produce biodiesel at anticipated cost and capacity levels, or to produce any biodiesel at all, would adversely affect our ability to build other planned production facilities, which will be based on the technology employed at our Grays Harbor production facility. Such failure would adversely affect our financial condition and results of operations.

Our business growth strategy substantially depends on our ability to build new production facilities to add to our Grays Harbor and Seattle production facilities. We may not be able to implement this expansion strategy as planned or at all.

We plan to grow our business by building three new 100 MGY nameplate capacity facilities, in addition to our Grays Harbor production facility, over the next 18 months at sites in Hawaii, in Argentina and on the U.S. East Coast. These three new production facilities are in various stages of planning and development. We are also currently evaluating several sites globally, including in Belgium, China and the Philippines, for possible additional production facilities. Development, construction and expansion of biodiesel production facilities is subject to a number of risks, any of which could prevent us from commencing operations at a particular facility as expected or at all, including adverse weather conditions, defects in materials and workmanship, labor and material shortages or delays, zoning delays, opposition from local groups, transportation constraints, construction change orders, site changes, labor issues and other unforeseen difficulties. For example, if the barge we have

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leased is not delivered on time, we may suffer delays in delivery of feedstock from suppliers and delivery of biodiesel to customers. We must also obtain numerous regulatory approvals and permits to construct and operate new production facilities. These requirements may not be satisfied in a timely manner or at all. In addition, as described below under “—Risks Relating to the Biodiesel Industry—We may be adversely affected by environmental, health and safety laws, regulations and liabilities,” federal and state governmental requirements may substantially increase our costs, which could have a material adverse effect on our results of operations and financial condition. Our expansion plans may also result in other adverse consequences, such as the diversion of management’s attention from our existing operations.

We believe that the net proceeds of this offering will only be sufficient to fund the construction costs of our next three planned production facilities. Total construction costs to complete our Grays Harbor production facility are expected to be approximately $73 million, but construction costs in other regions could be more expensive. For example, construction costs of our planned production facility in Hawaii are expected to be approximately 25% higher than our Grays Harbor construction cost for a production facility with the same capacity.

To the extent that proceeds from this offering or, if necessary, our cash on hand and cash generated from operations, are not sufficient to fund the construction costs of our production facilities in development, additional financing will be required. Additional financing may also be required in connection with the construction of our production facilities under evaluation. We may not have access to required financing or such financing may not be available to us on acceptable terms or at all. We may finance the expansion of our business with additional indebtedness or by issuing additional equity securities. We could face financial risks associated with incurring additional indebtedness, such as reducing our liquidity, cash flow and access to financial markets, and increasing the amount of cash flow required to service such indebtedness, or associated with issuing additional stock, such as dilution of ownership and earnings.

Our construction costs may also increase to levels that would make a new production facility too expensive to complete or unprofitable to operate. We have not yet entered into construction contracts for our three new planned production facilities or any other facilities that might limit our exposure to higher costs in developing and completing any new facilities. Contractors, engineering firms, construction firms and equipment suppliers also receive requests and orders from other biodiesel companies and, therefore, we may not be able to secure their services or products on a timely basis or on acceptable financial terms. We also have only limited experience with production facility construction, and we may suffer significant delays or cost overruns as a result of a variety of factors, such as shortages of workers or materials, increased cost of construction materials, transportation constraints, adverse weather conditions, unforeseen difficulties or labor issues, any of which could prevent us from commencing operations as expected at our production facilities.

The significant expansion of biodiesel production capacity currently underway in the U.S. and internationally may also impede our expansion strategy. As a result of this expansion, we believe that there is increasing competition for suitable sites for biodiesel production facilities, and we may not find suitable sites for construction of new production facilities or other suitable expansion opportunities. Even if we are able to identify suitable sites or opportunities, we may not be able to secure the services and products from the contractors, engineering firms, construction firms and equipment suppliers necessary to build our biodiesel production facilities on a timely basis or on acceptable economic terms.

We will depend on a single customer for a substantial portion of our revenue during 2007 and 2008, and the loss of, or a significant reduction in biodiesel purchased by, this customer could significantly reduce our revenue.

We have entered into a biodiesel purchase agreement with a large industrial fuel user that provides for our delivery of approximately 18 million gallons of biodiesel to this user in 2007, which may increase by up to 10% per year through 2011. The purchase agreement with this user is currently the only major long-term biodiesel customer contract that we have, and we expect this contract to account for a substantial portion of our

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2007 and 2008 revenue. This user could terminate this agreement for any reason with six months’ prior written notice, subject to a termination fee, or in the event of our inability to perform our responsibilities, our insolvency, our uncured material breach of the agreements, including our inability to supply biodiesel at required specifications, or if any law, regulation, judgment or order makes our performance of any obligation under the agreement illegal or prohibited. The termination of, or a significant reduction in biodiesel purchased under, the purchase agreement would materially reduce our revenue and would harm our financial condition and results of operations.

Cold weather can cause biodiesel to gel, which could cause consumers to lose confidence in the reliability of biodiesel. Such loss of confidence could adversely impact our ability to successfully market and sell our biodiesel.

The pour point for a fuel is the temperature at which the flow of the fuel substantially stops. A lower pour point means the fuel will flow more readily in cold weather. The pour points for No. 2 diesel and No. 1 diesel, which are used extensively for automotive transportation, are approximately -17ºF and -45ºF, respectively. In contrast, the pour points of canola-based, soybean-based and palm-based pure biodiesel, or B100, are approximately 16ºF, 32ºF and 54ºF, respectively. The pour points for biodiesel vary with the particular feedstock, increasing or decreasing with the level of unsaturated fatty acids. Therefore, for certain uses, we believe we will need to blend the biodiesel we produce with diesel or other additives to provide a biodiesel product that has an acceptable pour point in cold weather. In colder temperatures, lower blends are recommended to avoid fuel system plugging. This may cause the demand for our biodiesel in colder climates to diminish seasonally. This may also require us to use particular feedstocks that customers believe are better suited for their climate, which could require us to purchase more expensive feedstocks and increase our cost of sales. The tendency of biodiesel to gel in colder weather may also result in long-term storage problems. At low temperatures, biodiesel may need to be stored in a heated building or heated storage tanks, which would increase storage costs. Any reduction in the demand for, or increased costs of, our biodiesel will reduce our revenue and have an adverse effect on our financial condition and results of operations.

Problems with product quality or product performance could result in a decrease in customers and revenue, unexpected expenses and loss of market share.

