The corporate objective of Gross-Wen Technologies Inc.

(GWT) is to use our patent-pending algae-

based wastewater treatment system to affordably and sustainably treat wastewater. GWT is an Iowa
State University spinoff and was founded in 2013 by Drs. Martin Gross and Zhiyou Wen. In October
2014, Dr. Darren Jarboe joined the company as vice president of business development. In 2016, Dave
Furbush invested $225,000 as a strategic angel investor in 2016, and will join the management team late
2017. Currently the company has 7 full-time/part-time employees. GWT has won a 2016 and 2017 USDA
Phase I SBIR grant and won a 2017 USDA SBIR Phase II grant. The algae-based wastewater treatment
process is low-cost, eco-friendly, and carbon-negative. This process is shown in Figure 1 below:

Figure 1. Growing a sustainable entity through GWTs products and services.

GWT is pre-revenue and will offer three products/services, (1) sale of algal-based treatment systems to
remove pollutants from municipal wastewater, (2) operation and maintenance contracts with RAB system
customers, and (3) sale of algae-based fertilizer. These three revenue streams represent a sustainable
business model as demonstrated in the pro-forma included in this business plan
Customer Problem: The United States Environmental Protection Agency (EPA) and states nationwide
are reducing the level of N and P that can be released into surface waters. Many municipal wastewater
treatment plants are not designed to meet these new nutrient-discharge limits and will be forced to
completely replace or significantly retrofit their existing treatment systems, often costing the municipality
millions of dollars. This situation has created a need for alternative technologies, such as the GWT
rotating algal biofilm (RAB) system, which is designed to be simply and affordably retrofitted to a
municipalitys existing wastewater treatment infrastructure to meet the new discharge limits.
Rural communities are greatly affected by these new stricter limits: Small communities generally use
lagoon-based treatment systems (approximately 37,000 nationwide) that cannot meet new ammonia (a
form of N) discharge limits without drastically changing their treatment system. This costs a community
of 1,500 people between $3 to $5.5 million in capital, which is a huge burden on a small tax base (cost
based on quotes provided to rural communities). Some small towns in Iowa are considering un-
incorporating because they cannot afford to meet the new limits
(www.desmoinesregister.com/story/news/2015/01/03/sewage-systems-rural-concerns/21238671/). Our
RAB system will provide these rural communities a new option to meet the limits at a much lower cost
($1.5-2 million capital cost).
Target Market: The municipal wastewater treatment market is estimated to be a $183 billion market
globally. There are two major types of municipal wastewater- treatment systems in this market: (1) lagoon
systems (used by municipalities with <10,000 residents), which have a large footprint, are easy to operate,
and are relatively low-cost; and (2) mechanized treatment systems (used by municipalities with 10,000
residents), which have a smaller footprint, are mechanically complex, and have high capital and operating
costs. Although the GWT algal-based treatment system is an ideal candidate to be retrofitted at both
existing types of wastewater treatment systems, our initial target market is retrofitting rural lagoon
systems. This is due to the lack of cost-effective options for nutrient (both N and P) removal in this
market. There are roughly 37,000 lagoon-based treatment systems in the United States today.
The RAB system produces algal biomass as a co-product during water treatment, which can be
manufactured into a fertilizer product. The initial target market for the biobased algae fertilizer is the
home lawn and gardener market. This lawn/gardener market is estimated to be $6 billion annually.
Specifically, the natural and organic fertilizer fraction of this market is estimated at $475 million in 2014,
rising 4.4% annually according to the Report of Lawn and Garden Supplies 10th Edition
(http://www.packagedfacts.com/redirect.asp?progid=87768&productid=9212531). Organic and specialty
fertilizers sell for about $2/kg wholesale, and $8/kg off-the-shelf (prices based on real sale prices
available online). In addition to fertilizers, the algae is a very good feedstock for biocomposites. If we are
unable to enter the fertilizer market rapidly, our backup plan is to enter the biocomposites market, where
