Ba702 sum 2012 - hilyard second draft presentation 1

Alex Hilyard

Adamant Alternative

Energy, Inc.

BA 702 – SUMMER 2012

The Problem

Current durability of solar panels and wind Current durability of solar panels and wind turbinesturbines

Warranties don’t cover effects of environmentWarranties don’t cover effects of environment

Cost to repair damaged unitCost to repair damaged unit

Overall quality of solar panels and wind Overall quality of solar panels and wind turbinesturbines

Value Proposition

Double the industry average warrantyDouble the industry average warranty

Warranty covers the product, not just the original Warranty covers the product, not just the original customercustomer

Most stringent environmental testing on the Most stringent environmental testing on the marketmarket

Potential relationships with large retailersPotential relationships with large retailers

Cost effective to competitors due to parts Cost effective to competitors due to parts manufacturer relationshipsmanufacturer relationships

Capital

Currently funded from capital put up by Alex Currently funded from capital put up by Alex Hilyard, CEOHilyard, CEO

Seeking $5M for a 25% equity in the companySeeking $5M for a 25% equity in the company

Start with solar panels, then add wind turbines and Start with solar panels, then add wind turbines and hybrid solar/wind turbineshybrid solar/wind turbines

Equity stake expected to reach $5M in 2.5 yearsEquity stake expected to reach $5M in 2.5 years

Expand operations globally by establishing Expand operations globally by establishing manufacturing companies starting in Mexicomanufacturing companies starting in Mexico

Company Description

Adamant Alternative Energy Inc. (AAE) was founded in October 2011 by Alex Hilyard

Located currently in Houston, Texas

Our goal is to develop a product combining solar and wind technology which will have an increased level of consistency for energy production


Company Description

Plan to offer 3 solar packages ranging from 17,000 watts to 38,000 watts

Through AAE market research, anticipate over 800 solar packages to be sold in North America in first year, with total sales of $10 million expected


Industry Analysis

Solar Panel Industry

Growth rate of 61.5% from Growth rate of 61.5% from 2009 to 20102009 to 2010

Industry profit margin Industry profit margin averages 5% annuallyaverages 5% annually

Wind Turbine Industry

Expected to increase 2.6% Expected to increase 2.6% annually from 2011 to annually from 2011 to 20162016

Industry profit margin Industry profit margin averages 7.8% annuallyaverages 7.8% annually


Solar & Wind Distribution


Target Market

Homeowners

Ages 30-55 (112M people)Ages 30-55 (112M people)

Established career with Established career with above average income above average income (12M)(12M)

Knowledge of technology Knowledge of technology (8M)(8M)

Eco-conscious buying habits Eco-conscious buying habits (6M)(6M)

Small Businesses

Companies with less than Companies with less than 100 employees (5.75M)100 employees (5.75M)

Financial stable and able Financial stable and able to make investments in to make investments in business improvement business improvement (1.15M)(1.15M)

Wanting to become more Wanting to become more energy independent energy independent (750K)(750K)


The Competition

Solar Panels Companies

Panasonic/SanyoPanasonic/Sanyo

SharpSharp

SuntechSuntech

SolarworldSolarworld

Wind Turbine Companies

Bergery WindpowerBergery Windpower

Hummer WindHummer Wind

Southwest WindpowerSouthwest Windpower

Urban Green EnergyUrban Green Energy


The Competition

Competitive Advantages

Quality & DurabilityQuality & Durability

Long-term customer Long-term customer relationshipsrelationships

Quick & effective customer Quick & effective customer serviceservice

Barriers To Entry

High entry costHigh entry cost

Government regulationGovernment regulation

Electrical grid deficienciesElectrical grid deficiencies

GlobalizationGlobalization


Strategic Position & Risk AnalysisTo be a leader in residential & small business solar To be a leader in residential & small business solar panels and wind turbines, AAE has developed a panels and wind turbines, AAE has developed a strategic position emphasizing:strategic position emphasizing:

Reliable products using the latest technologyReliable products using the latest technology

Ongoing R&D into design efficiencies as well as new Ongoing R&D into design efficiencies as well as new alternate energy sourcesalternate energy sources

Customer service to head-off potential problemsCustomer service to head-off potential problems


Marketing Plan

Traditional Vehicles

No TV or radio adsNo TV or radio ads

Print ads in national Print ads in national magazines and trade magazines and trade journalsjournals

Active PR campaignsActive PR campaigns

““Capturing Energy from Capturing Energy from Nature”Nature”