The production of biodiesel that meets stringent quality requirements is complex. Concerns about fuel quality may impact our ability to successfully market our biodiesel. If we are unable to produce biodiesel that meets the industry quality standard, our credibility and the market acceptance and sales of our biodiesel could be negatively affected. In addition, actual or perceived problems with quality control in the industry generally may lead to a lack of consumer confidence in biodiesel and harm our ability to successfully market biodiesel. For example, the State of Minnesota temporarily suspended its 2% biodiesel, or B2, requirement on at least two occasions due to concerns about biodiesel quality. Similar quality control issues in biodiesel that we produce or that is produced by other industry participants could result in a decrease in demand or mandates for biodiesel, with a resulting decrease in our revenue.

Our future growth will depend on our ability to establish and maintain strategic relationships with distributors and feedstock suppliers. If we are unable to establish and maintain such relationships our business growth strategy could be significantly limited.

Our future growth generally depends on our ability to establish and maintain relationships with third parties, including alliances with distributors and feedstock suppliers. For example, we currently rely on an agreement with Methanex Methanol Company, or Methanex, to supply methanol to us for our Grays Harbor production facility. However, we will need to enter into additional agreements with Methanex or other third parties to supply us with required quantities of methanol for our planned production facilities in Hawaii, in Argentina and on the U.S. East Coast. Further, we will need to enter into agreements with additional suppliers of vegetable oils. In addition, we will rely to a certain extent on third parties to sell and market our biodiesel. We cannot assure you

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that we will be able to establish strategic relationships with third parties on terms satisfactory to us or at all, or that any arrangements that we enter into will result in the type of collaborative relationship with the third party that we are seeking. Further, these third parties may not regard their relationship with us as important to their own business and operations and may not perform their obligations as agreed. Any failure to develop and maintain satisfactory relationships with distributors and feedstock suppliers would have a material adverse effect on our business.

We have a limited operating history and our business may not be as successful as we envision.

We began our business in 2004 and commenced commercial operations at our Seattle production facility in 2005, and plan to commence production at our Grays Harbor production facility in July 2007. Accordingly, we have a limited operating history from which you can evaluate our business and prospects. We have generated net losses and negative cash flow from operations since we commenced our operations. For example, for 2006 and the quarter ended March 31, 2007, we incurred net losses of approximately $5.5 million and $2.8 million, respectively, our net cash used in operating activities was approximately $3.8 million and $23.1 million, respectively, and, at March 31, 2007, our accumulated deficit was approximately $9.3 million. We expect to incur increasing net losses and negative cash flow from operations through at least the end of 2007 and possibly in future periods as we build new productions facilities, hire additional employees, apply for regulatory approvals, continue development of our technology, expand our operations and incur the additional costs of operating as a public company.

In addition, our prospects must be considered in light of the risks and uncertainties encountered by an early-stage company in the rapidly-evolving biodiesel market, where supply and demand may change significantly in a short amount of time.

Some of these risks relate to our potential inability to:

If we cannot successfully address these risks, our business and financial condition would suffer.

Our level of indebtedness could adversely affect our ability to react to changes in our business, and we may be limited in our ability to use debt to fund future capital needs.

We expect to enter into a $101.2 million credit facility in June 2007 to provide financing for a portion of the cost of constructing our Grays Harbor production facility and to provide a working capital line of credit for this production facility. We expect our debt service requirements to increase substantially in the future in connection with this credit facility and future credit facilities that we may enter into for the purpose of funding future construction costs and working capital needs.

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Our expected substantial indebtedness could adversely affect our financial condition. Our level of indebtedness could:

Our ability to make payments on and refinance our indebtedness will depend on our ability to generate cash from our future operations. Our ability to generate cash from future operations is subject, in large part, to general economic, competitive, legislative and regulatory factors and other factors that are beyond our control. There can be no assurance that we will be able to generate enough cash flow from operations or that we will be able to obtain enough capital to service our debt or fund our planned capital expenditures. In addition, we may need to refinance some or all of our indebtedness on or before maturity. There can be no assurance that we will be able to refinance our indebtedness on commercially reasonable terms, or at all.

If we cannot service or refinance our indebtedness, we may have to take actions such as selling assets, seeking additional equity financing or reducing or delaying capital expenditures, including construction of planned new production facilities, strategic acquisitions or investments. We may not be able to take these actions, if necessary, on commercially reasonable terms or at all. In addition, lenders under our proposed credit facility could foreclose on and sell our assets at our Grays Harbor production facility if we default under our proposed credit facility.

We are a holding company and there may be limitations on our ability to receive distributions from our subsidiaries.

We conduct substantially all of our operations through subsidiaries and are dependent on dividends or other intercompany transfers of funds from our subsidiaries to meet our obligations. Moreover, our subsidiary that owns and will operate the Grays Harbor production facility is limited in its ability to pay dividends by the terms of its operating agreement and also, we expect, by the terms of the proposed credit facility we expect to enter into in June 2007.

Our ownership position in our Grays Harbor subsidiary and the supermajority provisions contained in the operating agreement that governs that subsidiary may restrict our ability to govern and manage our business.

A third party owns 7% of Imperium Grays Harbor, LLC, our subsidiary that owns and operates the Grays Harbor production facility. In addition to its economic interest, the third party has the right to appoint a manager to the governing board of managers of Imperium Grays Harbor, LLC. The consent of the third party’s appointed manager is required for a number of matters, including equity and debt financings, payment of cash dividends, and the sale or liquidation of Imperium Grays Harbor, LLC. Because of the third party’s separate business objectives with respect to the operations of this production facility and our obligations under our biodiesel purchase agreement with the third party, there is a risk that the third party may not provide its consent on such matters. On or after September 2009, or earlier if necessary to resolve any dispute, we may be required, pursuant to a put right held by the third party attributable to its interest, to acquire the third party’s interest in Imperium

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Grays Harbor, LLC for the greater of its $10,000,000 cash investment or 7% of the then fair market value of Imperium Grays Harbor, LLC. The obligation to purchase this interest may require that we obtain additional debt or equity financing, all of which could have a material adverse effect on our business, results of operations and financial condition or dilute to the interests of our shareholders.

We expect that our proposed credit facility will contain, and that any future debt financing agreements may contain, restrictive covenants that limit distributions and impose restrictions on the operation of our business. Our failure, or the failure of any of our subsidiaries, to comply with applicable debt financing covenants and agreements could adversely affect our business and financial condition.

We expect that our proposed credit facility will contain restrictive covenants that have important implications on our operations, including, among other things:

The terms of our future debt financing agreements may also contain financial, maintenance, organizational, operational and other restrictive covenants. If we are unable to comply with these covenants or service our debt, we may lose control of our business and be forced to reduce or delay planned capital expenditures, sell assets, restructure our indebtedness or submit to foreclosure proceedings, all of which could result in a material adverse effect upon our business, results of operations and financial condition. Our debt arrangements may also include subordinated debt, which may contain even more restrictions and be on less favorable terms than our senior debt. To secure subordinated debt, we may have to give the lender warrants, put rights, conversion rights, the right to take control of our business in the event of a default or other rights and benefits as the lender may require. This could further dilute your ownership interest in us.

