Olmito project aquaculture with investors numbers & graphics fish & prawns

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Olmito Agriquatics Treating Wastewater to Produce Macrobrachium & Tilapia Some “Numbers” and Graphs

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Transcript of Olmito project aquaculture with investors numbers & graphics fish & prawns

Page 1: Olmito project aquaculture with investors numbers & graphics   fish & prawns

Olmito Agriquatics

Treating Wastewater to Produce

Macrobrachium

&

Tilapia

Some “Numbers” and Graphs

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The Project Context

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A Close-up of the Olmito WWT Plant site

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Olmito Agriquatics Project Abstract

The Olmito Agriquatics project will treat the wastewater now collected by the Olmito Water Supply Corporation (OWSC) to a fully recyclable condition – achieving the highest quality treated effluent in the state of Texas. It will also desludge and formally decommission the two lagoons that now serve as OWSC’s wastewater treatment plant. The project will also treat wastewater now being produced by the neighboring town of Los Fresnos. It will continue, in the future, to accept and treat wastewater flows originating in the existing Olmito Water Supply Corporation service area, as well as adjacent neighborhoods currently served by the City of Brownsville and the community of Rancho Viejo. Production is expected, in future, to expand to the North Alamo Water/Wastewater district, a region having the potential to treat approximately 10 times as much wastewater as is now received in the Olmito district.

In addition to treated wastewater, the principal byproducts of the Agriquatics System are a superior quality biogas and harvested duckweed. The former will be used in a combined heat and power context to produce thermal energy and electricity for local consumption as well as peaking electricity for export to the grid. The latter will be solar dried (gas assisted) blended with corn and milo carbohydrates and fed to Tilapia fish and Macrobrachium prawns grown onsite using the Company’s innovative dome-housed, intensive, recirculating aquaculture system. Fish will be harvested daily, filleted onsite and packaged for shipping to clients: Sysco Foods, Whole Foods and HEB.

Olmito Agriquatics is expected to generate pre-tax profits of almost $3.5 million in 2016 on a projected sale of 1,054 tonnes of tilapia fillets and 105 tonnes of whole macrobrachium prawns.

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Duckweed Aquaculture Scenario

Scenario-Specific Notes

In this scenario, with minor exception, the entire 1,200+ tonnes (dry weight) of duckweed produced annually as a byproduct of the Olmito Agriquatics wastewater treatment process is committed to supplying internal aquaculture of Tilapia fish and Macrobrachium prawns. The system is unique among intensive aquaculture systems for it’s ability to remove all wastes – including residual nitrates and phosphorus – from the water the fish are grown in. It is also unique in that it captures these wastes – both solids and dissolved solids -- leverages them with photosynthetic energy (sunlight on duckweed), and then feeds the product back to the fish. By slaughtering and processing fish onsite, the project is also able to recycle as feed, 100% of fish discards (skin, head, guts, bones and fins). This brings feed costs for the Agriquatics system to the lowest among all global aquaculture systems/technologies.

This scenario presumes a cash investment of approximately $1.3 million by third party investors. The cash investor is being offered a first-in-first-out return on his/her investment (year 4) and a convertible B preferred share/unit that will pay dividends equal to 22% of the invested amount in circumstances where post-tax net earnings permit (presumably year 5, going forward). The preferred shares/units are convertible through the end of year 5 to 20% of the company’s then outstanding shares. The conversion is presumed to allow the investor to share, proportionately, in the company’s future growth in the South Texas Valley. These shares/units are projected to have obtained a value of $4.36 million within 5 years – just as the company begins a rapid expansion phase by taking in wastewater from the City of Brownsville.

While, in this circumstance, guarantees are presumed to be provided by The Olmito Water Supply Corporation, were they to be offered to third party investors, they would be valued at 50% of cash. $3.0 million in guarantees would, therefore, obtain an equivalent share/unit value (20%) as is here offered to the cash investor – presuming the cash investor opts for conversion.

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Income Statement

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Cash Flow Statement

Note under “Dividend Paid” in 2015, the Investor is fully reimbursed for his capital investment. Dividends paid in 2016,equal to 22% of the original cash investment, will be paid to the investor continuously thereafter, or until such time as the investormakes a decision to convert his preferred “B share/unit to a common A share/unit.

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Balance Sheet

Note: Project partner, The Olmito Water Supply Corporation, is presumed to retain ownership of the project’s land and existing Lagoon facilities. As such, the “Land and Improvements” line shows a zero value across the board. This circumstance isconsidered “open” to further clarification and interpretation.

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Start-up Costs & Sources of Financing

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Investment Scheduling

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Labor and Wage Summary

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Product Gross Margins

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Breakeven Analysis

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Ratio Analysis

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Shareholder Value Calculations (A)

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Shareholder Value Calculations (B)

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Shareholder Value Calculations (C)

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Olmito Agriquatics Stock / Units Matrix

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Olmito Agriquatics Key Parameter Value Assumptions (A)

Note: The only product assumed to be manufactured in this scenario is the “Milled to <10 microns” duckweed powder. AllOther products may, however, be produced under differing, feasible scenarios.

