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BLUGLASS LIMITED Capital/Financing Update 2012

Dec 6, 2012

64532_rns_2012-12-06_c2c9a74e-de6b-4e03-a0f3-3592d27226b1.pdf

Capital/Financing Update

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5 December 2012

This is an important document that requires your attention.

Dear Shareholder,

Share Purchase Plan – Eligible Shareholders may purchase parcels of fully paid ordinary shares up to a value of A$15,000

On behalf of BluGlass Limited ( BluGlass ), I am pleased to offer you the opportunity to increase your investment in BluGlass through a Share Purchase Plan (the SPP ).

On 3 December 2012, BluGlass announced that it had received commitments to place 11.7 million fully paid ordinary shares at A$0.20 per share with institutional investors to raise A$2.35 million (the Placement ). BluGlass is now offering eligible shareholders the opportunity to also subscribe for fully paid ordinary shares at the same price of $0.20 per share paid by institution investors in the Placement.

The purpose of the Placement and SPP is to provide funds for:

  • commercialisation of BluGlass’ RPCVD technology for LED applications;

  • further development for solar cell applications using the RPCVD technology;

  • provide match funding should BluGlass be successful with its application for an AusIndustry Clean Technology Innovation Program grant; and

  • for general working capital requirements.

The Share Purchase Plan

The SPP provides an opportunity for Eligible Shareholders to acquire BluGlass shares at A$0.20 per share ( New Share ). The amount that each Eligible Shareholder can apply for under the SPP is capped at A$15,000. The total amount accepted under the SPP will be determined by BluGlass’ directors. If applications are received in excess of the amount required by BluGlass, applications will be scaled back at the discretion of BluGlass.

The Offer

The SPP is offered exclusively to all Eligible Shareholders, being registered holders as at 7pm (Sydney time) on 5pm, 30 November 2012 ( Record Date ) with a registered address in Australia or New Zealand who meet certain other conditions as set out in the Terms and Conditions.

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The SPP provides Eligible Shareholders with an opportunity to buy a parcel of New Shares in BluGlass valued at A$2,500, A$5,000, A$7,500, A$10,000, A$12,500 or A$15,000.

The SPP opens on 7 December and is expected to close at 5pm (Sydney time) on 21 December 2012.

Participation in the SPP is entirely voluntary. All New Shares issued under the SPP will rank equally with existing fully paid ordinary shares and will carry the same voting rights and entitlement to receive distributions. No brokerage costs apply to purchases under the SPP. The issue of New Shares is expected to occur on 24 December 2012.

The SPP will not be underwritten.

How to accept this offer

To apply for New Shares under the SPP, please follow the instructions on the enclosed personalised Application Form.

This letter and its attachments set out the details and Terms and Conditions of the SPP. I encourage you to read the enclosed material and seek your own financial advice in relation to the SPP, before you decide whether to participate.

On behalf of the Board, I invite you to consider participation in the SPP.

Yours sincerely

BluGlass Limited

George Venardos

Chairman

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Key Dates

Date Event
5pm (EST)
30 November, 2012
Record Date The date on which BluGlass
determines Eligible Shareholders
5pm (EST)
7 December, 2012
Opening Date SPP opens
5pm (EST)
21 December, 2012
Expected Closing Date SPP closes. Applications and
cleared funds must be received by
5pm (Sydney time)
24 December 2012 Expected Allotment Date New Shares expected to be issued
on this date
27 December 2012 Expected Dispatch Date Holding statement expected to be
dispatched to shareholders

These dates are subject to change and are indicative only. BluGlass reserves the right to and has the discretion to amend all dates and times without notice to Eligible Shareholders. Any variations will be notified to the ASX.

Further Assistance

If you have any questions in relation to the SPP please call your broker, accountant or professional adviser. If you require information on how to complete the Application Form please contact the BluGlass Shareholder Information line on (02) 9334 2300.

Foreign Jurisdictions

The SPP does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States or to any U.S. Person (as defined in Regulation S under the United States Securities Act of 1933, as amended (the US Securities Act). The SPP has been prepared for publication in Australia and New Zealand only and may not be released elsewhere. BluGlass has determined that it is not practical for holders of Shares with registered addresses in other jurisdictions to participate in the SPP.

