HQ is Chicago Illinois Business focuses on the manufact uring of organic and pathogen free products through recycling of food scraps. Founded in 2010 Location: Chicago IL Each location working in a 3-5 mil e circumference [tons] Almost any business can successfully divert food discards from landfills. Businesses with record-setting food diversion programs are recovering 50% to 100% of their food discards and reducing their overall solid waste by 33% to 85%.
Market Performance(1) }
The estimated growth for 2011, is 13.8% from 1,207.3 million in 2010 to 1,503.6 million.
Wha Wh at Feed
Feed Earth Now, needs a total of $1.5 million to complete its Round One Funding }
The company is in the process of acquiring a 30,000 loan for with ret urn in 30 days. Can be collateralized against the license }
The Company is willing to disc uss a small ownership interest instead of a loan for the sum of $30,000 .[Discuss « budget, model] } Terms are negotiable.
evol ution in market:
Initial interest will be from m unicipalities, restaurants, food preparation locations, agricult ural sites then followed by horticult ural sales companies.
Growth expected in the food waste market for U S market is forecast at a value of $31.7 bil lion, an increase of 71% since 2009. Projected growth in sales for the participant of this agreement will increase over 10% year over year. With a gross profit margin of 65%+ after 6 months.
Feed Earth Now is currently in the r unning for several grants including } } } }
Confidential: Feed Earth Now
Earth Now Is Looking For
750,000 SBCDIC 250,000 CleanTech 100,000 100,00 0 T echweek 25,000 Charles Barkley Among others
Dynamics/Trends(1) Half of all food produced globally is wasted accounting for 1/3 percent of the overall ove rall waste streaming the United States more than than 50 million tons tons of food waste is sent to l andfills annually. Organic non-food sales grew 9.7 percent in 2010, to reach $1.97 billion. Total U.S. organic sales, incl uding food and non-food products, were $28.682 bill ion in 2010, up 9.7 percent from 2009. Certified organic acreage in the United States reached more than 4.8 million acres in 2008, according to latest data posted by USDA. U.S. total organic cropland reached 2,655,382 2,655,382 acres in 2008, whil e land devoted to organic pasture totaled 2,160,577 acres.
Consu Consulting lting Market CAGR Growth Market Mark et 5-year5-year CAGR Growth GlobalGlobal Consulting History History 23.5%
' 86 - ' 9 0
'8 66-''9 91 0-'95
'9 11-''9 965-'0 0
'96 -''0 00 11-'0 5
'0 1 -''0 06 5-'1 0
' 0 6- ' 1 0
2010-2014 growth expected to rise to mid to high single digits
According to the research the addressable market segments segme nts For this research will be:
Grocery Chains Agricult ural Co-ops Hotels M unicipalities Restaurant Chains Mom And Pop Chains Aquariums Event locations Retail Breweries Farming institutions
With returns on invested capital projected to reach almost 70% in 2013, this business represents a potentially highly profitable vent ure.
Co Comp mpan any y - Ov Over ervie view w Competitive
Reputation(1) % of Respondents N aming Top 5 Firms
The ability to collect a large-vol ume of food waste on a regular basis, allowing for the ability to transform into large quantities of EARTHCANDY EARTHCANDY and EARTHNOW Pulp } The ability to establish long-term partnerships wit h local farmers and restaurants } A strong understanding the organic retail marketplace. Weaknesses } The lack of management aro und the coll ection of the food waste } The lack of established law s requiring the accuracy and }
timeliness of the collection collection of the waste and dissemination of the soil amendment. 0%
Strengths & Weaknesses
Limited focus: R & D ho uses, in food waste recycling providers, Universities, and government
Primary focus: Hotels, Restaurants Bread Companies, Farming, among others
No focus Non-bundled service providers
(1) Based on s urveys This Company sends to clients.