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Olmito Agriquatics Key Parameter Value Assumptions (B)

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Olmito Agriquatics Key Parameter Value Assumptions (C)

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Olmito Agriquatics Capital Structure

NOTE: OWSC contribution of land, lagoons and developed infrastructure are assessed to have a present value of approximately $3.0 million

Cash Invested, $1,300,000

Term Loan, $ 5,142,247

Working Loan, $ 1,500,000

Olmito Agriquatics Capital Structure

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$ 4,544,386

$ 337,324

$ 85,845

$ 72,676

$ 480,000$

325,000

$ 300,000 $

80,000

$ 129,718

$ 30,000

$ 100,000

$ 150,000

$ 300,000

$ 1,050,00

0

Olmito Agriquatics Capital Allocations

Tissue Culture Lab - AD and SteviaWWT (series of 22 l/s units - including fish,worms & digesters)Local Hydraulics & Sludge MiningRoadsSecurityElectricity and Backup Power UnitsPhase II Park Project LandscapingPhase II Park ConstructionNon-Farm Rolling StockMiscellaneous Equipment + Spare Parts Closing Costs Preliminary Expenses Initial inventory Initial accounts receivable Initial operations, admin & sales costs

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Mon01 Mon02 Mon03 Mon04 Mon05 Mon06 Mon07 Mon08 Mon09 Mon10 Mon11 Mon12

$0

$50,000

$100,000

$150,000

$200,000

$250,000

Olmito Agriquatics Year 1. Cost Distribution

Debt Service Depreciation General & Admin. R&D/Quality Assurance & Prelim Expenditures Sales, marketing, & distribution Production Costs Production Labor Raw Material

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Raw Material; $684Production Labor; $21,326 Production Costs; $21,326

Sales, marketing, & distribution; $1,500

R&D/Quality Assurance & Prelim Expenditures; $28,000

General & Admin.; $170,103Depreciation; $332,296

Olmito Agriquatics Year 1. Cost Structure

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Mon

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Mon

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Mon

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Mon

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Mon

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Mon

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Mon

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Mon

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Mon

09

Mon

10

Mon

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Mon

12

$ 0

$ 200,000

$ 400,000

$ 600,000

$ 800,000

$ 1,000,000

$ 1,200,000

$ 1,400,000

$ 1,600,000

Olmito Agriquatics Year 1 Cash Flow

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Cash & short-term investments; $ 678,212

Inventories; $ 50

Plant & Equipment; $ 5,917,794

Olmito AgriquaticsYear 1. Assets

Short-term debt and notes payable; $ 1,304,025

Accounts payable; $ 14,197

Long Term Debt; $ 4,860,921

Equity; $ 416,913

Olmito Agriquatics Year 1. Liabilities

Cash & short-term investments; $ 416,446

Accounts receivable; $ 541,732

Inventories; $ 62,314

Plant & Equipment; $ 5,714,854

Olmito Agriquatics Year 2. Assets

Short-term debt and notes payable; $ 1,279,741

Accounts payable; $ 148,443

Long Term Debt; $ 4,565,133

Equity; $ 742,029

Olmito Agriquatics Year 2. Liabilities

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Mon01 Mon02 Mon03 Mon04 Mon05 Mon06 Mon07 Mon08 Mon09 Mon10 Mon11 Mon12

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

Olmito Agriquatics Year 2 Cost Distribution

Debt Service Depreciation General & Admin. R&D/Quality Assurance & Prelim Expenditures

Sales, marketing, & distribution Production Costs Production Labor Raw Material

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Raw Material; $939,738

Production Labor; $546,491

Production Costs; $546,491

Sales, marketing, & distribution; $223,516

R&D/Quality Assurance & Prelim Expenditures; $82,694

General & Admin.; $605,535

Depreciation; $316,794

Debt Service; $1,237,164

Taxes; $195,171

Olmito Agriquatics Year 2 Cost Structure

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Mon01 Mon02 Mon03 Mon04 Mon05 Mon06 Mon07 Mon08 Mon09 Mon10 Mon11 Mon12

0.00

50.00

100.00

150.00

200.00

250.00

Olmito Agriquatics Year 2. Production (tons)

Aquameal Macrobrachium Tilapia

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Mon01 Mon02 Mon03 Mon04 Mon05 Mon06 Mon07 Mon08 Mon09 Mon10 Mon11 Mon12

$ 0

$ 100,000

$ 200,000

$ 300,000

$ 400,000

$ 500,000

$ 600,000

Olmito Agriquatics Year 2. Sales ($s)

Tilapia Macrobrachium

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2012 2013 2014 2015 2016

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

Olmito Agriquatics 5-Year Cost Distribution

Taxes Debt Service Depreciation General & Admin. R&D/Quality Assurance & Prelim Expenditures Sales, marketing, & distribution Production Costs

Production Labor Raw Material

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Raw Material; $1,677,788

Production Labor; $779,338

Production Costs; $779,338

Sales, marketing, & distribution; $199,587

R&D/Quality Assurance & Prelim Expenditures; $74,976

General & Admin.; $725,622

Depreciation; $328,062

Debt Service; $1,259,803

Taxes; $1,040,224

Olmito Agriquatics Year 5 Cost Structure

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2012 2013 2014 2015 2016

0

500

1,000

1,500

2,000

2,500

3,000

Olmito Agriquatics 5-Year Production tons)