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TERMS AND CONDITIONS

IMPORTANT NOTICE: The offer to purchase New Shares under this Share Purchase Plan (SPP) is not a recommendation to purchase shares in BluGlass. If you are in any doubt about whether or not, or the extent that, you should participate in this SPP, you should obtain professional financial and/or taxation advice to assist you (taking into account your own financial situation, needs and objectives). Nothing in these Terms and Conditions, the Application Form or any other accompanying documentation constitutes investment or financial product advice or is intended to influence your decision whether or not to participate in the SPP.

If you apply to participate in the SPP by completing and returning the Application Form with a cheque or money order, you are accepting the risk that the market price of shares in BluGlass may change between the Opening Date, the date on which you send in an Application Form and the Allotment Date. This means it is possible that, up to or after the Allotment Date, you may be able to buy shares in BluGlass at a lower price than the Issue Price.

Set out below are the Terms and Conditions of the BluGlass Limited Share Purchase Plan which are binding on any Shareholder completing a Share Purchase Plan Application Form. The Application Form forms part of this document.

Capitalised terms used in these Terms and Conditions are both defined in the body of these Terms and Conditions as well as in clause 17.

1. The SPP

  • 1.1. The SPP is an invitation to Eligible Shareholders by BluGlass Limited ( BluGlass ) to subscribe for fully paid ordinary shares in BluGlass ( BluGlass Shares ) at the Issue Price (see clause 5 below) per New Share.

  • 1.2. The minimum application amount under the SPP is A$2,500. All applications must be in increments of A$2,500.

  • 1.3. The amount an Eligible Shareholder can apply for will be restricted to a cumulative total of A$15,000.

  • 1.4. The SPP is conducted under ASIC Class Order CO 09/425.

  • 1.5. You are not obliged to accept or otherwise participate in the SPP. Participation in the SPP is optional.

  • 1.6. The SPP is made to each Eligible Shareholder on the same terms and conditions.

  • 1.7. The offer under the SPP is non-renounceable, which means you may not transfer your right to apply for New Shares under the SPP to anyone else.

  • Opening and Closing Date of the SPP

The SPP opens at 5pm (Sydney time) on 7 December 2012 and is scheduled to close at 5.00pm (Sydney time) on 21 December 2012. BluGlass reserves the right to change the closing date of the SPP. No late applications will be accepted.

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3. Eligible Shareholders

  • 3.1. You are eligible to participate in the SPP (Eligible Shareholder) if you were a registered holder of fully paid ordinary shares in BluGlass at 5.00pm (Sydney time) on 30 November 2012 ( Record Date ) and your address in the security register of BluGlass is in Australia or New Zealand unless:

  • a. you hold BluGlass Shares on behalf of another person who resides outside Australia or New Zealand and do not hold BluGlass Shares in any other capacity;

  • b. you are in the United States or you are a U.S. Person, or acting for the account or benefit of a U.S. Person; or

  • c. you are ineligible to participate in the SPP because of the aggregate limit explained in clause 4 below.

  • 3.2. ( Single Holders ) If you are the only registered holder of BluGlass Shares, but you receive more than one offer under the SPP (for example, due to multiple registered holdings), you may only apply for one maximum parcel of New Shares up to the value of A$15,000.

  • 3.3. ( Joint Holders ) If you are recorded with one or more other persons as the joint holder of BluGlass Shares, that joint holding is considered to be a single registered holding for the purposes of the SPP and, subject to the conditions of eligibility set out in this clause 3, the joint holders are entitled to participate in the SPP in respect of that single holding only. The certification under clause 9.1(iv) by one joint holder will be effective in respect of the other joint holder(s). If the same joint holders receive more than one offer under the SPP due to multiple registered holdings, the joint holders may only apply for New Shares up to a maximum of A$15,000.

  • 3.4. ( Custodians, Trustees and Nominees ) If you are a custodian within the definition of 'custodian' in ASIC Class Order CO 09/425 and you are a registered holder of BluGlass Shares on behalf of another person ( Beneficiary ) and you apply to acquire New Shares on behalf of the Beneficiary, you must certify in writing to BluGlass a number of matters relating to such beneficiaries ( Custodian Certificate ).