we have a commitment from a Algix Inc. to buy 3,000 tons of algae annually at $825-1050/ton.
Customers: The initial target customers for the RAB system are rural communities with 50010,000
residents that currently have lagoon-based wastewater treatment systems. These communities are facing
more-stringent ammonia-discharge limits. Their existing lagoons cannot meet these new permit limits;
therefore, they must invest in new treatment systems or retrofits. The current options cost in the range of
$3 to $5.5 million in capital costs. Our RAB treatment system can address these new permit limits for an
estimated $1.5-2.0 million in capital costs. Longer-term, another market for the RAB system is larger
communities with over 10,000 residents that are looking for new nutrient-removal options. GWT
currently collaborates with the MWRD of Greater Chicago on pilot studies. A major advantage that a
large city gains by implementing our technology is that the RAB system is the most environmentally
sustainable treatment option available. Furthermore, the algae biomass coming off the treatment process
has value and could help offset their treatment costs.
Core Technology: In 2011, GWTs founders invented a game-
changing algal-based treatment technology known as the revolving
algal biofilm (RAB) system. The RAB system is a series of vertical
conveyor belts that rotate in and out of wastewater, allowing algae to
attach as a biofilm and then remove N and P from the wastewater and
CO2 from the air. The RAB system promotes very high algal
productivities (10 times higher than competing systems), while
eliminating the need for expensive harvesting technologies that
current algal raceway pond and photobioreactor systems require. The Figure 2. RAB treatment system
RAB system (Figure 2) can reduce the N and P in wastewater to
levels that meet the new EPA and state nutrient requirements. GWT co-owns a US pending patents with
Iowa State University (ISU), GWT has exclusive license. The specifics of the technology are detailed in
the narrative of this application, and this video: https://www.youtube.com/watch?v=wJN2Z9_hCak.
To the best of our knowledge our RAB system is superior to all other algal treatment systems available.
This was validated when the Chicago Wastewater District (which is the largest and most innovative
wastewater district in the world) selected the RAB system out of all other algal systems available to
perform pilot-scale testing on.
Competition and Competitive Advantage:
Table 1. Competing technologies for nutrient removal from wastewater
Suitable
Wastewater for
Description Comparisons to GWTs technology
Technology Rural
Towns?
Simplest and cheapest form of wastewater Does not meet new requirements for
treatment. Water flows into ponds and natural N in winter months. GWTs system is
Lagoon Yes
bacteria remove COD. N is removed by complementary and can be retrofitted
nitrification/denitrification, but slow in winter to meet new N and P requirements
Algae photobioreactor using clear tubes and
Algae- High energy consumption, issue with
artificial light to remove N and P. Algae No
Clearus algae harvesting, no commercial sites
harvested through filtration device.
No algae byproduct. Doesnt
Rotating cylinders that have algae attaching
Algae- effectively remove P. Challenges with
on. Algae is not harvested but rather sloughed Yes
Algaewheel scaling vertically, no commercial
off into wastewater. Removes N.
sites
Retrofit lagoons to keep water warm to enable
SAGR or Lemna High cost for retrofitting, only
nitrification/ Yes
Cover removes N, not P.
denitrification in winter months.
High treatment capacity in small footprint Effective at N removal, not P
Mechanized- Yes, but
using activated bacteria. Uses bubbled air to removal, high capex and opex, cost
Activated Sludge costly
grow bacteria and clarifiers to separate them. for sludge removal
Usually coupled with activated sludge. Uses Effective at N and P removal, high
Mechanized-
aerobic/anaerobic/anoxic zones to stimulate P cost, challenge to operate, cost for No
EBPR
accumulating bacteria to remove P sludge removal
Effective at N removal, not P
Mechanized- Similar to activated sludge system, but Yes, but
removal, high capital and operating
Attached Growth bacteria are attached not suspended costly
expense, cost
Struvite-based Wastewater diverted into reactor and Expensive to implement, not suitable
Company (Example: combined with compounds such as for small communities, requires No
Ostara) magnesium to precipitate N and P. chemicals