Comp mpan any y - Pr Pro oducts Business Segments (% 2011 Revenues)
Segmen t Size (Revenues Millions of USD)
$40,000 $30,000 $20,000 $10,000 $0
Franchise Service Descriptions Segment 1
30 day on site help from headq uarters
Select Indirect Competitors (Revenues $M) FEN
43t -175t day/ 1380t - 480 4800t 0t month
1.1t day / 33t month
NO LARGE BONES
END PRO PRODU DUCT CT
3k compost day/ 90k month
Design and Global Process Materials Segment 3 Segment 4
Technology licensing rights
3 press releases per month
Online marketing including firm website B)
Financial Support PROCESS TIME
1130 1130k k - 23,0 23,000 00k k soil amendment day B) 59,0 59,000 00ml ml 240,000ml agro tea day
Fermentation Analysis 1.
Colle Col lect ct all food scr scrap apss inclu includin ding g mea meat, t, bone bone , and and fat fatss
Elimin Elim inate atess the ne need ed for Pe Petro tro Fer Fertiliz tilizer er
Clean Cle anss Drain Drains, s, Exce Excelle llent nt for for High High Rise Rise an and d Hotels Hotels
Deodo De odoriz rizes es Se Septi ptic c Tanks Tanks an and d Sewe Sewerr Syste Systems ms
Remov Re moves es Path Pathoge ogens ns that that other otherwis wise e woul would d be presen presentt in Compos Compostin ting g
Non-Fermented Lots of Pathogens
Post Fermented Pathogens Gone!
The } }
research provided has a number of critical assets
A person in US generates 2.9 pounds of trash every day Approximately 1.5 tons of solid waste per year. } Approximately 75 percent of solid waste is recyclable while only 30 percent of foods waste is actually recycled Soil Depletion in the United States has increased over 60% in the past 10 years. } In the past 100 years United State·s current overall soil depletion has reached staggering numbers as high as 74%.
These assets can be utilized for«.. } } }
Increased sales of manufacturing goods within an ever growing marketplace marketplace.. A better understanding of the needs of both Chicago and United State·s agricultural community community as well as its recycling and waste management communities Soil amendment produced due to this fermentation process } Increases the moisture in the soil } Increases the nutrients within the soil } Actually revitalizes damaged damaged and dead soils } Provides a revenue stream while helping Chicagoland Chicagoland and US lands
The organic marketplace }
Certified organic acreage in the United States reached more than 4.8 million acres in 2008, according to latest data posted by USDA. U.S. total organic cropland reached 2,655,382 acres in 2008, while land devoted to organic pasture totaled 2,160,577 acres. According to Organic Monitor estimates, global organic sales reached $54.9 billion in 2009, up from, $50.9 billion in 2008. Organic non-food sales grew 9.7 percent in 2010, to reach $1.97 billion. Total U.S. organic sales, including food and non-food products, were $28.682 billion in 2010, up 9.7 percent from 2009.
Safeway SHEDD Aquarium Dominics Whole Foods Tyson chicken Intercontinental Swissotel All Hotel and Spas Five Star Restaurants Mom and pop restaurants Food Manufacturers Bread manufacturers Bakers Pastry Houses Breweries Home Depot Agricultural Depots Lowes Among others
(1) If necessary necessary more
Reputation and Market Position(1) }
The nations first commercial commercial food scraps recycling manufacturer, utilizing a new patent pending technology combined with age old proven technologies to create separate lines of organic retail and agric ultural products. The company effectively collects and recycles organic waste The company effectively manufactures organic retail products across multiple verticals FEN has created a market position of providing prov iding the end to end solution in recycling FEN through long-time established relationships provides the
100% 80% 60% 40% 20% 0%
ability to collect o ur souretail rce materials creating a high margin offering while simultaneo usly
Complementary Offerings (2010 Rev. M)
two companies will be able to leverage our current and
future rolodexes to support growth within the partnership
two companies will be able to co-market and co-brand for public relations purposes focusing on the same target markets to better utilize our joint marketing/advertising dollars.
Combined Entity Pro forma Financials
Breadth and Depth of Product Offer
Soil Nutrient Content Value
FEN has excl usive rights to Ill inois combines with excl usivity it is granting to T urkey for the EU. Chicagoland can franchise within its own borders and provide pick ups internationally for three years Feed Earth Now will be al lowed to utilize this next generation technology FEN intends to expand to bordering Chicagoland areas and Eastern European countries as well as bordering states.