If you are a custodian please contact the Security Registry to obtain the form of Custodian Certificate that you are required to submit.

If you are a custodian and you hold shares or interests jointly on behalf of two or more persons, the $15,000 limit applies jointly in relation to those persons as if you hold the shares or interests on behalf of a single person.

If you hold BluGlass Shares as a trustee or nominee for another person, but are not a 'custodian' as defined above, you cannot participate for Beneficiaries in the manner described above. In this case, the rules for multiple single holdings (above) apply.

Nominees and other registered holders of BluGlass Shares that are acting on behalf of a person in the United States must not (i) send this document or any other document relating to the SPP to any person in the United States or (ii) purport to exercise rights under this offer on behalf of a person in the United States.

  • 3.5. If you are an Eligible Shareholder, your rights under this offer are personal to you and are nonrenounceable, which means you cannot transfer your rights to another person.

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4. How much can you invest?

The minimum application amount under the SPP is A$2,500. All applications must be in increments of A$2,500. Applications under the SPP may only be made for the following amounts:

  • A$2,500;

  • A$5,000;

  • A$7,500;

  • A$10,000;

  • A$12,500; and

  • A$15,000.

The offer under the SPP needs to comply with the limit in ASIC Class Order CO 09/425. Under that class order, Eligible Shareholders may only acquire a maximum of A$15,000 worth of BluGlass Shares under a security purchase plan in any 12 month period. This means that Eligible Shareholders are not permitted to acquire more than A$15,000 worth of BluGlass Shares in aggregate, even if you receive more than one Application Form or hold BluGlass Shares in more than one capacity, e.g. if you are both a sole and joint holder of BluGlass Shares ( Aggregate SPP Participation ).

5. Issue Price of New Shares under the SPP

  • 5.1. The price per New Shares on offer under the SPP ( Issue Price ) is $0.20 per New Share.

  • 5.2. The current BluGlass Share price can be obtained from the ASX website at www.asx.com.au (ASX code: BLG) and is listed in the financial and business section of major daily newspapers circulated in Australia.

  • 5.3. A$0.20 per BluGlass Share represents a discount of 11% to the closing price of BluGlass Shares on 28 November 2012 and a 28% discount to the volume weighted average price of shares traded since BluGlass’ proof of concept announcement on 22 November 2012.

  • 5.4. You agree to pay the Issue Price for each New Share calculated under clauses 5.1 and 6.2 or, if there is a Scaleback (as defined in clause 12 below), the number of BluGlass Shares calculated under clause 12.

  • 5.5. You acknowledge that the market price of New Shares may rise or fall between the date of this SPP and the date that New Shares are allotted to you under the SPP (Allotment Date) and that the effect of this is that the Issue Price you pay for the New Shares may exceed the market price of BluGlass Shares on the Allotment Date.

Applying for New Shares

  • 6.1. Eligible Shareholders may apply to purchase a parcel of New Shares above a minimum of A$2,500 and only in increments of A$2,500, up to a maximum of A$15,000. If you are an Eligible Shareholder and wish to participate in the SPP, you must follow the instructions on the SPP Application Form ( Application Form ) and complete the Application Form and provide a cheque or money order made payable to "BluGlass Limited",so that it is received by the Security Registry by

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  • 5.00pm (Sydney time) on the Closing Date. Payments must be denominated in Australian dollars.

  • 6.2. If you apply for New Shares under the SPP, you will apply for a certain value, rather than a certain number, of New Shares. Subject to clause 6.3 BluGlass will divide the parcel value you select by the Issue Price in order to determine the number of New Shares for which you have applied (rounded down to the nearest whole number of New Shares). Any balance of monies sent by you that is remaining as a result of rounding will be refunded to you except where the amount is less than A$2.00 (or an amount advised by BluGlass).

  • 6.3. Eligible Shareholders who receive more than one offer under the SPP (for example, because they hold BluGlass Shares in more than one capacity) may apply on different Application Forms for New Shares but may not apply for New Shares with an aggregate value of more than A$15,000.

