Executive Summary of the Olmito Agriquatics project -- assumes no income from sale of water or from attendant agribusiness conducted with that water.

1. Olmito Agriquatics
A Business Plan Executive Summary
________________________________
Paul Skillicorn
3/19/12

2. Olmito Agriquatics
A Business Plan Executive Summary
________________________________
Paul Skillicorn
3/19/12
Introduction:
Olmito Agriquatics, a collaboration among principals now based in Texas, is
launching a new wastewater treatment business based on the proprietary Agriquatics
System. Following successful commissioning of a comprehensive Agriquatics pilot
project now being conducted with the help of smallholders of Santa Catalina and the City
of Barranca in the Lima Region of Peru, the Company is moving forward to implement a
full scale operation which, through successive phases, will provide comprehensive
wastewater treatment services to Olmito and surrounding areas in South Texas.
Olmito Agriquatics intends to change, fundamentally, the existing paradigm for
wastewater treatment in South Texas. The Agriquatics System treats municipal, industrial
and CAFO (concentrated animal feeding operations) wastewater effluents to a fully
recyclable condition. Byproducts of the Agriquatics wastewater treatment process –
branded high protein animal feeds, fish, crustaceans and protein concentrates – generate a
positive cash flow sufficient to cover both operating and capital costs of the underlying
wastewater treatment plant. Nothing is discharged. No water is lost. The Agriquatics
System, as first implemented in Olmito, Texas will, in fact, rank among the first truly
profitable commercial-scale “no-fees” wastewater treatment systems in the world.
In subsequent phases, Olmito Agriquatics intends using the “entre” and local
presence afforded by its rural, or small town wastewater treatment concession, to
introduce to The Valley region of South Texas the massive advantages of its unique
aquaculture and fertigation methods in the context of a mutually beneficial, truly
interdependent joint venture agribusiness relationship with local smallholders. In a
second phase agribusiness iteration, an AJVA (Agriquatics Joint Venture Agribusiness)
enterprise will leverage possession of the continuous stream of highly treated effluent
realized by the Agriquatics wastewater treatment system and adoption of advanced
fertigation irrigation technologies, to achieve highly efficient distributed production and
2

3. local processing of a wide range of valuable extractive crops, energy crops, building
materials and domes for internal consumption and sale in the greater US, European and
the Far East markets. In so doing, the AJVA enterprise will also enrich rural smallholder
partners in a manner and to a level hitherto believed to be unattainable.1
Olmito Agriquatics’ longterm objectives with respect to wastewater treatment are
to employ an accelerated amortization, distributed treatment approach to treating
wastewater in the South Texas periurban and rural contexts. In so doing, the System will
save future municipal and/or water service company clients not only the cost of a
treatment plant, but also the cost of installing and maintaining some expensive mains and
lift stations that would otherwise be required to aggregate wastewater and transport it to
common points of treatment and discharge. The System will “clean up” and
decommission existing wastewater treatment lagoons. It will also allow quick, local
distribution of treated wastewater to industrial clients and to a wide variety of public and
private irrigation applications – thus freeing up the municipalities’ or water supply
corporations’ constrained fresh water supplies for use in supporting new growth in the
greater metropolitan area. Agriquatics and its partners intend financing each such system
located within the South Texas region entirely off budget to the client municipalities and
or water supply corporations. In “mature Agriquatics applications, later phases of the
extension of such projects will, in part, be enabled by the capital gains realized through
sale of properties that have been “cycled” through the Agriquatics process and thereby
gained “absolute preference” with respect to zoning allowances, installation of
infrastructure (roads, electricity, water, wastewater, telephone, emergency service, police
etc.), and preferential access to Agriquatics-treated recycled water.
Construction of the first commercial Agriquatics wastewater treatment plant – the
immediate object of this business plan – will begin in early 2013, with commissioning of
the first subsystems commencing in late 2013 and fullscale operations expected to begin
in mid-2014. During the subsequent 5 years, the Company will predictably become an
important factor in the South Texas domestic market for premium, high protein branded
feeds and an important new supplier of tilapia, barramundi, a western Pacific region fish,
and macrobrachium fresh water prawns.
The Company will be managed, at the discretion of its board of directors, by a
compact team of experienced managers and production experts based in the Company’s
offices located in Austin and South Texas.
