RGT Spring 2014 Business Plan - Five Years part draft

Page | 1Private & ConfidentialSpring, 2014

LOCATION COMPETITION

GRACILARIA

Business Plan - Five Years

proprietary & proven technology producing proprietary & proven technology producing

high grade Agarose under controlled conditionshigh grade Agarose under controlled conditions

DRAFT 1

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

DRAFT 1


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

DRAFT 1Business Plan – Five Years

Farm construction


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


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

QualityHigh & standardized

qualityNo control

Extraneous

InfluencesControlled environment

No control on tides;

temperature; pollution &

nutrient levels

THE COMPETITION:

GRACILARIAGRACILARIA

AGARAGAR

AGAROSE

1 tonne

>300 kg

AGAROPECTIN

Gracilaria Macro Algae

PHYCOERYTHRINPHYCOERYTHRIN >10 kg

DYES & CELLMARKERS

Land based

Production Units

REVENUE EARNERSREVENUE EARNERS

>140 kg >140 kg

OVERVIEW OF THE RGT PROCESS:

ANTI-VIRALDRUGS

AGAROSE/GELDERIVATIVES



PROPERTIES & BENEFITS OF AGAROSE:

XXXXXXXXXXXXXXXXXXXXXXXXXX


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.


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


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


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.

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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


Sta

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Sta

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Sta

ge 4

Sta

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CULTIVATION PONDS

Sta

ge 3

Sta

ge 3

Sta

ge 2

Sta

ge 2


Stage 1

big tanks: 600 liters

small tanks: 150 liters

SCHEMATIC LAYOUT FOR FARM PRODUCTION FACILITY:

LABORATORY MAINTENANCE

Harvest Pipe

GREEN HOUSE

DRYING UNIT STORAGE



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




Appendix – Agarose Scientific Applications:


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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RGT Spring 2014 Business Plan - Five Years part draft

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