  • 6.4. BluGlass may accept or reject your application for New Shares, either in whole or in part, at its absolute discretion. For example, BluGlass may reject your application in any of the following circumstances (among others):

  • a. it appears that you are applying to purchase a number of New Shares that will mean that your Aggregate SPP Participation will exceed A$15,000;

  • b. your Application Form is incorrectly completed, incomplete or otherwise determined by BluGlass to be invalid;

  • c. your cheque is dishonoured or the cheque or money order that you enclose with your Application Form is not made out for the amount corresponding to the value of the parcel of New Shares for which you have applied;

  • d. your Application Form is received after the Closing Date. Late or otherwise incomplete or invalid payments will be refunded to you; or

  • e. BluGlass believes you are not an Eligible Shareholder (subject to compliance with any applicable Australian Securities and Investments Commission (ASIC) or ASX requirements).

7. Risk

Subscription for New Shares under the SPP is a speculative investment and the market price may change between the date you apply for New Shares and the issue of New Shares to you. Accordingly, the value of New Shares applied for is likely to rise or fall. Importantly, there is a risk that during the period between when you apply for New Shares and when the New Shares are issued to you, the price at which BluGlass Shares are traded on the ASX may be less than the Issue Price payable under this SPP.

This document is not a prospectus or product disclosure statement, and has not been lodged with ASIC. The issue of a prospectus or product disclosure statement is not required for the purposes of the SPP. This document does not contain the types of disclosure required to be contained in a prospectus or product disclosure statement. You must rely on your own knowledge of BluGlass, previous disclosures made by BluGlass to the ASX (including disclosure regarding the risks of making an investment in BluGlass) and, if necessary, consult your professional adviser when deciding whether or not to participate in the SPP.

8. Timetable

8.1. Subject to clause 8.2:

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  - a. ( Record Date ) the record date for the offer is 5.00pm (Sydney time) on 30 November 2012;

  - b. ( Opening Date ) the offer opens at 5.00pm (Sydney time) on 7 December 2012;

  - c. ( Closing Date ) the offer closes at 5.00pm (Sydney time) on 21 December 2012;

  - d. ( SPP Results Announcement ) the number of New Shares to be issued, the Issue Price and, if applicable, any Scaleback will be announced to the ASX shortly after the Closing Date;

  - e. ( Allotment Date ) BluGlass proposes to allot the New Shares on 24 December 2012;

     - ( Trading Date ) the New Shares are expected to commence trading on 28, December 2012; and

  - f. ( Despatch Date ) the date on which transaction confirmations are sent to securityholders and, if applicable, a direct credit deposit to your nominated account is made or refund cheque is dispatched, is expected to be 27, December 2012.
  • 8.2. BluGlass may vary any of the above dates in clause 8.1 at its discretion (even if the offer has opened, or Application Forms have been received) by lodging a revised timetable with ASX.

  • Effect of Making an Application

  • 9.1. If you submit an Application Form together with a cheque or money order:

    • a. you acknowledge that you are an Eligible Shareholder;

    • b. you irrevocably and unconditionally agree to these Terms and Conditions and the terms of the Application Form and agree not to do any act or thing that would be contrary to the spirit, intention or purpose of the SPP or these Terms and Conditions;

    • c. you acknowledge your application is irrevocable, unconditional and cannot be withdrawn once returned;

    • d. you certify that the total of the application price for the following does not exceed A$15,000:

      • A. New Shares under the SPP the subject of your application;

      • B. any other New Shares or interests under the SPP or any BluGlass Share or interests in the class of shares issued that you acquired under any similar arrangement in the 12 months before the date of your application;

      • C. any other New Shares or interests in the class of shares issued which you have instructed a custodian to acquire on your behalf under the SPP; and

      • D. any other BluGlass Shares or interests in the class of shares issued to a custodian under an arrangement similar to the SPP in the 12 months before the date of your application as a result of an instruction given by you to the custodian or another custodian and which resulted in you holding beneficial interests in the shares or interests in the class,

even though you may have received more than one offer under the SPP or received offers in more than one capacity under the SPP;