Olmito Agriquatics principals believe the Company’s “green” contributions to
improving the local environmental circumstance; changing the global paradigms for
1 Readers should consult The Olmito Agriquatics Agribusiness Phase II Business Plan for
details on subsequent phases of the Olmito Agriquatics Project. The company will also
introduce, during Phase II, its approach to using duckweed to produce biodegradable
bioplastics.
3

4. treatment of wastewater and production of food protein; leveraging the limited and fragile
supplies of fresh water for human use and consumption; and developing dramatic
improvements in the production efficiencies of building materials and renewable energy
feed stocks will continue to gain recognition in a world that is becoming increasingly
sensitivity to the health of the environment in which we live.
Public Benefits
A recitation of Olmito Agriquatics’ public benefits – in effect a contribution to all
residents of South Texas – is noteworthy.
During the first five years of the proposed project, Olmito will move from being
“at the back of the pack” in its treatment of wastewater to ranking among the global
leaders. All wastewater treated by the Olmito Agriquatics wastewater treatment plant(s)
will meet the highest treated effluent standards in the world, and all of it will be fully
recycled. Nothing will be lost. This will have the effect of significantly expanding the
availability of water to all those in the immediate Olmito area – a region comprising the
towns of Olmito, Rancho Viejo, Los Fresnos, San Benito, Indian Lake, Laureles and
neighboring Brownsville suburbs.
By joint-venturing, in subsequent project phases, with neighboring south Texas
smallholders, the Company intends to share up to 15% of the expanded project’s profits
with local farmers. By the end of 2016, rural smallholder partners will be expected to
share an annual distribution averaging just over $600,000 for a contribution of only 200
acres of adjacent land. For the first time in contemporary history, a “major rural
development project” will have gone beyond merely providing basic needs, to genuinely
enriching select smallholder farmers – helping them truly get ahead. These same
smallholders will also have generated reciprocal benefits by helping to reduce the
“wastewater treatment burden” of many of their urban brethren effectively to zero.
Agriquatics expects, eventually, to expand services to encompass a significant portion of
the sewered population within The Valley Region of south Texas.
Duckweed, the principal crop produced by the project, is now universally
recognized as the most productive of all leafed, flowering, vascular plants. Grown with
supreme efficiency, as it will be in this project, duckweed will convert more CO2 per acre
than can any other combination of plants on any “footprint” on the face of the earth.
Agriquatics Systems treating 15 MGD of wastewater to a drinking water standard, for
instance, will effectively remove more than 20 tons of CO2 from the environment each
year – equivalent to taking over a dozen mid-sized cars completely “off the road.”
By substituting for next generation activated sludge wastewater treatment plants,
the only comparable system when it comes to effluent quality, an aggregate 15 MGDs of
Agriquatics Systems will also save over 25,000 megawatt hours of electricity each year –
enough capacity to provide all the electricity needs of over 1,000 households: capacity
4

5. that can contribute to improving the lives of every Valley citizen. If produced by a
conventional coal-powered thermal power plant, that same energy would generate release
of over 25,000 tons of carbon dioxide over a 12-month period, approximately the same
amount as a fleet of 2,500 mid-sized cars. Additionally, by increasing the general
availability of water that can be used in cooling operations of powerplants, the
Agriquatics System will contribute to developing a solution to what has today become a
crisis throughout Texas.
The centerpiece of the Agriquatics wastewater treatment system, the duckweed-
based biological nutrient removal system, will effectively change the global paradigm for
production of plant-based protein. One acre of duckweed surface area will produce 30
times as much plant protein as will soybeans grown on that same acre – and a better
protein (better amino acid profile) at that.2 An aggregate 15 MGDs of Agriquatic
Systems will produce more than 106,000 tons of duckweed meal each year – substituting
for approximately 120,000 tons of soybeans – most of which must now be imported into
the region. The project’s novel vermiculture primary treatment system will also produce
more “meat protein” per unit of surface area than does any other animal protein
production system. As harvests of fishmeal inevitably decrease with overfishing and the
advent of global warming, “Agriquatics worms” can easily replace those losses.
The Agriquatics phased-sequenced anaerobic digesters provide an alternative
method by which to extract high value from volatile solids. Today, they can deliver more
biogas, and a better biogas (higher methane) from primary waste solids than can any
other comparable anaerobic process. These systems will also contribute, in a significant
manner, to both CO2 mitigation and energy savings throughout the south Texas region.
