Ysati has developed a technology to transform vinasse, a waste byproduct of ethanol production, into clean water and organic potassium fertilizer. This solves environmental problems caused by current vinasse disposal methods while generating revenue. Ysati will build and operate mobile 20m3/hour pilot plants to fine-tune the technology, then scale up to full 300m3/hour commercial plants. Initial funding of $10 million is sought to build the pilot plant and operate for 18 months, establishing proof of concept. Long term, Ysati aims to install 20 commercial plants over 10 years, generating an 18% return on the $500 million total investment. The technology, partnerships, financial projections, and environmental/economic benefits are

1. 1
Solving an environmental problem
and
still making money
Ysati – Brazil
January 2015

2. From Pollutant to Water and
Fertiliser
2
January 2015

3. January 2015
Initial Focus on the
Brazilian Sugar Industry
 Take Vinasse from Ethanol Fermentation Process and
Recycle it into Clean Water and Organic Potassium
Fertilizer.
 Recover and Reuse Water held within the Vinasse.
 Substantially Reduce the Brazilian Imports of Potassium.
 Reduce the capitation of water from rivers to be used for
Human Consumption.( It is a bit confusing what we want
to say ?)
 Ensure that the phreatic aquifers remains
uncontaminated by vinasses.
3

4. What is the need for funds in the
pre-operational phase?
Investment
 Building a 20m3/h ours
unit for fine-tuning the of
technology for each bigger
final installation
 This unit is mobile and will
be used 20 times. Each
time on a new mill.
 CAPEX USD 5,7 MM
OPEX USD 4,3 MM over a
period of 18 months.
Actions
4
January 2015
 USD 10 MM Pre-Operational
 10 % of Ysati shares
 The evaluation of Ysati is
estimated to be USD 250
MM
 Worst Case Scenario the
value of the company could
be the value of the
equipment of 20 m3/h
 Optimistic Valuation of the
Ysati USD 500 MM

5. Long Term Investments
Investment
 Opportunity to Invest in
Industrial plants valued at
USD 25 MM – each.
 Total Investment over 10
years is USD 500 MM
Return
 The Return on this
investment is based on an
average ROIC @ 18%
Pretax. Depends on –
CAPEX, Price of
Potassium and Service
Fee
 Estimated pay-back 6
years. This requires that
all 20 unites are installed.
5
January 2015

6. More details on Financials
 CAPEX USD 5,700,000 (quotes from individual
suppliers).
 Financed by BNDES.
 More than t 70% locally produced.
 Equipment can be used as Guarantee.
 May require a Bank Guarantee of USD 2,000,000.
 Payment to be done over 6 months.
 The equipment is mobile and will be reused 20
times. 6

7. More details on Financials
 OPPEX USD 4,300,000
 Disbursement over 18 months
 Running of 20 m3/hour (24/7)
 Engineering, controlling and management
7

8. More details on Financials
 Cash flow for 18 months In - Out
 Figure
8

9. Technology Providers
 Koch Membranes (part
of Koch Industries -
USA)
 Rosenblad Design
Group (USA)
 Niro Atomizer (part of
the GEA Group
Germany)
 All three companies are
working world-wide and
are regarded as First-in-
Class.
 Ultra Filtration and
Reverse Osmosis
 Evaporation
 Spray Drying
 Proven technology for
the process of
transforming Vinasse
into Water and Dry
Fertilizer.
9
January 2015

10. Basic Issues
 Vinasse is the left-over waste water from the Ethanol
Fermentation of (1st generation). In order to
discharge the vinasse it is sprayed on to the farm
land. This action lead to the pollution of the
underground water and phreatic water reserves due
to the high level of salts (Soil salinisation)
 There is a strong legal framework that controls the
irrigation with vinasse. Sugar Mill are migrating
towards the elimination of vinasse.
10
January 2015

11. Solution
 By the means of unitary process – Membrane
Filtration – Evaporation - Spray Drying the vinasse is
turned into Clean water and Dry Fertilizer, rich in
Potassium.
 In this process 80% of the water, and 100% of the
Potassium, is recuperated.
 Volumes of vinasse to process are between 200
m3/h – 500 m3/h per mill.
11
January 2015

12. Ysati and the Technology
The Ysati Team
 Steen Hedetoft, Danish, 58
years old, Dairy Engineer,
MD of various international
companies in South America
 Juan Staibano, Argentine,
66 years old, Chemical
Engineer, Main part of
Career with GE in South
America.
 Silvio Taboas, Brazilian, 52
years old, Mechanical
Engineer, MD for various
companies in Brazil
Technology
 A Green Patent has been
filed in Brazil.
 Juan Staibano and Steen
Hedetoft are the patent
holders.
 The patent contain the
process that is used for
transforming vinasse into
water and dry fertilizer; as
well for other Waste Water
Streams
12
January 2015

13. Big Questions
 Why have nobody thought of this process before? In the Sugar Industry there have
been a tendency not to discuss the Vinasse as a problem – there is a solution today
with is the irrigation. However, with the increased focus on the environment and Patent
Holders cross-industrial knowledge the idea of connecting 3 unitary process came to to
light over a period of 3 – 4 years (2005 – 2009).
 Why have investors not shown up yet? From 2009/10 up to 2013/14 the team was
focusing on generating the Business Plan from a technical and economical point of
view. In 2014 started the work of approaching the Financial community. We
encountered following issues.
 Some Fund (VC) and banks only wanted to invest in on-going business and not in
start-up.
 Some investors were not that familiar with the Sugar Industry and were concerned
of going into the venture.
 Some Investors (PE) had very different expectations to the return of capital on
these Infrastructural Plants.
 Which kind of investor are we looking for? Investors that know the Sugar Industry,
have a horizon of Long Term investments (like Cogeneration, Waste Water Treatment
Plant), can be working partners and can be a sound board, are interested in funding
solutions for enviromental improvements. 13