We may secure future debt financing directly or through subsidiaries. Regardless of the structure, our debt financing arrangements may contain various covenants and agreements and may contain cross-acceleration and cross-default provisions. Under these provisions, a default or acceleration of one debt agreement could result in the default and acceleration of our other debt agreements, regardless of whether we were in compliance with the terms of such other debt agreements, providing the lenders under such other debt agreements the right to accelerate the obligations due under such other debt agreements. Accordingly, a default, whether by us or any of our subsidiaries, could result in all of our outstanding debt becoming immediately due and payable. The application of cross-acceleration or cross-default provisions means that our compliance, and our subsidiaries’ compliance, with applicable debt covenants and agreements will be interdependent and one default, including a default by one of our subsidiaries, could have a material adverse effect on our business, results of operations and financial condition.

Our production facilities, storage facilities and terminals may have unknown environmental problems that could be expensive and time consuming to correct, which may delay or halt construction and operations and delay our ability to generate revenues and profits.

We may encounter hazardous conditions at or near each of our production facilities, storage facilities and terminals that may delay or prevent construction or operation of a particular facility. If we encounter a hazardous

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condition at or near a site or our operations result in contamination of the environment or expose individuals to hazardous substances, work may be suspended and we may be required to correct the condition prior to continuing construction or further production. The presence of a hazardous condition or contamination would likely delay or prevent construction of a particular production facility and may require significant expenditure of resources to correct the condition. If we encounter any hazardous condition during construction or our operations result in contamination of the environment or expose individuals to hazardous substances, estimated sales and profitability would likely be adversely affected.

We engage in hedging transactions and other risk mitigation strategies that could harm our financial results.

In an attempt to partially offset the effects of volatility of the spot prices for vegetable oils and biodiesel, we may from time to time purchase vegetable oil in the cash market and hedge the related price risk through futures contracts and options to reduce short-term exposure to price fluctuations on a forward basis and also engage in other hedging transactions involving exchange-traded and off-exchange futures contracts for vegetable oils. The financial statement impact of these activities is dependent on, among other things, the prices involved and our ability to sell sufficient products to use all of the vegetable oils for which we have futures contracts. Hedging arrangements also expose us to the risk of financial loss in situations where the other party to the hedging contract defaults on its contract or, in the case of exchange-traded contracts, where there is a change in the expected differential between the underlying price in the hedging agreement and the actual prices paid or received by us. There is no assurance that our hedging activities will successfully reduce the risk caused by price fluctuation that may leave us vulnerable to high vegetable oil prices. Hedging activities can themselves result in losses when a position is purchased in a declining market or a position is sold in a rising market. We also vary the amount of hedging or other risk mitigation strategies we undertake, and we may choose not to engage in hedging transactions at all. As a result, our financial condition may be adversely affected by increases in the prices of vegetable oils or decreases in the price of biodiesel or diesel.

We may be unable to protect our intellectual property, which could negatively affect our ability to compete.

We rely or may rely on a combination of trademark, tradename, trade secrets, confidentiality agreements and other contractual restrictions on disclosure to protect our intellectual property rights. We also enter into confidentiality agreements with our employees, consultants and other third parties, and control access to and distribution of our confidential information. We have also filed a provisional patent application regarding our production technology but the patent has not yet been issued. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise obtain and use our proprietary information. Monitoring unauthorized use of our confidential information is difficult and we cannot be certain that the steps we take to prevent unauthorized use of our confidential information will be effective.

Litigation or other proceedings relating to intellectual property rights could result in substantial costs and liabilities and prevent us from selling our biodiesel.

We must operate in a way that does not infringe the intellectual property rights of others in the U.S. and foreign countries. Third parties may claim that our production process or related technologies infringe their patents or other intellectual property rights. Competitors may have filed patent applications or have issued patents and may obtain additional patents and proprietary rights related to production processes that are similar to ours. We may not be aware of all of the patents potentially adverse to our interests. We may need to participate in interference proceedings in the U.S. Patent and Trademark Office or in similar agencies of foreign governments to determine the priority of invention involving issued patents and pending applications of another entity.

The cost to us of any litigation or other proceeding relating to intellectual property rights, even if resolved in our favor, may cause us to incur significant expenses, divert the attention of our management and key personnel from other business concerns and, in certain cases, result in substantial additional expenses to license technologies from third parties. Some of our competitors may be able to sustain the costs of complex patent

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litigation more effectively than we can because they have substantially greater resources. An unfavorable outcome in an interference proceeding or patent infringement suit could require us to pay substantial damages, cease using the technology or to license rights, potentially at a substantial cost, from prevailing third parties. There is no guarantee that any prevailing party would offer us a license or that we could acquire any license made available to us on commercially acceptable terms. Even if we are able to obtain rights to a third party’s intellectual property, those rights may be non-exclusive and therefore our competitors may obtain access to the same intellectual property. Ultimately, we may be unable to produce and sell our biodiesel or may have to cease some of our business operations as a result of infringement claims, which could severely harm our business. We cannot guarantee that our biodiesel or technologies will not conflict with the intellectual property rights of others. Additionally, any involvement in litigation in which we are accused of infringement may result in negative publicity about us and injure our relations with any then-current or prospective customers or vendors.

We depend on our officers for management and direction, and the loss of any of these persons could harm our business.

We depend on our officers for implementation of our expansion strategy and execution of our business plan. The loss of any of our officers could harm our business. The employment of each of our officers or other key personnel is “at will” and each officer or other key employee can terminate his or her employment with us at any time. The loss of any of our officers could delay or prevent the achievement of our business objectives.

Potential future acquisitions could be difficult to find and integrate, divert the attention of key personnel, disrupt our business, dilute shareholder value and adversely affect our financial results.

As part of our business strategy, we may consider acquisitions of building sites, other biodiesel production facilities, storage or distribution facilities and selected infrastructure. We may not find suitable acquisition opportunities.

Acquisitions involve numerous risks, any of which could harm our business, including:

Acquisitions also frequently result in the recording of goodwill and other intangible assets, which are subject to potential future impairment that could harm our financial results. In addition, if we finance acquisitions by issuing convertible debt or equity securities, our existing shareholders may be diluted, which could affect the market price of our common stock. As a result, if we fail properly to evaluate acquisitions or investments, we may not achieve the anticipated benefits of any such acquisitions, and we may incur costs in excess of those we anticipate. The failure to successfully evaluate and execute acquisitions or investments or otherwise adequately address these risks could materially harm our business and financial results.

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Our business and financial condition may be adversely affected by technological advances if we are unable to adopt or incorporate such advances into our operations at reasonable costs.