Location
The Agriquatics System may be profitably deployed in any location within the
greater Valley region of south Texas where wastewater is collected. Weather, topography
and soil conditions favoring reuse of treated wastewater in agriculture and aquaculture
are prevalent throughout the region. By substituting for water that must now be extracted
from the Rio Grande River, the Agriquatics System will allow more of that valuable
water to be extracted in regions up-stream, such as the greater El Paso region, that now
suffer serious shortages of both potable and irrigation water. These attractive geographic
circumstances combine with the favorable disposition of cognizant municipal, state and
2 Demand for soymeal to feed the exploding demand for meat in India and China is now
generally recognized as the primary driving force behind clearing of Amazon jungle in
Brazil, Peru, Bolivia, Colombia, Venezuela and Guiana. One acre of Agriquatics
“duckweed bioreactor surface area” conceptually compensates for 30 acres of soybeans –
thirty acres of rainforest.
5

6. federal authorities in the region to make The Valley ideally suited to host the first major
implementation of the Agriquatics System in the United States.
The Team
Olmito Agriquatics will be managed by a senior team of experienced
professionals, headed by Paul Skillicorn. As a group, the “project team” has more
experience with duckweed production, duckweed-based wastewater treatment,
duckweed-based pisciculture and reuse of treated municipal effluent than any comparable
group worldwide. Management will work at the direction of a 5-member board of
similarly experienced directors. Management and the Olmito Agriquatics Board of
Directors will be advised by members of the Advisory Team, each of whom has
legitimate claim to be at the top of his/her respective disciplines, globally.
The Numbers
A brief summary of project first phase “numbers” is presented below. The reader
should note that beyond the Olmito region, no other sewered towns or communities
feature in “The Numbers,” as presented here. The Numbers also ignore potential income
derived from reuse of water and any future value derived from urban real estate capital
gains. The Company believes, nevertheless, that these “ancillary” source of income may
eventually come to exceed the System’s core aquaculture returns. Expressions of interest
already received from the mayors and councils of towns such as Los Fresnos, Rancho
Viejo and Indian Lake suggest, nevertheless, that Agriquatics will experience little
difficulty gradually expanding its services to cover a significant portion of the greater
Valley region.
Start-up Costs & Sources of Funding
GUARANTEED
INVESTMENT BY LOAN WORKING LOAN
TOTAL 3RD Parties % Bank YYY % Bank ZZZ %
PLANT AND EQUIPMENT (guaranteed loans)
Tissue Culture Lab - AD and Stevia $0 $0 0% $0 0% $0 0%
WWT (series of 22 l/s units - including $
fish,worms & digesters) 4,544,386 $0 0% $ 4,544,386 100% $0 0%
