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Waste biomass to high value food and environmental remediation products

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This company has developed a process to extract high value materials from a variety of remnant waste biomass types. It creates inulin, a dietary additive, as well as biochar and activated carbon for environmental remediation from wastes such as wheat straw, corn stover, sugar cane bagasse and certain hardwoods. The company is already financially supported in part by Sustainable Development Technology Canada (SDTC), which conducted significant diligence before investing.
Executive summary of company's business: 

NovaGreen has developed a unique process it is currently patenting to extract high value materials from inexpensive or free biomass feedstocks.

It is initially targeting the consumer food market, producing Inulin and Xylitol. Inulin is a ‘novel fibre’, a market expected to grow by 750% growth over the next three years, according to estimates. It is in demand as a nutrient additive by food processors including Kraft, Kellogg, Catelli, Danone, and PepsiCo. Xylitol is a sugar replacement product. It is diabetic-safe, and prevents tooth decay. These products are in short supply in the North American market. NovaGreen's high value, low capital expense solution is intended to address this unmet demand, the company says.

After initial extraction processes, nearly 70% of initial biomass remains available for further processing, NovaGreen claims. The company utilizes this remnant to create biochar and activated carbon. Biochar enhances growth, and improves water & nutrient retention in soil. Activated carbon is derived from this biochar. Part of a $2B annual North American market, NovaGreen says its activated carbon has unique properties that enable it to trap mercury and other air and waterborne toxins. Oil sands applications for its activated carbon are under early stage development, according to the company.

Feedstock used in the process is ‘remnant biomass’. Numerous agricultural and forestry biomass types can be used, the company claims. Wheat straw, corn stover, sugar cane bagasse, and many hardwoods can be used to diversify and ‘de-risk’ the project input base. Resulting outputs enable complete biomass utilization and high profitability, according to models.

Differentiation vs. competitors: 
NovaGreen believes its solution provides a high quality, domestic (North American based) solution set for several high demand products. The company utilizes multiple input sources, and provides multiple product outputs. The process is highly efficient, it claims, utilizing over 95% of starting input biomass. Finally the solution is fully integrated, with supply chain integration from field to client, it claims. Environmental benefits are acknowledged and financially supported by Sustainable Development and Technology Canada, according to the company.
Key team members: 
Dr. George Ritchie, Chief Scientific Officer - 25 years of experience with core technology, and 8 related patents; Barry Farquharson, CEO - 30 years business experience as new technology business development leader with IBM, Bell, and Honeywell; Larry Donovan, President - Masters in Environmental Management, extensive experience working with environmental solution development. The company says it has partnered with nine leading organizations to diversify project expertise, and accelerate time to market. Technology partners include the Canadian National Institute for Nanotechnology (NINT), POS Bio-Sciences, and Alberta Innovates-Technology Futures (AITF). Agricultural partners include the Battle River Agri-Ventures Cooperative (BRAV-C), and Lakeland College. Marketing partners include ADS Consulting and Ted Bilyea Consulting. Business Development partners include Deloitte Canada (financial model development), and Bennett Jones LLP (internationally recognized leadership in patent development). NovaGreen says these partners allow it to leverage its core competencies, reduce project risk and strengthen its project and knowledge base immensely.
Existing investors and capitalization details: 
Over $7M in prior and current project development funding. Core technology investment includes approximately $4.0M in pilot development and operation and business plan development, sourced primarily from government agencies. Approximately $500K has been invested into the company via private equity placement. $1.8M is pledged by SDTC (Sustainable Development Technology Canada) for demonstration project implementation. Additionally, estimates prepared for Canadian Scientific Research & Experimental Development (SR&ED) suggest over $1M in SR&ED credit available to the company over the next two years for the project.
Capital sought & use of proceeds: 
The company seeks up to $4M to complete the funding of a demo project, and to activate its SDTC funding and SR&ED credits. These funds are to be used for an 18 month demonstration project that is intended to optimize integration of all processes, confirm equipment configuration prior to scale up, and produce a wide range of product samples that can be analyzed by end user clients. A preliminary, immediate tranche of $300K will enable outsourced, short term production of additional samples of biochar, activated carbon, and inulin via outsourcing agreements negotiated and awaiting execution by the company and selected sub-contractors. Investors participating at this level are intended to have low risk, 'first right of refusal' access to financial participation and benefit for the entire project. A phase 2 investment round for an expected $40M is to follow in year three, with projected IRR of 49.5%.
Characteristics of ideal investors: 
Early stage investors with knowledge or background in some combination of agricultural, bio-tech, food production, or environmental remediation would be well suited to the project.
Expected close date: 
09/2012
Company name: 
NovaGreen
Contact name: 
Barry Farquharson, CEO
Contact email: 
barry@novagreen.ca
Web site: 
http://www.novagreen.ca
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Hypoallergenic natural rubber extraction technology for $65B market