The development and implementation of new technologies may result in a significant reduction in the costs of biodiesel production. For example, in the U.S. in 2006, approximately 90% of biodiesel was produced from soybean oil, although biodiesel can also be produced from canola, palm and other vegetable oils and animal fat. All of our biodiesel production facilities currently under development, including our Grays Harbor production facility, are being designed to be “multi-feedstock” production facilities, meaning that each facility will be able to produce biodiesel from multiple feedstock sources such as soybean, canola or palm oil. However, efforts to produce other feedstocks with higher yields, or volume of feedstock per acre, are ongoing, and our cost of production could increase if higher yield feedstocks were developed by us or our competitors that would require us to reconfigure our production facilities to operate on such new feedstocks. As refining technology develops, biodiesel producers may become less dependent on soybean oil as the primary feedstock, and technological advances by other biodiesel producers in methods to refine feedstocks into biodiesel could increase efficiency and decrease the cost of production, which could increase competition, decrease biodiesel prices and cause us to incur additional capital expenditures to modify our production methods to remain competitive. We cannot predict when new technologies may become available, the rate of acceptance of new technologies by our competitors or the costs associated with new technologies.

Advances and changes in biodiesel production technology may make the biodiesel production technology installed in our Grays Harbor production facility or any of our future production facilities, if any, inefficient, less desirable or obsolete. These advances may also allow competitors to produce biodiesel at a lower cost than us. We expect that technological advances in biodiesel production methods will continue to occur. On January 31, 2006, President Bush announced the Advanced Energy Initiative, which will fund additional research in biodiesel technology. New technologies may develop as a result of this or other initiatives that could become viable means of biodiesel production in the future. If we are unable to adopt or incorporate technological advances, our biodiesel production methods and processes could be less efficient than our competitors, which could reduce our cost competitiveness or cause us to become uncompetitive. If competitors develop, obtain or license technology that is superior to ours or that makes our technology obsolete, we may be required to incur significant costs to enhance or acquire new technology so that our biodiesel production remains competitive. Alternatively, we may be required to seek third-party licenses, which could also result in significant expenditures. There can be no assurance that third-party licenses will be available or, once obtained, will continue to be available on commercially reasonable terms. These costs could negatively affect our business and financial condition.

Expansion into international markets is important to our long-term success, and our inexperience in operations outside the U.S. increases the risk that our international operations may not be successful.

We believe that our future growth depends, in part, on constructing biodiesel production facilities in foreign countries, such as Argentina, and our ability to produce and sell biodiesel outside the U.S. While some of our executive officers have experience in international business from prior positions, we have no experience with operations outside the U.S. Our goal of selling biodiesel into international markets will require management attention and resources and is subject to inherent risks, which may adversely affect us, including:

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The noted factors and other factors could adversely affect our ability to execute our international production and marketing strategy or otherwise have a material adverse effect on our business.

Risks Relating to the Biodiesel Industry

We may not be able to compete effectively in our industry.

The biodiesel industry is extremely competitive and growing more intense as more production facilities are built and the industry expands globally. We may not be able to compete successfully against current or potential competitors. In the U.S., we primarily compete with three groups of biodiesel producers: large-scale biodiesel production facilities, including companies that have divisions devoted to biodiesel production, such as Archer Daniels Midland Company and Cargill, Inc.; start-up biodiesel refineries that are entering the market; and large petroleum refining companies that are developing large-scale refineries that use natural gas, coal and other non-renewable feedstocks. Many of these competitors have greater financial resources than we do. While the nameplate capacity of our new Grays Harbor production facility will make this facility the largest biodiesel production facility in the U.S., our competitors could develop more efficient biodiesel refining methods that would increase their biodiesel production capacity and place downward pressure on biodiesel pricing. For example, in April 2007, ConocoPhillips and Tyson Foods, Inc. announced a joint project to construct a facility that produces renewable diesel from animal fat, which they estimate will cost approximately $100 million and when fully functioning will produce 175 MGY of renewable diesel.

According to the NBB, as of January 31, 2007, there were 105 biodiesel production facilities in operation in the U.S. with reported aggregate annual production capacity of approximately 864 million gallons and 85 facilities under construction or expansion with expected additional annual production capacity of approximately 1.7 billion gallons. All of these facilities currently, or will in the future, compete with us for feedstocks and customers.

In addition, we will face competition from international biodiesel suppliers outside the U.S. if we attempt to sell into international markets, such as Europe. The European biodiesel market is more mature than the market in the U.S., and there are more competitors with greater production capacity than in the U.S. Any increase in domestic or foreign competition could cause us to reduce our prices and take other steps to compete effectively, which could adversely affect our results of operations and financial condition.

The U.S. biodiesel industry is highly dependent on a mix of federal and state legislation and regulation and any changes in legislation or regulation could harm our business and financial condition.

The elimination or a significant reduction in the biodiesel tax credit could have a material adverse effect on the price of biodiesel and on our financial condition and results of operations. Federal tax incentives make the cost of biodiesel production significantly more competitive with the price of diesel. Currently, under the American Jobs Creation Act of 2004 and the Energy Policy Act of 2005, or EPAct, producers of diesel/biodiesel blends can claim up to a $1.00 tax credit per gallon of biodiesel produced from virgin vegetable oils. This credit is currently scheduled to terminate on December 31, 2008, and there can be no assurance that it will be renewed on similar terms, if at all. In addition, this credit and other federal and state programs that benefit biodiesel generally are subject to U.S. government obligations under international trade agreements, including those under the World Trade Organization Agreement on Subsidies and Countervailing Measures, that might in the future be the subject of challenges. The elimination or significant reduction in the biodiesel tax credit or other programs could harm our results of operations and financial condition. See “Industry Background—Government Incentives for Biodiesel Production and Use.”

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The effect of federal renewable fuel standards is uncertain. The EPAct established minimum nationwide levels of renewable fuels, which includes biodiesel, ethanol and any liquid fuel produced from biomass or biogas, to be blended into fuel supply. By the year 2012, these standards require that the national volume of renewable fuels to be blended in fuel supply equal or exceed 7.5 billion gallons. While these renewable fuel standards should stimulate demand for renewable fuels generally, there can be no assurance of specific demand for biodiesel. Additionally, the U.S. Department of Energy, in consultation with the Secretary of Agriculture and the Secretary of Energy, may waive the renewable fuels mandate with respect to one or more states if the Administrator of the U.S. Environmental Protection Agency, or EPA, determines that implementing the requirements would severely harm the economy or the environment of a state, a region or the U.S., or that there is inadequate supply to meet the requirement. Any waiver of the renewable fuel standards could adversely impact the demand for biodiesel and may have a material adverse effect on our financial condition and results of operations.