Local Hydraulics & Sludge Mining $ 337,324 $ 219,436 65% $ 117,888 35% $0 0%
Roads $ 85,845 $ 85,845 100% $0 0% $0 0%
Security $ 72,676 $ 30,000 41% $0 0% $0 0%
Electricity and Backup Power Units $ 480,000 $0 0% $ 480,000 100% $0 0%
Phase II Park Project Landscaping $ 325,000 $ 325,000 60% $0 0% $0 0%
Phase II Park Construction $ 300,000 $ 300,000 100% $0 0% $0 0%
Fertigation Infrastruction (per hectare) $0 $0 0% $0 0% $0 0%
Fertigation Infrastructure
(station/overhead facilities) $0 $0 0% $0 0% $0 0%
6

7. Farm Infrastructure & Farm Rolling
Stock $0 $0 0% $0 0% $0 0%
Non-Farm Rolling Stock $ 80,000 $ 80,000 100% $0 0% $0 0%
Extraction Units $0 $0 0% $0 0% $0 0%
Kenaf Equipment, Press and
Infrastructure $0 $0 0% $0 0% $0 0%
Miscellaneous Equipment + Spare Parts $ 129,718 $ 129,718 100% $0 0% $0 0%
OVERHEAD COSTS THROUGH
STARTUP
Closing Costs $ 30,000 $ 30,000 100% $0 0% $0 0%
Bridge Financing $0 $0 0% $0 0% $0 0%
Preliminary Expenses $ 100,000 $ 100,000 100% $0 0% $0 0%
WORKING CAPITAL
REQUIREMENT
Initial inventory $ 150,000 $0 0% $0 0% $ 150,000 100%
Initial accounts receivable $ 300,000 $0 0% $0 0% $ 300,000 100%
$
Initial operations, admin & sales costs 1,050,000 $0 0% $0 0% $ 1,050,000 100%
Second Round Working Capital $ 400,000 $0 0% $0 0% $ 400,000 100%
$
TOTAL START-UP EXPENSES 8,384,950 $ 1,300,000 16% $ 5,142,274 61% $ 1,900,000 23%
Investment Scheduling
Up Front Year 2
$0
Cash Investments
Closing Costs $ 30,000 $0
Bridge Financing & Preliminary Expenses $ 100,000 $0
Equipment and Supplies $ 1,170,000 $0
Working Capital Disbursements $0 $0
$0 $0
Guaranteed (Olmito) $0 $0
Year-1 Working Capital *** $ 1,500,000 $ 400,000
Equipment Purchase $ 5,142,274 $ 104,859
$0 $0
Line of Credit $0 $0
Year-1 Working Capital *** $ 1,500,000 $ 400,000
$0 $0
Term Loans and/or Bonds $0 $0
Year1 1 & 2 Equipment Purchases $ 5,142,274 $ 104,859
TOTAL INVESTMENT/DEBT RAISED $ 7,942,274 $ 504,859
*** Note: Year 1 loans long term loans may require 100% guarantees
****Note: Total Cash Investment being sought is only : $1,300,000
7

8. Income Statement (Profit &
Loss) 2013 2014 2015 2016 2017
SALES $0 $ 4,518,041 $ 7,373,409 $ 8,020,114 $ 8,491,605
Product Group 1 Sales $0 $0 $0 $0 $0
Poduct Group 2 Sales $0 $ 4,518,041 $ 7,373,409 $ 8,020,114 $ 8,491,605
Product Group 3 Sales $0 $0 $0 $0 $0
Product Group 4 Sales $0 $0 $0 $0 $0
COST OF GOODS SOLD $ 41,131 $ 2,310,148 $ 3,373,107 $ 3,604,401 $ 3,746,067
INCOME FROM PRODUCTION (Gross
Margin) -$ 41,131 $ 2,207,893 $ 4,000,303 $ 4,415,713 $ 4,745,538
OPERATING EXPENSES $ 631,900 $ 1,219,545 $ 1,374,472 $ 1,384,317 $ 1,315,945
EBITDA -$ 340,734 $ 1,305,142 $ 2,946,133 $ 3,355,589 $ 3,757,655
INCOME FROM OPERATIONS -$ 673,031 $ 988,348 $ 2,625,830 $ 3,031,396 $ 3,429,592
NET INTEREST INCOME -$ 210,106 -$ 400,056 -$ 348,647 -$ 293,485 -$ 211,585
INCOME BEFORE TAXES -$ 883,137 $ 588,293 $ 2,277,183 $ 2,737,911 $ 3,218,007
TAXES ON INCOME $0 $ 195,171 $ 719,713 $ 879,941 $ 1,040,224
NET INCOME AFTER TAXES -$ 883,137 $ 393,122 $ 1,557,471 $ 1,857,970 $ 2,177,783