Online Vehicles

Social MediaSocial Media

SEM campaignsSEM campaigns

SEO optimizationSEO optimization

E-Mail campaignsE-Mail campaigns


Operations Plan

Corporate headquarters and distribution facility in Corporate headquarters and distribution facility in Houston TexasHouston Texas

Planned 60 employees in first yearPlanned 60 employees in first year

Production facility to run at 95% capacityProduction facility to run at 95% capacity

JIT and FIFO used in operationsJIT and FIFO used in operations

12 total retailers used for distribution12 total retailers used for distribution


Operations Plan

Time-Effective Programs

Production line Production line implementationimplementation

Additional surge in Additional surge in employees to meet employees to meet demanddemand

Centrally located Centrally located production facilityproduction facility

Cost-Effective Programs

Global expansion (300k Global expansion (300k savings)savings)

Development of test Development of test procedures (10k savings)procedures (10k savings)


Management & Organization


Social Responsibility & SustainabilityCommitted to being a positive influence in the community and the world in which it operates

AAE feels it has a responsibility to do the right thing and think about every one of its stakeholders

Supports local sports teams and Habit for Humanity

AAE is a carbon neutral company and uses its own AAE is a carbon neutral company and uses its own products to reduce its footprintproducts to reduce its footprint


Development, Milestones & Exit

PlanCommitment to reinvest 12% of earnings back in to R&D

Annual sales are projected to increase to $160 million by 2016

AAE is seeking $5 million for the completion of their wind turbine manufacturing facility in Mexico

Goal to reach total market share of approximately 1% in small wind and .75% in solar.


Development, Milestones & Exit

PlanAAE has the authority to issue up to 1 million shares of common stock

Upon reaching $50 million in revenues annually AAE will go public with the shares

AAE expects to reach this milestone within 3.5 years


2013 2014 2015 2016 2017

Gross Sales

$6,000,000 $7,972,400 $20,000,000 $42,000,000 $75,000,000

Net Sales $5,349,400 $7,133,960 $17,900,000 $37,675,000 $67,365,000

COGS $1,069,880 $1,212,773 $2,685,000 $5,651,250 $10,104,750

Gross Profit

$4,279,520 $5,921,187 $15,215,000 $32,023,750 $57,260,250

Total Expenses

$5,178,500 $6,439,738 $14,898,000 $20,861,000 $30,467,000

Net Profit ($1,033,827) ($440,769) $269,450 $9,488,338 $22,774,263

Income Statement


2014 2015 2016 2017

Cash from Sales $7,972,400

$20,000,000

$42,000,000

$75,000,000

Cash from Financing

$5,961,200

$792,000 $1,210,000 $1,515,000

Cash Disbursements

$8,710,678

$19,869,500

$32,205,500

$46,923,500

Net Cash Flow $5,223,222

$922,500 $11,004,500

$29,591,500

Ending Cash Balance

$341,734 $356,250 $1,919,750 $6,861,750

Cash Flow Summary


2014 2015 2016 2017

Current Assets $2,206,734

$2,406,250 $5,069,750 $14,161,750

Fixed Assets $6,028,000

$6,573,750 $7,532,500 $9,032,500

Current Liabilities

$259,734 $630,000 $900,000 $1,360,000

Long-Term Liabilities

$275,000 $350,000 $402,250 $600,250

Net Worth $7,700,000

$8,000,000 $11,300,000

$21,234,000

Balance Sheet Summary


The Financials

Break Even

2014: $5,287,477 in sales2014: $5,287,477 in sales

2015: $11,901,214 in sales2015: $11,901,214 in sales

Investor Payback: 1Q Investor Payback: 1Q 20162016

Uses of Funds

Leasehold Improvements Leasehold Improvements (15%)(15%)

Equipment & Furniture Equipment & Furniture (20%)(20%)

Purchase of Inventory Purchase of Inventory (20%)(20%)

Staff Expansion (25%)Staff Expansion (25%)

Marketing Expansion Marketing Expansion (15%)(15%)

Business Expansion (5%)Business Expansion (5%)BA 702 – SUMMER 2012

Conclusion

Asking for $5 million from investorsAsking for $5 million from investors

Investor equity expected to match original investment Investor equity expected to match original investment in less than 3.5 yearsin less than 3.5 years

Revenues anticipated to increase by 2000% in 5 years Revenues anticipated to increase by 2000% in 5 years from $8 million to $160 million.from $8 million to $160 million.

Concentration on quality products and Concentration on quality products and customer/community servicecustomer/community service

Global expansion to Mexico and Spain in the next 3 Global expansion to Mexico and Spain in the next 3 yearsyears


Questions?


Ba702 sum 2012 - hilyard second draft presentation 1

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