14. Value Stream Management
Ysati will be responsible for running the installed plants
in order to ensure full capacity 24/7
Treating of vinasse and
recuperation of water
 Vinasse Volume 300m3/h
 Water recuperated 240 m3/h.
 Ysati will charge USD 2,70/m3 of
vinasse processed. This value
may vary from mill to mill.
Potassium Recuperation
 Vinasse Volume 300m3/h
 K2O recuperated is 600 - 1,500
kg/h our.Variable from mill to
mill
 The potassium (K2O)will be sold
locally based upon the
international commodity price at
USD 510/Mt. FOB Vancouver.
14
January 2015

15. Building Ysati Value
15

16. Business model
 The model calls for a BOT Set-up linked to a Service agreement.
 The BOT-model (Build, Operate and Transfer) is a model
where outside s investors (VC, Private Investors BNDES-
(The Brazilian Development bank)) invest the CAPEX – No
investment done by the Mill. On this investment there will be
a long term return of ROIC @ 18%. The payment of the loan
will come primarily from the selling of Potassium (as dry
fertiliser.)
 There will be set up an Service Agreement between the Mill
and Ysati for a period of 20 years. This Service agreement
include running/maintaining the installed Vinasse Processing
Plant. The Service Fee is charged per m3 vinasse processed.
There is a yearly negotiation on the value charged.
16

17. Business Plan
First Step
 Set up a 20m3 plant to
fine-tune the technology
 The Mill where the plant
will be installed will pay
for the treatment of the
vinasse and the
Potassium will be sold.
 This phase will take ?be
6 – 9 months
Second Step
 Install a 300 m3/h plant.
 This e phase will take
12 – 16 months.
 Plan is to install 20
processing plants over
10 years.
17
January 2015

18. Time Line for the first 18 months
18

19. Risks
 CAPEXP will be above R$ 18,500,000? Prices are based upon FOB. However, we are
planning to move 70% of the value to Brasil for local production, which should make the
total cost less. However, we still have exchange rate risk of imported goods.
 COPEX will be above R$ 10,000,000 for 18 months?
 Does the technology work? The technology was tested at two mills over a period of 12
months (2009/2010). The Technology Providers are confirming that their individual
technology can perform to expectation i.e. recover 80% of the water and 100% of the
potassium.
 Price of Potassium? The price of Potassium is quoted as an international commodity.
Trades are expecting increase in price over the years to come based upon 1)growing
need of potassium for agricultural fertilization 2) limited supply of mineral potassium in
geopolitical sensitive areas.
 Exchange rates? We have two risks 1) import of goods mitigated by more local
production 2) price of potassium is quoted in USD.
 Can the technology be copied? It will be difficult to copy the equipment for two reasons 1)
Patent protection 2) Ysati will engineer, install, commission and run the plant. There will
be only one central coordination of the technology i.e. limited risk of “bringing the
technology to a competitor”
19

20. Risks
 Will there be vinasse for the next 20 – 30 years? So far the
ethanol is an important part of the Brazilian energy matrix with
approximate 30 bi litters produced per year. There are initiative to
increase the production rather than decrease. Thus the will keep on
being Vinasse.
 Are there any competitive technologies? Concentrating of
vinasse in order to reduce the volume spread onto the fields –
however the environmental problem is not eliminated. Production of
Methane from vinassa will eliminate the BOD (Biological Oxygen
Demand), however the COD (Chemical Oxygen Demand) will
remain and would be spread onto the fields OR be a processed in
the Ysati plant equipment generating clean water and Potassium.
Reduce the volume of vinasse with new fermentation technologies –
however the vinasse remains. 2nd Generation of Ethanol as well has
vinasse as a sub-product.
 Are there alternative suppliers? The chosen suppliers are 1st in
class, however there are various other companies, internationally
and local, that have similar technology that can satisfy the need for
equipment.
20

21. Benefits
 Eliminating Vinasse (ZLD = Zero Liquid Discharge), thus eliminating an environmental
hazard/risk.
 Generating clean water in the mill, reducing the capture of water from rivers. It is
expected that the Sugar Industry and other high water consuming industries will see
an increase in the price of water.
 Sugar Mills will be self-sufficient with Dry Organic Potassium.
 Brazil will reduce imports of Potassium.
 BOT (Build Operate and Transfer) will ensure that the mill will not invest in the
equipment (no capital disbursement), but will take over the equipment after 20 years.
 Ysati will have a Service contract for 20. This will ensure that the investor (Ysati) will
operate with a high level of efficiency.
 The plants are compact and need only 3,000 m2 area within the mill. In-put from the
mill Vinasse and electricity – Out-put to the mill clean water and fertilizer sold in the
market place.
21

22. CAPEX, Potassium, Vinasse and Service
Fee
 CAPEX
 Potassium
 Vinasse
 Service Fee
 The 20 m3/hour plant will
define the CAPEX of the first
300m3/h plant.
 We are using the international
price for Potassium USD 510
(Dec. 2014) to calculate the
local selling price.
 We will charge (R$/m3) for the
treated vinasse.
 We will charge a service fee
which will be less than the
present cost the mill does have
today when discharging the
Vinasse.
22
January 2015

23. 23
Thank you for your attention!
Solving an environmental problem
and
at the same time doing a good
business
Ysati – Brazil
January 2015