Download as pptx, pdf, or txt
Download as pptx, pdf, or txt
You are on page 1of 20

Investment Opportunity:

Advanced Greenhouse
Technologies USA, Inc.
1200 Westlake Ave N, Suite 604
Seattle, Washington, 98109
Tel: (206) 829-8015
Presentation Summary
I-502 Overview;
Advanced Greenhouse Technologies USA, Inc.
Jam Box, Inc.; and
Financial presentation*.
* All dollar figures in this presentation are in USD
I-502 Overview
In April, 2011, the State of Washington passed ESSB 5073, which provided
medical marijuana (cannabis) to qualifying patients and allowed the
Department of Health and Department of Agriculture to authorize and license
commercial businesses that produce, process or dispense cannabis.

In November, 2012, the Washington State Liquor Control Board (WSLCB)
passed Initiative 502 (I-502) pursuant to a vote by the people of the State
of Washington. I-502 authorized the WSLCB to regulate and tax recreational
marijuana products for persons over twenty-one years of age and thereby,
created a new industry for the growing, processing and selling of State-
regulated recreational marijuana products.
Advanced Greenhouse Technologies USA,
Inc.
Advanced Greenhouse Technologies USA, Inc. is a Washington corporation
which designs and provides leading-edge turnkey greenhouse packages to
State of Washington-licensed production and processing companies (AGT).
AGTs technology, equipment and greenhouse systems are designed to suit a
variety of budgets, growing locations and required size of operation.





Jam Box, Inc.
Jam Box, Inc. is a Washington corporation, founded by William Whelan in July,
1992 (Jam Box).
Jam Box is in the process of obtaining a Tier 3 production and process
license from the State of Washington for the purpose of growing and
processing two products, including bud (sold per gram as a premium product)
and edible products (created from oil using lower grade cannabis).
With a three-year operational history as a profitable State of Washington -
licensed medical cannabis grower and processor, along with a solid reputation
as a reliable business that provides quality products and services, we believe
Jam Box is in a strong position to become successful in its anticipated
transition from Washingtons medical cannabis industry to the new
recreational marijuana market.


AGTs Arrangement with Jam Box, Inc.
AGT and Jam Box desire to enter into an arrangement whereby AGT shall
provide the AGT Services to Jam Box. This arrangement will include Jam Box
renting space owned by AGT, licensing technologies provided by AGT and
entering into various operational and marketing agreements for the purpose
of conducting its business.
Specifically, AGT will acquire real estate and provide greenhouses (and
related equipment and technology) in connection with the design and
development of the AGT green campus.




Greenhouse Design




Real Estate
AGT has identified approximately 30 acres of real estate located in Thorp,
Washington.
This real estate will serve as the initial location for the design and
development of the AGT green campus. This real estate is compliant with I-
502.
It is anticipated that AGT shall enter into a Purchase and Sale Agreement with
the owners of the real estate sometime in the month of September, 2014.















Investment
AGT is seeking an investment of $3,500,000.00 (the Investment).
The Investment will allow AGT to do the following (the AGT Services):
Purchase real estate in the State of Washington;
Acquire greenhouse equipment;
Lease real estate to State of Washington-licensed production and processing
businesses;
Lease and/or contract labor, equipment and infrastructure to those production and
processing businesses;
Consulting services; and
License its greenhouse infrastructure and growth technologies to those production
and processing businesses.





Investment
In consideration for the Investment, AGT is offering a 10% three-year
Promissory Note with the following terms:
Length of Term: 3 Years;
Interest Rate: 10%;
Repayment Terms:
Interest-only in Year 1, 2 and 3 ($29,166 per month);







The Model

Real Estate lease, Equipment,
Greenhouse technology,
Contracts and Consulting services

Advanced Greenhouse
Technologies USA, Inc.
Jam Box, Inc.
Operations (site,
technology, people)
Investor
Cash
Consideration
$3.5M Investment
Promissory Note
Financial Presentation Jam Box
Assumptions & Introduction*
Assumptions:
Year 1: 21,000 square foot facility;
Year 2: 21,000 square foot facility; and
Year 3: 21,000 square foot facility.
State tax on products will be assessed only at the Processor level (tax rate =
25%);
We expect that Jam Box will generate the following net income (production
and processing operations combined):
Year 1: $1,571,000 USD;
Year 2: $5,570,000 USD; and
Year 3: $5,242,000 USD.

*Dollar figures are estimates based on projected Net Income derived from basic production/processing model not associated with a particular
real estate location or technology.
Jam Box Revenue Assumptions
(Year 1, 2 and 3)
Revenue Generated by Bud Product Sales is Calculated Using the Following
Assumptions:
Year 1 assumes a 21,000 sq ft facility;
500 lights in the area;
500 lights yield 500 lb bud;
1 lb Bud = 453.59 grams bud;

Jam Box will produce and process 595,337 grams of bud per harvest;
Four harvests in a year;
= Jam Box will produce and process 2,381,348 grams of bud per year;


Calculation of Jam Box Revenue (Year 1, 2 and 3)
Calculation of Revenue Generated from Bud Product Production/Processing is
as follows:
[(2,381,348 grams of bud per year * sale price of $5/gram) / 12 months per year]
= revenue = $992,228 USD per month (pre-tax)
In addition, we expect that Jam Box will produce and process edible
products, which will generate an anticipated $164,316 USD per month (Pre-
tax).

Financial Performance Overview
Gross Revenue
Year 1 $6,939,000 USD
Year 2 $13,878,000 USD
Year 3 $13,878,000 USD
Total: $34,615,000 USD
Net Income
Year 1 $1,571,000 USD
Year 2 $5,570,000 USD
Year 3 $5,242,000 USD
Total: $12,383,000 USD
Net Income Margin
Year 1 22.64%
Year 2 40.14%
Year 3 37.78%
Financial Performance Overview (cont.)
Build-out and Operating Expenses
Year 1 $6,738,000 USD
Year 2 $4,488,000 USD
Year 3 $5,166,000 USD
Total: $16,437,000 USD
Net Operating Expense as Percentage of Gross
Revenue
Year 1 97.75%
Year 2 32.34%
Year 3 37.22%
Investment Summary
Net Present Value*
Investment $3,500,000 USD
Net Income, Year 1 $1,571,000 USD
Net Income, Year 2 $5,570,000 USD
Net Income, Year 3 $5,242,000 USD
IRR (end of Year 3)** 15.95%
NPV (end of Year 3)*** $8,884,000 USD
NPV of Future Income**** $14,659,000 USD
* Net Income calculated excludes Investment;
** IRR assumes that source of $3.5 M Investment is entitled to 20% of Net Income each year;
*** NPV calculated with adding Net Income of Year 1, 2 and 3 and subtracting $3.5M Investment;
****Discount is 66% and Multiple of 5;
Cash Return on Investment
Return on 20% Equity*
Year 1: $314,200 USD
Year 2: $1,114,088 USD
Year 3: $1,048,579 USD
Total : $2,476,867 USD
Rate of Return: 70.77%
* By Year 3, AGT anticipates net income of $5,242,000. This net income with a multiple of 5 equals $26,210,000. 20% of
this equals $5,242,000.
Questions & Answers
Please direct questions and comments to:



Attn: David M. Otto, Managing Partner
1200 Westlake Ave N, Suite 604
Seattle, Washington, 98109
Tel: (206) 829-8015
Email: Dotto@martindavislaw.com
Web: www.martindavislaw.com

You might also like