Arcis Exec Summary

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Includes company overview, market background, business history, and management team background for Arcis Resources Corporation (ARCS)

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Arcis Exec Summary

  1. 1. Arcis Resources Corporation (ARCS.QB)An integrated beneficial reuse & recycling companywww.arcisresourcescorp.comIndustry: Environmental/Energy COMPANY OVERVIEWOffices: Alabama Arcis Resources Corporation (“Arcis”) (OTC: ARCS.QB) is changing the way in Ohio which companies dispose of their hazardous waste, non-hazardous waste, oils Florida and petroleum products and is leading the way for those companies to begin Al Khobar, Saudi Arabia converting that waste from a liability and expense into a beneficial reuse product and revenue stream. At its heart, Arcis Resources Corporation is an integrated fluid recovery & beneficial reuse environmental company positioned to be theOFFERING TERMS: dominant player in the $50B global beneficial re-use market. We deliver beneficial reuse and recycling services through three interrelated divisions of theOffering: $ 5MM company comprised of:Structure: Convert. Debenture • Mobile Fluid Recovery (“MFR”) - Patented fluid recovery technologyCoupon: 12% APR services and product sales;Term (mos): 36 • Arcis Energy (“AE”) - Beneficial reuse sales and marketing; andStrike Price: $0.40 per share • Arcis Logistics & Distribution (“ALD”) - Logistics and distributionWarrant Cover % : 25% services. The core of the Company is ourCAPITAL TABLE (as of 3/23/12) Mobile Fluid Recovery Division (MFR). Its’ patented fluid wasteTicker: ARCS.QB recovery technology “spins” liquidAuthorized shares: 200,000,000 wastes out of industrial absorbentOutstanding: 29,818,000 materials resulting in a 35% to 50%Float: 6,515,000 expense reduction in absorbentBeneficial Shareholders: 23,556,000 replacement, hazardous waste disposal and regulatory costs. Through its patented process, MFR has assisted automotive, oil and gas,SELECT BLUE CHIP CUSTOMERS: semiconductor, plastic and other industries in eliminating hazardous waste classification by removing “free liquids” from rags, wipes, booms and absorbents directly at the site of the generator, thus, eliminating the need for manifests to ship hazardous waste. Typically, MFR enters into long term service agreements with the customers giving MFR recurring and predictable revenue streams. MFR maintains and continues to grow it blue chip customer base which includes GM, Honda, Mercedes Benz, Southwest Airlines, Waste Management, among others. In 2010, GM awarded MFR the Environmental Services Supplier of the Year Award. Defensible IP MFR holds two patents and has a third pending. Our award winning, patented liquid recovery centrifuge technology removes liquid waste from sorbent material. The uniqueness and high efficiency of MFR’s solution stems from its ease of deployment. MFR’s solution is a mobile reclamation platform with versatile mounting capabilities to provide services via trucks, containers or other mobile platforms based upon the demands of the client. Synergistic Cross Sell Platform MFR’s highly desirable, IP protected, fluid recovery services provides instant market penetration for the Company’s second and third divisions, Arcis Energy (AE), and Arcis Logistics & Distribution (ALD). AE takes an MFR customer’s industrial waste by-products (beneficial reuse material) and sells the by-product to AE’s customers (“receivers”) to be used as raw materials in that receiver’s products, manufacturing process, and/or services. By converting the waste into a beneficial reuse product, AE’s customers are able to purchase the product at a significant discount to market for the same virgin product. AE typically enters into long term supply and off-take agreements with its beneficial reuse material generators and its receiver customers thereby ensuring a predictable stable 1Confidential: Nothing in this Business Plan shall constitute an offer to sell any securities of Arcis Resources Corporation (OTC: ARCS.QB) or any other entity. Any such offer (if oneis made) may be made only by a formal offering document prepared by Arcis Resources Corporation. © 2003-2012 Arcis Resources Corporation all rights reserved.