  • e. if you are a custodian, you make additional representations that you either:

  • A. hold an Australian financial services licence that:

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  • i. covers the provision of a custodial or depository service (as defined by section 766E of the Corporations Act 2001 (Cth) (Corporations Act)); or

  • ii. includes a condition requiring you to comply with the requirements of ASIC Class Order CO 02/294; or

  • B. are exempt from the requirement to hold an Australian financial services licence for the provision of a custodial or depository service under:

  • i. paragraph 7.6.01(1)(k) of the Corporations Regulations 2001 (Cth) (Regulations);

  • ii. paragraph 7.6.01(1)(na) of the Regulations;

  • iii. ASIC Class Order CO 05/1270 to the extent that it relates to ASIC Class Order CO 03/184;

  • iv. ASIC Class Orders CO 03/1099, CO 03/1100, CO 03/1101, CO 3/1102, CO 04/829 or CO 04/1313;

  • v. an individual instrument of relief granted by ASIC in terms similar to one of the Class Orders referred to in clause 9.1(d)(B)(iv) above; or

  • vi. paragraph 911A(2)(h) of the Corporations Act; or

  • C. are otherwise a custodian as defined in Class Order CO 09/425, and that you have provided a Custodian Certificate to BluGlass;

  • f. you authorise BluGlass to correct minor errors in your Application Form and to complete the Application Form by inserting any missing minor detail;

  • g. you acknowledge that BluGlass may determine that your Application Form is valid in accordance with these Terms and Conditions, even if the Application Form is incomplete, contains errors or is otherwise defective;

  • h. you accept the risk associated with any refund that may be sent to your address or to your nominated bank account as shown on the BluGlass security register;

  • i. you are responsible for any dishonour fees or other costs BluGlass may incur in presenting a cheque for payment that is dishonoured;

  • j. you acknowledge that no interest will be paid on any application monies paid in connection with this SPP and that are held pending the allotment of the New Shares or subsequently refunded to you for any reason;

  • k. you acknowledge that you have not been provided with investment advice or financial product advice by BluGlass or the Security Registry and that neither of them has any obligation to provide this advice in relation to your consideration as to whether or not to participate in, or the extent of such participation in, the SPP;

  • l. you acknowledge that BluGlass is not liable for any exercise of its discretions referred to in these Terms and Conditions;

  • m. you acknowledge that the New Shares have not, and will not be, registered under the US Securities Act or the securities law of any other jurisdiction outside Australia and, accordingly, the New Shares may not be offered, sold or otherwise

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transferred except in accordance with an available exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and any other applicable securities laws;

  • n. you represent and warrant that you are not a US Person, and are not applying under the Offer for or on behalf of a US Person;

  • o. you agree not to send any materials relating to the Offer to any person in the United States or to any person who is acting for the account or benefit of a US Person; and

  • p. if you are a Custodian, you make additional representations that you meet the definition of “custodian” in the Class Order and have provided a Custodian Certificate to BluGlass.

10. Waiver, Amendment, Suspension and Withdrawal

BluGlass may, at its discretion, waive compliance with any provision of these Terms and Conditions, amend or vary these Terms and Conditions or suspend or withdraw the offer made under this SPP at any time and in its absolute discretion. Any such waiver, amendment, variation, suspension or withdrawal will be binding on all Eligible Shareholders even where BluGlass does not give notice of the event. However, the rights of any Eligible Shareholder in connection with any New Shares that have been duly issued and allotted to that person prior to the occurrence of any such waiver, amendment, variation, suspension or withdrawal will not be affected as a result of any such occurrence.

BluGlass and TMT Partners are not liable for any loss, cost, expense, liability or damage arising out of exercise of any of its discretions under these Terms and Conditions.

If you have any questions in respect of the SPP, please contact the BluGlass Shareholder Information line on (02) 9334 2300.

11. Rights Attaching

The rights and obligations of the New Shares are contained in the BluGlass Constitution. The New Shares will be issued on the same terms as all other BluGlass Shares and BluGlass will apply for the New Shares proposed to be issued under the SPP to be quoted on the ASX. If the New Shares are not quoted on the ASX, the New Shares will not be issued and all application monies will be refunded.