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This company has developed a clean process for the extraction of natural rubber from rubber bearing plants and designed an automatic and continuous rubber extractor. Instead of using chemicals, solvents or water, the extraction process is dry, which is environment-friendlier, more efficient and less cost-intensive compared to competing technologies, according to the company. In addition to selling extraction equipment, the company intends to itself produce natural rubber, hypoallergenic latex and inulin – a prebiotic food additive that can also be used in the production of ethanol.
Executive summary of company's business: 

KOK Technologies Inc. (KTI) says natural rubber and hypoallergenic latex are vital to every economy. The company has developed processes to extract rubber from special rubber-bearing plants that can be quickly grown in northern climates, unlike conventional slow-growing rubber trees indigenous to tropical climates.

Natural rubber is used in the production of car tires, airplane tires and medical rubber products. According to the company's analysis the market is expected to grow more than 10% per year due to the increasing demand for tires from China and India's fast growing economies. KTI estimates the value of the market today is $55 billion and expects it to grow to $100 billion by 2020.

KTI plans to target-market latex made from rubber-bearing plants to the high value sector represented by medical, dental, military and household products due to its excellent hypoallergenic characteristics. The company says total demand for hypoallergenic (non-rash) latex is 1 million tons annually for production for gloves, condoms, catheters, etc. with an estimated $10 billion market value. It estimates demand for inulin is 100k tons today and rapidly growing due to health and ethanol industry use. KTI estimates its technology will enable it to capture 10% of this $65B dollar market.

KTI states that additionally to its patented extraction technology it has completed development of a proprietary rubber extractor (machine design is patent-pending).

The company's business model:

  • Phase 1: Build and sell the proprietary rubber extractor
  • Phase 2: Build, own and operate several extraction facilities comprising from 4 production units
  • Phase 3: Grow rubber plants and produce commercial quantity of high quality seeds
  • Phase 4: Extract, purify and sell natural rubber and inulin to the medical and industrial users
Competitors: 
Delta Plant Technologies, Kultevat, PENRA, EU-PEARLS
Differentiation vs. competitors: 
KTI believes it is ahead of competitors and first in the market. It says its competitors do not own patented green and dry extraction technology. It states its technology is superior to competing technologies regarding environment-friendliness and cost advantage (due to the use of dry media, no water consumption, higher efficiency, and less labour requirements).
Key team members: 
Dr. Anvar Buranov – inventor and founder, PhD, 17 years of R&D and management experience, published 15 papers, 2 patents and conference presentations; Mr. Jason Rite - business development manager, serial entrepreneur with 40 years of business experience; Mr. Otto Baumgartner - design and engineering of rubber extractors/grinders; Mr. Evan Baergen – finance and accounting, BBA and MBA; advisors: Dr. John Kelly (Ontario) & Dr. Bob Ingratta (BC).
Existing investors and capitalization details: 
The company states it prototyped with friends and family funding from June 2009 until January 2010. Currently: Non-dilutive funding, US Civilian R&D Foundation Grant ($66 K), Canadian NRC –IRAP grant ($44 K), Quebec government ($150 K), Ontario government ($ 143 K).
Capital sought & use of proceeds: 
The company is seeking $300 K for 10% of the company. The company intends to use $100 K for building 5 rubber extractors and purification units, and $200 K for seed production activities (on 20 ha of land).
Characteristics of ideal investors: 
Investors with experience in agriculture, bioproducts, agricultural machinery and engineering are preferred by the company.
Expected close date: 
10/2012
Company name: 
KOK Technologies
Contact name: 
Dr. Anvar Buranov
Contact email: 
buranov@koktech.com
Web site: 
http://www.koktech.com
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Unique bioplastic technologies for large customers in increasingly attractive market

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$430 billion worth of plastics are produced each year. Traditionally, plastics are made from crude oil and natural gas, unstable and increasingly expensive feedstocks. The plastics industry is just beginning to convert to bioplastics (plant-based plastics) as sustainable alternatives to these petroleum-based plastics (see http://tinyurl.com/yct3nad). In R&D; for over 4 1/2 years, Solegear Bioplastics appears to have unlocked unique technologies allowing bioplastics to access performance levels and applications previously thought not possible. The company is currently in the early commercialization stage of its development and preparing for its initial growth.
Executive summary of company's business: 

The $430 billion global plastics industry has grown to become the largest manufacturing materials industry in the world on the back of cheap and abundant crude oil. Today, we know that this feedstock is becoming increasingly finite, increasingly risky to use and poses health risks that we are just becoming aware of.

