2014 ecologiciti presentation

EcologiCiti“Beyond the Urban Farm”

Sustainable Urban Food Centers Grow, Renew, Sell, Process, Generate Energy

EcologiCiti = Think Global Grow Local

Our Mission

Our Vision

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Meeting the food and energy needs of our urban communities through a vertically integrated business ecology.

Renew properties, grow healthy local food, sell and process the food, and generate energy.

To reach over five million new customers in 5 years with over 15 locations in 7 major cities of the United States through our vertically integrated business centers.

Building Sustainable Urban Communities.


Business Model

GrowRenew

Gene

rate

Ene

rgy

ProduceReal Esta

te

Clea

n w

aste

Sell

Jobs, Process, Training

Produce

Create

5. On-Site Energy Generation (OSG)

6. Real Estate

2. Sell

1. Food

4. Develop and operate food processing centers

• Grow healthy• Grow local• Produce/Vegetables

3. Economic Development

• Distribute vegetables

• Local markets • Restaurants• City schools • Hospitals• Public agencies

• Renewal of underutilized urban land

• Renewal of old warehouses

• Reduce energy cost

• Create profit centers

• Extending the life of our greenmarket crops

• Jobs creation and training • Incubator Kitchens

EcologiCiti

Centers

• Incentives• Tax Credits• Grants • Bond Financing

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EcologiCiti is a scalable, vertically integrated business center aggregator concept. We will Grow, Renew, Sell, Process and Generate Energy in our centers. Our goal is to provide fresh produce to over 5 million new customer in 15 locations throughout 7 major US cities to the multi-billion dollar fresh food industry:

Renewing and revitalization of underutilized properties in urban locales – Real estate development. Growing, packaging, processing and distributing produce/vegetables using clean, Controlled Environment Agriculture

(CEA) technologies – Efficient food production technologies. Processing our produce in our centers to extend the life cycle and range of what we grow. “Grow Local - Buy Local” – Wholesale and Retail Direct Sales In-house incubator kitchens located on our sites will be rented out to entrepreneurial food service vendors. On-site Energy Generation (OSG), a renewable energy source, will reduce our energy expenses. Creating job opportunities in urban areas – Community outreach and commitment.

Vertically integrated centers will be built in close proximity to dense urban population centers. Centers will be housed in underutilized manufacturing or industrial locations. The concept is repeatable. This will provide a competitive advantage by combining all the required business components under one roof.


Business Plan

EcologiCiti has targeted sites in the New York Metropolitan region of Brooklyn, Queens, Staten Island and the Bronx. Sites in Connecticut and the New Jersey cities of Paterson and Newark are in pre development.

Executive Summary – Sustainable Urban Food Centers

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Vertically Integrated EcologiCiti Food & Energy Centers

H2O

EcologiCiti = Think Global Grow Local 5

(OSG)

Incubator Kitchens

The EcologiCiti business plan, a vertically integrated food center supply concept, controls production, processing, utility costs, distribution (retail and wholesale) and quality of the produce.

Indoor vertical growing technologies – CEA, Aeroponic and Hydroponic – are proven to have the highest yield per square foot, are clean, predictable, continuous, profitable, and scalable forms of agricultural growing.

Innovative hybridization in growing techniques will provide healthy, affordable, locally grown food. “Grow it locally” – make it immediately available to the consumers, reducing transportation cost. Assured growth cycle, sustainability, consumable, climate independent product. Clean, germ free and fresh, high-quality, locally grown produce available to our communities. Utilize the production of food to create jobs and assist in economic development. Provide positive environmental impacts to the local community through low cost energy use, efficient water use

(EWU), and the minimization of solid municipal waste (SMW).

Business Plan

The “Grow, Sell, Process, Generate Energy and Renew” model, is a closed-loop sustainable development model creating a Self Sustaining Ecocentric Business.

Executive Summary

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Real Estate Development Models


EcologiCiti vertically integrated center model is unique and new to the market.

EcologiCiti model responds to the revolutionary change to the US food industry.

EcologiCiti is meeting consumer demand by growing fresh, healthy e-coli free, local produce.

Higher energy prices have increased the cost of fuel adversely, impacting food prices. Grow it Locally will attract a greater volume of customers to our offerings. Volatile and intensified climate changes threaten catastrophic impact on food availability and cost. Weather is the single largest risk to long distance food supply chain. Extreme weather events can create spikes in market prices.

With our center concept, we are responding to the “Locavore” Revolution, a sweeping impulse for locally grown, healthy, fresh, sustainable food that has increased demand from upscale purveyors and celebrity chef restaurants all the way to federally funded school lunch programs, institutions and corporations.