The effect of state renewable fuel standards is uncertain. The State of Washington has mandated that, by no later than November 30, 2008, at least 2% of diesel sold in Washington be biodiesel, which will increase to 5% when the Director of the Washington State Department of Licensing determines that in-state oil seed crushing capacity and feedstock can satisfy 3% of the required biodiesel. Additionally, by June 1, 2009, 20% of the diesel that Washington State agencies purchase must be biodiesel. While these renewable fuel standards should stimulate demand for renewable fuels locally, only a few other states, including Illinois, Louisiana, Minnesota, Maryland, New Mexico and New York, have enacted similar laws and there can be no assurance that other states will do so. Any change in state renewable fuel standards could adversely impact the demand for biodiesel and may have a material adverse effect on our financial condition and results of operations.

Competition due to advances in alternative fuels may lessen the demand for biodiesel and negatively impact our profitability.

Alternative fuels, gasoline oxygenates, ethanol and biodiesel production methods are continually under development. A number of automotive, industrial and power generation manufacturers are developing alternative clean power systems using fuel cells or clean-burning gaseous fuels that, like biodiesel, may address increasing worldwide energy costs, the long-term availability of petroleum reserves and environmental concerns. Additionally, there is significant research and development being undertaken regarding the production of ethanol from cellulosic biomass, the production of methane from anaerobic digestors, and the production of electricity from wind and tidal energy systems, among other potential sources of renewable energy. If these alternative fuels continue to expand and gain broad acceptance, we may not be able to compete effectively. This additional competition could reduce the demand for biodiesel, which would adversely affect our business.

New production facilities under construction or decreases in the demand for biodiesel may result in excess production capacity in the biodiesel industry, which could cause the price at which we sell biodiesel, and our revenue, to decline.

According to the NBB, as of January 31, 2007, there were 105 biodiesel production facilities in operation in the U.S. with reported aggregate annual production capacity of approximately 864 million gallons and 85 facilities under construction or expansion with expected additional annual production capacity of approximately 1.7 billion gallons. Excess capacity in the biodiesel industry could result in lower sales prices for our biodiesel, adversely affecting our financial condition and results of operations. In a manufacturing industry with excess capacity, producers have an incentive to manufacture additional products for so long as the price exceeds the marginal cost of production. This incentive can result in the reduction of the market price of biodiesel to a level that is inadequate to generate sufficient cash flow to cover the costs of production. Excess capacity may also result from decreases in the demand for biodiesel, which could result from a number of factors, including regulatory developments that eliminate or reduce incentives for biodiesel use and reduced consumption of all types of diesel fuel. If the price at which we sell our biodiesel falls due to excess production, our revenues will likely decline, which would decrease our cash flow and negatively impact our operating results.

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Declines in the prices of biodiesel will have a significant negative impact on our financial performance.

Our revenue will be greatly affected by the price at which we can sell our biodiesel. These prices can be volatile as a result of a number of factors. These factors include the overall supply of and demand for biodiesel, the price of crude oil and diesel, the level of government support, and the availability and price of competing products. U.S. biodiesel prices generally parallel the movement of crude oil and diesel prices. Crude oil and diesel prices are difficult to forecast because the market reflects the global economy, which is subject to political upheaval, natural disasters, and other myriad factors. Even the slightest rumor of political instability can significantly affect the price of crude oil and diesel. Further, exchange rates play a key role in domestic oil pricing. Any lowering of crude oil or diesel prices will likely also lead to lower prices for biodiesel, which may decrease our biodiesel sales and reduce revenue.

Biodiesel imported from other countries may be a less expensive alternative to our biodiesel, which would cause us to lose market share or adversely affect our efforts to operate internationally.

Biodiesel imported from other countries may be a less expensive alternative to domestically produced biodiesel. Foreign countries may have more abundant supplies of soybean, palm or canola oil, or other feedstocks, less expensive labor, more biodiesel production capacity, more advanced biodiesel infrastructure or technology, more favorable government incentives or other policies, or other economic factors that allow for sales of foreign biodiesel to both U.S. and international customers at prices lower than biodiesel produced in the U.S. The absence of U.S. protective tariffs similar to those imposed on ethanol imports, and any resulting competition in the U.S. from biodiesel imported from other countries, may affect our ability to sell biodiesel profitably.

Growth in the sale and distribution of biodiesel depends on changes to and expansion of related infrastructure, which may not occur on a timely basis, if at all, and our operations could be adversely affected by infrastructure disruptions.

Growth in the biodiesel industry depends on substantial development of infrastructure, such as rail capacity and available barge fleets, to transport raw materials and biodiesel. Areas requiring expansion include:

Substantial investments required for these infrastructure changes and expansions may not be made or they may not be made on a timely basis. Any delay or failure in making the changes to or expansion of infrastructure could hurt the demand or prices for our products, impede our delivery of biodiesel, impose additional costs on us or otherwise have a material adverse effect on our financial condition. Our business depends on the continuing availability of infrastructure and any infrastructure disruptions could have a material adverse effect on our business.

We may be adversely affected by environmental, health and safety laws, regulations and liabilities.

We are subject to various federal, state, local and foreign environmental laws, regulations and permits, including those relating to the discharge of materials into the air, water and ground, the generation, storage, handling, use, transportation and disposal of hazardous materials, and the health and safety of our employees. In addition, some of these laws and regulations require our facilities to operate under permits that are subject to renewal, modification or revocation. These laws, regulations and permits can often require expensive pollution control equipment or operational changes to limit actual or potential impacts to the environment. A violation of these laws and regulations or permit conditions can result in substantial fines, natural resource damages, criminal

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sanctions, permit revocations and/or facility shutdowns. In addition, we have made, and expect to make, significant capital expenditures on an ongoing basis to comply with increasingly stringent environmental laws, regulations and permits.

We may be liable for the investigation and cleanup of environmental contamination at each of the properties that we own or operate and at off-site locations where a release or disposal of hazardous substances occurs and we are deemed to be a responsible party. We may be responsible for releases at our production facilities or at off-site locations under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, or CERCLA, or other environmental laws for all or part of the costs of investigation and/or remediation, and for damages to natural resources. We may also be subject to related claims by private parties alleging property damage and personal injury due to exposure to hazardous or other materials at or from those properties. Some of these matters may require us to expend significant amounts for investigation, cleanup or other costs.

In addition, new environmental laws and regulations, new interpretations of existing laws and regulations, increased governmental enforcement of existing laws or other developments could require us to make additional significant expenditures. Continued government and public emphasis on environmental issues can be expected to result in increased future investments for environmental controls at our production facilities. Present and future environmental laws and regulations, and interpretations thereof, applicable to our operations, more vigorous enforcement policies and discovery of currently unknown conditions may require substantial expenditures that could have a material adverse effect on our financial condition.

