RGT Spring 2014 Business Plan - Five Years part draft
1. Page | 1Private & ConfidentialSpring, 2014
LOCATION COMPETITION
GRACILARIA
Business Plan - Five Years
proprietary & proven technology producingproprietary & proven technology producing
high grade Agarose under controlled conditionshigh grade Agarose under controlled conditions
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2. Page | 2Private & Confidential
THE VISION:
To be a world leader in developing a pipeline of Agarose products for the
biotechnology and the cosmeceutical industries.
RGT is dedicated to meeting the expanding market demand for existing Agarose
products. The Company plans to develop Agarose as a substitute for chemicals
now being used in a wide range of commercial products. With our proprietary
technology we can control the properties of our source material and consistently
extract our range of Agarose products – turning the vision into reality.
Company Team:
Beyla Potash BA
Dr. Israel Levy
Dr. David Myslabodsky
Dr Leonid Lurya
Eran Uliel BSc, MBA
Mayir Asher BA, FCA
Advisory Board:
Professor Avi Domb
Dr. Tsafi Danieli
Brian H. Davies JD
Dr. Yuval Cohen
Dr. Shmuel Mandel
Professor Joseph Mendelson
Spring, 2014
This Business Plan – Five Years contains forward-looking statements that
involve a number of risks and uncertainties, including, but not limited to,
unpredictability of operating results, risks in product and technology
development and rapid technological change, extent of demand for the
company’s products, impact of competitive products and pricing, market
acceptance, changing economic conditions, dependence on key personnel,
difficulties in managing growth, risks relating to sales and distribution, risks
of product defects, uncertainty in product development and related product
trails, dependence on company proprietary technology. There can be no
assurance that the results projected in this Business Plan – Five Years will be
met. The content of this Business Plan – Five Years is proprietary to the
company and is provided on the understanding that it will not be disclosed to
any third parties without the express written consent of RGT.
Business Plan – Five Years
Legal Attorneys:
● Yehuda Raveh & Co
Patent Attorneys:
● Dr. Eyal Bressler & Co
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3. Page | 3Private & Confidential
page
Company Team 2
Advisory Board 2
The Vision 2
Target Market 3
Market Opportunity 3
Technology Profile 3
Investment Highlights 4
Financials/Corporate 4
2 Years Projected Accounts 5
Use of Proceeds 5
Introduction 6 - 8
Background Information 9
Profit & Loss Summary 9
Funding Requirements 10
Annual Cash Flow Forecast 10
Farm Schematic Layout 11
Company Extraction Lab 12
Activity chart 13
Appendix:
Market Size 14
Competitors 14
Typical Agarose Pricing 14
CONTENTS:
Spring, 2014
TARGET MARKET:
● Agarose is a widely used polysaccharide
● Agarose Scientific market estimate = $1b+ annually
● Agarose Cosmeceutical market estimate = $3b+ annually
● Agarose sells from $800 to $4,000/kg in Scientific market
● Markets are serviced by several established vendors
● Other derivatives and by-products from macro algae farm
MARKET OPPORTUNITY:
● Algae usually harvested from ocean
● Single annual harvest
● Sea-harvesting is subject to environment
● Unpredictable yields & long supply chain
● Vendors looking for quality & dependably supply
TECHNOLOGY PROFILE:
● Proprietary technology for cultivating algae
● Controlled environment of tanks & ponds
● Algae strains specifically developed by RGT
● High yields – 10 tons dried algae /1,000m2 ponds/year
● High Agarose yield – 1,400kg / 1,000m2 ponds/year
● Proprietary range of Agarose products
● Final Agarose products have high profit margins
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Business Plan – Five Years
Farm construction
4. Page | 4Private & ConfidentialSpring, 2014
INVESTMENT HIGHLIGHTS:
● Raise $3.3m in capital
● Build world-class macro algae by-product company
● Apply unique technology to capture existing market
● Start sales for core product within 12 months market
● Generate profits within 12 months
● Annual revenues > $23m in Year 2
● Additional innovative product lines scheduled
FINANCIALS/CORPORATE:
● Private company based in Israel
● Debt: zero
● 5 year plan: expand current production capacity from 500m2 to 91,000 m2
● Reach annual Agarose production of 120 tons
● Achieve annual revenues of > $170m by Year 5
● Become The Market Leader in Agarose Scientific & Cosmeceutical markets
Uncontrolled yields
& one annual crop
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Business Plan – Five Years
Israel farm location
within aerial photo
Parameters Our Technology Other
Cultivation
Scalable, land-based
salt-water ponds,
controlled yields &
multiple crops
Nets/open sea &
uncontrolled yields and
one crop per year
Labour Minimal Intensive
Environmental Friendly/controllable Unfriendly system
Pollution Minimal risk Uncontrollable
Quality
High & standardized
quality
No control
Extraneous
Influences
Controlled environment
No control on tides;
temperature; pollution &
nutrient levels
THE COMPETITION:
5. GRACILARIAGRACILARIA
AGARAGAR
AGAROSE
1 tonne
>300 kg
AGAROPECTIN
Gracilaria Macro Algae
PHYCOERYTHRINPHYCOERYTHRIN >10 kg
DYES & CELL
MARKERS
Land based
Production Units
REVENUE EARNERSREVENUE EARNERS
>140 kg >140 kg
OVERVIEW OF THE RGT PROCESS:
ANTI-VIRAL
DRUGS
AGAROSE/GEL
DERIVATIVES
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Business Plan – Five Years
Page | 5Private & ConfidentialSpring, 2014
PROPERTIES & BENEFITS OF AGAROSE:
XXXXXXXXXXXXXXXXXXXXXXXXXX
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INTRODUCTION:
Gracilaria grows naturally in the seas and is subject to
pollutants. It is generally only harvested once a year and the
Gracilaria is then used to produce Agarose. However, RGT’s
proprietary technology makes it possible to harvest Gracilaria
every two weeks from a completely controlled environment.