Business Plan - The Market

EcologiCiti vertically integrated indoor food centers are beyond the urban farm. Using the CEA model, we provide food security with minimal environmental impact, sustainability and increased public health while

providing local economic development benefits.

Executive Summary

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Market Forces

Increased demand by urban populations for fresh, healthy,

reliable food at affordable prices

Higher energy prices have increased the cost of fuel thus

adversely impacting food prices

Increase food security by providing year round access to

locally grown food

Intensifying negative climate changes have had catastrophic impacts on healthy local food

availability and cost


EcologiCiti is positioning our vertically integrated food centers product development, marketing, and service resources on segments of the food industry with the greatest unmet demand to profitably distribute produce to:

Upscale food sellers, mass market vendors and local groceries, and restaurants Public institutions, schools. Hospitals, Faith-based organizations and social outreach programs Corporate commissaries.

EcologiCiti vertically integrated food centers house multiple profit centers under a single roof: Real estate development and leasing Food production Produce sales Processing / packaging / distribution / incubator kitchens On-site generation of energy Waste to energy conversion Training programs and job creation The medicinal pharmaceutical and cosmetological plants are a future lucrative market sector

The Market

Market Positioning, Multiple Revenue Stream and Profit Centers

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EcologiCiti is providing food security and reduced food risk through innovative integration of existing technologies and sustainable food and energy production.

2015 2016 2017 20180%

10%

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100%

Grow Renew Energy Training Process Leasing

As the EcologiCiti project matures, we expect that Energy Generation, as a component of sales, will increase substantially, becoming a bigger profit center for the operation and validating the viability of a vertically integrated business.

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Multiple Profit Centers


We are building an EcologiCiti community with our vertically integrated food centers operations.

Local food distribution, time and distance, will be greatly reduced by developing locations in close physical proximity to retailers and our target urban market.

Distribute, on a wholesale and retail basis, our produce within a 100 mile radius from our centers. EcologiCiti will be creating valuable assets in otherwise non-performing real estate by selecting target sites

in underutilized and often neglected locations. CEA, Aeroponic and Hydroponic techniques will be use for growing produce indoors 24/7. CEA provides a predictable model for continuous food production. CEA, together with the use of LED lighting and a water nutrient solution, allow for the growth of plants in

high density rack space, the achievement of highly efficient predictable crop and high yield per square foot of developed space.

Indoor CEA, Aeroponic and Hydroponic techniques are beyond climatic and long distance threat of disruption. Marketing locally grown food in retail grocery space at our locations will attract customers. 24/7 use of processing center and incubator kitchens to growers and small food entrepreneurs.

Business Operations

Operations: Growing, Distribution, Processing, Branding, Developing

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Business Operations: Onsite Energy Generation (OSG)Operations: Energy and H2O + CO2 …. Waste to Energy Conversion

OSG responds to local energy costs. Credits and incentives are available. Combined heat and power (CHP) integrates the production of usable heat and power (electricity), in one

single, highly efficient process. OSG component will provide a profit center by selling energy at below market rates. OSG production will minimize overhead costs by producing energy at low rates. Controlling energy costs of our food growing and refrigeration will reduce cost and increase revenue. OSG electricity and CHP will offer economical, sustainable electricity and heating to the tenant occupancies. Waste Conversion Technologies will enhance profitability for the basic OSG operation. Water Incentive “–” Scarcity “+” Infrastructure Benefits “=” Incentives. Utilization of diverted landfill-bound WTEF- SMW municipal waste will generate tipping fees. Jobs Training Programs is a community service component that attracts public incentives. Incubator Food Kitchens – rentable commercial kitchen space allows new food businesses to develop.

Business Operations

Operations: Energy and H2O, Jobs Training, Incubator Kitchens

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Conserve and Re-Use Solar Panels


Vertical Centers Storm Water Retention

Stormwater

Rapid Start Center Scale (RSCS) sites: Phased 6 to 9 months to revenue (8 to 10 planned sites).

Rapid on-line redevelopment by recycling buildings vs. new build development. RSCS sites are small square foot projects in existing buildings with simple industrial construction which are

capable of handling heavy load factors. RSCS are responsive to local community’s needs. Total 10 sites in 5 years. These RSCS are intended to prove the business model by creating quick profitable startups. The RSCS model is scalable, flexible startup responding to individual food, energy, site, land and jobs

availability in a given market location. Smaller RSCS community-based facilities (Greenpoint, Patterson, Whitestone) – can be phased 6 to 9 months.