Insert practice area Base, Target
Feed Earth Now will foc us on initial expansion in u
Chicago, Wisconsin, Iowa, and Florida d e to customer interest levels. 10
Investment Thesis Commentary
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Rational for Revenue Client Growth
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Took Management assumptions as given for Year 1 (2011 (2011), ), then extended annual growth by 30% 30% each year ((2012 2012 ² 2014). Other scenarios have more moderate growth expectations. [bottom-up model required]
Salary, Marketing, and Legal expenses grown at inflation each year ² 3%. 3%.
Research Expense depends on # of locations, technology growth, and R and D expense. Monthly location interest interest continues to grow, but at a more moderate and decreasing pace.
R and D location expense is broken down by region.
Interest income at 3%
Rational for COGS & SG&A
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p i r c s e
Rational for Research Data Expense
business plan, it seemed reasonable to expect Receivables to be on a 30-day period, and Payables on a 45-day period.
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p i r c s e
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Alone P&L [tons]
Projected Income Statement for Feed Earth Now In $'s, Inputs in blue
Management Scenario Number of Restaurants Restaurant revenue Back
Project ed Ye ar Ending Dec Dec em ember ber 31, 2011
SG&A E xpenses xpenses SG&A Expense Marketing Expense:
Total SG&A Expense EBI TDA Depreciation Amortization EBIT
Other Non-operating Expense / (Income)
Interest Expense Interest (Inc ome) Pret ax Inc ome Inc ome T axe s Ne t I ncome
1, 803, 980
3, 213, 340
7, 804, 382
89, 598, 552
92, 800 4, 000
92, 800 4, 000
92, 800 4, 000
92, 800 4, 000
1, 5 50 07, 061
15, 810, 747
63, 285, 567
922, 545, 802
0. 0 26, 025 (10,529)
0. 0 26, 025 (163,902)
0. 0 26, 025 (910,129)
0. 0 26, 025 (10,004,961 )
1, 491, 565
15,948, 62 625
64, 16 169,671
447, 470 1,044,096
4, 784, 587 11,164,037
85.1% 45.0% 40.0% 37.6% 26.1%
91.2% 15.3% 75.9% 75.4% 53.3%
97.5% 10.7% 86.8% 86.7% 61.5%
99.8% 8. 8% 91.0% 91.0% 64.4%
423.2% 891.8% 949.1% 969.3%
248.4% 298.4% 300.3% 302.4%
1288. 7% 1355. 7% 1357. 8% 1353. 2%
Margin SG&A Margin EBITDA Ma rgin EBIT Margin Net Inc ome Margin
Growth Rate Analysis Sales Growt h Rat e EBITDA Growt h Rat e EBIT Growth Rate Net Inc ome ome Growth Rate
Effective Tax Rate
Financial Model Analysis Perpet etuity Analysis and Returns ² DCF Perp Discounted Cash Flow Perpetuity Analysis Analysis for Fe ed Earth Now In $'s, Inputs in blue
Projected Year Ending D Decem ecem ber 31, 2011 2012 2013
Sales EBITD A Less: Depreciation Less: Amortization EBIT Less: Taxes @ Ta Tax-effected x-effected EBIT
1 5, 5, 90 90 7, 7, 54 54 7
6 3, 3, 38 38 2, 2, 36 36 7
9 22 22 ,6 ,6 42 42 ,6 ,6 02 02
1 ,5 ,5 07 07 ,,0 0 61 61
6 3, 3, 2 28 8 5, 5, 5 56 67
9 22 22 ,,5 5 45 45 ,,8 8 02 02
1 ,0 ,0 54 54 ,,9 9 42 42
1 1, 1, 06 06 7, 7, 52 52 3
4 4, 4, 2 29 9 9, 9, 8 89 97
6 45 45 ,,7 7 82 82 ,,0 0 62 62
Unlev er ed Free Cas h Flow
Dis cou nt Rate
B PV of Te r m in al V alue as a Pe r pe t ual Gr o w th Rate o f 3.0% 3.5%
Free Cash Flow Growth Rate
Dis cou nte d Cas h Flow s (2011 - 2014)
1 5, 5, 81 81 0, 0, 74 74 7
Plus: Depreciation Plus: us: Amortization of Intangibles Plus: us: Changes in Deferred Taxes Less : Capital Expenditures Less : A dditions to Intangibles Less : Changes in Working C Capital apital Less : Changes in Other A ssets and Liabilities ities U nlevered
Plus: Depreciation Plus: us: Amortization of Intangibles Plus: us: Changes in Deferred Taxes Less : Capital Expenditures Less : Additions to Intangibles Less : Changes in Working C Capital apital Less : Changes in Other A ssets and Liabilliti itie es s