  2. 2. Arcis Resources Corporation (ARCS.QB)An integrated beneficial reuse & recycling companywww.arcisresourcescorp.comWIN-WIN VALUE PROPOSITION: revenue stream for AE. AE’s deep knowledge of the market enables margin optimization through arbitrage, blending, cracking, tax minimization and logistics. Arcis Logistics & Distribution (ALD) works as the Domestic North American trading arm of Arcis Energy and provides all of the planning, management, monitoring, accounting, billing, and tax reporting for: identifying requested sources and/or buyers of a product; providing all logistics planning to include, but not limited to: identifying transport partners, costs, testing partners and procedures, and payment methods; management of the daily, weekly, monthly, and/or quarterly shipments, transactions, and load testing; and providing accounting, billing, and tax reporting services for each delivery. ALD was strategically acquired for its established domestic relationships ranging from producers, to storage and pipeline operators. ALD has established contacts in aviation, energy and utilities, paper, concrete, fiberglass, manufacturing and transportation, as well as in retail and wholesale distribution.COMPANY AWARDS: ALD is federally and state licensed and operates the domestic North American 2011 GM Supplier for Environmental trading operation. ALD is able to import, export, and purchase refinery direct, blend, store and ship via the pipeline systems in the United States. ALD is Excellence actively involved in the petrochemical community and understands the dynamics 2005 Daimler-Chrysler International involved in this sensitive, highly regulated arena. Environmental Leadership Award Due to this dynamic, Arcis Energy has tremendous cross-sell leverage as generators and receivers often switch roles as Arcis identifies each party’s waste 2004 General Motors “We Care streams and needs. Moreover, these same generator and receiver customers are Award” potential customers for MFR and the Company’s other services including Arcis Logistics and Distribution. Providing this suite of services also satisfies a challenge of many customers by bringing generators and receivers of product together through a single and convenient platform to have their waste byproductKEY MARKET METRICS: reclaimed, matched with a buyer and/or seller, and the logistics and distribution of the product completed without the need to engage any other vendor to assist Beneficial Reuse TAM: in the process from start to finish. $50.8B – Global $10.2 B – North America MARKET Currently, this market is valued at Historical Market Growth 7.8% CAGR $50.8B globally, and $10.2B in North Global energy demand will double over America with a projected growth rate of 7.8% CAGR. We believe these the next 40 yrs. numbers are greatly understated Rising energy & material costs because in the US, the EPA only tracks the top waste generators. Since this Rising “green” regulatory costs reducing market is highly fragmented, there are ROI on plant & equipment by up to 42% thousands of large, medium, and small generators who fall “below the radar.” Depletion of natural resources As a result of this, we believe the US Increased regulatory regime forces market alone could be 15 to 20 times larger than currently tracked by the customers to seek alternative solutions EPA. There are several key factors driving the market. Rising energy and material costs are causing customers to seek out alternate sources of raw materials. This is compounded by the rising cost of “green” regulatory regimes which is 2Confidential: Nothing in this Business Plan shall constitute an offer to sell any securities of Arcis Resources Corporation (OTC: ARCS.QB) or any other entity. Any such offer (if oneis made) may be made only by a formal offering document prepared by Arcis Resources Corporation. © 2003-2012 Arcis Resources Corporation all rights reserved.
