When we entered the parking lot we were impressed by the size of the new 30,000 square foot building, with stucco exterior, and finished landscaping. The building had a sign in front, informing us that we were about to enter the ``World Headquarters`` of BioAgra. Inside the front door, we were met by , C.M. ``Chick`` Mihalich, Vice-President of Operations, who proceeded to give us a tour.

The building is, as advertised, ``state of the art``. It is located on a seven acre lot in a new industrial park. There is a large paved parking lot behind the building, enclosed with a chain link fence. The back of the building has 6 overhead doors and a truck loading dock.

The interior consisted of 3 separate, yet connected spaces. The front door opened into a reception area that sported an attractive semi-circular reception counter at the back of a large open space with a glass block wall and ceramic tile floor. This area seems to have been designed as a waiting and reception space. There was, as yet, no furniture, but it was a cheerful and inviting place. There was an ``in box`` on the reception counter, with 6 spaces, each with only first names of people I assumed to be working there in some capacity. Behind the reception desk was a corridor leading to rest- rooms, offices and several multi-purpose rooms. One office had a desk, a phone, a leather desk chair and a couple of white plastic patio chairs. It was obvious that start-up financing had not been frivolously squandered on opulent or excessive furnishings. There was room for at least 6 large offices, all but one of which were empty. There was plenty of room for growth and expansion.

The 2 multi-purpose rooms were equipped with utility sinks and wall mounted white boards. These rooms, we were told, would be the locations of Research and Development, as well as the laboratory for testing each batch of product for quality assurance purposes. We were told that the company intends for R&D to take a very important role, and that development of new, related product lines was part of their business model. It was expected that these labs would be equipped and operational by the time the first batch of product was ready for testing in about 6 weeks.

We were shown a mock-up of the new blue and green BioAgra logo that was awaiting final tweaking. This logo was part of a label that will go on each container of product. We were told that BioAgra is hopeful that smart tags from Exypnotech will be utilized in BioAgra`s inventory control process. It was also mentioned that they are hoping to work with Exypnotech on a pilot program using smart tags for commercialization in other areas the agricultural industry.

The largest area, by far, was the manufacturing/warehouse. It was large enough that the contractor and workmen had driven their trucks into the building , and across the warehouse to bring their tools closer to the work area. When we entered, we saw the boiler room with raised concrete pads and a concrete containment basin. Water and steam lines had been piped in and were awaiting the arrival of the primary and back-up electric boilers. We were told that a negotiated electric rate made the operation cost of electric boilers very favorable, and that a new transformer had been installed by the electric service provider to accommodate BioAgra.

We met the contractor responsible for installation of the piping and equipment, and the BioAgra employee who will ultimately be responsible for the physical plant mechanicals. It was explained that the BioAgra employee is participating in the installation so that he will be very familiar with the system when it is placed in operation.

There were numerous large plastic tanks that appeared to have a capacity of 1000 gallons each. The tanks were elevated on steel legs. Much of the plumbing to, from, and between those tanks, was already installed, though installation of valves and grinding of some welds was in progress that day in anticipation of the delivery of several stainless steel vats expected the following day (Saturday).

One of the items that I had looked forward to seeing was the centrifuge. I was disappointed to learn that though it had arrived in the US from its country of origin, delivery had been delayed because of hurricane Katrina. (We were informed that Katrina had affected almost every aspect of business in the South, and that it was fortunate that progress has continued despite the delays.) The centrifuge was expected to be delivered shortly, and may already be on site as I write this report. ``Chick`` said he was not happy with the delays, but that they were still anticipating that they would be set up and in production according to the announced schedule (January 1, 2006).

The ``first`` production line seemed to be planned to occupy about a quarter of the available manufacturing space. It seemed to me that there might actually be room for at least 3 lines, and possible a fourth. ``Chick`` explained that piping was being installed so that additional lines could be added without interruption of production.

Kent and I were invited back to the sparsely furnished office where we sat in the plastic patio chairs and pummeled ``Chick`` with questions. Some of our questions were simply met with a smile. Others were willingly answered by someone who was obviously enthusiastic about the subject. I did not take notes, but what follows are as many points of the conversation as I can remember.