Cashflow Statement 2013 2014 2015 2016 2017
INVESTMENT AND OTHER CAPITAL $ 1,300,000 $0 $0 $0 $0
LONG-TERM DEBT $ 5,057,425 $ 104,859 $0 $0 $ 64,859
SHORT TERM LOANS $ 1,500,000 $ 400,000 $0 $0 $0
INCOME FROM OPERATIONS $0 $ 3,976,320 $ 7,270,117 $ 7,985,873 $ 8,455,940
INCREASE IN ACCOUNTS PAYABLE $ 14,197 $ 134,246 $ 185,012 $ 194,888 $ 197,761
INCOME FROM INTEREST $ 34,472 $ 12,177 $ 23,892 $ 38,420 $ 58,395
TOTAL SOURCES OF FUNDS $ 7,906,094 $ 4,627,602 $ 7,479,022 $ 8,219,181 $ 8,776,955
CAPITAL EXPENDITURES $ 6,250,091 $ 122,190 $ 83,728 $ 81,203 $ 77,603
SALARIES, LABOR & COMM. $ 128,793 $ 1,264,353 $ 1,645,819 $ 1,726,463 $ 1,747,968
COST OF GOOD SOLD $ 22,011 $ 1,486,230 $ 2,205,795 $ 2,361,741 $ 2,457,126
OTHER OPERATING COSTS $ 189,931 $ 584,262 $ 677,158 $ 685,351 $ 634,566
PAYMENT OF PRINCIPAL $ 392,478 $ 824,931 $ 882,583 $ 923,217 $ 989,822
INTEREST EXPENSE $ 244,578 $ 412,233 $ 372,539 $ 331,905 $ 269,980
INCOME TAX PROVISION $0 $ 195,171 $ 719,713 $ 879,941 $ 1,040,224
DIVIDEND PAID $0 $0 $0 $ 1,300,000 $ 286,000
TOTAL UTILIZATION OF FUNDS $ 7,227,882 $ 4,889,369 $ 6,587,335 $ 8,289,821 $ 7,503,290
FUND INCREASE (DEFICIT) $ 678,212 -$ 261,767 $ 891,687 -$ 70,640 $ 1,273,665
OPENING CASH BALANCE $0 $ 678,212 $ 416,446 $ 1,308,133 $ 1,237,493
CLOSING CASH BALANCE $ 678,212 $ 416,446 $ 1,308,133 $ 1,237,493 $ 2,511,158
Balance Sheet 2013 2014 2015 2016 2017
8

9. ASSETS
CASH & SHORT TERM INVESTMENTS $ 678,212 $ 416,446 $ 1,308,133 $ 1,237,493 $ 2,511,158
ACCOUNTS RECEIVABLE $0 $ 541,732 $ 645,035 $ 679,284 $ 714,960
INVENTORIES $ 50 $ 62,314 $ 184,162 $ 379,379 $ 628,775
TOTAL CURRENT ASSETS $ 678,262 $ 1,020,492 $ 2,137,329 $ 2,296,156 $ 3,854,893
LAND AND IMPROVEMENTS $0 $0 $0 $0 $0
MACHINERY, EQUIPMENT, VEHICLES $ 6,250,091 $ 6,363,944 $ 6,441,818 $ 6,519,466 $ 6,596,628
BUILDINGS & IMPROVEMENTS $0 $0 $0 $0 $0
ACCUMULATED DEPRECIATION $ 332,296 $ 649,090 $ 969,394 $ 1,293,587 $ 1,621,649
TOTAL PLANT & EQUIPMENT $ 5,917,794 $ 5,714,854 $ 5,472,425 $ 5,225,879 $ 4,974,979
OTHER ASSETS $0 $0 $0 $0 $0
TOTAL ASSETS $ 6,596,056 $ 6,735,346 $ 7,609,754 $ 7,522,035 $ 8,829,871
LIABILITIES
SHORT-TERM DEBT & NOTES PAYABLE $ 1,304,025 $ 1,279,741 $ 803,575 $ 282,741 $0
ACCOUNTS PAYABLE $ 14,197 $ 148,443 $ 333,455 $ 528,343 $ 726,103
TOTAL CURRENT LIABILITIES $ 1,318,222 $ 1,428,184 $ 1,137,030 $ 811,084 $ 449,156
LONG TERM DEBT $ 4,860,921 $ 4,565,133 $ 4,158,717 $ 3,756,334 $ 3,391,059
INVESTMENTS & OTHER CAPITAL $ 1,300,000 $ 1,300,000 $ 1,300,000 $ 1,300,000 $ 1,300,000
RETAINED EARNINGS -$ 883,087 -$ 557,971 $ 1,014,008 $ 1,654,618 $ 3,689,656
TOTAL EQUITY $ 416,913 $ 742,029 $ 2,314,008 $ 2,954,618 $ 4,989,656
TOTAL LIABILITIES $ 6,596,056 $ 6,735,346 $ 7,609,754 $ 7,522,035 $ 8,829,872
Labor and Wage Summary
2013 2014 2015 2016 2017
VARIABLE COST LABOR
Manufacturing Labor
Line Supervisor 2 2 2 2 2
Skilled Workers 4 4 4 4 4
Semi-Skilled Workers 6 6 6 6 6
Unskilled Workers 2 2 2 2 2
FIXED COST LABOR
Manufacturing Labor