Rapid Start Center Scale (RSCS) sites: Phase I is focused on opportunities in and around New York City and other major US cities. Neighborhood sites zoned for multi-use, brownfields. Properties with a low asset value basis. Model can be replicated to other high food costs, high energy cost markets with water crises. Florida and

California.

EcologiCiti Development ModelEcologiCiti will pursue several growth development models. Model #1 is a Rapid Start Center Sites:

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RSCS Financial Requirement: EcologiCiti is pursuing a financial commitment per RSCS of $1.5 to $5.0 million


EcologiCiti Urban Scale Center Sites (USCS) will be large-scale urban food centers via a three-phase construction project.

1 2

3

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Center Development Phasing


Urban Scale Center Sites (USCS): Phased 18 months to 2 years to revenue (5 planned sites).

Larger USCS projects focused on either underutilized warehouse or industrial sites. Purpose built facilities to meet the project’s needs. Total of 5 new facilities in 5 years. Site will be minimum of 50,000 to 100,000 Sq. Ft in size Large Urban development centers (Bronx, Bush Terminal, Newark, Bridgeport) – Phased 1.5 to 3 years Implementation requires intensive planning and phased construction. Site financial requirements are studied

per project. Economic and industrial development zones, partnerships with NGOs or public initiatives sites. Brownfield Sites “=” “+” Incentives, strong upside potential.

Urban Scale Center Sites (USCS): Phase 2 is focused on opportunities in and around New York City, Boston, Bridgeport and Atlanta. Neighborhood sites zoned for multi-use, brownfields and or properties with a low asset value basis. The Urban model can be implemented in high food cost, high energy cost markets. Florida and California.

EcologiCiti Development ModelEcologiCiti will quickly deploy RSCS and couple the model with our USCS Model #2 centers:

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USCS Financial Requirement: EcologiCiti is pursuing a financial commitment per USCS of $9.0 to $12.0 million


Brownfield sites and benefits: Low asset value, high cost of entry, public incentives. Suitable zoning. Proximity to underserved urban communities. Municipal real estate tax abatement and Energy + New Market Tax Credits. Governmental incentives. Proximity to regional transportation network. Horizontal – low-rise development.

Horizontal Low-rise development - Old Industrial Manufacturing Structures and benefits: Proximity to underserved communities, existing buildings, variety of structures, shapes and sizes. Few emerging manufacturing uses. Zoning barriers to change of use. Public incentives: Food Desert, IDZ, Enterprise Zones. Solid high bay construction, heavy loads.

Potential Development SitesControlled environment approach to site selection, growing produce and energy generation can be tailored to the specific locations and structures reducing cost, time to re-develop and operate.

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Whether using a recycled building or new build simple industrial structures with high performance thermal cladding can be used. Optimally 18’ ceiling heights and 100-150 pound live loads is all that is required. Flat or low pitch roofs permit rooftop greenhouse or attic level CEA growing based on solar power enhanced by LED lighting.


Project TimelineTypical Rapid Start projects will begin operations in late 2015 Q1 with Rapid Start Center Sites #1 and Urban Scale Center Sites #1

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RSCS will provide research and development for all areas of the business including production methods, marketing, branding, processing, distribution, energy production and the creation of a consumer base.

Rapid Start Center Sites # 1Pre Construction / Construction

2017 Q12016 Q42016 Q32016 Q22016 Q12015 Q42015 Q22015 Q1 2014Q4 2015 Q3

Rapid Start Center Sites #1 Operations Begin and Continued Operations at RSCS # 1

EcologiCiti

Urban Scale Center Site #1 Pre Construction/ Construction

Rapid Start Scale Site # 2Operations Begin and Continued Operations at RSCS # 2


EcologiCiti will focus on operating sites that allow for the production of renewable energy to sustainably support our urban food production plant at a cost benefit to local energy market rates.

On-site renewable energy generation at below market rates add a key profit element to our model. Access to below market utility costs, combined with a much lower fossil fuel requirement, allow

EcologiCiti to produce vegetables year round at lower per unit cost than conventional farming methods. EcologiCiti has targeted urban areas that do not have the means to sustainably grow produce using

traditional soil based agriculture. High density CEA provides high yield, high quality produce locally.

The New York area has several different growing methods employed in its boroughs: Rooftop soil based, traditional soil based, hydroponic greenhouse.

Soil-based agriculture is unable to match CEA on a per yield sf basis. There are no CEA or soil-based agricultural operations currently producing locally at an industrial scale. EcologiCiti proposes to grow our market share by employing vertically integrated techniques to service the

unmet market demand. Growing decentralized energy capacity is the most viable strategy to handle future demand for energy.