Solegear manufactures proprietary bioplastics under the brand names Polysole and Traverse, and expects to sell directly to customers from manufacturing/distribution locations. This plan calls for the use of contract manufacturing partners and in-house manufacturing, a standard model used in the plastics industry. The CapEx required to install each in-house manufacturing facility is less than $800k, with potential annual revenues in the $6 million range, has a payback period of 8 months and increases gross margins by 15 points. These facilities are modular and can be installed in logistically advantageous locations.

Customers see value in working with the company's materials on several fronts: firstly, Solegear materials can provide superior strength and ease of processing. Secondly, Solegear materials are offered at comparable prices to petroleum-based plastics, and in some cases, will be cheaper on a per-pellet basis. Thirdly, customers are intended to save money by using 25% less energy to process Solegear materials. Lastly, Solegear materials are turnkey and don't require any re-tooling or special configurations at the customer's processing location - they are plug and play, the company claims.

The company intends to take a staged approach to building out commercial opportunities, first focusing on consumer durables including markets such as children's toys, durable food and cosmetics packaging and personal care products. Solegear is currently engaged in commercializing projects with mid to large sized customers in these markets, which would produce several million dollars' worth of revenues for the company.

Competitors: 
Cereplast, Metabolix, NatureWorks
Differentiation vs. competitors: 
Solegear says it is able to achieve higher performance levels with its materials, from a strength and ease of processing standpoint. The company is also expecting to soon deliver increased performance on thermal stability. This increased performance is delivered with clearly defined sustainability advantages to support customer marketing programs. Solegear claims it has trials underway with medium to large sized companies in its target markets and is expecting to deliver these added values to customers at pricing that is expected to be equal or cheaper to its competitors.
Key team members: 
Toby Reid, Founder & CEO, has a background in marketing and finance and has worked in the financial industry in securities trading and sales (RBC Dominion Securities), as well as in sales and investor relations for a publicly listed cleantech issuer (Naturally Advanced Technologies). Reid is an ambitious and motivated entrepreneur, coming from family of agricultural entrepreneurs. He has won several awards for the development of Solegear, and was most recently nominated for the 2011 National Manning Innovation Award for his work in the field of bioplastics. Brian Gusko, CFO, formally joined Solegear after several years on the Company's board of advisors. Brian is a CFA candiadate, with an MBA in finance from the University of Calgary. Brian has a strong track record of financial management and governance for private and publicly-traded companies, where he has held positions of Investor Relations, CFO and Director. Brian joined Solegear early in 2011 as part of the company's corporate planning for the next stage of its development. Dr. Christo Stamboulides, R&D Manager, has been working on the Solegear project for over 3 years. As a formally trained chemical engineer, Christo has a background specializing in polymer engineering and rheology characterization. Christo is also an advisor to the Canadian Olympic Committee with a specialty in developing high-performance ski bases for the Canadian Alpine Team. Solegear is also planning to add to the team with a Chief Technology Officer and a VP Business Development. These are the final additions to be made to the team as part of the company's planning for the next stage of its development. Both these positions are expected to be filled in the coming weeks, and the company is in discussions with several candidates at this point.
Existing investors and capitalization details: 
Solegear has been supported by investment from the founder, friends & family and angel investors ($400k). In addition, the company has received $75k R&D grant funding from the Canadian NRC's Industrial Research Assistance Program (IRAP) as well as prize money from new business competitions ($115k).
Capital sought & use of proceeds: 
Solegear is in the process of seeking $1,000,000 of commercialization financing from Angel and Private sources, expected to close at the end of March 2011. These funds are expected to go towards raw materials purchases (40-50%), business development activities (20-25%), patents and certifications (20%), equipment and facilities (10-15%) and general overhead (5%). The company expects to then raise its first round of institutional funds (Series A) in the summer of 2011 in the range of $5-8 million.
Characteristics of ideal investors: 
Angel, super angel and angel or PE funds that invest in early stage businesses in the chemicals and/or manufacturing space. Experience within the plastics industry is an asset. Series A investors could be VCs with experience in the biopolymers space and/or plastics companies looking for highly profitable businesses to partner with to give them exposure, or increased success, in the bioplastics space.
Expected close date: 
12/2011
Company name: 
Solegear Bioplastics
Contact name: 
Toby Reid
Contact email: 
treid@solegear.ca
Web site: 
http://www.solegear.ca
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Profitably producing bio-chemical glycols from byproducts

