Mike McKevitt Jimmy Wright Iain Stables Dave Puech BioGreen Inc. Mike McKevitt Jimmy Wright Iain Stables Dave Puech

Business Proposal Manure Biodigester – incorporated into a 5,000 head feedlot Situated near Rosetown in west central Saskatchewan

Project Overview Process raw manure into two value added products Methane gas which will be burned to generate electricity An enriched form of fertilizer

Methane Gas Produced during microbial breakdown of manure Used to create electricity

Fertilizer More concentrated form than the raw product Can be classified as an organic fertilizer Can be sold in bulk liquid form or may be dried and packaged

Long-term Benefits Environmental Added jobs to the rural economy Reduction in air, soil and water pollution associated with ILO’s Added jobs to the rural economy Adding to the profitability and long term viability of a farming enterprise

Facility Layout

Physical Product Flow

Capital Budget Site Costs 178,000 Equipment Costs 1,626,694 Net Working Capital 43,873 Total Capital Required 1,848,567

Marketing Products Energy will be marketed as environmentally friendly Fertilizer will promoted as an organic fertilizer

Future Markets Dry packaged fertilizer Needs addition of a water press to the facility Gives the opportunity to sell to gardeners, greenhouses, etc

Pricing Strategy Price received for energy will be controlled by SaskPower Fertilizer price will be determined by market forces

Promotion Will take place through brochures, web page and word of mouth Sales will be done directly without the need for distibutors Fertilizer sales will be targeted at golf courses

Marketing Budget 2006 2008 2010 2012 2014 Vehicle(Lease, Fuel & Insurance) 10,776 Telephone 2,160 2,247 2,338 2,433 2,531 Brochures 1,590 1,931 2,345 2,848 3,458 Webpage 2,500 306 318 331 345 Total Marketing Expenses 17,026 15260 15,777 16,388 17,110

Sales Forecast Year 2006 2007 2008 2009 2010 Sales 367,400 361,888   Sales 367,400 361,888 389,526 397,316 405,263 COGS 147,543 316,538 265,128 224,163 191,611 Gross Margin 219,857 65,351 124,397 173,153 213,652 Expenses 80,503 73,321 68,683 63,724 58,422 Net Income Before Tax 139,354 (7,970) 55,714 109,429 155,230 Income Tax 15,106 5,175 11,862 16,827 Net Income After Tax 124,248 50,539 97,567 138,403 Total Net Cash Flow to Equity 332,933 190,299 191,451 191,240 192,818

Financing Budget Total Financing Required 1,795,335 Long Term Debt 897,677 Owners Equity Total Financing

Dividend Policy Estimated dividends paid to investors 2006 2007 2008 2009 2010 (268,303) 59,057 184,792 185,834 185,490

Sales Forecast - Energy 2006 2008 2010 2012 2014 Quantity Sold (kWh) 1,500,910 Price($/kWh) 0.11 0.12 0.13 Revenue($) $165,100 $171,770 $178,710 $185,930 $193,441

Sales Forecast - Fertilizer 2006 2008 2010 2012 2014 Quantity Sold (m3) 26,600 Price ($/m³) 5.50 5.72 5,95 6.19 6.44 Revenue ($) 146,300 152,211 158,360 164,758 171,414

Sales Forecast – Manure Removal Year 2006 2008 2010 2012 2014 Quantity Sold (kWh) 28,000 31,500 Price($/m³) 2.00 2.08 2.16 2.25 2.34 Revenue($) 56,000 65,545 68,193 70,48 73,815

Organizational Structure SaskEnergy (30%) BioGreen Founders (70%) Board of Directors Saskenergy(1) BioGreen(2) President/CEO Manager Technician

Employees General Manager Technician Oversees day to day operations Marketing General office duties Technician Perform required maintenance Fill and monitor digester tanks

Employees – cont’d Temporary Maintenance crew Seasonal employees Help with general upkeep of facility

General Assumptions Biodigester will be filled continuously and the fertilizer will be removed regularly Manure will be readily available year round The loan will have a fixed interest rate

General Assumptions Able to secure equity financing Inflation rates will remain at or near the same level BioGreen is able to contract the energy, fertilizer and manure removal

Conclusion Employee training will be critical Feasibility of a biodigester in Saskatchewan