The hazards and risks associated with producing and transporting our products, such as fires, natural disasters, explosions, abnormal pressures, blowouts and pipeline ruptures and the failure of pollution control equipment, also may result in personal injury claims or damage to property and third parties. As protection against operating hazards, we maintain insurance coverage against some, but not all, potential losses. Our coverage includes, but is not limited to, physical damage to assets, employer’s liability, commercial general liability, automobile liability and workers’ compensation. We do not carry environmental insurance. Notwithstanding any insurance we may carry, we could sustain losses for uninsurable or uninsured risks, or in amounts in excess of existing insurance coverage. Events that result in significant personal injury or damage to our property or third parties or other losses that are not fully covered by insurance could have a material adverse effect on our financial condition.

Changes in industry specification standards for biodiesel may increase production costs or require additional capital expenditures to upgrade and/or modify our biodiesel production facilities to meet them. Such upgrades and/or modifications may entail delays in or stoppages of production.

The American Society of Testing and Materials, or ASTM, is the recognized standard-setting body for fuels and additives in the U.S. ASTM’s specification for pure biodiesel, D 6751, has been adopted by the EPA, and compliance with such specification is required in order for our biodiesel to qualify as a legal motor fuel for sale and distribution. ASTM has modified its D 6751 specification in the past, and is expected to continue to modify the specification in the future as the use of biodiesel expands. There is no guarantee that our production facilities will be able to produce ASTM-compliant biodiesel in the event of changes to the specification, or that our production facilities will be able to produce biodiesel that complies with specifications used in other countries. We may need to invest significant capital resources to upgrade or modify our production facilities, which might cause delays in or stoppages of production and the resultant loss of revenue, or which might not be economically feasible at all. Any modifications to our production facilities or to the biodiesel ASTM specification or other specification with which we attempt to comply may entail increased production costs or reduced production capacity. These consequences could result in a negative impact on our financial performance.

Adverse public opinions concerning the source of our feedstocks could harm our business.

We plan to use significant amounts of palm oil from Southeast Asia, primarily Indonesia and Malaysia, in the production of biodiesel. Palm oil is currently the least expensive vegetable oil feedstock that we use.

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Environmental and other groups have recently expressed concern that the growing demand for palm oil may result in the clearing of rainforests in Southeast Asia and could threaten animal and plant species in that region. Palm oil growers, processors and environmental groups are working to develop regulations that would attempt to balance the supply of palm oil against these other ecological issues. Public concerns have also been raised concerning the use of soybeans as an alternative fuel feedstock. Historically soybeans have been used for food production, both domestically and as a significant export. The increased use of soybeans as a biodiesel feedstock contributes to the increasing price of soybeans, and could result in decreased availability of soybeans for food production, and could lead farmers to convert to soybean production from the production of other crops that contribute to domestic or international food production. Unfavorable public opinions concerning the use of palm oil, soybeans and other feedstocks, or negative publicity arising from such use, could reduce the global supply of such feedstocks, increase our production costs and reduce the global demand for biodiesel, any of which could harm our business and adversely affect our financial condition.

Adverse public opinions concerning the biodiesel industry in general could harm our business.

The biodiesel industry is new, and general public acceptance of biodiesel is uncertain. Public acceptance of biodiesel as a reliable, high-quality alternative to diesel may be limited or slower than anticipated due to several factors, including:

Such public perceptions or concerns, whether substantiated or not, may adversely affect the demand for our biodiesel, which in turn could decrease our sales, harm our business and adversely affect our financial condition.

Risks Relating to This Offering and Ownership of Our Common Stock

There is no existing market for our common stock and we do not know if one will develop. Even if a market does develop, the stock prices in the market may not exceed the offering price.

Before this offering, there has not been a public market for our common stock and there is a very limited number of public companies with biodiesel operations. We cannot predict the extent to which investor interest in our company will lead to the development of an active trading market on the NASDAQ Global Market or otherwise, or how liquid that market may become. If an active trading market does not develop, you may have difficulty selling any shares that you buy.

The offering price for the common stock will be determined by negotiations among us and the representatives of the underwriters and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell shares of our common stock at prices equal to or greater than the price you pay in this offering.

Our common stock price may be volatile and you may lose all or part of your investment.

The market price of our common stock could fluctuate significantly, and you may not be able to resell your shares at or above the offering price. Those fluctuations could be based on various factors in addition to those otherwise described in this prospectus, including:

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A decline in the market price of our common stock could cause investors to lose some or all of their investment and may adversely impact our ability to attract and retain employees and raise capital. In addition, shareholders may initiate securities class action lawsuits if the market price of our common stock drops significantly, which may cause us to incur substantial costs and could divert the time and attention of our management.

As a result of this offering, we will be subject to public company reporting and other requirements for which we will incur substantial costs and our accounting and other management systems and resources may not be adequately prepared.

As a result of this offering, we will become subject to public company reporting and other obligations under the Securities Exchange Act of 1934, as amended, including the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act. Section 404 requires that our management annually assess the effectiveness of our internal control over financial reporting and that our independent auditors report on management’s assessment. We expect that these requirements will be required beginning with our fiscal year ended December 31, 2008. These reporting and other obligations will place significant demands on our management, administrative, operational and accounting resources. We anticipate that we will need to upgrade our systems, implement additional financial and management controls, reporting systems and procedures, and hire additional accounting, internal audit and finance staff. If we are unable to accomplish these objectives in a timely and effective fashion, our ability to comply with our financial reporting requirements and other rules that apply to reporting companies could be impaired. Further, during the course of our testing for compliance with Section 404, we may identify deficiencies which we may not be able to remediate in time to meet our deadline for compliance with Section 404, and we may also identify inaccuracies or deficiencies in our financial reporting that could require revisions to or restatement of prior period results. Any failure to maintain effective internal controls could have a material adverse effect on our business, operating results and stock price.

We will also incur significant additional legal, accounting, insurance and other expenses as a result of being a public company. For example, laws and regulations affecting public companies, including the provisions of the Sarbanes-Oxley Act and rules related to corporate governance and other matters subsequently adopted by the SEC and the NASDAQ Stock Market, will result in substantially increased costs to us, including legal and accounting costs, and may divert our management’s attention from other matters that are important to our business.

Our principal shareholders and management own a significant percentage of our stock and will be able to exercise significant influence over our affairs.

Our executive officers, directors and holders of five percent or more of our common stock, as of March 31, 2007, beneficially owned approximately 72% of our common stock. We expect that upon the closing of this offering, based on the shares outstanding as of March 31, 2007, that same group will continue to hold at least         % of our outstanding common stock. Consequently, even after this offering, these shareholders will likely

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be able to determine the composition of our board of directors, retain the voting power to approve some matters requiring shareholder approval and continue to have significant influence over our operations. The interests of these shareholders may be different than the interests of other shareholders on these matters. This concentration of ownership could also have the effect of delaying or preventing a change in our control or otherwise discouraging a potential acquirer from attempting to obtain control of us, which in turn could reduce the price of our common stock.