12. Scaleback

  • 12.1. BluGlass may, in its absolute discretion, reduce the number of New Shares allotted to each applicant to the extent and in the manner that it sees fit ( Scaleback ). If undertaken, the Scaleback will apply to all applications received on a pro-rata basis, based on each application size.

  • 12.2. If there is a Scaleback, the difference between the application monies received from you, and the number of New Shares allocated to you multiplied by the Issue Price, will be refunded by BluGlass, without interest, following allotment.

13. Costs of Participation

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No brokerage costs will be payable by Eligible Shareholders in respect of the application for, and allotment of, New Shares under the SPP.

14. Privacy

By receiving completed Application Forms, BluGlass collects personal information about Shareholders. BluGlass will use this information for the purposes of processing the Application Form and updating the records of BluGlass. To the extent restricted by law, BluGlass will not disclose personal information about a Shareholder to a third party. To the extent permitted by law, Shareholders are able to access, upon request, personal information about them held by BluGlass.

15. Dispute Resolution

BluGlass may settle in any manner it thinks fit, any difficulties, anomalies or disputes that may arise in connection with or by reason of the operation of the SPP. The decision of BluGlass will be conclusive and binding on all participants and other persons to whom the determination relates. BluGlass' rights may be exercised by the Board or any delegate of the Board.

16. Governing Law

These Terms and Conditions are governed by the laws in force in New South Wales. Any dispute arising out of or in connection with these Terms and Conditions, or the offer of New Shares, will be determined by the courts of New South Wales. By accepting this offer, you agree to submit to the exclusive jurisdiction of the courts in New South Wales.

17. Definitions

Aggregate SPP Participation has the meaning set out in clause 4.

Allotment Date means the date upon which New Shares will be allotted under the SPP.

Application Form means the SPP Application Form.

ASX means the Australian Securities Exchange.

Beneficiary means a person on whose behalf a custodian within the meaning of ASIC Class Order CO 09/425 holds registered BluGlass Shares.

Board means the board of directors of BluGlass.

Closing Date means 5.00pm (Sydney time) on 21 December 2012.

Corporations Act means Corporations Act 2001 (Cth).

Custodian Certificate means the certificate to be provided by custodians within the meaning of ASIC Class Order CO 09/425.

Eligible Shareholder means a Shareholder eligible to participate in the SPP in accordance with clause 3.

Equity Placement means the placement of BluGlass Shares to institutional investors as announced to the ASX on Friday, 3 December, 2012.

Issue Price means $0.20 per New Share.

BluGlass means BluGlass Limited (ACN 20 116 825 793).

BluGlass Constitution means the constitution of BluGlass.

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BluGlass Share means a fully paid ordinary share in BluGlass.

New Shares means a fully paid ordinary share issued in accordance with this SPP.

Opening Date means 5pm (Sydney time) on 7 December 2012.

Record Date means 5.00pm (Sydney time) on 30 November 2012.

Regulations means the Corporations Regulations 2001 (Cth).

Scaleback means the right of BluGlass, in its absolute discretion, to reduce the number of New Shares allotted to each applicant under clause 12.

Shareholder means the registered holder of a BluGlass Share.

Security Registry means Security Transfer Registers Pty Ltd.

SPP means this Security Purchase Plan.

U.S. Person means “U.S. person” as defined in Rule 902(k) under the U.S. Securities Act.

US Securities Act means the United States Securities Act of 1933, as amended.

About BluGlass: BluGlass Limited is an Australian green technology company formed to commercialise a

breakthrough in the Semiconductor Industry. BluGlass has invented a new process using Remote Plasma Chemical Vapour Deposition (RPCVD) to grow semiconductor materials such as gallium nitride (GaN) and indium gallium nitride (InGaN), crucial to the production of high efficiency devices such as next generation lighting technology Light Emitting Diodes (LEDs) with advanced low cost potential.

The RPCVD technology, because of its low temperature and highly flexible nature, offers many potential benefits over existing technologies including higher efficiency, lower cost and greater scalability.

Contact: Stefanie Winwood +61 2 9334 2302, +61 433 307 853 [email protected]

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