Market Position

EcologiCiti Sustainable Urban Food Centers

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Competitive Landscape - New York Area 2014 Commercial Competition.

NAME OVERVIEW STRENGTHS WEAKNESSEagle Street Rooftop Farm, Greenpoint, Brooklyn

Eagle Street Rooftop Farm is a 6,000 square foot green roof organic vegetable farm located atop a warehouse rooftop. http://rooftopfarms.org/

Supplies a community supported agriculture (CSA) program, an onsite farm market, and bicycle fresh produce to area restaurants. Strong publicity record.

The growing season is not very long in New York. The rooftop is susceptible to damage from storms, pests and diseases.

Gotham Greens Greenpoint, Brooklyn

A New York City based company dedicated to growing the highest quality vegetables and culinary herbs for local restaurants and retailers.

They use greenhouse and hydroponic technology to grow food. Meaning minimal waste and protection from the elements. The have the capacity to produce over 80 tons of premium quality produce, year-round.

Greenhouse yield/sq. ft. is much lower than vertical farming technology.

Brooklyn Grange Farms, Long Island City, Queens

A commercial organic farm located on New York City rooftops. We grow vegetables in the city and sell them to local people and businesses.

Low levels of capital investment necessary. First year produce production amounted to 7 tons.


Brightfarms LLC Designs, finances, builds and operates hydroponic greenhouse farms at supermarkets and other food retail outlets; e.g., Walmart.

No transportation or storage costs. Minimal post-harvest losses.

There is a risk to the retailer, as they are relying on one source for their leafy greens.

Queens County Farm Museum The farm is owned by the New York City Department of Parks, operated by the Colonial Farmhouse Restoration Society of Bellerose, Inc.

They are supported by the state. Products are distributed on-site, at the Union Square Market, and to several restaurants in Brooklyn.


Added Value Farms They operate a farm on Governor’s Island and in heart of Red Hook. Traditional farming methods.

Strong ties to the Red Hook Com- munity, governmental support, and low capital investment.


VFT LLC They design, build, and operate controlled environment agriculture facilities

Founded by Dickson Despommier, good publicity. Two-proposed projects: Newark, NJ and Orlando, Florida.

Current Operating Facilities capacity.

PlantLab http://www.plantlab.nl/4.0/

Farmedhere http://farmedhere.com/. FarmedHere® produce is grown indoors in urban facilities free of bug, diseases, pesticides, and weather.

Vertical growing technology and local distribution methods reduce energy use, travel time and costs .


Market Positioning – Competition

http://farmedhere.com/

Michael ZigmanChairman

Emilio VallsCEO

Richard CharlesCOO

David LoweCAO

Mark HarariChief Development

Bruce OstroffCFO

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Executive Management TeamEcologiCiti has grouped together a management team with the knowledge and proven business acumen to successfully create and implement a food energy business.

The founders of EcologiCiti bring together the experience, expertise and business acumen to successfully manage the complexity and foster achievable project innovation.

The EcologiCiti team is comprised of recognized leaders and senior managers with over 100 years of proven track records of successful, sustainable, real estate development and construction management.


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Executive Management Team

NAME EXPERIENCE

Michael ZigmanChairman

• Chairman of Nanotronics Imaging• Mr. Zigman has worked closely with high technology corporations for the past 20 years, helping to advise, finance and

operate these companies. Currently Mr. Zigman is COO and CFO of Nanotronics Imaging

Emilio J. Valls Chief Executive Officer

• President, MedStar Solutions, Inc. • Founded in 2004, MedStar Solutions, Inc. is an electronic medical records, practice management software company

marketing to physicians’ offices as well as custom Hadoop, NetSuite and Java development.

Mark Harari Chief Development Officer

• Co-President and Principal, phbCatalyst Group, Inc.• Over many years, a builder, architect and development executive, Mr. Harari has been involved with green building

sustainability considerations in real estate development projects and the construction industry.

Bruce OstroffChief Financial Officer

• Director of Development, phbCatalyst Group, Inc. • Mr. Ostroff brings 20 years of experience in project management, project development, financial management, working

directly with senior management on large development project.

Richard CharlesChief Operating Officer

• Co-Founder, EcoVeggies• From 2004 to Present: Mr. Charles Richard founded and presently dedicates his energies full-time to running Rennergy

LLC (solar technology company) and VertiFarms/EcoVeggies LLC.

David LoweChief Administrative Officer, Operations

• Mr. Lowe founded Libertas Technology, LLC• Spent 20 years working as an IT and Sales Executive, DuPont, Salomon Smith Barney, and Hewlett Packard.