1) We asked ``Chick`` about the status of sales, and the public announcements that there had been purchase orders or commitments to account for the entire first year`s production. ``Chick`` confirmed that the first line of production is essentially ``sold``. He qualified this as follows:

When the initial announcement was made in late 2004, regarding the joint venture with Nanopierce, it was expected that Nanopierce would contribute $1.5 Million to the venture within 90 days, and consummate the agreement. The JV was delayed for a year while Nanopierce worked to raise the required capital. During that time, BioAgra canceled purchase orders that they had in hand, realizing that they would not be able to deliver in the time originally specified. ``Chick`` indicated that their potential customers responded with understanding of the delay, and simply said to keep them informed and when BioAgra was ready to produce, new purchase orders would be executed. ``Chick`` indicated that there are more than enough customers who have said, ``We are ready to buy``, to account for initial production of a minimum of 10,000 kilos/month. He indicated that 10K was a conservative number and that 15K was more probable once they get into full operation.

(I asked at what price BioAgra would be selling their product, saying that I had learned that one of their competitors was selling a kilo domestically for $175.00. ``Chick`` responded by saying, ``That is good to know``, but then smiled, as if to say, ``our price is our secret``.)

``Chick`` explained that in the agricultural business, it was important that customers be able to rely upon consistent delivery of product. ``Animals have to eat, and they don`t stop eating just because there is a hurricane, or because your equipment breaks down.`` He said BioAgra would have to maintain inventory to deliver in the event there was an interruption of production. He indicated that is why the will have ``back-up`` equipment to insure uninterrupted product flow.

``Chick`` said that the agricultural sales business depends on relationships. Consistency, service, and trust promote sales. He said that BioAgra is continuing to build those relationships, even though they are not yet producing and delivering product. I asked ``Chick`` if he had any doubt whatsoever as to BioAgra being able to sell their full production. Without hesitation, he said, ``No. I wish I could bring in equipment and start building a second line right now.``

2) We asked ``Chick`` about the relationship between Nanopierce Technologies and Xact Resources in forming the joint venture. ``Chick`` said that Xact is very big on forming strong relationships, and from the very beginning felt very comfortable with the people associated with Nanopierce. He mentioned Paul Metzinger and Stan Richards by name, saying that he believes they are ``good people``, and that Nanopierce and Xact have formed a strong working relationship. ``Chick`` indicated that he believed Nanopierce shareholders should soon be very pleased with the value the BioAgra joint venture would bring to their investment.

3) We brought up the current concerns around the world regarding avian flu, asking if those concerns had increased the interest in beta glucan. ``Chick`` said that yes, avian flu was a major concern, and that clinical trials were being conducted outside the country. He would not elaborate further, but said that the risks to the 28 billion dollar US poultry industry were far too great for the work to be done in within the United States right now.

4) ``Chick`` talked about the need to train customers in the use of the product. He said that you can`t just start selling product without educating customers and controlling application. He explained that providing inconsistent feedings, or inaccurate dosage was counterproductive, and would have a negative impact on effectiveness. He said that if too much or too little beta glucan were to be fed to farm animals, the desired results would not be obtained. He said that BioAgra plans to work hard to train consumers in use of the product, and may even consider selling a ``Pre-mix`` (beta glucan added and thoroughly mixed with the appropriate amount of feed), as has been done with other feed supplements.

5) ``Chick`` explained that Neal Bartoletta had planned to meet with us and show us around. He said that Neal`s home in Florida had been damaged in the recent hurricanes and that Neal had to return to Florida to meet with an insurance adjuster. Neal phoned several times while Kent and I were there, and stayed in contact with ``Chick`` throughout our visit.

We also learned that since ``Chick`` and Neal both still retain their homes in Florida, and still, for the time being, return to Florida on Friday afternoons to spend the weekends with their families. It became obvious to Kent and me that though ``Chick`` was being a gracious host, we were keeping him from his weekly routine of leaving Hinesville and returning home for the weekend. We thanked him for his willingness to meet with us, and asked if he and Neal would be eventually relocating to Georgia. ``Chick`` said, ``Yes, they were making plans to do so.``

As we prepared to end our 2 hour visit, Kent posed the question that was uppermost on our minds. ``Now that BioAgra has received the funding, is there is anything, short of a major catastrophe, that you believe will keep this venture from succeeding. ``Chick``, without hesitation, responded, ``No``.

Wanting to be certain that there was no misunderstanding, I rephrased the question by asking, ``So you believe BioAgra will be a commercial success?`` ``Chick`` smiled indulgently and responded, ``Yes, that`s why I`m here.``

I came away from the meeting, grateful for the opportunity of seeing the facility, and feeling very bullish about my investment in Nanopierce. It may be that the most beneficial connection Nanopierce has made to date, is their connection with the people at Xact Resources, forming a joint venture called BioAgra.

-zties