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S2G Biochemicals Inc. is a private company located in Vancouver, British Columbia, Canada that is poised to build commercial plants based on its “Sugar-to-Glycol” technology for the production of low-cost and sustainable biochemicals from byproduct or surplus materials. Sugar-to-Glycol is a patented hydrotreating process that generates valuable propylene and ethylene glycol from a range of abundant feedstocks. This allows S2G to add value to the byproduct glycerine from biodiesel companies; cellulosic ethanol companies to create profitable revenue streams from their challenging wood-based sugars; and forest products or agricultural companies to change waste pulp liquors, wood slash, straw, corn stover and other low-value biomass from a problem into a business opportunity.
Executive summary of company's business: 

The $20 billion propylene and ethylene glycol market is currently supplied with petrochemicals derived from oil & gas, with associated cost, environmental and sustainability issues. Major users of glycols, such as Arch (personal care products), Proctor and Gamble (liquid detergents and personal care products), Prestone (antifreeze), M&G (PET bottles for Coke, etc,) and Tier 1 auto parts companies, are facing increasing pressure from their customers (Walmart, Coke, OEM’s, etc.) to convert to sustainable biochemicals to produce their products.

S2G Biochemicals Inc is a private company located in Vancouver, BC, Canada that is poised to build commercial plants based on its “Sugar-to-Glycol” technology for the production of low-cost and sustainable biochemical glycols from byproduct or surplus materials. Sugar-to-Glycol is a patented hydrotreating process that generates valuable propylene and ethylene glycol from a range of abundant feedstocks. This allows S2G to add value to the byproduct glycerine from biodiesel companies; cellulosic ethanol companies to create profitable revenue streams from their challenging wood-based sugars; and forest products or agricultural companies to change waste pulp liquors, wood slash, straw, corn stover and other low-value biomass from a problem into a business opportunity.

S2G licensed its technology to a Chinese company that is successfully producing biochemical glycols for the Chinese market. S2G is currently undertaking a $4.3 million pilot project in Vancouver to demonstrate the technology with partner byproduct sugars. This will be the springboard to commercial projects in NA and beyond. S2G has a pipeline of projects with site, feedstock, channel to market and partners lined up. S2G is now seeking a financial partner to help it raise capital to secure a significant ownership position in its first commercial project, and then continue the build-out to capitalize on this opportunity.

Competitors: 
Archer Daniels Midland, Global BioChem Technologies
Differentiation vs. competitors: 
1) Use of cellulosic sugars, 2) Low cost, durable catalyst, 3) Distributed production at a scale that matches available supplies of low-cost, byproduct sugars.
Key team members: 
Mark Kirby, P.Eng President & CEO Senior management at Praxair (Director), QuestAir (VP), Ballard (Director) where he successfully developed and commercialized novel technologies & businesses. Ran operations for division of Praxair overseeing growth from $80 to $140 million. Developed and managed senior strategic relationships – e.g.: ExxonMobil, Ebara, Baxi Innotech, Linde. Managed $100 million divestiture of Ballard’s automotive fuel cell business to Daimler. Terry Brix, M.Sc, MBA Chief Technology Officer President & Founder of International Polyol Chemical Inc. Developed Sugar-to-Glycol technology. After working with Battelle Memorial Institute for thirteen years, Terry started the first of his 18 technology based companies in 1980. Established and leads world's largest iodine production facility. Co-founder of Cyanotech (one of the first publically traded microalgae companies (spirulina) Greg Barrett, CA CFO International financial experience Consulting (PWC, Nuli) and senior management in public companies David Pfeil, P.Eng VP Engineering 20 years of experience focused on business development, project management, engineering, and construction of oil, gas and clean fuel technology projects in Canada, USA, Europe and Africa. Prior to joining S2G Biochemicals he worked for Methanex Corporation and Plug Power Inc. where he held the position of Director of Hydrogen Energy. Dr. Bill McKean Lead Expert & Project manager Professor Emeritus at the University of Washington School of Forestry.
Existing investors and capitalization details: 
The company has secured partners, governmet financing, pilot equipment and undertaken technolgy development with $300,000 investment by the founding companies: Sacre-Davey Engieering, HTEC Hydrogen Technology & Energy Company and International Polyol Chemical Inc., plus investments by management, friends and family. The company is in the midst of an angel round which has secured a further $200,000.
Capital sought & use of proceeds: 
The company is seeking $10 million to construct and secure a significant (30-40%) ownership position in a first commercial plant, which is to have an installed capital cost of $25 million. Balance to be held by feedstock supplier and equipment fabricator. Position company for a liquidity event by developing additional projects.
Characteristics of ideal investors: 
Experience in biochemicals investing.
Expected close date: 
01/2013
Company name: 
S2G Biochemicals
Contact name: 
Mark Kirby
Contact email: 
mkirby@s2gbiochem.com
Web site: 
http://www.s2gbiochem.com
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