Macrobrachium Tilapia Aquameal

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2012 2013 2014 2015 2016

$ 0

$ 1,000,000

$ 2,000,000

$ 3,000,000

$ 4,000,000

$ 5,000,000

$ 6,000,000

$ 7,000,000

$ 8,000,000

Olmito Agriquatics 5-Year Sales ($s)

Tilapia Macrobrachium

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2012 2013 2014 2015 20160

0.5

1

1.5

2

2.5

3

Olmito Agriquatics 5-Year Cash Flow ($ millions)

Note: The pronounced dip in Year 4 is a consequence of compensating the Investor on a first-in-first-out basis

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2012 2013 2014 2015 2016

-$1,500,000

-$1,000,000

-$500,000

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

Olmito Agriquatics 5-year Pretax Profits

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Cash & short-term investments; $ 2,511,158

Accounts receivable; $ 714,960

Inventories; $ 628,775

Plant & Equipment; $ 4,974,979

Olmito Agriquatics Year 5 Assets

Short-term debt and notes payable; -$ 276,947

Accounts payable; $ 726,103

Long Term Debt; $ 3,391,059

Equity; $ 4,989,656

Olmito Agriquatics Year 5. Liabilities

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2012 2013 2014 2015 2016$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

Fresh Tilapia FiletsBreak Even Price ($/ton)

Break Even Price Target Price

2012 2013 2014 2015 20160

200

400

600

800

1000

1200

1400

Fresh Tilapia Filets Break Even Volume (tons/yr)

Break Even Volume Target Volume

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2012 2013 2014 2015 2016$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

Fresh Macrobrachium Prawns Break Even Price ($/ton)

Break Even Price Target Price

2012 2013 2014 2015 20160

20

40

60

80

100

120

Fresh Macrobrachium Prawns Break Even Volume (tons/yr)

Break Even Volume Target Volume

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2012 2013 2014 2015 20160

5

10

15

20

25

Olmito Agriquatics Current & Quick Ratios

Current ratio Quick ratio

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2012 2013 2014 2015 2016

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

Olmito Agriquatics Profit Ratios

Gross margin Operating margin Profit margin on total sales Return on assets Return on equity

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2012 2013 2014 2015 2016

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

Olmito Agriquatics Sales to Fixed Assets

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2012 2013 2014 2015 2016

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

Olmito Agriquatics Debt Ratios

Debt to total assets Debt to total capitalization Debt to equity

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2012 2013 2014 2015 2016

-0.5

-0.3

-0.1

0.1

0.3

0.5

0.7

0.9

Olmito Agriquatics Efficiency Ratios

Production Sales, Marketing & Distribution R&D/Quality Assurance General & Administration

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2012 2013 2014 2015 2016

0

0.2

0.4

0.6

0.8

1

1.2

Olmito Agriquatics Asset Turnover

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2012 2013 2014 2015 2016

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

Olmito Agriquatics Cost Structure

Total Variable Costs Total Fixed Costs

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2012 2013 2014 2015 2016 2017$0.000

$5.000

$10.000

$15.000

$20.000

$25.000

Olmito AgriquaticsShare Prices

Series1

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1 2 3 4 5 6 7 8 91

01

11

21

31

41

51

61

71

81

92

02

12

22

32

42

52

62

72

82

93

03

13

23

33

43

53

63

73

83

94

04

14

24

34

44

54

64

74

84

95

05

15

25

35

45

55

65

75

85

96

0

0.00

50,000.00

100,000.00

150,000.00

200,000.00

250,000.00

300,000.00

Olmito Agriquatics Wastewater Treated (cubic meters treated monthly)

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Year 1

Year 2

Year 3

Year 4

Year 5

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

Olmito Agriquatics Sales

Macrobrachium Tilapia

Year

Do

llars

in S

ales

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r 1

Yea

r 2

Yea

r 3

Yea

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$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

Olmito Agriquatics Fresh Tilapia Filet Sales

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r 1

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$20,000

$30,000

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$60,000

$70,000

$80,000

$90,000

Olmito Agriquatics Fresh Macrobrachium Sales

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$ 0

$ 100,000

$ 200,000

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$ 400,000

$ 500,000

$ 600,000

$ 700,000

$ 800,000

Olmito Agriquatics Accounts Receivable

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ar

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Ye

ar

2

Ye

ar

3

Ye

ar

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Ye

ar

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$ 0

$ 100,000

$ 200,000

$ 300,000

$ 400,000

$ 500,000

$ 600,000

$ 700,000

Olmito Agriquatics Finished Inventories

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r 1

Yea

r 2

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r 3

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$ 0

$ 200,000

$ 400,000

$ 600,000

$ 800,000

$ 1,000,000

$ 1,200,000

$ 1,400,000

Olmito Agriquatics Capital Spending

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r 1

Yea

r 2

Yea

r 3

Yea

r 4

Yea

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$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

Olmito Agriquatics Outstanding Debt