Manufacturing Manager 1 1 1 1 1
Production Managers 0 0 0 0 0
Operation Managers (Shop) 1 1 1 1 1
Operation Managers (Electrical) 1 1 1 1 1
Engineers 1 1 1 1 1
Shipping & Stores Personnel 1 2 2 2 2
Field Workers 2 2 2 2 2
G&A Labor
Executives (CEO, COO, CFO, CTO) 0.2 0.2 0.2 0.2 0.2
Marketing/Sales Manager 0.2 0.2 0.2 0.2 0.2
Sales Staff 0.2 0.2 0.2 0.2 0.2
Accounting/Financial Staff 1 1 1 1 1
9

10. Administrative Staff 1 1 1 1 1
Support Staff 2 2 2 2 2
LABOR SUMMARY (Broken Down Two
Ways)
Total Manufacturing Labor 21 22 22 22 22
Total G&A Labor 4.6 4.6 4.6 4.6 4.6
Total Variable Cost Labor 14 14 14 14 14
Total Fixed Cost Labor 11.6 12.6 12.6 12.6 12.6
TOTAL HUMAN RESOURCES 25.6 26.6 26.6 26.6 26.6
WAGE SUMMARY (Broken Down Two Ways)
Total Manufacturing Wages $ 1,046,400 $ 1,046,400 $ 1,046,400 $ 1,046,400 $ 1,046,400
Total G&A Wages $ 336,233 $ 336,233 $ 336,233 $ 336,233 $ 336,233
TOTAL WAGES $ 1,382,632 $ 1,382,632 $ 1,382,632 $ 1,382,632 $ 1,382,632
Total Variable Cost Wages $ 825,273 $ 825,273 $ 825,273 $ 825,273 $ 825,273
Total Fixed Cost Wages $ 557,360 $ 557,360 $ 557,360 $ 557,360 $ 557,360
TOTAL WAGES $ 1,382,632 $ 1,382,632 $ 1,382,632 $ 1,382,632 $ 1,382,632
Ratio Analysis A
2013 2014 2015 2016 2017
ANNUAL GROWTH RATES 63% 9% 6%
LIQUIDITY
Current ratio 5.00 4.72 6.69 9.27 19.66
Quick ratio 0.51 0.67 1.72 2.36 7.18
DEBT
Debt to total assets 0.74 0.68 0.55 0.50 0.38
Debt to total capitalization 0.92 0.86 0.64 0.56 0.40
Debt to equity 11.66 6.15 1.80 1.27 0.68
Leverage 15.82 9.08 3.29 2.55 1.77
Times interest earned -2.61 2.43 7.11 9.25 12.92
Fixed charges coverage -2.61 2.43 7.11 9.25 12.92
ACTIVITY
Inventory turnover 0.00 72.50 40.04 21.14 13.50
Average collection period 43.77 31.93 30.91 30.73
Sales to fixed assets 0.00 0.79 1.35 1.53 1.71
Asset turnover 0.00 0.67 0.97 1.07 0.96
PROFITS
Gross margin 49% 54% 55% 56%
Operating margin 0% 22% 36% 38% 40%
Profit margin on total sales 0% 9% 21% 23% 26%
Return on assets -13% 6% 20% 25% 25%
Return on equity 0% 0% 67% 63% 44%
EFFICIENCY
Production 0.51 0.46 0.45 0.44
Sales, Marketing & Distribution 0.05 0.02 0.02 0.02
R&D/Quality Assurance 0.02 0.02 0.01 0.01
General & Administration 0.13 0.10 0.09 0.08
Post-Tax
RATES OF RETURN Post-Tax IRR 51% NPV $ 11,680,589
10

11. COST STRUCTURE
$
Total Fixed Costs $ 1,108,356 $ 2,621,121 $ 2,804,095 2,825,231 $ 2,775,465
$
Total Variable Costs $ 101,731 $ 2,154,730 $ 3,211,621 3,431,397 $ 3,558,652
Shareholder Value Calculations
Risk Adjusted Present Value Calculation
Discount
Rate 6.75% P:E Ratio 3
Present
Value
Worst
After-Tax Plan Best Case: Case:
Net
Income Net Income Valuation 1.2 FAILURE
2012 $0 $0 $0 $0 $0
2013 $ 393,122 $ 368,264 $ 1,104,792 $ 1,325,751 $0
$
2014 1,557,471 $ 1,366,734 $ 4,100,203 $ 4,920,244 $0
$
2015 1,857,970 $ 1,527,338 $ 4,582,013 $ 5,498,416 $0
$
2016 2,177,783 $ 1,677,039 $ 5,031,116 $ 6,037,339 $0
Projected Present Valuation $ 14,818,124 $ 17,781,749 $0
Assigned Probability 40% 10% 50%
Risk-adjusted Valuation by "Case" $ 5,927,250 $ 1,778,175 $0