Competition in rural communities (our target market): Many small rural communities use lagoon systems
that are unable to meet new EPA ammonia permit levels; thus, these lagoons need to be retrofitted or
replaced with a different treatment system. The options for these communities include (1) removing the
lagoons and installing a mechanical plant ($5.5 million), or (2) drastically retrofitting the existing lagoon
system to install a SAGR or Lemna system ($3 million) (see Table 1). Each of these options are
expensive and can address the ammonia problem, but they do not remove P. In our discussions with
consulting engineering firms, they expect small community permits to have P limits in the next 10 to 15
years, which will require these communities to adopt yet another new technology. The RAB system,
which will sell for an estimated $1.5-2 million, can be added to an existing lagoon system without
extensive retrofitting. It treats N in the form of ammonia or nitrate and also removes P. To our
knowledge, no other system has been developed that can simply and as inexpensively be retrofitted
to lagoon systems to address current and future nutrient limits.
Competition in large communities: Large cities have more treatment options than small communities.
These systems are outlined in Table 1 below. In general, these larger communities can remove N
efficiently, but P removal is a major challenge. Common approaches for P removal are the chemical-
based, struvite precipitation method and the enhanced biological phosphorus removal (EBPR) method,
with each of these methods also having disadvantages. For example, both are very costly, struvite requires
the constant addition of chemicals, and the EBPR has sludge disposal, while the RAB system does not
require chemicals and produces valuable algal biomass.
Competition from other algal systems: Many algal technologies exist, but none is as cost-effective and
efficient as the patent-pending RAB system. The RAB system is one of two systems that the Metropolitan
Water Remediation District (MWRD) of Greater Chicago selected for evaluation. After a worldwide
search for new wastewater treatment technologies, the MWRD selected our RAB system as one of two
systems for evaluation at pilot-scale. After initial testing, our technology was further validated by being
chosen for on-going testing, while the other technology being pilot-tested by MWRD was abandoned
because of it was too expensive. This decision by MWRD validates the performance of the unique and
efficient design of our patent-pending system.
Product/Services and Business Model: GWT will have three product/services: (1) RAB system sales,
(2) consulting/operating fees, (3) algal biomass sales.
RAB System Sales: The RAB system for a 1,500-person community requires a footprint of 2,160 ft2 (200
m2). This unit will be sold for an estimated $1.5-2 million to municipalities directly or through the
distribution channels of engineering consulting firms. This price provides a 40% markup over the total
cost of manufacturing and installation of the RAB unit. This price point is highly attractive compared
with those of competing technologies for a 1,500-person communitysuch as the SAGR, Lemna cover,
and mechanized systemswhich cost $3 million, $3 million, and $5.5 million, respectively. We estimate
our process requires approximately $50,000 to operate annually and has a 20-year life. The closest
competing technology costs approximately $30,000 annually to operate. Although our RAB system has
higher operating costs, over the system life, it costs an estimated $1 million less than the competition in
terms of total capital and operating costs.
Consulting/Operating Fees: In addition to revenue generated from RAB system sales, a recurring
monthly consulting or operating fee will be charged to the customer. This fee will be based on the
services each community needs. For example, in our initial target market of rural communities, skilled
labor is not available on staff and GWT operation of the system would be preferred. A recurring operating
fee of $4,150/unit/month will pay for GWT personnel to operate and maintain the RAB unit each week.
Once the unit is built, the customer is only responsible for supplying power for the RAB unit. These fees
will be embedded in the RAB system sales contract and required for the first five years of ownership.
However, if we install commercial units with MWRD of Greater Chicago, we will charge a consulting fee
of $10,000/unit annually because MWRD has skilled labor on staff that can operate the system.
Algal Biomass Sales: GWT will have an offtake agreement with the municipality for the algal biomass
produced during treatment. We will profit-share a percentage of the algal biomass sales with the
municipality. Initially, the algae biomass will be marketed as a controlled-release algal fertilizer. The
initial target market will be home lawn/gardeners due to the high margins ($2/kg) associated with this
product and simple product manufacturing required. We have also identified bioplastics company Algix
that has committed to buy 3,000 tons annually for ~$1/kg. GWT intends to maintain an active R&D
program, part of which will be dedicated to developing new high-value products from algae.
Sales/Marketing Strategy:
RAB System Units and Consulting Services: Wastewater treatment technologies are usually sold to rural
communities through consulting engineering firms. Small towns generally do not have engineers on staff,
so when new infrastructure is needed, such as wastewater treatment systems, they hire consulting
engineering firms to suggest and rank options. We will market directly to and through these consulting
engineering firms. To make sales to these small communities, we have proactively met with consulting
engineering firms that serve Iowa, Illinois, Minnesota, Missouri, Nebraska, Michigan, and South Dakota.
In addition to marketing our RAB system through consulting firms, GWT will also market the system
directly to municipalities.
Algal fertilizer: The algae produced during treatment will be marketed as a controlled-release algal
fertilizer. In a plant-growth trial conducted by the ISU Horticulture Department, the algal fertilizer has
been shown to be more effective than commercial off-the-shelf organic fertilizers such as milorganite.
This fertilizer will be marketed to home lawn/gardeners because of the high profit margins in this market
sector and will be marketed locally at home garden stores.