If you purchase shares of common stock sold in this offering, you will experience immediate and substantial dilution.

Prior investors have paid substantially less per share for our common stock than the initial public offering price. Accordingly, if you purchase shares of our common stock in this offering at an assumed initial public offering price of $             per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, you will experience immediate and substantial dilution of $             in as adjusted net tangible book value per share of common stock, calculated as of March 31, 2007, because the price that you pay will be substantially greater than the as adjusted net tangible book value per share of common stock of the shares you acquire. See “Dilution.”

We have outstanding options that have the potential to dilute shareholder value and cause the price of our common stock to decline.

In the past, we have offered and we expect to continue to offer stock options and other forms of stock-based compensation to our directors, officers, employees and others. As of March 31, 2007, we had outstanding options to purchase 2,805,337 shares of our common stock under our 2005 Stock Option Plan at a weighted-average exercise price of $4.39 per share and after this offering will have an aggregate of                      additional shares of common stock reserved for future issuance under our 2007 Performance Incentive Plan and 2007 Employee Stock Purchase Plan, plus potential automatic annual increases in the number of shares of common stock reserved for future awards under each plan and increases in the number of shares of common stock reserved for future awards under our 2007 Performance Incentive Plan resulting from the rollover of terminated and expired options originally granted under our 2005 Stock Option Plan. To the extent that these options, awards or any additional options or warrants we issue in the future, are exercised and the shares issued on exercise are sold in the public market, the public market price of our common stock may decline.

A substantial number of shares of our common stock will become eligible for sale in the public market following this offering, which could cause the price of our common stock to decline.

All of our officers, directors, existing shareholders and option holders as of the date of this offering have agreed with the underwriters not to sell or otherwise dispose of any of their shares for a period of at least 180 days after the effective date of this prospectus. When these lock-up agreements expire, these shares, and the shares underlying any options held by these individuals, will become eligible for sale, in some cases subject only to the volume, manner of sale and notice requirements of Rule 144 of the Securities Act of 1933, as amended, or the Securities Act. Furthermore, immediately after completion of this offering and based on shares outstanding as of March 31, 2007, the holders of                    shares of our outstanding common stock will also have the right to require that we register those shares under the Securities Act and will also have the right to include those shares in any registration statement we file with the SEC, which would enable those shares to be sold in the public markets, subject to the restrictions under the lock-up agreements referred to above. Sales of a substantial number of these shares in the public market after this offering, or the perception that these sales could occur, could cause the market price of our common stock to decline. In addition, the sale of these shares could impair our ability to raise capital through the sale of additional equity securities. See “Shares Eligible for Future Sale” for further discussion of the shares that will be freely tradable following expiration of the lock-up agreements.

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Anti-takeover defenses of Washington law and that we have in place in our articles of incorporation and our bylaws could prevent or delay an acquisition of us that shareholders may consider favorable or a replacement or removal of our management that could be beneficial to our shareholders.

Provisions of our articles of incorporation and bylaws and applicable provisions of Washington law may make it more difficult or impossible for a third party to acquire control of us without the approval of our board of directors. These provisions:

In addition, the Washington Business Corporation Act generally prohibits us from engaging in any business combination with certain persons who acquire 10% or more of our voting securities without the prior approval of our board of directors for a period of five years following the date such person acquires the shares. These provisions may have the effect of entrenching our management team and may deprive investors of the opportunity to sell their shares to potential acquirors at a premium over prevailing prices and could reduce the price of our common stock.

If we are or become a “United States real property holding corporation,” non-U.S. investors may be subject to U.S. federal income tax, including withholding tax, in connection with the disposition of our shares, and U.S. investors selling our shares may be required to certify as to their status in order to avoid withholding.

A non-U.S. holder of our common stock will generally be subject to withholding of U.S. federal income tax with respect to distributions made by us that are treated as dividends for U.S. federal income tax purposes. Moreover, a non-U.S. holder of our common stock not otherwise subject to U.S. federal income tax on gain from the sale or other disposition of our common stock may nevertheless be subject to U.S. federal income tax with respect to such sale or other disposition if we are, or have been, a United States real property holding corporation at any time within the five-year period preceding the disposition, or the non-U.S. holder’s holding period if shorter. Generally, a corporation is a “United States real property holding corporation” at any time the fair market value of its U.S. real property interests, as defined in the Internal Revenue Code of 1986, as amended, and applicable regulations, equals or exceeds 50% of the aggregate fair market value of its worldwide real property interests and its other assets used or held for use in a trade or business. Although we believe that we are not currently a United States real property holding corporation, and do not expect to become a United States real property holding corporation, no assurances can be made in this regard.

Certain non-U.S. holders of our common stock may be eligible for an exception to the general rule described above if our common stock is regularly traded on an established securities market during the calendar year in which the sale or disposition occurs and the non-U.S. holder holds no more than 5% of our outstanding common stock, directly or indirectly, during the relevant period, or the 5% exception. If we are a United States real property holding corporation during the relevant time period, and the 5% exception does not apply, the purchaser or other transferee of our common stock will generally be required to withhold tax at the rate of 10% on the sales price or other amount realized, unless the transferor furnishes an affidavit certifying that it is not a foreign person in the manner and form specified in the applicable U.S. Treasury regulations. See “U.S. Federal Income Tax Considerations for Non-U.S. Holders.”

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 FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. In particular, statements that we make under the headings “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business” relating to the energy and biodiesel industries, including prices of crude oil, diesel, biodiesel and vegetable oils, margin trends, anticipated production facilities and related capital expenditures and our strategies are forward-looking statements. When used in this prospectus, the words “may,” “will,” “could,” “should,” “target,” “potential,” “intend,” “anticipate,” “estimate,” “expect,” “project,” “believe,” “plan,” “seek” and similar expressions are intended to identify forward-looking statements.

These statements are based on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. All forward-looking statements address matters that involve risks and uncertainties. Any forward-looking statements are not guarantees of our future performance and are subject to risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by any forward-looking statements. We are under no duty to update any forward-looking statements. Some of the factors that may cause actual results, developments, performance, business decisions and other events or circumstances to differ materially from those contemplated by any forward-looking statements include the risks and uncertainties discussed under the heading “Risk Factors.”

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 USE OF PROCEEDS

We estimate that we will receive net proceeds of $             million from the sale of the              shares of common stock offered by us in this offering, based upon an assumed initial public offering price of $             per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

We intend to use approximately $220 million of the net proceeds from this offering to finance the development and construction of three new production facilities in Hawaii, in Argentina and on the U.S. East Coast. The remaining net proceeds will be used for general corporate purposes, including working capital.

The amounts and timing of these expenditures will depend on numerous factors, including the federal, state and local permitting and licensing process, the construction schedules of our contractors, the delivery of goods and equipment by our suppliers and various other considerations typically associated with large-scale construction projects. Pending any use as described above, we plan to invest the net proceeds in investment-grade, short-term, interest-bearing securities.