Background Mrs. Cathy Scratch, the current President President and CEO of Feed Earth Now, is experienced in project management management and food waste recycling. Since 2008, she worked with the mom and pop as well as large scale corporations to restr ucture their current recycling needs, such as the Marriott Hotel in Chicago, Whole Foods Grocers, among others. She also acted as cons ultants for green organizations for their communications and development providing speeches and educational lecturers at consumer and corporate corporate events. Prior to her Recycling consultancy she worked within the large large scale interior and development spaces. Creating Fe Feed ed Earth Now, Mrs. Scratch has managed to fulfill a dream, to create a provide a sol ution that will both make reven ue and help to replenish soil throughout the world.
Ms. Gerlach has expertise in product marketing, product management and Web design, internet marketing, and market intelligence. With experience in wireless telecommunications, B2B software, manufacturing, retail, Gerla eCommerce eComm erce and HR,Previo erlach ch is uniquely qualified to build the businesseplan usly, Gerlach reorganized market intelligence for this organization. intelligenc at Websense, a global leader in internet filtering and web security solutions. Gerlach managed global market research and competitive intelligence, tracking security software vendors and re-sellers, as well as hardware v endors. She also played a central role in helping to close over $20 million in sales in one quarter alone. As the head of Channel Competitive Intelligencefor the ARS Division of Current Analysis, Gerlach created and managed managed the division. In addition to publishing retail and e-commerce company profiles, her u responsibilities responsibilit ies incl ded market intelligence, tracking retailers, providing consultancy to all types of retail, e-commerce players and direct re-sellers, as well as supporting component providers, retail buyers and Value Added Resellers on a daily and monthly basis. She was instr umental in providing M&A and business consulting services to both SMB and sev eral Fortune 500 companies. Prior, Prior, as the Senior Market Research Manager for Kyocera Wireless Corp, Gerlach coordinated and managed intelligence intelligence for CDMA 95a and 1X handsets, PDA's and current and future technologies incl uding Palm OS, Smart Phones and Bluetooth. She was awarded the Kyocera Merit Based Award and was named to the Board of the Cons umer Electronics Association. Ear ly in her career, she Lucent Technologies and Mid-AmericaEarly Resear Research/FIF. ch/FIF. While at worked Lucent,with Lucent·s Terminal Partnership Team, r un by Gerlach, forged lucrative alliances between Lucent and companies such as Compaq. During her tenure she worked on accounts including RIM, Hyundai, Nokia, Motorola, Ericsson and Sanyo Fisher. At Mid America Research/FIF,she was Project Manager for the Northeast region, covering accounts such as Procter and Gamble, Milward Brown, AC Neilson Bases and Pfizer. Gerlach earned her B.A. from Drew University in Madison, NJ. She is presently a member of the Consumer Electronics Association (CEA), NASF, WBN, University Cl ub, Mid America Club, RotaryOne, JobsOne Committee, Commit tee, and a member of the Chicagoland Chamber of Commerce. Ms Gerla erlach ch is currently on the Advisory Boards of Circle Urban Ministries, National Jewish Health Foundation, Roosevelt University University and the WCD of the CEA.