Total Risk-Adjusted Present Valuation (cases
summed) $ 7,705,425
Original Shareholders
Risk Adjusted
Shareholder # Shares: % Equity Speculative Value
Original Group (Management & Technology) 500,000 50% $ 3,852,712
OWSC (Land & WWT Investors) 500,000 50% $ 3,852,712
0 0% $0
0 0% $0
0 0% $0
Total Outstanding 1,000,000 100% $ 7,705,425
Shareholder Value Calculations Page 2
Preliminary Investment in Cash
shares
Risk Adjusted Calculated Share Value $7.705 (Assuming 1,000,000 outstanding)
Stated Share Price $1.000
Risk
Adjusted
$ Nominal Speculative
Shareholder # Shares: % Equity: Investment Value Value
11

12. Original Group (Management & Technology) 500,000 50% $ 100,000 $ 500,000 $ 3,852,712
OWSC (Land & WWT Investors) 300,001 30% $ 100,000 $ 300,001 $ 2,311,635
Cash Investors (convertible B preferred) 199,999 20% $ 1,300,000 $ 199,999 $ 1,541,077
Guarantees (50% of cash) 0 0% $0 $0 $0
Other Partner C 0 0% $0 $0 $0
Total Outstanding 1,000,000 100% $ 1,500,000 $ 1,000,000 $ 7,705,425
First Round Investment - Cash & Guarantees
shares
Risk Adjusted Calculated Share Value $7.705 (Assuming 1,000,000 outstanding)
Stated Share Price $4.000
Risk
Adjusted
$ Nominal Speculative
Shareholder # Shares: % Equity: Investment Value Value
Original Group (Management & Technology) 500,000 50% $ 100,000 $ 2,000,000 $ 3,852,712
OWSC (Land & WWT Investors) 300,001 30% $ 100,000 $ 1,200,004 $ 2,311,635
Cash Investors (convertible B preferred) 199,999 20% $ 1,300,000 $ 799,996 $ 1,541,077
Guarantees (50% of cash) 0 0% $0 $0 $0
Other Partner C 0 0% $0 $0 $0
Employee Stock Plan 0 0% $0 $0 $0
Total Outstanding 1,000,000 100% $ 1,500,000 $ 4,000,000 $ 7,705,425
Shareholder Value Calculations Page 3
IPO - After Year-5
Presumed stock market valuation of company and shareholder value at 12x Year-5
after-tax earnings
$
Assumed Year-6 Pre-IPO Valuation 26,133,395
IPO Target Price (12x post-tax earnings) $21.778 per share
5-Yr %
Gain
$
Investmen on
Shareholder # Shares: % Equity: t Valuation Investment
$
Original Group (Management & Technology) 500,000 42% $ 100,000 10,888,915 10889%
OWSC (Land & WWT Investors) 300,001 25% $ 100,000 $ 6,533,371 6533%
Cash Investors (convertible B preferred) 199,999 17% $ 1,300,000 $ 4,355,544 435%
Guarantees (50% of cash) 0 0% $0 $0 0%
Other Partner C 0 0% $0 $0
Employee Stock Plan 0 0% $0 $0
IPO Subscription 200,000 17% $ 4,355,566 $ 4,355,566
$
Total Outstanding 1,200,000 100% $ 5,855,566 26,133,395
IPO Funds Raised
Stock Sales $ 4,355,566
12

13. Expenses, Fees and Commissions $ 522,668
Net Cash Raised $ 3,832,898
While the IPO scenario is merely illustrative, it is noteworthy that, in 2017,
project partners would share a pre-tax profit of approximately $3 million. The
amount contributing to OWSC – approximately $0.9 million per year – would serve
to paydown that company’s existing longterm capital debt, before eventually
contributing to reduction of service fees for water and wastewater treatment now
being charged to its member/clients.
