California Safe Soil introductory presentation March 2015

Sustainable Value from Recycled Food

Dan Morash

Founder

California Safe Soil, LLC

Confidential © 2015 California Safe Soil, LLCSecurities Placed Privately by WealthForge, LLC. Member of FINRA/SIPC

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H2H Farm and Research Video

Confidential © 2015 California Safe Soil, LLC 2

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California Safe Soil (CSS) Mission


Fresh Produce

Recycled Organics

• Innovation

• Science

• Profitability

• Stewardship

“Fresh Food Recycling”

using heat, mechanical action

and digestive enzymes

Product Time Value/ton

• Our technology ⇒ Fertilizer 3 hours $800

• Anaerobic digestion ⇒ Methane 3 weeks $300

• Composting ⇒ Compost 3 months $8.40

“Low cost producer of a high value product”

CSS: Simple, but Disruptive Technology


Recycled Produce: 1 supermarket, 1 day = 1 acre for 1 year


Recycling of Food into Fertilizer


CSS Pilot Plant, West Sacramento, CA

Proprietary Process:1. Heat2. Mechanical Action3. Food Grade Enzymes4. 3 Hour Process

H2H after 3 hour DigestScientifically Sustainable


CSS - H2H Organic Registrations:• California Department of Food and Agriculture

• Washington State Dept. of Agriculture

“Harvest- to-Harvest” or H2HConventional and Certified Organic Product


CSS manufactures 2 versions of our liquid fertilizer, H2H:• H2H conventional, for use in all conventional agriculture.• H2H organic, meets all requirements of USDA National Organic Products

(NOP) and may be used in all organic agriculture.

Pathogen free for food safety

Local urban permitting; low cost logisticsCSS “Fresh Food Recycling”


Sustainable –A win for the supermarket, the farmer and the environment.

• Save Mart operator of 218 stores in N. California and Nevada

Equivalent of 90,000 acres of sustainable agriculture

• Long-term agreement to supply CSS with produce/meat/deli/bakery

• Distribution centers ideally located in Roseville and Merced, CA

• An early leader in organics recycling, beginning composting in 1990’s

Partnership with


Waste goes to distribution centers

Modular plants built near market DC’sTotes and Buggies

Improved Store Hygiene

Frequent cycling helps keep food fresh

Demonstrates leadership to customers

AB 1826 Requires stores to recycle organics by 4/1/16

Fresh Food Recycling – Supermarket Benefits


Cuts waste expenses and shows customers their

commitment to sustainability

Crop and Soil Balance: Upset by too many crop chemicals


Crop and Soil Balance: Blend of Biologicals and Chemicals


Value Proposition Savings (costs)/acre

Cut nitrate fertilizer use by 50% $ 100

Water savings $ 100

Cut compost use $ 120

Cost of H2H ($ 200)

Cost savings $ 120

• Farmer gets yield increases and sustainability benefits as “upside”

Farm Value Proposition


Crop California Acres HarvestedNet Value of 15% Yield

Increase/acre

1. Almonds 860,000 $ 966

2. Processing Tomatoes 290,000 $ 528

3. Strawberries 41,500 $ 4,641

4. Leafy Greens 440,100 $ 737

5. Grapes:Table Wine

95,000525,000

$ 944$ 892

6. Carrots 62,500 $ 520

CSS Focus Crops


• H2H works best to increase yields when Grower Standard nitrogen is

decreasedo Decrease chemical nitrogen 25% to 50% to increase yield

• With Reduced water, H2H can help plant growth and productivity

• H2H has a “bio-stimulant” effect promoting root growtho More roots equals more nutrient and water uptake

• H2H measurably increases Soil Organic Mattero Can replace or reduce need for compost

• H2H measurably increases soil biological activityo Measureable increase in CO2 from soil organisms

CSS ResearchWhat we learned…


Initial Research Results on Tomatoes*

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*Control is no fertilizer; H2H™ is our food hydrolysate; Urea is a common chemical fertilizer.Research performed in the lab of Dr. Edwin Lewis, University of California at Davis, 11/11.

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Field Trial Research – Leafy Greens (4)Yield Response to Drip Injections – Modesto, CA 2013

Treatment #4 – 50/50 Treatment (H2H + ½ rate UN32)

Yield Data – Fresh and Dry Weights

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Treatment (Total of 3 Repetitions)

Fresh Weight (lbs)

1. Control 5.28

2. Grower Standard 9.90

3. H2H ‒ 100% 7.04

4. 50% ‒ 50% 11.00

Field Trial Research – Leafy Greens Yield Response to Drip Injections – Modesto, CA 2013

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H2H + G STD

50 - 50%CONTRO

L

Field Trial Research – CabbageYield Response to Drip Injections – Modesto, CA 2013

TREATMENT

YIELD/CABBAGE HEAD

REPLICATES/CABBAGE HEAD TOTAL

WEIGHT weight

lbs lbs

1 2 3 AVG/CHD

H2H + G - STD (50-50)

3.8 4.4 4.9 4.7

H2H 100% 1.5 2.6 2.5 2.2

GROWER - STD 3.0 2.2 2.6 2.6

CONTROL 1.8 3.2 1.3 2.1

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Field Trial Research – CabbageYield Response to Drip Injections – Modesto, CA 2013

Field trial: 2.4 acres, 08/25/2013

H2H combined with grower standard result:

Significant quality and weightIncrease vs. standard

Trial: Broccoli Cooperator: Major California Grower, Santa Maria Costal RegionProtocol: Field A, Grower Standard vs. Field B, ½ Grower Standard + ½ H2H (Significant reduction in total nitrogen chemical fertilizer application)Results: • Grower rate crop “Exceptional” in terms of quality• Grower very encouraged with results from the trial• 3 applications of H2H using drip-irrigation without plugging• Total yield estimated by grower at 890 cartons/acre• Soil quick test nitrogen (available N) was HIGHER in treated areas compared to control

Field Trial – 2014Broccoli

Substitution of Chemical Fertilizer with H2H


Control (left) vs.H2H Treated (right)Prior to harvest

Trial: Establishing almond orchard using H2H as sole nutrient input using 3/4 Grower Standard available water. [Note: Available water restricted due to grower receiving only ½ of normal water allocation for the entire ranch.]