  3. 3. Arcis Resources Corporation (ARCS.QB)An integrated beneficial reuse & recycling companywww.arcisresourcescorp.com reducing ROI in plant and equipment by up to 42%. These two drivers areALLIANCE PARTNERS: further enhanced by margin compression resulting from globalization which is forcing management teams to scrutinize and reduce every line item cost in their operation. On a local market level, these market forces manifest themselves in new environmental regulations that are favorable to Arcis. For example, Wisconsin banned the disposal of Oil Filters and Absorbents in Landfills in 2009 (2009 Wisconsin Act 86). Consequently, all industrial customers must find alternatives Boutique active trader of specialty to landfill disposal in this market; making it an ideal target market for Arcis. petrochemical products with operations Current solution providers primarily provide laundering services which are not in the US, the Caribbean, Africa, & S. cost competitive with our Company’s Mobile Fluid Recovery solution; making America this a fertile market for growth. $39M 2010 Net Revenues with 20 What is the Opportunity for Beneficial Reuse Services? employees The generator market, consisting of 1,000’s of companies, is very fragmented. There is no central market or mechanism to match buyers (receivers) and sellers (generators). Most generators do not even know there is a market for their industrial process by-product. Based on historical transactions and the current beneficial reuse sales pipeline, Arcis believes there is an enormous opportunity to build a sales and marketing platform which identifies matches between generators and receivers and utilizes long term fixed margin arbitrage or cost plus revenue models to maximize margins and reduce risk. International environmental services company specializing in waste recycling What is the Opportunity for Fluid Recovery Services? with operations in Spain, UK, USA, There are several market conditions that are driving this business. First, the France, Turkey, & Thailand $1.45B US industrial market for sorbent materials is growing at a rate of 5% per annum. Second, Polypropylene (PP), the primary material used for industrial ~$336M 2010 Revenues with 1,200 sorbent products, prices are forecast to increase as US PP manufacturers output employees shrinks resulting from a market driven conversion to less expensive and less efficient feed stocks. Third, increasing costs and regulatory liability in handling and disposing of hazardous waste is driving industrial customers to implement waste minimization programs. Fourth, industrial customers are increasingly focused on the market’s perception of their “green” image. BUSINESS HISTORY Owned by the 9th richest family in Saudi Arcis Resources Corporation is the result of four acquisitions/mergers which Arabia, Al-Suwaiket is a leading provider took place between September 22, 2010, and July 15, 2011. These acquisitions of oil, gas, & pipeline services to KSA & consisted of American Plant Services, Mobile Fluid Recovery, Gulf Coast Energy the GCC and Distribution and the assets which formed Arcis Energy, Inc. Upon the completion of the acquisition of American Plant Services (“APS”) on July 15th Offices in Al-Khobar, Riyadh, Jeddah, 2011, it was the decision of management and the Board of Directors of Arcis to across the Middle East & Europe cease operations of APS and proceed with selling all assets non-relative to corporate direction. Post consolidation, the company had $7.5 million in debt, which was reduced within the first 6 months post-merger to $1.5 million; all non- essential personnel were removed from the operation; and the company was restructured from an industrial service operation to a beneficial reuse and recycling services company. The end result of this restructuring resulted in a gross margin increase from 31% to a projected 58% in 2012 post funding, and is projected to increase EBITDA from a historical 19.4% to 34.1% projected in 2014. Historical audited financials were filed on July 15,, 2011, and indicate the following: $12 million for 2010 annual revenue pre-merger completion, $5.4 million in revenue for 2011 which is comprised of revenue generated from 3Confidential: Nothing in this Business Plan shall constitute an offer to sell any securities of Arcis Resources Corporation (OTC: ARCS.QB) or any other entity. Any such offer (if oneis made) may be made only by a formal offering document prepared by Arcis Resources Corporation. © 2003-2012 Arcis Resources Corporation all rights reserved.
  4. 4. Arcis Resources Corporation (ARCS.QB)An integrated beneficial reuse & recycling companywww.arcisresourcescorp.com operations in January through July up to and from the merger date. Post-merger the company had limited operations due to and during its restructuring and restarted operations in November, 2011 and based on current growth trendsGROWTH STRATEGY: shall reach full, positive revenue operations by beginning of the second fiscal quarter of 2012. Utilize existing key customer’s national facility footprint to expand MFR to 24 PRE CONSOLIDATION branch locations within 24 months HISTORICAL STATEMENT OF OPERATIONS Leverage four (4) existing Master American Plant Services, LLC & Subsidiary Services Agreements (MSA) with Nexeo Statement of Operations Solutions, Waste Management, Heritage For Years Ended December 31, 2010 (Consolidated) Environmental, & Honda of America And 2009 (Unconsolidated) Mfg., Inc., to penetrate over 25,000 facilities currently served by these partners. 2009 2010 Revenues 8.76 11.50 Maximize revenue per customer CoGS 6.18 7.66 through cross sale of fluid recovery & beneficial re-use solutions. GP 2.57 3.84 Exp 1.88 2.74 Expand into new markets and industries EBITDA 0.69 1.10 with similar environmental challenges. EBITDA % 7.9% 9.5% Centralize logistics & sales operations FORWARD LOOKING FINANCIAL PROJECTIONS Capitalize on current sales pipeline of Proforma Projections ($millions) over $39MM in beneficial re-use 2012 2013 2014 revenue. Revenue $ 10.32 $ 44.66 $ 76.76 CoGS 4.29 20.36 36.03INVESTMENT HIGHLIGHTS: Gross Margin 6.03 24.30 40.72 Operating Exp 4.70 12.84 14.54 “Green” Company EBITDA $ 1.33 $ 11.45 $ 26.19 Large & growing TAM EBITDA % 12.9% 25.6% 34.1% Patented Technologies Note: 2012 forward looking projections assumes the Company completes $5MM in financing in January Highly scalable “hub & spoke” business 2012. 100% customer retention Multi-year contracts Fortune 500 customer base Strong management team Diversified sales pipeline 4Confidential: Nothing in this Business Plan shall constitute an offer to sell any securities of Arcis Resources Corporation (OTC: ARCS.QB) or any other entity. Any such offer (if oneis made) may be made only by a formal offering document prepared by Arcis Resources Corporation. © 2003-2012 Arcis Resources Corporation all rights reserved.