Financing and Capital Contributions:
Olmito Agriquatics is seeking a third party cash investment of $1.3 million3 and a
$5.9 million capital loan to allow construction of Phase-I infrastructure. This should be
supported by a $1.9 million working line of credit. The Olmito Water Supply
Corporation, a 50% project partner, will commit its existing land, wastewater treatment
infrastructure and attendant hydraulic resources to the project. It will also formally
guarantee the debt with its existing service fee revenue stream.4 Agriquatics LLC will
provide local rights to its proprietary technology and attendant engineering knowhow,
while also managing the project. Upfront “internal costs,” estimated at approximately
$200,000, will be shared equally by the Agriquatics and OWSC. Project engineering and
environmental assessment costs, estimated at $400,000 and $50,000 respectively, are
embedded in the capital cost budget.
Timing:
With land and much of the necessary hydraulic infrastructure already in place, the
Olmito Agriquatics project can quickly be brought to a shovel-ready circumstance. Pre-
engineering project development, estimated to require 2 months, can proceed
immediately upon receipt of funding and preapprovals from TCEQ (The Texas
3 Investors are being offered “first-in-first-out” terms, with complete reimbursements of
invested capital expected to take place in years 3 and 4. Investors are also being offered
preferred shares earning 22% of respective invested amounts, with an option to convert to
20% of all outstanding A shares/units before the end of year 5 (2017). An investor
committing $1,000,000 to the project would expect, by the end of 2017, to have all
his/her money back plus dividends of $440,000. If he/she should elect to convert to “A”
shares, he/she might then expect to receive a further contribution to his/her capital
account in the amount of approximately $600,000 in 2018.
4 OWSC managers and members of board of directors understand that, should outside
guarantees be necessary, ownership will be modified accordingly.
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14. Commission on Environmental Quality). Subsequent engineering and environmental
assessments are presumed to take a further 6 months to completion. Final permitting, a
painstaking iterative process conducted with Mr. Louis Herrin and his staff at TCEQ, is
estimated to require at least 3 months. Phase-I of project construction will take 6 months,
with commissioning and startup requiring an additional 90 days to completion.
Landscaping and site “optimization” will thereafter continue on an open-ended basis.
Revenues from sale of fish and prawns are expected to begin accruing
approximately 13 months following groundbreaking. The project is expected to begin
making net profits on month 17, with targeted optimal margins attained 2 months
thereafter (gross margins: 56% ). The project’s financial model suggests payback on
capital will be approximately 2.8 years.
Additional and Optional Future Project Elements:
Having attained profitability, Olmito Agriquatics will be well positioned to launch
“additional local elements,” including: (a) a Visitor Center and Park open to formal
school science visits and intrepid tourists; (b) expansion to treat effluent from
neighboring communities; and (c) AJVA enterprises employing recycled treated effluent
to supply high tech fertigation-irrigated, vertically integrated, value-added agriculture
conducted in joint venture with local smallholder farmers.
Demonstable local success of the Agriquatics System will trigger acquisition (at
no charge) of raw wastewater now being treated at Rancho Viejo, Los Fresnos, San
Benito, Indian Lake, Laureles and neighboring Brownsville suburbs. Nutrients derived
from these sources will substitute for nutrients hitherto “mined” from existing Olmito
lagoons. The Company will also begin aggressively to develop plans for treating
wastewater in a number of other favorable locations throughout The Valley. Initially,
these “new” Agriquatics System wastewater treatment plants will add new capacity in
high growth regions and replace systems requiring upgrading and/or repairs. Increasingly,
however, Agriquatics Systems will also replace serviceable and well-performing
activated sludge facilities – serving thus to lower cost of service to client municipalities,
enhance the local supply of recycleable water and improve treatment plants’ carbon
footprints.
Contact Information:
Readers requiring additional information should contact:
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15. Paul Skillicorn
Skillicorn@yahoo.com, PaulSkillicorn@gmail.com
Home/office: +1 512-934-7441 cell: +1 512-934-7441
Skype: PaulSkilliorn
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