Cooperator: Marino Bros. Farms, Merced, CA

Protocol:

• H2H added at a rate of 8 gallons/acre to trees transplanted 1 year before

• Water used was approximately 13.5 inch/acre vs. standard 18 inch/acre

• Grower chose H2H as sole nutrient source since H2H did not require additional water input (unavailable) to prevent damage to trees caused by use of chemical fertilizers when insufficient dilution water is available

Results:

Field Trial – 2014Young Almond Orchard Development 2nd year almond orchard grown with 3/4 normal water plus H2H


H2H TreatedTree

Diameter% Change

Average Size, August 2.214 240%

Average Size, June 0.923

Growth, June to August 1.291

Control% Change vs

Treated

Average Size, August 1.880 85%

Average Size, June 0.716 78%

Growth, June to August 1.165 90%

Marino Farms: 2nd year almond orchard grown with 3/4 normal water and H2H

Trial: Evaluate “bio-stimulant” growth effect of H2H when sprayed directly on tomato roots

Trial design: Test designed and maintained by Dr. Miguel Duarte, Duarte Associates

Protocol: Plants were “hanging” within fixture; No soil or growing medium; Plant roots sprayed with equal

amounts of designated materials at regular intervals; Control spray was water only

Results: Significant bio-stimulant effect from direct root exposure to H2H

Field Trial – 2014Aeroponics Root DevelopmentTesting Effect of H2H on Tomato Root Growth


ControlH2H + UN32

ControlH2H + Water

25Confidential © 2015 California Safe Soil, LLC

Field Trial – 2013Strawberries, page 1Yield Response to Drip Injections – Santa Maria, CAUCCE – San Luis Obispo County


Field Trial – 2013Strawberries, page 2Yield Response to Drip Injections – Santa Maria, CAUCCE – San Luis Obispo County

Field Trial – 2014StrawberriesHolden Research & Consulting (David Holden, Independent Researcher)

Grower Standard

H2H Treated


Nursery and Field Studies with Strawberry for Growth and Production for CalSafeSoilwww.holdenresearch.com

Field Trial – 2013, 2014Young Almond Orchard, page 1Block locations and sampling sites, 1,250 acres

1

2

1

2

1

2

1

2

BLOCK

8

BLOCK 6

BLOCK 7

BLOCK 5

1

2

1

2

1

2

1

2

BLOCK

4

BLOCK

3

BLOCK

1

BLOCK

2


Soil organic matter sampling locations

Field Trial – 2013, 2014Young Almond Orchard, page 2Duarte & Associates, SOM Data


Sample ID & Block

02/25/2014% Organic

Matter

05/17/2013% Organic

Matter

49-1-1 2.02 0.66

49-1-2 1.75 0.80

49-2-1 1.85 0.92

49-2-2 1.73 0.92

49-3-1 1.76 0.95

49-3-2 1.79 0.95

49-4-1 1.70 0.86

49-4-2 1.74 0.93

49-5-1 2.51 1.00

49-5-2 1.72 0.37

49-6-1 1.90 0.78

49-6-2 1.98 0.75

49-7-1 2.72 0.80

49-7-2 2.10 0.97

49-8-1 2.12 0.59

49-8-2 1.90 0.78

ADEQUATE2.03.0

2.03.0

After

H2HBefore

H2H

Almond Orchard

H2H EFFECT ON % SOIL ORGANIC MATTER2013 Fall Season

Summary Results

Average Change:Soil Organic Matter

From 0.814% to 1.956%

% Increase in SOM 140%

T-Test 1.237E-14

Confidence interval 99.9999…%

Area Treated 1,230 acres

Application Rate

Season 50 gallons/acre

Application as of 2/25/2014

36 GPA

Field Trial – 2013, 2014Young Almond Orchard, page 3Control vs. H2H Treated Almond Trees, 18 Months OldHeight Measure, Spring 2014


83.1”

118.1”

Control H2H Treated

Trunk cross section = 3.3 in.2 Trunk cross section = 11.3 in.2

Dan Morash ‒ Founder, Managing Member

Mark LeJeune ‒ Chief Operating Officer

Mark Bauer ‒ Director, Business Development

Dr. Miguel Duarte ‒ Agronomic Advisor

David Yurosek – Sales, Central Valley

Ed Seaman – Sales, Central Coast

John Erke ‒ Director, Supermarkets

George Eowan ‒ Regulatory Advisor

Independent Researchers:

Dr. Edwin Lewis ‒ Associate Dean, School of Agriculture, UC Davis

Dr. David Holden – Private Agronomic Researcher, Ventura County

Five member Board plus twenty five other partners

Management Team


CSS Market and Financial Impact

CSS Business and Financial Model:

• Business plan to build 5 plants in 5 years

• Serving 1,700 supermarkets, (150,000 TPY) mostly from existing customers

• Serving 600,000 farm acres (of 8.1 million total), mostly in 5 target crops

Market Scale California Market US Market

TPY of organics to recycle 600,000 3.7 million

Acres of sustainable farming2.4mm,

(8.1mm total)14.8 million


Planned CSS California Network


Production Facility

Roseville

Tracy

Merced

Los AngelesSan Bernardino