  5. 5. Arcis Resources Corporation (ARCS.QB)An integrated beneficial reuse & recycling companywww.arcisresourcescorp.com MANAGEMENT TEAM With over 100 years of combined knowledge, Arcis’ talented management teamPROFESSIONAL PARTNERS: blends the best of leadership with years of experience in the energy, environmental and beneficial reuse industries. In addition to generating increased Investor Relations: profits and cash flow, the priority of management is to lead the company to Hart Partners, LLC achieve its full potential in the global beneficial reuse and recycling market. www.hartpartners.net Kenneth Flatt is the Company’s CEO. He has over 20 years of extensive Public Relations: management experience in the environmental and industrial services industry. SS/PR His accomplishments include the growth and sale of KR Industrial Services of www.sspr.com Alabama from a four person operation to over 200 employees and five locations and culminating in the sale of KR to a publicly traded company. Mr. Flatt’s Accounting/Auditor: strength of leadership and industry expertise has been repeatedly proven Rosenberg, Rich, Baker Berman & throughout his career and is showcased in the drastic growth and development Company initiatives that he has been able to develop and implement. www.rrbb.com Trevis Lyon is the Company’s President. He has over 11 years of management and business development experience in the environmental and industrial Gen. Corporate Legal Counsel: services industry. As Business Development Manager at Ashland Midland Robert Brantl, Esq Chemicals of Ohio, Mr. Lyon’s team produced the fastest growing business at Ashland resulting in a growth rate exceeding 30% year over year. Mr. Lyon’s Securities Legal Counsel: market knowledge, advanced level management, and marketing and sales skills in Andrea Cataneo the new business development arena have been the driving force behind the Sichenza, Ross, Friedman, Ference, recent growth of Arcis’ US domestic market operations. LLP www.srff.com Robert Di Marco is the Company’s Executive Vice President. He has over 25 years of experience successfully restructuring and creating growth strategies for Corporate Counsel: companies in the oil, gas, commodity trading and financial services industries. His Arthur Wright resume is marked by numerous personal achievement awards, such as the Dr. Thompson-Knight, LLP Arthur E. Turner “Entrepreneur of the Year” award. Mr. Di Marco was also www.tklawo.com responsible for leading the precedent setting and law changing company reorganization in the Standard Oil of Delaware case. Drawing on his extensive experience managing investments and operations in foreign markets, Mr. Di Marco has been leading the growth of Arcis as it branches out onto a global level.CONTACT INFORMATION: Mr. Robert Fanella is the Company’s Chief Financial Officer. He has over 36 years of experience in worldwide industrial and technological enterprises,Arcis Resources Corporation including seven years at Motorola as a financial analyst, and later as businessRobert Di Marco controller. Mr. Fanella has co-founded and served as CFO for companies rangingExecutive Vice President from metal fabrication to electronics manufacturing. He also has providedDirect: 561.713.1183 independent financial consulting to companies in industries such as electronicr.dimarco@arcisresources.com manufacturing, industrial plating, chemical, and health 5Confidential: Nothing in this Business Plan shall constitute an offer to sell any securities of Arcis Resources Corporation (OTC: ARCS.QB) or any other entity. Any such offer (if oneis made) may be made only by a formal offering document prepared by Arcis Resources Corporation. © 2003-2012 Arcis Resources Corporation all rights reserved.

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