Why the excitement over this product? What is it?
Spring, 2014
◄ Gracilaria Macro Algae
Agarose is extracted from the
Gracilaria macro algae and
applied to products in the
Diagnostic, Cosmeceutical and
Natural Therapy Markets.
Agarose products sell for
between $800 to $3,000+ a kilo
– depending on the application.
It is used for reading DNA,
petri dishes, and other
scientific applications.
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Business Plan – Five Years
The Company has an excellent management team of professional scientists, specialists
and consultants. RGT is poised to make significant achievements over the next 18
months with its innovative technology, new production capacity, product development
and marketing and sales of its macro algae products and derivatives.
RGT operates in Israel and is focused on:
1 Propagation and cultivation of Gracilaria macro algae
2 Commercialization of its derivatives – especially Agarose
7. Page | 7Private & Confidential
The Company’s Research & Development
Department has started development work on
an innovative range of Own Label Agarose
based cosmeceutical products.
The provisional name for the product range is:
Sea Dreams Cosmetics
R G Technologies requires an investment of $3,300,000 to
achieve the First Stage and is projecting profits (EBITDA)
of $xxxxxxxx in the first two years from funding.
Spring, 2014
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Business Plan – Five Years
INTRODUCTION: continued
RGT plans to produce and market an innovative range of products for the
cosmeceutical industry. The potential market demand for this range of products
is extensive and the Company anticipates it will develop into a whole new
industry.
Agarose is a superior base for cosmetic gels, creams, hair dyes, and hair gels.
Cosmetic companies have expressed great interest to use the Company’s
innovative range of Agarose-based intermediate gels and creams in their own
cosmetic product ranges.
RGT has two patents pending for the production of Agarose creams & gels as
Intermediate Agents and plan to supply its products according to individual
customer’s needs and specifications.
RGT is developing its farm capacity at its dorsrmhas The First Stage of
the Farm development is to create a 6,000 square meter cultivation
capacity in the Dor location. The Company is projecting a financial
“break-even” point at around 1,500 square meters of production
capacity.
The Second Stage of the Farm development program is to add a
further xxxxxxxxx square meters of farm capacity in Moshav Dor to
meet expanding sales.
SeaDreamsCosmeticsSeaDreamsCosmeticsSeaDreamsCosmeticsSeaDreamsCosmetics
8. Page | 8Private & Confidential
INTRODUCTION: continued
RGT is a cleantech business based on:
Gracilaria macro algae is a red seaweed which
normally grows in the intertidal coastal zone:
Spring, 2014
Proprietary technology
Unique & specialized macro algae farming know how
Land-based macro algae cultivation in tanks & ponds
Farming within a totally controlled environment
Seaweed cultivation doubling in weight every two weeks
Land available for Farm expansion & increased capacity
1,000 sq m can produce 1,400 kg of Agarose annually
1,400 kg of Agarose can produce $700,000+ in revenues
Extraction processing is focused on the higher end market
Gel products have consistent physical/chemical profile
Strong interest from cosmeceutical industry clients
Huge market potential
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Business Plan – Five Years
10. Page | 13Private & Confidential
RGT EXTRACTION LABORATORY:
RGT operated a Pilot Facility that produced over 100 kilograms of quality
Gracilaria macro algae every week in the growing season. The seaweed was
very healthy and the results exceeded expectations. The Company is now
focused on producing a sample range of Agarose-based products.
The first stages of the samples process is shown below:
Spring, 2014
Process Start Raw Material - Gracilaria
Dry Gracilaria RGT Process: final rinse RGT Process: pre-drying
RGT Process: diced gel Final Product
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Business Plan – Five Years
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Business Plan – Five Years
Appendix – Agarose Scientific Applications:
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Appendix – Market size and global growth:
RGT has two markets for Agarose – (1) pure
Agarose products and (2) Agarose gel & cream
products.
The information regarding the pure Agarose
markets derives from conversations with
potential distributors and appears to be close to
$1 billion annually and is growing at between
10% to 12% per year.
The market for Agarose gels in the
cosmeceuticals market is extensive. There is a
latent demand for Agarose gels & creams which
the company believes to be between $3 billion
to $4 billion.
This market depends on Agarose gel products
being produced that are both stable and
consistent. RGT is not aware of any
manufacturers who can achieve this result, and
thus the company’s proposed products will be –
unique in the market place
Typical retail sales prices for Agarose are shown
opposite. These retail prices vary from around
$600 per kilo up to over $4,000 per kilo.
RGT is focused on the high end products
Appendix – Competitors:
As far as the company is aware there are no
competitors to its controlled cultivation of
Gracilaria. This is a unique process that
produces stable and consistent crops of RGT
Gracilaria macro algae.
Regarding the extraction of Agarose from
Gracilaria there are production plants who do
this work from dried seaweed. There are many
companies working as producers and
distributors of Agarose and various
microbiological agents world wide.
Spring, 2014
Per/kg
$
970
840
700
600
6400
4500
3600
3400
2800
2500
2600
2500
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Business Plan – Five Years