Investment & Tax

Incentives

Direct, ReliableLocal Healthy Eco-Friendly ProduceDistribute Food

Energy Generation

Grow ProduceEcologiCiti

NaturalProcessed

Foods

Real Estate

BrownfieldRE Incentives Faith Based

Partnerships Tax Advantages

Jobs CreationTraining

NGO Partners& Community

Community outreach Jobs

Economic Development

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Business Center Inputs and Outputs


Project Equity Requirements

Initial Investment: Startup Capital and Financial Requirements

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Total Capital Requirement

Investment Tranche Uses Investor IRR

$9,200,000

$600,000 of Investor Capital

+$100,000 in grants

= $700,000 of total

funding

• Fund the first two years of EcologiCiti operations• Generate revenue from development and

management fees

• Investor IRR: 45.5%• Investor Capital: $600,000

Investor IRR driven by:• Cash flow from operations • Assumed sale in Year 5 using a

valuation of five (5x) times Net Operating Income in Year 5

$8,600,000 of Investor Capital

• Development of the first two Rapid Start Community Scale facilities and the first Urban Scale Center Site in the first two years of operation

• Equity will be leveraged with grants, New Market Tax Credits, Investment Tax Credits [energy], incentives and debt to construct these facilities

• A full list of potential incentives, for which EcologiCiti might be eligible, is included as an Appendix in our capital stack

• Additional incentives that EcologiCiti may receive will further enhance the returns shown in this proposal

• Investor IRR: 33.1%• Investor Capital: $8,600,000

Investor IRR driven by: • Cash flow from operations • Assumed sale in Year 5 using a

valuation of ten (10x) times Net Operating Income in Year 5

$72,000,000 TBD • Develop 15 locations across the US


Additional EcologiCiti sites will be developed starting in Year 2. We anticipate doing a second round of funding at that time. Initial investors will be provided the right of first refusal for the second round of financing. We anticipate having five (7) RSCS facilities and three (5) USCS facilities operating by Year 5. Total debt for the development of two (2) RSCS and one (1) USCS, including operations, is estimated to be

$28,000,000. Additionally, we estimate receiving $25,000,000 in tax exempt bonds.

Project Equity Requirements

Initial Investment: Financial Data

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EcologiCiti proposes to sell the properties (including all infrastructure) with a stay-of-management turnkey agreement.

EcologiCiti parent company proposes to manage these ongoing business operations and control the evolution of the EcologiCiti brand.

Separating the assets from the business operations of EcologiCiti will unlock the value of our brand and position the company for further future growth.

In Year 5, with a proven track record of performance and profitability, an intensified EcologiCiti expansion program would seek to recapitalize.

Recapitalization will allow EcologiCiti to pursue multiple sites in designated cities. Leveraging private capital would allow EcologiCiti for the pursuit of multiple sites in designated

cities at the same time. Leveraging private investment with New Market Tax Credits (NMTC) and targeted public

grants/incentives would be welcomed by local economic development authorities as an engine that accelerates the growth of a new urban industry where the benefit of “local” is irreplaceable and intrinsic.

Business Exit StrategyEcologiCiti has developed an Exit Strategy as our Urban Food Center sites mature and reach a profitable asset value.

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EcologiCiti brand positioning and marketing plan will communicate to vendors our products’ value

“People, Profit and Planet,” the three pillars of the Triple Bottom Line, an effort to maximize profits, encourage sustainable community development and minimize negative environmental impacts.

Segment our markets to improve our competitiveness and profitability with customers by focusing food product development, marketing, and service resources on the supermarket segments.

Multiplying our marketing and service offerings will = more profits. EcologiCiti can greatly improve its share of local market by developing green food products and

clean energy services with a targeted marketing message focused on specific segments and their specific needs.

We look to sell our Produce in Waldbaums, Pathmark, A&P, The Food Emporium and Whole Foods. EcologiCiti will increase customer retention and create brand loyalty by focusing on the needs of

our most desirable customers. EcologiCiti will transform the growing of food from present day farming to new modern

production techniques, vastly increasing both productivity and quality to consumers.

Market Analysis

Branding and Segmentation

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EcologiCiti Food Centers

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EcologiCiti

Produce

Natural processed

foods

Jobs Creation, Education

Training, and Community

Energy Production

Real Estate


2014 ecologiciti presentation

Documents

global grow localthink

global grow localecologiciti

energy ecologiciti

food processing centers

integrated centers

integrated business

healthy local food

energy expenses