Olmito Agriquatics

A Business Plan Executive Summary

________________________________

Paul Skillicorn

3/19/12

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

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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

11 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.

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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

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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

22 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.

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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

INVESTMENT BY

GUARANTEED 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%

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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

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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 $ 3,746,067INCOME 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

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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 $ 0TOTAL 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

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Administrative Staff 1 1 1 1 1

Support Staff 2 2 2 2 2LABOR 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

RATES OF RETURN Post-Tax IRR 51%Post-Tax

NPV $ 11,680,589

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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

After-Tax Plan Best Case:Worst 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

Risk Adjusted Calculated Share Value $7.705 (Assuming 1,000,000shares outstanding)

Stated Share Price $1.000

Risk

Adjusted

Shareholder # Shares: % Equity:$

InvestmentNominal

ValueSpeculative Value

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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

Risk Adjusted Calculated Share Value $7.705 (Assuming 1,000,000shares outstanding)

Stated Share Price $4.000

Risk

Adjusted

Shareholder # Shares: % Equity:$

InvestmentNominal

ValueSpeculative 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

Shareholder # Shares: % Equity:

$ Investmen

t Valuationon

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

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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

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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.

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OWSC managers and members of board of directors understand that, should outside guarantees be necessary, ownership will be modified accordingly.

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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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Paul SkillicornSkillicorn@yahoo.com, PaulSkillicorn@gmail.comHome/office: +1 512-934-7441 cell: +1 512-934-7441Skype: PaulSkilliorn

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