The amount of our estimated net proceeds appearing above has been calculated using an assumed initial public offering price of $             per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus. A $1.00 increase or decrease in the assumed initial public offering price per share would increase or decrease, respectively, the estimated net proceeds to us from this offering, after deducting underwriting discounts and commissions, by approximately $            , in each case assuming that the number of shares offered by us as set forth on the cover page of this prospectus remains the same. Likewise, the amount of our estimated net proceeds appearing in the first paragraph above has been calculated assuming that we will issue              shares of common stock in this offering. A 100,000 share increase or decrease in the number of shares of common stock that we issue in this offering would increase or decrease, respectively, our estimated net proceeds by approximately $            , assuming an initial public offering price of $             per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus.

To the extent the underwriters exercise their over-allotment option, we will not receive any of the proceeds from the sale of over-allotment shares by the selling shareholders.

 DIVIDEND POLICY

We have never declared or paid cash dividends on our capital stock. The payment of dividends is within the discretion of our board of directors and will depend on our earnings, capital requirements and operating and financial position, among other factors. We expect to retain all of our earnings to finance the expansion and development of our business, and we currently have no plans to issue dividends in the foreseeable future. Our subsidiary that owns and operates the Grays Harbor production facility is limited in its ability to pay dividends by the terms of its operating agreement, and we expect that our proposed credit facility will limit, and that any future debt agreements may restrict, our ability to pay dividends. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and “Description of Certain Indebtedness.”

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 CONVERSION OF SERIES B PREFERRED STOCK

In connection with the consummation of this offering, all of our outstanding preferred stock will automatically convert into common stock. Each share of our outstanding Series A redeemable convertible preferred stock will convert into one share of our common stock and, if the public offering price of our common stock in this offering is $26.18 or more per share, subject to adjustment for stock splits, each share of our outstanding Series B redeemable convertible preferred stock will also convert into one share of our common stock. However, if the public offering price is less than $26.18 per share, subject to adjustment for stock splits, the number of shares of common stock issued upon conversion of each outstanding share of Series B redeemable convertible preferred stock will be increased and will be equal to the number obtained by dividing $13.0853, subject to adjustment for stock splits, by 50% of the public offering price per share in this offering. Therefore, depending on the price of the shares sold in this offering, the holders of the Series B redeemable convertible preferred stock may receive more than one share of common stock for each outstanding share of Series B redeemable convertible preferred stock. We will not know the conversion rate of our Series B redeemable convertible preferred stock until the actual public offering price is determined.

Upon completion of this offering, our existing shareholders will continue to have significant influence over the outcome of corporate actions requiring shareholder approval, including the election of directors, any merger, consolidation or sale of all or substantially all of our assets or any other significant corporate transaction. Because only some of our shareholders own Series B redeemable convertible preferred stock, any increase in the conversion ratio of the Series B redeemable convertible preferred stock in connection with this offering will increase the relative ownership of our common stock by those shareholders upon completion of this offering.

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 CAPITALIZATION

The following table sets forth, as of March 31, 2007, our cash, cash equivalents and capitalization:

You should read this table in conjunction with the consolidated financial statements and the related notes, “Use of Proceeds” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included elsewhere in this prospectus.

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The table above excludes the following, as of March 31, 2007:

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 DILUTION

If you invest in our common stock, your interest will be diluted to the extent of the difference between the public offering price per share of our common stock and the as adjusted net tangible book value per share of our stock after this offering. We calculate net tangible book value per share by dividing our net tangible book value, which equals total assets less intangible assets, total liabilities and total redeemable convertible preferred stock, by the number of shares of common stock outstanding as of March 31, 2007. Our net tangible book value at March 31, 2007 was approximately $8.3 million, or $0.25 per share, based on 33,824,875 shares outstanding.

After giving effect to the sale of              shares of common stock in this offering, based on an assumed initial public offering price of $             per share, after deducting the estimated underwriting discount and estimated offering expenses payable by us, our as adjusted net tangible book value as of March 31, 2007 would have been approximately $             million, or $             per share. This represents an immediate increase in net tangible book value attributable to this offering of $             per share to existing shareholders, and an immediate dilution in net tangible book value of $             per share to new investors, or approximately         % of the assumed initial public offering price of $             per share. The following table illustrates this dilution on a per share basis:

The information in the preceding table has been calculated using an assumed initial public offering price of $             per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus. A $1.00 increase or decrease in the assumed initial public offering price per share would decrease or increase, respectively, the pro forma net tangible book value per share of common stock after this offering by $             per share and increase or decrease, respectively, the dilution per share of common stock to new investors in this offering by $             per share, in each case calculated as described above and assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. Likewise, the information in the preceding table has been calculated assuming that we issue a number of shares of common stock in this offering equal to the number of shares appearing on the cover of this prospectus. A 100,000 share increase or decrease in the number of shares of common stock that we issue in this offering would decrease or increase, respectively, the pro forma net tangible book value per share of common stock after this offering by $             per share and increase or decrease, respectively, the dilution per share of common stock to new investors in this offering by $             per share, in each case calculated as described above and assuming an initial public offering price of $             per share.

The following table shows on an as adjusted basis at March 31, 2007, the number and percentage of shares of common stock purchased from us by our existing shareholders and new investors purchasing shares in this offering, the total cash consideration paid to us and the average price per share paid by existing shareholders and by new investors in this offering before deducting estimated underwriting discounts and estimated offering expenses payable by us, based on an assumed initial public offering price of $             per share.

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The table above excludes the following, as of March 31, 2007:

To the extent these options are exercised, investors purchasing common stock in this offering will experience further dilution. In addition, to the extent we issue new options or rights under any stock compensation plans or issue additional shares of common stock in the future, new investors will experience further dilution.

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 SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

The following table presents selected consolidated financial and operating data as of the dates and for the periods indicated. The selected consolidated statement of operations data for the period from our inception on March 5, 2004 to December 31, 2004 and for the years ended December 31, 2005 and 2006 and the selected consolidated balance sheet data as of December 31, 2005 and 2006, have been derived from the audited consolidated financial statements included elsewhere in this prospectus. The selected consolidated statement of operations data for the three months ended March 31, 2006 and 2007, and the selected consolidated balance sheet data as of March 31, 2007, have been derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. The selected consolidated balance sheet data as of December 31, 2004 have been derived from the audited consolidated financial statements that are not included in this prospectus. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal and recurring adjustments, necessary to state fairly our results of operations as of and for the periods presented. You should read the information contained in this table in conjunction with “Use of Proceeds,” “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and accompanying notes included elsewhere in this prospectus. Historical results of operations and financial position are not necessarily indicative of the results that may be expected for future periods.

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